Estonia, EU – Baltic States, Investments, Legislation

International Internet Magazine. Baltic States news & analytics Sunday, 29.11.2020, 18:42

Estonia supports termination of investment protection treaty with Sweden

BC, Tallinn, 02.07.2020.Print version
The Estonian government at a sitting on Thursday approved the amendment and termination of the investment protection agreement between Estonia and Sweden, because there is no longer a need for an agreement as investment protection is governed by European Union law, informs LETA/BNS.

The agreement between Estonia and Sweden was signed on March 31, 1992 in Stockholm and it entered into force on May 20 of the same year, government spokespeople said.

On February 27 this year, Sweden proposed to Estonia to amend the agreement and terminate it. The agreement must be amended before its termination, as its provisions provide that the agreement will continue to apply to investments made during its term of validity for a further 20 years after its termination.

Termination is necessary to ensure equal treatment of investors from all EU member states under EU law. Investment promotion and protection agreements cover areas governed by EU law, in particular the freedom of establishment and the free movement of capital and payments.

Following EU accession, member states have lost the need for such additional guarantees, as all member states are subject to the same EU single market rules, including those on cross-border investment. According to the court practice of the Court of Justice of the EU, the possibility of recourse to arbitration provided for in the agreements is incompatible with EU law.

The agreement is concluded by exchanging notes, in order for it to enter into force, it must also be ratified by the Riigikogu on the basis of the principle of legal reservation.

Estonia has previously terminated bilateral investment promotion and mutual protection agreements with Italy, the Czech Republic, Denmark and Poland.

On May 5, an agreement on the termination of bilateral investment treaties between EU member states was signed, terminating bilateral investment treaties within the EU in a coordinated manner.

The agreement terminates eight of the 12 investment protection agreements within the European Union concluded by Estonia. These include the agreements with Spain, the Netherlands, Greece, Latvia, Lithuania, France, Germany and the Belgium-Luxembourg Economic Union.

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