The Legal Framework for Investment Protection between the European Union and Korea: Towards a Level Playing Field for Investors?
The Legal Framework for Investment Protection between the European Union and Korea: Towards a Level Playing Field for Investors?
Investment has traditionally been regulated at the international level through bilateral investment treaties (BITs). Therefore, individual EU Member States have concluded their own BITs with third states, including Korea. As a result, the standards that currently apply to European and Korean investors will often vary depending on which BIT, if any, applies to them. Yet, recent amendments to the scope of the common commercial policy under the Treaty on the Functioning of the European Union mean that the EU is now competent to enter into treaties on this subject matter by itself. This development offers the opportunity to negotiate a uniform legal framework that applies equally to all European and Korean investors. This chapter starts by explaining the key areas of divergence in existing BIT practice. It then goes on to explain the extent to which investment is addressed under the EU-Korea FTA in the provisions on establishment and payments and capital movements. Having found that the FTA falls short of establishing a uniform regime for the protection of investors, the chapter explores the legal issues that may arise in the negotiation of a comprehensive EU-Korea investment agreement.
Keywords: Investment protection, Common commercial policy, Foreign direct investment, Comprehensive European International Investment Policy, Investor-state dispute settlement, Payments and capital movements, Establishment, Survival clause
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