Abstract
This chapter reviews the options of legal redress offered to non-EU investors seeking to place controlling investments in EU member states vis-à-vis measures taken by member states, their investment screening and control mechanisms (ISCMs) and the European Commission under Regulation (EU) 2019/452 (EU Screening Regulation). It matches investors’ goals with legal bases and fora for legal redress to outline procedural options of legal redress. Thereafter, the chapter focusses on the material criteria of review and finds that judicial review is significantly limited regarding the factors that allow ISCMs to screen, prohibit, condition or unwind investments. This finding is valid for the legal bases taken into account, i.e. national law, exemplified by German law, EU law and international investment law, although the legalistic realization of limited revisability varies. Litigation seeking to annul screening decisions of ISCMs or to recover damages in consequence of screening decisions or other actions taken by ISCMs thus faces somber prospects. Fully reviewable procedural rights of investors and the protection by international investment agreements in the post-entry stages of investment provide the most reliable grounds for litigation. The EU Screening Regulation’s pertinent provisions are analyzed and found not to change the legal status quo of third state investors seeking controlling investments in EU member states.
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Notes
- 1.
Proposal for a Regulation of the European Parliament and of the Council establishing a framework for screening of foreign direct investments into the European Union, COM(2017) 487, 13 September 2017.
- 2.
Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union, OJ L 79 I, 21 March 2019, pp. 1–14.
- 3.
- 4.
Some investors might also be legally obligated to sue for damages by corporate law.
- 5.
Hence, especially portfolio investments and legal redress for EU investors and target companies are exempt from this analysis. It is assumed that FDI is controlling and portfolio investment is non-controlling investment.
- 6.
Mannheimer Swartling (2017), Freshfields (2017), Akin Gump Strauss Hauer & Feld LLP (2017), Allen & Overy (2017), Arnold Porter Kaye Scholer (2017), Baker McKenzie (2017), Clifford Chance (2017), DLA Piper (2018), EUbusiness (undated), European Council on Foreign Relations (2017), Herbert Smith Freehills (2017), Jones Day (2017), Kromann Reumert (2017), Mayer Brown (2017), Norton Rose Fulbright (2017a, b), Pinsent Mansons (2017), Squire Patton Boggs (2017), Steptoe & Johnson LLP (2017), Sullivan & Cromwell LLP (2017), Wilmer Hale (2017) and EUobserver (2017). See, by contrast, BDI, Freshfields (2008) on German legislation in the field of investment protection.
- 7.
- 8.
Thus, the Judgments of the Warsaw Administrative Court of 17 October 2017, cases VI SA/Wa 727/17, VI SA/Wa 728/17 an VI SA/Wa 776/17, as well as the Judgment of the US Court of Appeals for the District of Columbia Circuit of 5 May 2014, case 13-5315, are something of a rarity. Taking note of the scarcity of litigation in German foreign trade law is Hindelang (2013a), p. 9.
- 9.
It should be added that apart from “recourse”, the EU Screening Regulation does not contain a definition of “undertakings concerned”. These are the targets of investment, whose legal remedies are not addressed in this chapter.
- 10.
Art. 2 (2) EU Screening Regulation.
- 11.
Art. 2 (7) EU Screening Regulation.
- 12.
Art. 2 (6) EU Screening Regulation.
- 13.
Art. 2 (4) EU Screening Regulation (here and in the following square brackets added).
- 14.
Art. 2 (3) EU Screening Regulation.
- 15.
FDI is defined as “an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity in a Member State, including investments which enable effective participation in the management or control of a company carrying out an economic activity” (Art. 2 (1) EU Screening Regulation). This contribution employs the term FDI in this sense.
- 16.
Art. 6 (4) Draft Proposal read: “Foreign investors and undertakings concerned shall have the possibility to seek judicial redress against screening decisions of the national authorities.” See also in this volume Joanna Warchol, A look behind the doors of the RU Institutions: Inter-institutional Agreement on the Framework for the Screening of Foreign Direct Investments.
- 17.
The change is justified as follows (European Parliament 2018, p. 51): “The possibility of initiating proceedings before the national authorities or courts against the screening decisions must be ensured, while safeguarding the legal system of the Member State in question.” For example, France, and, inspired by its model, also Belgium, Italy, the Netherlands, Greece and Romania maintain administrative bodies with judicial functions (see Săraru 2017, pp. 228–230).
- 18.
See Judgment of the Court (First Chamber) of 13 December 2017, Soufiane El Hassani v Minister Spraw Zagranicznych, C-403/16, ECLI:EU:C:2017:960, paras 38-42, on the one hand, and Judgement of the European Court of Human Rights, Chevrol v. France, no. 49636/99, paras 76 et seq., on the other hand.
- 19.
Cf. Judgment of the Court of 15 October 1987, Unectef v Heylens, C-222/86, ECLI:EU:C:1987:442, paras 14-15.
- 20.
European Commission (2017) Proposal for a Regulation of the European Parliament and of the Council establishing a framework for screening of foreign direct investments into the European Union (COM/2017/0487 final – 2017/0224 (COD)), p. 3.
- 21.
Ibid. pp. 12–13.
- 22.
Judgment of the Court of 14 March 2000, Association Eglise de scientologie de Paris and Scientology International Reserves Trust v The Prime Minister, C-54/99, ECLI:EU:C:2000:124, para 17. Reiterated in the Court’s “Golden Shares” decisions, see Judgment of the Court of 4 June 2002, Commission v Portugal, C-387/98, ECLI:EU:C:2002:326, para 50; Judgment of the Court of 4 June 2002, Commission v France, C-483/99 ECLI:EU:C:2002:327, para 46; Judgment of the Court of 13 May 2003, Commission v Spain, Case C-463/00, ECLI:EU:C:2003:272, para 69. The material criteria for restrictions must be objective, sufficiently precise and reviewable (Judgment of the Court of 4 June 2002, Commission v Belgium, C-503/99, ECLI:EU:C:2002:328, para 52 and Judgement of the Court of 13 May 2003, Commission v Spain, C-463/00, ECLI:EU:C:2003:272, para 79).
- 23.
European Commission (2017), COM/2017/0487 final, p. 4 (here and in the following emphasis added).
- 24.
See Soufiane El Hassani v Minister Spraw Zagranicznych, C-403/16, para 26 with further references.
- 25.
Cf. Snell (2019).
- 26.
- 27.
The EU Screening Regulation tolerates that member states do not entertain ISCM (cf. Art. 1 (3), 3 (1) EU Screening Regulation [“may”] as well as recitals (4) and (10)). The explanatory memorandum to the Draft Proposal reads as follows (European Commission 2017, COM/2017/0487 final, p. 3): “The proposed Regulation does not require Member States to adopt or maintain a screening mechanism for foreign direct investment.” However, Bismuth (2018), pp. 52–53, detects an implied obligation to install an ISCM inter alia by the notification and reporting obligations of all member states under the Draft Proposal (cf. Art. 6 (1) EU Screening Regulation).
- 28.
The view is taken here that it is not possible to subsume opinions, information requests and comments under the EU Screening Regulation’s definition of screening decision because neither stem from a screening mechanism, but rather from the Commission (which entertains no ISCM of its own) or a member state (which need not entertain ISCM and if it does, the ISCM need not be the body competent for issuing comments or making information requests).
- 29.
Clearer was Art. 3 (2) Draft Proposal, which read: “The Commission may screen foreign direct investments that are likely to affect projects or programs of Union interest on the grounds of security or public order.” Although this clause was removed from the EU Screening Regulation, it is clear that the Commission has to remain competent to screen investments pertaining to “Union interest” in order to issue an opinion on how an investment affects security or public order.
- 30.
A different view could be based on the notion of a (legally binding) “final screening decision” (Art. 6 (9) EU Screening Regulation) as opposed to (an all-encompassing) “screening decision”, which could include comments, information requests and opinions. But as noted in fn. 28 above, it seems difficult to subsume these measures under the term screening decision. Art. 6 (8) EU Screening Regulation shows that with screening decision reference is made to a legally binding act and that the word “final” in Art. 6 (9) EU Screening Regulation is but legalistic prose for the avoidance of doubt.
- 31.
Art. 2 (3) to (6) EU Screening Regulation.
- 32.
Art. 10 EU Screening Regulation only protects the confidentiality of information transmitted, but it does not bar the public announcement that a screening procedure is considered or has been initiated.
- 33.
If the term screening decision is understood in a wide sense, i.e. including measures other than legally binding acts, Art. 3 (5) EU Screening Regulation would also provide recourse against these measures. The view is taken here that this is not the understanding of screening decision purported by the EU Screening Regulation (cf. above fn. 28, 30).
- 34.
See especially Lecheler and Germelmann (2010), p. 171 et seq.
- 35.
- 36.
Cf. Lecheler and Germelmann (2010), p. 171.
- 37.
Foucault and Gordon (1980), p. 27.
- 38.
Cf. Flaßhoff and Glasmacher (2017), p. 491. Duration of court cases is a topic escaping generalization not only due to few studies in the field (Voigt 2016, p. 200 et seq.), but also because of vast differences among jurisdictions and, within jurisdictions, among different judicial branches (see only Djankov et al. 2003; Spurr 1997; Grajzl et al. 2018; Di Vita 2018). For instance, the Court required 16.4 months for main and 2.9 months for interim proceedings on average in 2017 (see Court of Justice of the European Union (2018) Annual Report 2017: The Year in Review, p. 37. By comparison, the Verwaltungsgericht Berlin in 2017 on average required 8.6 months for main proceedings and 2 months for interim proceedings (see Präsidentin des Verwaltungsgerichts Berlin 2018, p. 1).
- 39.
Cf. Posner and Sykes (2013), p. 288 et seq.
- 40.
See Judgment of the Court of First Instance (Third Chamber) of 21 June 2006, Danzer v Council, T-47/02, ECLI:EU:T:2006:167, para 28 citing Judgment of the Court of 15 January 1987, Krohn & Co. Import-Export GmbH & Co. KG v Commission, C-175/84, ECLI:EU:C:1987:8 and below Sect. 2.2.1.
- 41.
Which is not to say that legal action against screening laws is per se unrealistic (at least in those member states which offer this kind of review procedure, see e.g. Art. 93 (1) No. 2, No. 4a juncto Art. 101 (1) Basic Law for the Federal Republic of Germany). It can also play a role, for instance, in the course of an infringement procedure (Art. 258 TFEU), action for annulment (Art. 263 TFEU) or preliminary ruling (Art. 267 TFEU), the former and latter of which was the case in Judgment of the Court of 23 October 2007, Commission v Germany, C-112/05, ECLI:EU:C:2007:623 and Église de scientology, C-54/99. In this context, it is worthwhile to take note of a GATT panel decision on the 1973 Canadian Foreign Investment Review Act (Canada’s ISCM): Not only did the GATT parties doubt the panel’s competence for the dispute since it involved investment legislation, but also did the panel declare to refrain from passing judgement on the ISCM itself. Operating on a thin line, the GATT panel managed to avoid passing judgement on the ISCM itself or the right of states to establish one (Report of the Panel of 25 July 1983, adopted on 7 February 1984, L/5504 – 30S/140, Canada – Administration of the Foreign Investment Review Act, para 5.1)): “In view of the fact that the General Agreement does not prevent Canada from exercising its sovereign right to regulate foreign direct investments, the Panel examined the purchase and export undertakings by investors subject to the Foreign Investment Review Act of Canada solely in the light of Canada’s trade obligations under the General Agreement.”
- 42.
In this regard, see Flaßhoff and Glasmacher (2017), pp. 491 et seq.
- 43.
Even before (host) member state A’s ISCM even considers screening an investment can member state B or the Commission request information in accordance with Art. 7 (5) EU Screening Regulation, so that even prior to the actual initiation of screening procedures, measures affecting an investment can be taken.
- 44.
Cf. https://e-justice.europa.eu/content_judicial_systems_in_member_states-16-en.do (accessed 6 January 2020) for information on the member states’ court systems.
- 45.
Sec. 42 (1) Code of Administrative Court Procedure, English translation of the promulgation of 19 March 1991 (Federal Law Gazette Part I (FLG I), p. 686), most recently amended by Art. 5 of the Act of 10 October 2013 (FLG I, p. 3786) available at http://www.gesetze-im-internet.de/englisch_vwgo/englisch_vwgo.html#p0166 (accessed 03 May 2019).
- 46.
The case will often only be theoretical due to a technical peculiarity of the German ISCM regarding all cross-sectoral screening: the so-called certificate of non-objection (Unbedenklichkeitsbescheinigung). Investors can apply for a certificate of non-objection and if no screening procedure is initiated within 2 months of the application, the certificate of non-objection is deemed to have been issued (Sec. 58 Foreign Trade and Payments Ordinance, English translation of the promulgation of 2 August 2013 (FLG I, p. 2865), as last amended by Art. 1 of the Ordinance of 19 December 2018 (Federal Gazette Official Part of 28 December 2018, p. V1) available at https://www.gesetze-im-internet.de/englisch_awv/englisch_awv.html (accessed 6 January 2020). It should be noted that the procedure is different (and said case not theoretical at all) for investments in the specific sectors mentioned in Sec. 60 (1) Foreign Trade and Payments Ordinance, where investments undergo sector-specific screening and require clearance (Sec. 61 Foreign Trade and Payments Ordinance). For details on the different procedures, i.e. cross-sectoral screening on the one hand and sector-specific screening on the other, see, for instance, Theiselmann (2009) (in English) and Hindelang and Hagemeyer (2017a) (in German; also on the recent extension of sector-specific screening).
- 47.
See Sec. 42 (1), 75 Code of Administrative Court Procedure.
- 48.
Cf. Judgment of the Bundesverwaltungsgericht of 22 November 2000, case 11 C 2/00.
- 49.
Judgment of the Court of 31 March 1971, Commission v Council, C-22/70, ECLI:EU:C:1971:32, para 42.
- 50.
Judgment of the Court of 11 November 1981, IBM v Commission, C-60/81, ECLI:EU:C:1981:264, paras 8-9.
- 51.
Cf. Judgment of the Court (First Chamber) of 12 November 1981, Birke v Commission, C-543/79, ECLI:EU:C:1981:265, para 27.
- 52.
Judgment of the Court of First Instance of 3 May 2002, Jégo-Quéré & Cie SA v Commission, T-177/01, ECLI:EU:T:2002:112, para 51. One might challenge this position on the grounds of the Court’s Plaumann formula (Judgment of the Court of 15 July 1963, Plaumann v Commission of the EEC, C-25/62, ECLI:EU:C:1963:17) since the concerned investor could be distinguished individually just as is the member state addressee of the opinion. Yet, the opinion remains non-actionable under Art. 263 (1) TFEU in lack of legal effect.
- 53.
The Court’s practice, probably inspired by French law, to allow actions for annulment against materially incorrect internal instructions (as ultra vires act or misuse of powers, cf. Art. 263 (2) TFEU) is of no avail to investors as the Court has only applied this intriguing finesse to allow member state suits under Art. 263 TFEU (see Judgment of the Court of 9 October 1990, France v Commission, C-366/88, ECLI:EU:C:1990:348 and Grundel (2016), p. 610 (concluding, for individual actions of annulment against the Commission’s guidelines on state aid, continuously negligible prospects of success)).
- 54.
Cf. Sec. 43 (1) Code of Administrative Court Procedure (for the action for a declaratory judgement) and Sec. 55, 60 Foreign Trade and Payments Ordinance (for covered transactions).
- 55.
Cf. Sec. 58, 61 Foreign Trade and Payments Ordinance.
- 56.
Schmidt-Aßmann (2018), para 279.
- 57.
See, for instance, Judgments of the Bundesverwaltungsgericht of 8 September 1971, case IV C 17/71, of 16 April 1971, case IV C 66/67, of 12 January 1967, case III C 58/65 and of 11 October 1963, case I A 10.60.
- 58.
Sec. 81 (1) No. 6 Foreign Trade and Payments Ordinance.
- 59.
- 60.
See Pietzcker (2018), para 167.
- 61.
Cf. Sec. 35 sentence 1 Administrative Procedure Act, English translation of the promulgation of 25 May 1976 in the wording last promulgated on 23 January 2003 (FLG I, p. 102), amended by Art. 4 (8) of the Act to Modernise the Law on Costs of 5 May 2004 (FLG I, p. 718) available at https://www.bmi.bund.de/SharedDocs/downloads/EN/gesetztestexte/VwVfg_en.html?cms_dlConfirm=true (accessed 6 January 2020): “An administrative act shall be any order, decision or other sovereign measure taken by an authority to regulate an individual case in the sphere of public law and intended to have a direct, external legal effect.”
- 62.
International investment law refers to the international law part of investment protection law. The term investment protection law is used here to refer to the vast body of rules protecting foreign property abroad. Not all investment protection law is international law. Domestic law can also protect foreign investors as can (so-called state) contracts between foreign investors and host states. See Salacuse (2013), p. 35.
- 63.
- 64.
- 65.
- 66.
English translation available at https://www.gesetze-im-internet.de/englisch_gg/englisch_gg.html#p0176 (accessed 6 January 2020).
- 67.
Civil Code, English translation of the version promulgated on 2 January 2002 (FLG I, pp. 42, 2909; 2003, p. 738), last amended by Art. 4 (5) of the Act of 1 October 2013 (FLG I, p. 3719) available at https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p3529 (accessed 6 January 2020).
- 68.
Cf. Judgments of the German Federal Court of Justice (Bundesgerichtshof) of 10 January 1955, case III ZR 153/53; of 23 February 1959, case III ZR 208/57.
- 69.
Judgment of the Bundesgerichtshof of 27 January 1994, case III ZR 42/92.
- 70.
Formal errors relating to due process are official duties (cf. Judgement of the Bundesgerichtshof of 1 October 1956, case III ZR 53/55). However, they play a negligible role because many formal errors can be rectified during (first and second instance) court proceedings (cf. § 45 (2) Administrative Procedure Act).
- 71.
In addition, a provision expressly stating that the Federal Ministry for Economic Affairs and Energy, which is competent for screening decisions, only acts in public interest (such as, for instance, Sec. 4 (4) Act Establishing the Federal Financial Supervisory Authority, English translation of the promulgation as published in the announcement of 22 April 2002 (FLG I, p. 1310) available at https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Aufsichtsrecht/Gesetz/findag_aktuell_en.html (accessed 6 January 2020) does for the Federal Financial Supervisory Authority), does not exist.
- 72.
Judgment of the Bundesgerichtshof of 15 February 1990, case III ZR 293/88. Despite alleviations such as the requirement to show which individual was negligent, cf. Judgment of the Bundesgerichtshof of 26 September 1960, case III ZR 125/59.
- 73.
Flaßhoff and Glasmacher (2017), pp. 492 et seq. (also for other bases for claims in German state liability law).
- 74.
Flaßhoff and Glasmacher (2017), p. 493.
- 75.
Order of the Bundesverwaltungsgericht of 1 February 2007, case 4 B 1/07.
- 76.
In detail and also from the perspective of the seller Flaßhoff and Glasmacher (2017), p. 494.
- 77.
Judgment of the Court of 19 November 1991, Francovich and others v Italy, joined cases C-6/90 and C-9/90, ECLI:EU:C:1991:428, paras 38-46; Judgment of the Court of 5 March 1996, Brasserie du pêcheur v Bundesrepublik Deutschland and The Queen / Secretary of State for Transport, ex parte Factortame and Others, C-46/93, ECLI:EU:C:1996:79, para 51; Judgment of the Court of 23 March 2004, Mediator v Lamberts, C-234/02, ECLI:EU:C:2004:174, para 49.
- 78.
Cf. Bülow (2013), p. 610.
- 79.
C-46/93, para 51.
- 80.
Cf. Judgment of the Court of 23 May 1996, The Queen v Ministry of Agriculture, Fisheries and Food, C-5/94, ECLI:EU:C:1996:205, para 26.
- 81.
Cf. Judgment of the Court of 28 May 1970, Denise Richez-Parise and others v Commission, Joined cases 19, 20, 25 and 30-69, ECLI:EU:C:1970:47, para 20; Judgment of the Court of First Instance of 14 September 1995, Lefebvre frères et soeurs, GIE Fructifruit, Association des Mûrisseurs Indépendants and Star fruits Cie v Commission, T-571/93, ECLI:EU:T:1995:163, paras 73–74.
- 82.
Cf. Judgment of the Court of 7 November 1985, Adams v Commission, C-145/83, ECLI:EU:C:1985:448.
- 83.
Judgment of the Court of 4 July 2000, Laboratoires pharmaceutiques Bergaderm SA and Jean-Jacques Goupil v Commission, C-352/98, ECLI:EU:C:2000:361, paras 43–44.
- 84.
Judgment of the Court of 10 July 2003, Commission v Fresh Marine, C-472/00 P, ECLI:EU:C:2003:399, paras 61 et seq.; see also Bülow (2013), p. 618.
- 85.
Judgment of the General Court of 23 November 2011, Sison v Council, T-341/07, ECLI:EU:T:2011:687, paras 39-40.
- 86.
Cf., for instance, Art. 8 (1) EU Screening Regulation: “Where the Commission considers […] it may […]”.
- 87.
Cf., for instance, Art. 6 (2) EU Screening Regulation: “Where a Member State considers […] it may […]”.
- 88.
That is, discretion in the sense of EU law, which does not follow the German dogmatic dichotomy of discretion regarding legal consequences (Ermessen) and discretion regarding factual requirements (Beurteilungsspielraum), see Hatje and Mankowski (2014), pp. 164 et seq.
- 89.
Where no discretion is available (for instance, regarding formal rights such as due process), sufficiently serious breaches of (procedural) law are a possibility.
- 90.
Numbers accumulated from https://investmentpolicy.unctad.org/international-investment-agreements (accessed on 6 May). Not all of the IIAs are in force.
- 91.
- 92.
On the often similar standards of protection in IIAs see, for instance, Audit (2009) pp. 624–625.
- 93.
Without any IIA or at least one of said configuration, however, such discrimination would likely not constitute an international wrong, cf. Sornarajah (2017), pp. 130 et seq., who even doubts that open discrimination against an ethnic group may be unlawful under general international law in an economic context.
- 94.
- 95.
Market access need not be unrestricted, particular sectors of the economy may be singled out and protected from foreign ownership. Neither is market access necessarily restricted to the capital market and investments but can also exist regarding goods, services, or persons.
- 96.
Sornarajah (2017), pp. 110, 128–129.
- 97.
- 98.
- 99.
Gómez-Palacio and Muchlinski (2008), p. 228.
- 100.
UNCTAD (2002), p. 7; Mann (1949), pp. 268 et seq; Dimopoulos (2011), p. 50; cf. Jennings et al. (1992), pp. 382–385 (paras 117–118); UNCTAD (2003), p. 102; Shihata (1994), p. 47; Salacuse (2015), p. 213; Gómez-Palacio and Muchlinski (2008), pp. 228, 239; Juillard (2000), p. 336; de Mestral (2015), para 1; Sacerdoti (2000), p. 105; Griebel (2008), p. 67; Schrijver (1997), pp. 281 et seq.; Shan (2005), p. 115; Salacuse (2013), pp. 76, 309; Heinemann (2011), p. 39; Muchlinski (2007), pp. 177 et seq.; Wallace (2002), p. 288; see Neff (1990b), pp. 125, 149 (regarding trade and export controls) and historically Neff (1990a), pp. 70 et seq.; Ralston (1926), p. 270 (para 476) (with regard to the comprehensive exclusion of access of foreigners); even Sandrock (2010), pp. 268–269, 301–302 seems so admit this at the basis of his argument, arguing however that (enforceable) market access rights have been granted in the majority of German (and, arguably, even European) post-1968 IIAs; implicitly Carlevaris (2008), p. 44; Carreau and Juillard (2013), pp. 441 et seq.; Shihata (1993), Art. II (3) World Bank Guidelines; UN General Assembly Resolution 3281 [XXIX] of 12 December 1974; Charter of Economic Rights and Duties of States: 1974 Charter Art. 2 (2) (a); Commission on Transnational Corporations (1983), Art. 47; Report of the Panel of 25 July 1983, adopted on 7 February 1984, L/5504 – 30S/140, Canada – Administration of the Foreign Investment Review Act, para 5.1.
- 101.
Heinemann (2012), p. 852.
- 102.
- 103.
Salacuse (2015), p. 222.
- 104.
Either by taking a “positive list” approach, committing expressly to the sectors which are opened for foreign investors or by taking a “negative list” approach, principally opening up to foreign investments but exempting specified sectors from such commitment (de Mestral 2015, para 9).
- 105.
For instance, Art. 8.18 Comprehensive Economic and Trade Agreement between Canada and the European Union and its Member States (CETA), OJ L 11, 14 January 2017, pp. 23–1080. State-state enforcement remains an option in this case, see Hindelang and Sassenrath (2015), p. 118.
- 106.
Salacuse (2015), pp. 218 et seq.
- 107.
- 108.
- 109.
- 110.
- 111.
- 112.
- 113.
Sacerdoti (2000), p. 112.
- 114.
- 115.
Alvarez (1990), pp. 120 et seq. (also on treaties of friendship, commerce, and navigation); Annacker (2011), pp. 546 et seq; Gómez-Palacio and Muchlinski (2008), pp. 240 et seq. call this the “‘controlled entry’ approach”; Sacerdoti (2000), p. 108; Sandrock (2010), pp. 275, 280; Sornarajah (2011), pp. 274, 281 also lists Japan and South Korea as employing effective market access provisions.
- 116.
- 117.
- 118.
Cf. Art. 8.18 CETA; Hindelang and Hagemeyer (2017b), p. 54.
- 119.
Cf. Sec. 55 (2), 60 (1) Foreign Trade and Payments Ordinance for Germany as well as recital (10) and Art. 3 (6) EU Screening Regulation.
- 120.
- 121.
Cf. Hindelang and Hagemeyer (2017b), pp. 105 et seq.
- 122.
See Sec. 52 No. 2 and 5 Code of Administrative Court Procedure.
- 123.
See Art. 34 third sentence Basic Law, Sec. 49 (6) third sentence Administrative Procedure Act, Sec. 40 (2) Code of Administrative Court Procedure; Sec. 71 (2) No. 2 Courts Constitution Act, English translation of the version published on 9 May 1975 (FLG I, p. 1077), last amended by Art. 10 paragraph 6 of the Act of 30 October 2017 (FLG I, p. 3618) available at www.gesetze-im-internet.de/englisch_gvg/englisch_gvg.html (accessed 6 January 2020).
- 124.
Cf. Sec. 18, 32 Code of Civil Procedure, English translation of the promulgation of 5 December 2005 (FLW I, p. 3202; 2006, p. 431; 2007 p. 1781), last amended by Art. 1 of the Act dated 10 October 2013 (FLG I, p. 3786) available at https://www.gesetze-im-internet.de/englisch_zpo/englisch_zpo.html (accessed 6 January 2020).
- 125.
- 126.
Regarding procedural rights (cf. Art. 41 CFREU), review remains possible and could indeed be viewed crucial given the limited review of material criteria.
- 127.
Cf. Cable (1995), p. 305 for a similar convergence of international economic and security concerns.
- 128.
See generally Jackson (2003).
- 129.
Cf. Clodfelter and Guerrero (2012), p. 186; Knoll (1984), pp. 622 et seq.; see also Art. 4 (2) TEU. On the scope of judicial review of Art. XXI GATT see, on the one hand, Bhala (1998), pp. 268 et seq.; Bhala (1997), pp. 8 et seq. and, on the other hand, Schill and Briese (2009), pp. 107–110, 120–138; Chen (2017), pp. 321 et seq.; Hestermeyer (2010), para 21.
- 130.
- 131.
- 132.
Église de scientology, C-54/99, para 17 (references omitted); see also Commission v Belgium, C-503/99, para 47.
- 133.
- 134.
Église de scientology, C-54/99, para 17; Rickford (2010), p. 74.
- 135.
Pottmeyer (2013), para 44.
- 136.
- 137.
- 138.
Judgment of the Court of 13 November 2012, Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue and others, C-35/11, ECLI:EU:C:2012:707, paras 89 et seq.; this line of jurisprudence has been maintained in the Judgment of the Court of 10 June 2015, X AB v Skatteverket, C-868/13, ECLI:EU:C:2015:375, para 17 and Judgment of the Court of 5 February 2014, Hervis Sport- és Divatkereskedelmi Kft. v Nemzeti Adó, C-385/12, ECLI:EU:C:2014:47, para 21.
- 139.
The ISCM of member states are envisioned (only) “to screen foreign direct investments” (Art. 3 (1) EU Screening Regulation), which is defined to include “investments which enable effective participation in the management or control of a company”, but, more generally, also “means an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity in a Member State” (Art. 2 (1) EU Screening Regulation).
- 140.
See Test Claimants in the FII Group Litigation v Commissioners of Inland Revenue and others, C-35/11, para 97-99; X AB v Skatteverket, C-868/13, para 18; Hervis Sport- és Divatkereskedelmi Kft. v Nemzeti Adó, C-385/12, para 22; in outlines already Judgment of the Court of 19 July 2012, Scheunemann v Finanzamt Bremerhaven, C-31/11, ECLI:EU:C:2012:481, para 35.
- 141.
- 142.
On issues of competence see in this volume Korte, In Search of a Role for the Member States and the EU to Establish an Investment Screening Mechanism. See also recital (6) EU Screening Regulation.
- 143.
Sec. 55 (1), 59 (1) Foreign Trade and Payments Ordinance; Sec. 4 (1) No. 4, 5 (2) Foreign Trade and Payments Act, English translation of the promulgation of 6 June 2013 (FLG I, p. 1482), as last amended by Art. 4 of the Act of 20 July 2017 (FLG I, p. 2789) available at www.gesetze-im-internet.de/englisch_awg/englisch_awg.html (accessed 6 January 2020).
- 144.
Sec. 60 (1) 62 (1) Foreign Trade and Payments Ordinance; Sec. 4 (1) No. 1, 5 (3) Foreign Trade and Payments Act.
- 145.
Hindelang (2013a), p. 15 (in German legal parlance: unbestimmte Rechtsbegriffe).
- 146.
Cf. Art. 19 (4) Basic Law and Order of the German Federal Constitutional Court (Bundesverfassungsgericht) of 17 April 1991, case 1 BvR 419/81, para 47.
- 147.
Cf. Order of the Bundesverfassungsgericht of 8 July 1982, case 2 BvR 1187/80, para 79; Order of the Bundesverwaltungsgericht of 16 January 2018, ECLI:DE:BVerwG:2018:160118B1VR12.17.0, para 27; Hindelang (2013a), p. 16 with further references.
- 148.
- 149.
European Commission (2017), p. 4.
- 150.
- 151.
Order of the Bundesverfassungsgericht of 25 October 1991, case 2 BvR 374/90, para 10.
- 152.
Widder and Ziervogel (2005), para 262.
- 153.
Cf. European Commission (2017), p. 5; Order of the Higher Administrative Court of Hesse of 10 April 2014, ECLI:DE:VGHHE:2014:0410.6A2077.13.Z.0A, para 11 (on Sec. 4 (1) No. 3 Foreign Trade and Payments Act; it is disputed whether and to which extent this applies to the other items in Sec. 4 (1) Foreign Trade and Payments Act); Judgment of the Court of 20 March 2018, Commission v Austria, C-187/16, ECLI:EU:C:2018:194, paras 72 et seq.
- 154.
Before the EU Screening Regulation, it was unclear whether recurrence to the German concept of public order and security (see Voland 2009, p. 522) were possible, given the competence issues between member states and the EU (see in this Volume Korte, In Search of a Role for the Member States and the EU to Establish an Investment Screening Mechanism. After the entry into force of the EU Screening Regulation, it seems that member states’ understanding of public order and security in the field of FDI has become entirely irrelevant. In any case, (court-enforceable) market entry rights, rarely ever granted in IIAs, cannot silently be read into the Foreign Trade and Payments Act.
- 155.
The Court even demands the inclusion of such exceptions to ensure that Art. 64, 66, and 75 TFEU can take effect, see, for instance, Judgment of the Court of 3 March 2009, Commission v Sweden, C-249/06, ECLI:EU:C:2009:119, paras 37–38; Viterbo (2012), p. 195 (fn. 133) with further references.
- 156.
- 157.
- 158.
- 159.
- 160.
Cf. Graham and Marchick (2006), p. 161.
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Hagemeyer, T.M. (2020). Access to Legal Redress in an EU Investment Screening Mechanism. In: Hindelang, S., Moberg, A. (eds) YSEC Yearbook of Socio-Economic Constitutions 2020. YSEC Yearbook of Socio-Economic Constitutions, vol 2020. Springer, Cham. https://doi.org/10.1007/16495_2020_4
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