Financial responsibility in European international investment policy

EU Financial responsibility resulting from investor-state arbitration is a politically sensitive topic that is currently shaping the emerging European international investment policy. What level of protection can foreign investors be granted in future EU investment treaties without compromising EU ‘policy space’? How much review of its regulatory powers by arbitral tribunals, rather than by the CJEU, is the EU willing to accept? Taking the Commission's recent draft Regulation on managing financial responsibility as the starting point, this article analyses the implications that future EU investment agreements may have for the existing safeguards balancing private and public interests in EU law. It discusses the different policy choices in the light of fears that investment treaties may affect the EU policy space. A more scientific and sustainable approach is then suggested for ensuring that future EU agreements provide sufficient clarity regarding the outer bounds of financial responsibility and criteria for liability with the aim of maximizing legal certainty for both investors and host states.