{"id":6409,"date":"2019-06-27T08:40:17","date_gmt":"2019-06-27T13:40:17","guid":{"rendered":"https:\/\/www.iisd.org\/itn\/?p=6409"},"modified":"2024-08-09T18:29:59","modified_gmt":"2024-08-09T16:29:59","slug":"cjeu-finds-ics-in-canada-eu-ceta-to-be-in-line-with-eu-law","status":"publish","type":"post","link":"https:\/\/www.iisd.org\/itn\/2019\/06\/27\/cjeu-finds-ics-in-canada-eu-ceta-to-be-in-line-with-eu-law\/","title":{"rendered":"CJEU finds ICS in Canada\u2013EU CETA to be in line with EU law"},"content":{"rendered":"

The CJEU<\/span> has deemed that the ICS<\/span> included in the Canada\u2013EU CETA<\/span> is consistent with EU<\/span> law, issuing its final opinion on April 30, 2019.<\/p>\n

The CJEU opinion is binding and was issued nearly two years after Belgium asked<\/a><\/u> for the bloc\u2019s highest court to examine whether the ICS would affect the \u201cautonomy of the EU legal order.\u201d In other words, it asked whether ICS tribunals would be able to weigh in on matters relating to EU law beyond what is included in CETA. Belgium also asked the CJEU to consider whether the ICS upholds the EU\u2019s general principle of equality and \u201cpractical effect\u201d and whether it ensures that Canadian investors, including small and medium-sized enterprises (SMEs), are able to access an independent tribunal.<\/p>\n

On all three questions, the court found that the ICS mechanism\u2019s design and safeguards were such that they would not infringe on EU law in any of the areas raised by Belgium.<\/p>\n

\u201cCETA does not confer on the envisaged tribunals any jurisdiction to interpret or apply EU law other than that relating to the provisions of that agreement,\u201d the court said<\/a><\/u>. According to the court, any ICS tribunal would be unable to \u201ccall into question the choices democratically made within a Party\u201d on core public policy objectives, such as health, safety and environmental protections. On the access issue, the court referred to the pledges made by two of the EU institutions\u2014the Council and Commission\u2014to support SMEs\u2019 ability to access these tribunals.<\/p>\n

A prior, non-binding opinion<\/a><\/u> by Yves Bot, an Advocate General of the CJEU, had also said that the ICS was compatible with EU law.<\/p>\n

The CJEU opinion was welcomed by European Commission officials, who noted that this would make it easier for EU member states to ratify CETA. That is an ongoing process that is necessary for the ICS to take effect, as well as the provisions on investment protection and market access involving portfolio investments. Aside from those areas, CETA is being provisionally applied in Canada and the European Union.<\/p>\n

\u201cOne of the key pledges in the political guidelines I presented for this Commission in 2014 was to not accept that the jurisdiction of courts in the EU member states is limited by special regimes for investor disputes. We delivered on that with the Investment Court System,\u201d said<\/a><\/u> European Commission President Jean-Claude Juncker in response to the CJEU opinion.<\/p>\n

Juncker added that the opinion validated the EU\u2019s approach to incorporate the new ICS in its recent investment negotiations, as well as its plan to push for these in subsequent agreements in lieu of the \u201cnotorious ISDS<\/span>.\u201d<\/p>\n