Update on Investment Screening – September 2021

EU – CJEU rules intra-EU investment arbitration under the Energy Charter Treaty (ECT) to be incompatible with EU law

On 2 September 2021, the CJEU issued its ruling in Case C‑741/19 (Republic of Moldova v Komstroy) finding that Article 26 of the ECT is not applicable to intra-EU investment disputes due to a violation of EU law, especially the principle of autonomy. The CJEU essentially held that the reasoning in Case C-284/16 (Slovak Republic v Achmea) for bilateral investment treaties applies likewise to disputes under the ECT.

For further information regarding the CJEU’s reasoning in Slovak Republic v Achmea you may have a look here. If you are interested in more information about the ruling in Republic of Moldova v Komstroy, where the CJEU in addition to the aforementioned considerations considered jurisdictional issues and interpreted the term “investment” under the ECT, you can consult the entire ruling here.

EU – Report on results of public consultation on proposed anti-coercion instrument published

On 7 September 2021, the EU published a report indicating the results of a public consultation period on its planned new anti-coercion mechanism. The latter is intended to deter and counter potentially coercive actions by non-EU countries seeking to pressure the EU or its Member States into taking or withdrawing particular policy measures potentially impacting geopolitical interests. The new mechanism will enable the Commission “to apply trade, investment or other restrictions towards any non-EU country unduly interfering in the policy choices of the EU or its Member States”.

For further information on the circumstances in which the EU may act, the types of measures the EU may apply to tackle coercion and the likely impact of the various options you can consult the report here.

Philippines – Bill introducing amendments to Foreign Investments Act approved

The Senate Bill No. 1156 intended to amend the Foreign Investments Act of 1991 has been approved in a third reading on 14 September 2021. It will further qualify the term of investment and create a new institution, the Investment Promotion Council. The objective of the latter is to develop an Investment Priorities Plan which shall coordinate the existing plans and promotion agencies and develop a strategy to promote the country as a desirable investment area. Furthermore, the conditions for small and medium enterprises which are reserved to nationals have been updated and a one-stop shop will be created in order to facilitate administrative steps for foreign investors.

If you want to get further information on the amendments, you may consult the Bill here.

India – The Cabinet allows 100% FDI in the telecoms sector

The huge surge in data consumption in times of COVID-19 due to online education, work from home and virtual meetings, made the Indian Cabinet adopt reforms intended to further accelerate the proliferation of broadband and telecom connectivity, especially 4G and 5G networks. Under these reforms of 15 September 2021, 100% FDI is now permitted in the telecommunications sector, among others. However, according to the press release, all safeguards will apply.

For further information on the remaining reform efforts, you can visit the official press release here.

Kazakhstan – Bill requiring owners of foreign social media apps to set up offices in the country is approved by the Parliament

According to several journalist sources, the Kazakh Parliament approved a bill on 15 September 2021 requiring owners requiring owners of foreign social media and messaging apps to set up offices in the country or risk being blocked as part of a campaign against cyberbullying. The offices in Kazakhstan must be headed by nationals who will be personally responsible for removing illegal content from the apps or platforms. However, the bill still needs to be approved by the Senate and the President.