The EU common investment policy is taking shape with the passing of new legislation on bilateral investment treaties (BITs). Regulation 1219/2012 was adopted by the European Parliament and European Council in December 2012 and grants legal security to more than 1200 BITs signed between EU members and countries outside the EU.

Since the end of the 1950s, BITs have been a source of legal protection for investors, granting them non-discriminatory treatment and protection from illicit expropriation, and resolving disputes through international arbitration.

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Under the new legislation, all EU member countries had until February 2013 to notify the European Commission (EC) about their bilateral treaties signed before the Lisbon Treaty (which amended the two treaties forming the constitutional basis of the EU) came into force in 2009 if they wished to keep them. By May 2013, the EC will publish the list of all active BITs. All individual investment treaties will remain in force until Brussels signs EU-wide treaties with countries outside the EU.

“This is a major step forward for EU investment policy... this will protect EU investments abroad and allow investors legal channels to defend themselves when needed,” Karel De Gucht, EU trade commissioner, said shortly after regulation 1219/2012 was passed.

As a result of the regulations, the EC is now in free-trade agreement negotiations with Canada, India and Singapore. In 2012, the EC also began to widen existing Euro-Mediterranean agreements with Morocco, Jordan, Tunisia and Egypt. The European Council is also likely to start trade negotiations with China following joint declarations made by the EU and China in 2012.

According to data from fDi Markets, in 2012, five of the 10 biggest source countries for crossborder investments were EU members. However, the number of greenfield projects coming from the top five EU investors contracted by 5% in 2012 compared with 2011.

Some of the top 20 destinations for investments coming from the EU in 2012 included the US, followed by the BRIC countries of Brazil, Russia, India and China, and then Singapore, Australia, the United Arab Emirates, Mexico, Canada and Serbia. In accordance with the Lisbon Treaty, FDI is a part of the EU’s common commercial policy.