The Scope of the New Exclusive Competence of the European Union with Regard to ‘Foreign Direct Investment’

Article 207 TFEU confers upon the European Union exclusive competence with regard to 'foreign direct investment'. This article argues that this competence may be broad enough to cover most, if not all, the matters usually addressed in a Bilateral Investment Treaty. It covers both the initial 'admission' of investments and 'post-admission' matters, such as 'national treatment', 'most-favoured nation treatment' or 'equal and fair treatment'. Member States retain the right to expropriate the assets of foreign investors, but the Union may subject its exercise to certain conditions. Article 207 TFEU does not cover 'portfolio investments', but the Union may have implied exclusive competence by virtue of the common rules on capital movements (Articles 63-66 TFEU). Competence in the 'field of transport' remains, in principle, 'shared'. Member States may maintain the restrictions 'grandfathered' by Article 64(1) TFEU. It is arguable, but more doubtful, that Article 65(1)TFEU also provides an exception.