April 30, 2019

European Court of Justice confirms CETA investor protection is compatible with EU law

The Court of Justice of the European Union ruled today that the Investment Court System (ICS) provisions of the Comprehensive Economic and Trade Agreement (CETA) between the European Union (EU) and Canada are consistent with the EU Treaties.

Some EU members have been contesting the CETA provisions regarding investor protections. Belgium requested the Court of Justice's opinion concerning the compatibility of the mechanism with EU law.

Today's outcome is in line with the Opinion provided by the EU's Advocate General in January that the Investment Court System under CETA is fully compatible with EU law.

The decision by the Court means that no changes have to be made to the text of the EU-Canada agreement and EU Member States' ratifications can proceed.

The agreement between Canada and the EU is under provisional application since September 2017 and can only enter fully into force once ratified by all EU Member States and concluded by the Council.

Only upon the conclusion of this process can the Investment Court System become operational. Until then, CETA will continue to be provisionally applied. CETA was approved by the European Parliament on February 15, 2017.