RIGA - The Latvian parliament today sent to the committees for review the bills about termination of bilateral agreements with Poland and the Czech Republic about promotion and protection of investments in order to ensure compliance with the EU regulations.
The Latvian Foreign Ministry explained that in 2009 the European Commission for the first time pointed out that bilateral investment treaties between member states (intra-EU BITs) were incompatible with EU law because they overlapped and conflicted with the EU regulatory framework applicable to cross-border investments therefore those treaties should be terminated.
Later the European Commission started an infringement procedure against five member states (Austria, the Netherlands, Romania, Slovakia and Sweden) and initiated the pre-infringement procedure against other member states, including Latvia, requesting information about compliance of the BITs with the EU law and inquiring about their willingness to terminate those treaties.
The Polish and Czech governments agree with the European Commission and have offered to Latvia to terminate the agreements on promotion and reciprocal protection of investments that were signed in 1993 and 1994 respectively.
Before the termination the agreements have to be amended to remove a provision stating that the agreement will continue in force for ten years after the termination, thus precluding a lasting breach of the EU regulations.
It is planned that the bilateral investment agreements with Poland and the Czech Republic will be terminated in three months after the completion of all the formalities.