engleski

THE IMPACT OD INVESTOR OF INVESTOR TO STATE DISPUTE SETTLEMENT MECHANISM ON INTERNATIONAL BUSINESS ACTIVITES

The introduction of the ISDS legal mechanism - Investor to State Dispute Settlement, i.e. the chapter on investment protection and dispute settlement between investors and states will be included in the TTIP and is the most controversial part of the agreement. This dispute settlement mechanism is built into almost every international investment agreement, and today there are over 3, 400 such agreements world-wide, and in the EU about 1, 400. The Commission’s proposals ignore the fact that investments between the EU and the USA have been going on for decades and grown to more than €3000 billion without ISDS. The Republic of Croatia has concluded 58 agreements on investment promotion and protection, and each of them also contains provisions on ISDS, including the Agreement on Investment Promotion and Protection with the USA from 1996. The ISDS allows investors from states with which the agreement on investment protection was concluded to initiate a dispute. This is usually international arbitration against the state investors had invested in, in the event that any of the state measures jeopardised their investment, instead of an internationally recognised judicial instance. It should be taken into account that the reason for initiation of a dispute cannot be a mere reduction in profits ; but cases in which the entire investment is at risk in the sense that it is impossible to perform normal business activities, when investors are discriminated against, when they are unjustifiably deprived of their assets, when they are prevented from freely transferring their funds to their homeland, or when their safety is at risk. In recent years, this system has come under mounting criticism from the public and non-governmental organisations, and many states have themselves noticed some of its shortcomings.

ISDS, TTIP, investments, the European Commission, international business activities

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