European Union: An Instrument For The Provisión Of Legal Certainty To Foreign Investors

The idea of conceiving the provision of legal certainty through the EU begins taking into consideration its patent recognition within the EU's structure. The Court of Justice of the EU has stated that legal certainty is one of the principles of EU⁸ law which requires that the "rules of law be clear, precise and predictable in their effects,"9 guaranteeing that the "situations and legal relationships governed by Community law remain foreseeable."¹⁰ Therefore, the principle of legal certainty makes it that individuals can determine clearly their rights and obligations and make decisions consequently.¹¹ The existence of the principle of legal certainty in the EU is subjected to the fulfillment of several requirements. These requirements are that EU's measures and law: a) be clear and predictable, b) completely enforceable, c) have unity and Page 4 coherence, and d) can be invoked by individuals and member states. Finally, it is required that national courts are submitted to rules establishing procedural exclusivity.¹²

The recognition and implementation of legal certainty as a principle within EU structure is reflected in several judgments of the Court of Justice of the EU. The Court has ruled that the principle must be observed by EU institutions and member states when they are exercising the powers granted to them by EU Directives.¹³ Moreover, the Court has judged that as a consequence of the principle: a) a Community measure must not commence being in force before it is published,¹⁴ b) the exercise of individual rights arising from EU law is prohibited from being subjected to conditions and limits by national administrative rules,¹⁵ c) a national provision constituting a variance of Community law must be modified,¹⁶ d) it is prohibited that a regulation be implemented retroactively, meaning that a factual situation is regulated by the existing legal rules at the moment of its occurrence,¹⁷ and e) EU institutions are forbidden from modifying measures already taken by them.¹⁸ Page 5

The principle of legal certainty is also expressed through the principle of legitimate expectations which has been seen as a "corollary" of the former.¹⁹ This principle is also a general principle within EU Community legal order and is present when an individual can rely "in a situation in which it is apparent that the Community administration has led him to entertain reasonable expectations."²⁰ However, when an "economic operator could have foreseen that the adoption of a Community measure is likely to affect his interests, he cannot rely on the principle of the protection of legitimate expectations if the measure is adopted."²¹ Likewise, he cannot expect that an existing situation remains unaltered where Community institutions have the legitimate power to modify it.²²

As can be noticed, many of the expressions and consequences of the principle of legal certainty flowing from the case law of the Court of Justice are of fundamental importance for foreign investors. Aspects such as the mandatory publication of EU law, the prohibition to modify it, its mandatory and non-retroactive character make it possible to conceive the EU as a fundamental mechanism for the adoption of clearer, transparent, and stable laws.

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EU law²³ constitutes the principal EU element for the provision of legal certainty because it is possible through it to adopt binding supranational and directly applicable laws that limit the action of member countries and compromise their international responsibility. As a result of its principles and special characteristics, EU law offers the opportunity to adopt clear, stable, coherent and transparent rules regulating the activity of foreign investors in the EU member countries. For example, the Court of Justice of the EU has stated that, as a development of the obligations assumed with the EU, member countries must not adopt national laws that go against Community law.24 Therefore, the ability of EU members to modify rights or duties incorporated in an EU law is limited, which consequently, provides stability to the law and more certainty in the development of economic activities.