In 2009 the Court of Justice declared in three judgements that Austria, Finland and Sweden had failed to fulfil their obligations under the second paragraph of Article 307 EC Treaty (Article 351 TFEU). The Court deemed that the provisions on free transfer of capital contained in the bilateral investment treaties (BITs) entered into with third countries were incompatibles with Articles 57.2, 59 and 60.1 EC Treaty, on the free movement of capital and payments. It was the first time for the Court to consider the compatibility of the large number of BITs concluded by Member States with EU Law.
This article aims at discussing the aforementioned judgements of the Court, and also at dealing with all possible inconsistencies of BITs with EU Law, both intra EU Bits and BITs with third countries, in the framework of the EC Treaty and the new TFEU arose from the Lisbon Treaty. The article comes to two main conclusions. On the one hand, EU Law is increasingly imposing restrictions to Member States in concluding BITs with third countries and calls for a revision of the many BITs that are in force to facilitate the participation of the EU through «mixed agreements» or framework agreements. On the other hand, intra-EU BITs shall be terminated.