Legal regulation of the free movement of capital between the European Union and Singapore

Abstract

The article provides a comprehensive analysis of the legal regulation of the freedom of capital movement in relations between the European Union (EU) and the Republic of Singapore. The relevance of the study is conditioned by the deepening economic interdependence of states under globalization, the role of Singapore as one of the EU’s leading economic partners in South-East Asia, and the intensification of European integration processes in Ukraine. The following methods, in particular, were used in the course of the research: comparative legal one, formal legal one and systemic analysis of primary and secondary EU law, as well as of the EU’s current international agreements.

The paper examines the multi-level system of legal regulation in this area, which covers: (1) the provisions of EU primary law (in particular, Article 63 of the Treaty on the Functioning of the European Union); (2) norms of secondary law (Regulation (EU) No 1219/2012 of the European Parliament and of the Council of 12 December 2012 establishing transitional arrangements for bilateral investment agreements between Member States and third countries; Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union); (3) international agreements of the EU with the Republic of Singapore (the Free Trade Agreement and the Investment Protection Agreement); (4) bilateral investment treaties concluded by individual Member States with Singapore that remain in force.

Particular attention is paid to the significance of Opinion 2/15 of the Court of Justice of the European Union of 16 May 2017, which delineated the boundaries of EU competence and resulted in the splitting of the initially single treaty package into trade and investment parts. The author analyses the key provisions of the EU–Singapore Free Trade Agreement concerning the freedom of capital movement and its permissible restrictions (exceptions), as well as the provisions of the corresponding Investment Protection Agreement regarding the standards of investor protection and the freedom of transfers related to covered investments. The conclusions state that the legal regime of the freedom of capital movement in EU–Singapore relations is based on a model of controlled liberalization that combines openness with mechanisms for the protection of public interests. The evolution of this regime reflects the transition from fragmented inter-state regulation to a unified treaty model at the EU level.