Americans rarely hear about the International Centre for Settlement of Investment Disputes (ICSID), yet it is one of the quiet pillars of global economic stability. The entire system depends on a simple principle: member countries must honor their commitments.
When a government loses an arbitration case in a neutral tribunal, it pays the award.
That predictability is what allows U.S. companies to invest abroad with confidence.
Romania is now threatening that foundation.
For more than a decade, Romania has been embroiled in a dispute with Swedish investors who were promised tax incentives in exchange for investing in Romania, which they did, to the tune of ~€1 billion.
Those incentives were then abruptly withdrawn as Romania rushed to satisfy EU accession demands in the mid 2000s.
The ICSID tribunal ruled in the investors' favor in 2013. Romania appealed and lost, repeatedly. U.S. federal courts confirmed the award and entered judgment for $356 million. Still, Romania shrugs its shoulders and refuses to pay.
The reason?
A growing trend we are seeing by the European Commission declaring that paying awards like this would constitute illegal "state aid" under EU competition law.
Brussels is claiming the authority to block a sovereign state's compliance to its binding international treaty obligations.
And in this case, has instructed Romania to ignore both the ICSID Convention and a U.S. federal court.
The consequences from this have gone from troubling to alarming.
The Commission's stance in state-aid doctrine not only prompted Romania to refuse payment but has triggered an aggressive recovery action that amounts to outright expropriation.
This has morphed into a scenario where the injured investors now face liability to the very state that breached international law. Romania is seeking repayment of the sums owed under the ICSID award.
This places the United States in an uncomfortable position.
Romania's behavior signals to American investors operating in the EU that they can no longer rely on international law.
Their contracts are valid only until Brussels decides otherwise.
This comes at a moment when Romania is pressing for accession to the Organisation for Economic Co-operation and Development.
OECD membership is reserved for states that demonstrate transparency, rule-of-law discipline, and respect for international commitments and that earn the trust of those already upholding those standards.
Against that backdrop, it's difficult to see how the U.S. Ambassador to the OECD, or any core member, could reconcile Romania's ambitions with its refusal to comply with binding U.S. court judgments.
Romania is a NATO ally hosting U.S. troops and missile defense assets.
Can a country that disregards U.S. judicial decisions be relied upon for higher-stakes commitments, let alone admitted into an institution built on mutual trust and legal compliance?
Spain, faced with similar EU interference after its renewable-energy disputes, ultimately found a path to respect its obligations. Romania has chosen defiance. That choice carries consequences.
Washington should respond forcefully and publicly.
First, the White House and State Department should formally request Romania’s explanation for its noncompliance.
Second, U.S. trade and diplomatic engagements should reflect the risks this matter poses to investor confidence.
Third, our European partners must understand that the integrity of global investment treaties cannot be subordinated to the internal regulatory preferences of the European Commission.
Finally, Romania's OECD aspirations must be judged against action, not intent.
Accession cannot proceed without verified compliance with binding international judgments, including payment of the awards owed.
Membership is a privilege, not an entitlement, and the rule of law is not negotiable.
The impact of this growing trend extends far beyond Romania.
It's a test of whether nations still honor the commitments that make global markets possible. It is a test of whether the EU can deploy internal regulatory doctrines to nullify awards rendered under a treaty framework that underpins trillions of dollars in investment.
And it is a test of whether the United States will defend the rule-of-law architecture that protects its companies and reinforces its leadership, globally.
If the United States does not draw a clear line here, it should expect others to test it elsewhere.
Diana London is a seasoned political strategist and commentator with over five years of experience on Capitol Hill. Currently a Newsmax columnist, Diana is President and Co-Founder of Ford & London Global Strategies, and Vice President of X Capital Investments. She also serves as CEO of The Secret Weapon Agency, specializing in crisis communications and public relations. She works on advancing conservative initiatives and empowering diverse communities as well as championing criminal justice reform. She is also the executive director of the American Growth and Innovation Forum (AGIF). Read Diana London's Reports — More Here.
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