The Internal Allocation of Financial Responsibility Under the REG
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When the EU or a Member State abides by its external payment obligations flowing from an arbitral award or settlement to an investor that succeeded in a dispute under a EU IIPA, this is not necessarily the end of the financial flows. With the adoption of the REG, the EU has created a system that allocates financial responsibility between the EU and the Member States internally. It may not come as a surprise that some federal states equally provide for such an allocation system between the federal state (that bears external financial responsibility) and its constituent subdivisions. Importantly, such systems are not rooted in international law but in EU law with respect to the REG and in national constitutional law with respect to federal states and its constituent subdivisions. The first part of this chapter will look at the system in Germany that allocates financial responsibility arising out of international verdicts and settlements between the Bund and the Länder (Sect. 5.1). The second part will assess the allocation system of the REG (Sect. 5.2).