In May 2016, a new bilateral investment treaty ("BIT") was concluded between the Government of Albania and the Government of Kosovo. This international treaty was approved by the Albanian Council of Ministers' Decision no. 375, dated 25 May 2016 and by the Kosovar President Decree DMN-017-2016, dated 22 June 2016. It supersedes the earlier BIT, which was concluded in 2004 between Albania and the United Nations Interim Administration Mission in Kosovo ("UNMIK") acting on behalf of the self-governing institutions of Kosovo.

Setting the BIT aside, already the legal framework of Albania and Kosovo offers considerable legal protection to foreign investors in each of these countries. Since the fall of communism and the introduction of market economy in the early 1990s, Albania introduced a special law aimed at the promotion and protection of foreign investors/investments. The Albanian Foreign Investment Law no. 7764, dated 2 November 1993 was drafted in line with the general international law on international investment. So was a special law for the promotion and protection of foreign investments in Kosovo (Law 02/L-33), which was approved in 2006 at a time when Kosovo was under the UNMIK administration. This was abrogated by a new Law 04/L-220/2013, passed by the Parliament of the Republic of Kosovo upon the declaration of its independence in 2008.

On top of these national laws, the recently approved Albania-Kosovo BIT marks an important legal development with respect to the reciprocal promotion and protection of foreign investments and investors of the two countries. Being an international treaty, it offers to investors from Albania and Kosovo an additional lawyer of protection and right of action, in case their investments in the other country are negatively affected by the government conduct and an investment dispute arises. The BIT remains available to the respective Albanian and Kosovar foreign investors despite any abrogations of or detrimental amendments to the relevant national laws on foreign investment, which are subject to changes as per the will of each country's parliament.

Content-wise, the BIT is designed in line with the majority of modern BITs concluded worldwide. It covers the typical three-parts: (a) definitions ('foreign investor', 'foreign investment', and 'territory' – which is specific in the case of Kosovo); (b) substantive investment protection standards (a provision on admission of investments, a guarantee of fair, equitable and transparent treatment, a guarantee of national treatment and most-favored-nation treatment, a guarantee in case of unlawful expropriation, and a guarantee concerning the free transfer of payments) and (c) dispute settlement provisions on state-state and investor-state arbitration (with regard to this latter, availing the disputing parties with the option of submitting their investment dispute to ICSID- and/or UNCITRAL- based arbitration and specifically referring to the applicability of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards for purposes of enforcement of non-ICSID awards).

Notably, the BIT offers a combination of the above-mentioned standards of investment protection with modern provisions on sustainable development and corporate social responsibility. It brings into the scope of the BIT – which is primarily an economic development instrument, issues of foreign investors' compliance with generally applicable health and safety standards, employment standards and environmental protection, thereby reflecting the new trend in the design of international investment treaty law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.