On 6 August 2009, Russia publicly announced its intention to withdraw from the Energy Charter Treaty (ECT), an international agreement that, among other things, provides substantive and procedural protections to investors in the energy sector. The announcement followed Prime Minister Vladimir Putin's signing of a decree on 30 July 2009, completing the necessary domestic procedures for withdrawal to take place.

The ECT, which was originally signed in December 1994 and entered into force in April 1998, contains various provisions regarding trade and investment in energy, as well as related technical and environmental issues. Part III of the ECT, which concerns the promotion and protection of energy-sector investments, contains many of the same types of substantive protections for investors that are included in typical bilateral investment treaties (BITs), including the requirements of most-favored-nation treatment, national treatment, fair and equitable treatment, protection from unreasonable or discriminatory measures, and the right to prompt, adequate and effective compensation in the case of expropriation. In addition, the ECT contains a dispute resolution provision that allows investors to file claims against ECT member states before international arbitration tribunals for violations of substantive ECT rights.

Russia signed the ECT in 1994, but has never ratified it. As a result, Russia has been subject to ECT Article 45, under which Russia is required to "provisionally apply" the terms of the ECT to the extent that such terms are consistent with its constitution, laws and regulations. Under Article 45, Russia's termination of its provisional application status will be complete 60 days after it has given formal notice of withdrawal to the government of Portugal (the Depositary of the ECT).

Russia is currently a respondent in arbitration proceedings brought by former shareholders in the defunct Russian energy company Yukos. The claims, which are being heard by a tribunal operating under the auspices of the Permanent Court of Arbitration (PCA) in The Hague, allege that Russia expropriated the claimants' shareholdings in Yukos through a series of actions that forced Yukos into bankruptcy. The tribunal is expected to address the extent to which Russia's provisional application of the ECT requires it to adhere to the substantive investment-protection provisions under Part III of the treaty.

Attorneys for the claimants in the Yukos arbitration have stated that Russia's withdrawal from the ECT should not affect their claims. They cite Article 45(3) of the ECT, which governs the termination of provisional application status, and provides that in the event of such termination, the Article III investment protections shall remain in force for an additional period of 20 years with respect to investments made by nationals of ECT signatory states during the period of provisional application.

Although some have suggested that the timing of the withdrawal decree and announcement indicate that they are linked to the impending jurisdictional decision in the Yukos arbitration, Russia has previously given other reasons for its dissatisfaction with the ECT. In particular, Russia has sought the amendment or deletion of provisions in the ECT and a related protocol regarding energy transit, which could require non-discriminatory access to Russian pipelines and limit Russian control over gas pricing.

Russia's announcement follows steps taken by Ecuador earlier this year to withdraw from the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), as well as similar actions by Bolivia in 2007.