Iceland in Europe
Iceland's relation to the European Union is mainly based on the Agreement on the European Economic Area (EEA) which came into effect in 1994. Iceland is not a member of the European Union (EU). In essence, the EEA Agreement unites the EU member states and the three EFTA EEA states (Iceland, Liechtenstein and Norway) into one single market governed by the same basic rules (Acquis Communautaire). These rules cover the so- called four freedoms free movement of goods, capital, services and persons, and competition rules.
Iceland has fully implemented the Schengen Agreement since 25 March 2001, which ended internal border checkpoints and controls. Citizens of countries implementing the Schengen Agreement can cross the internal borders of the implementing countries at any point without checks.
In July 2009 the Parliament of Iceland instructed the Government to apply for EU-membership, and to put the results of negotiations to a national referendum. The European Council decided on 17 June 2010 to open negotiations with Iceland. Information on the negotiations 2009-2013 can be found here.
Following a change of government in May 2013 the negotiations were put on hold. In March 2015 the Foreign Minister clarified in a letter to the EU Presidency that the government has no intention of resuming the accession process, that any commitments made by the former government in the accession process are superseded by the new policy and that the EU should take action in view of the fact that Iceland can no longer be considered a candidate country.
Policy on Europe
In March 2014 the government presented a policy on Europe aimed at reinforcing the representation of Iceland's interests on the platform of the Agreement on the European Economic Area (EEA) and other current agreements between Iceland and the European Union. The policy prioritises efficient implementation of the EEA Agreement, including by improving consultation within the administration and with Althingi. Independent, proactive and close cooperation with the EU and its Member States will continue to be a priority. The policy underlines the importance the government places on Iceland becoming involved in the EU legislative process at an earlier stage.
Embassy in Brussels
The Icelandic Embassy in Brussels serves as the mission to the EU. The majority of its activities evolve around issues related to the EEA Agreement and the Schengen Convention. Most Icelandic ministries have a Counsellor at the Embassy that focuses on the policy areas involved.
General Policy Areas:
European Economic Area (EEA)
The Agreement on the European Economic Area (EEA) extends the Single Market of the EU to three out of the four EFTA countries, namely Iceland, Norway and Liechtenstein. Switzerland, while being a member of EFTA is not a party to the EEA, having voted against membership in December 1992. Within the EEA there is free movement of goods, services, capital and persons. Citizens of all 18 countries have the right to move freely throughout the EEA - to live, work, set up business, invest or buy real estate, with a few minor limitations in certain sectors.
Origins of the EEA
Since the establishment of EFTA in 1960, the European Community has been EFTA's most important trading partner. In 1972 individual EFTA countries signed free trade agreements with the EEC with the aim of abolishing import duties on industrial products. This aim was more or less achieved by 1977. The idea of a European Economic Area dates back to a joint EFTA-EEC ministerial meeting in Luxembourg in 1984 where a declaration mentioning the establishment of a European Economic Space later "Area") was adopted.
Between 1984 and 1989 the removal of obstacles to trade was undertaken on a case- by-case basis. This approach proved inadequate in the run-up to the EU's Single market Programme due to be completed by 1993. The need for a more structured arrangement and for common institutions became increasingly evident. In 1989, Jacques Delors, then President of the Commission, proposed a new form of partnership, which was to become the EEA Agreement. The EFTA states, at that time Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland, welcomed the ideas with enthusiasm; formal negotiations began in June 1990 and the Agreement was signed on 2 May 1992 in Oporto. The Agreement entered into force on 1 January 1994. Since 1 January 1995, Austria, Finland and Sweden have participated in the EEA as EU member states. Liechtenstein became a full participant in the EEA on 1 May 1995.
Throughout the European Economic Area the same rules are applied to maintain a homogeneous market. The EEA Agreement is based on the primary legislation of the European Union, as developed over the past 30 years and on the succeeding secondary legislation (Acquis Communautaire). Hence, a large part of the EEA Agreement is identical to the relevant parts governing the four freedoms as laid down in the Treaty of Rome of 1957. The EEA Agreement is made up of 129 articles as well as 22 annexes and 49 protocols. The annexes refer to the Acquis Communautaire applicable in the EEA, without fully repro-ducing these legal texts. The protocols include provisions on specific areas such as rules on the origin of goods, transition periods for the EFTA states in certain fields and simplified customs procedures. These matters are generally not based on EU legislation.
Dynamic Aspects of the Agreement
One of the central features of the EEA Agreement, and the one which distinguishes it most from other international agreements under public international law, is that its common rules are continuously updated by adding new EU legislation. This aspect is essential given the large output of Community legislation on the internal market. Each month a number of EEA-relevant pieces of legislation are incorporated into the EEA Agreement by decision of the EEA Joint Committee.
The Agreement provides for information and consultation procedures at all stages of the Community's decision-making process. EFTA experts are consulted by the commission in its preparation of draft legislation. The EFTA EEA states can ask for consultation on matters of concern. The EFTA-EEA states can negotiate adaptations to Community legislation in its application to the EFTA side when this is called for by special circumstances and agreed by both sides.