European Free Trade Association, EFTA

EFTA – the European Free Trade Association was established in 1960 with the EFTA-Stockholm Convention. The founding parties of the Convention were Austria, the United Kingdom, Norway, Portugal, Sweden and Switzerland. Finland, Iceland and Lichtenstein subsequently became members. Currently, there are only four EFTA countries, i.e. Iceland, Lichtenstein, Norway and Switzerland. The other countries are members of the European Union, which the EFTA countries co-operate with in various fields. EFTA's new Memorandum of Association, the Vaduz Convention, entered into force on 1 June 2002. The Convention implements, in stages, provisions applying to the free passage of workers between member states. Citizens of the EFTA states are, according to the Convention, entitled to entry, employment and residency in other member states of the Convention, may offer their services for a specified period and are entitled to equal treatment. The convention ensures the harmonisation of the social services systems within member states and, moreover, provides for the mutual recognition of education and competency. The EFTA states undertake, pursuant to the Convention, to provide one another with sufficient and effective protection of intellectual property rights. They may not provide the citizens of other EFTA states with less protection of intellectual property rights than they provide their own citizens (national treatment), and they cannot not be provided with less protection than is provided to the citizens of third-party states (most-favoured-nation treatment).

The EFTA states mutually recognise among themselves reports, certifications, permits, standardisation labels and manufacturer statements of standardisation. The Convention provides for the right of establishment, i.e. the right to establish, acquire and operate an undertaking within the member states. Within the framework of the Convention and without prejudice to its provisions, there are no restrictions on the right to establish undertakings or companies in accordance with the legislation applicable in the member state in question. Moreover, the Convention provides that there shall be no restrictions on the transfer of capital in relation to the establishment of an undertaking or a company by a member state in the territory of another member state.

The EEA Agreement entered into effect on 1 January 1994 with the Act on the European Economic Area No 2/1993. The second paragraph of Article 65 of the EEA Agreement makes reference to Protocol 28 and Annex XVII, which contain special provisions and arrangements with respect to intellectual property and property rights in the field of industry.

The Agreement is a free-trade agreement between EFTA countries (Iceland, Norway and Liechtenstein) and the European Union. The goal of the Agreement is to encourage the continuous and steady strengthening of trade and economic relationships between parties to the agreement with the aim of creating a uniform European economic zone. The Agreement provides EFTA states within the EEA with access to the EU internal market. Together, the EU and the three EFTA states form a single market where the same rules apply, as well as freedom in the movement of capital, goods, services and workers.

The European Union is responsible for administering the EEA Agreement for the EU states while the European Free Trade Association (EFTA) is responsible for this role with respect to Iceland, Norway and Liechtenstein. In this context, the system is often described as a two-pillar system, as the EFTA states established, on the basis of the EEA Agreement, bodies comparable to those of the EU to administer the Agreement. A joint forum was then established as a bridge between the pillars where representatives from the EU and EFTA meet to make decisions on the EEA Agreement. This means that the joint forum makes decisions on which EU acts must be incorporated into the EEA Agreement, i.e. what new EU legislation falls under the Agreement and must be adopted by the legislation of the EFTA states within the EEA. The Agreement is under continuous development (new acts added) which means that Icelandic legislation is continually subject to direct effects from its existence.

The EEA Agreement does not include voting rights for the EFTA states within the EEA regarding legislation that the EU establishes for internal markets and which the three countries must adopt. However, the EFTA states within the EEA have a formal right of involvement in and formulation of legislation at its initial stages, i.e. at preliminary and processing stages. In this respect, the staff of the Embassy in Brussels play the role of relaying information on Icelandic interests to the EU, either through EFTA working groups or by participation in EU expert meetings.