”Single Economic Area” Faroes – Iceland THE HOYVÍK AGREEMENT

1. ”Single Economic Area” Faroes – IcelandTHE HOYVÍK AGREEMENT Herluf Sigvaldsson Department of Foreign Affairs Prime Minister’s Office

2. The objective of the Agreement (ART 1) • The establishment of a single economic area comprised by the Faroes and Iceland where any discrimination on the basis of nationality, place of establishment, or the place of origin of goods is prohibited.

3. The substantive scope of the Agreement (ART 3) • The core of the Agreement lies in the "four freedoms" • The free movement of goods, services, capital and persons • Trade in goods • Trade in services • Movement of persons and right to residence • Movement of capital and investment • Right of establishment • Competition, state monopolies, state aid and public procurement • Co-operation in other areas

4. Most-Favoured-Nation Treatment (ART 4) • Natural persons • Legal persons • Originating goods

5. National Treatment (ART 5) • Any discrimination between Icelandic natural persons and Faroese natural persons on the basis of nationality is prohibited. • Any discrimination between legal persons, on the basis of their place of establishment, is prohibited. • Any discrimination between originating goods is prohibited.

6. Mutual Commitments (ART 5) • Trade in goods • Tariffs and quantitative restrictions, by any name or for any reason and measures having equivalent effect shall be prohibited. • Trade in services • Any discrimination, in law or in fact, against a service provider shall be prohibited.

7. Mutual Commitments (ART 5) • Movement of persons and right to residence • Any discrimination, in law or in fact, regarding the right to residence or free movement of persons, shall be prohibited. • Access to schools, universities and other institutions of learning shall be granted without discrimination.

8. Mutual Commitments (ART 5) • Movement of capital and investment • Any discrimination, in law or in fact, regarding the free movement of capital or investment, on the basis of the destination of the capital or the place of investment shall be prohibited. • Right of establishment • Any discrimination, in law or in fact, as regards the right of establishment, shall be prohibited.

9. Mutual Commitments (ART 5) • Competition • Any discrimination in rules on competition or their application shall be prohibited. • State monopolies • In their operations, state monopolies shall not accord discriminatory treatment, in law or in fact.

10. Mutual Commitments (ART 5) • State aid • State aid or aid through state resources in any form whatsoever, directed at an economic activity shall be granted without discrimination. • Public procurement • Any discrimination relating to public procurement, in law or in fact, shall be prohibited.

11. Mutual Commitments (ART 5) • Trade in agricultural goods • Appropriate and proportionate measures may be taken unilaterally with regard to seriously detrimental imports of specific agricultural products in chapters 1, 2, 4, 5, 12, 15, 16 and 21 in the Harmonized Commodity Description and Coding System.

12. Exceptions from national treatment (ART 6) • Veterinary and phytosanitary rules (Faroes/Iceland) • Foreign ownership and establishment in the sectors of fisheries and fish processing (Iceland) • Foreign ownership and establishment in the fisheries sector (Faroes) • The Hydrocarbon Activities Act (Faroes) • Investments by governments or governmental bodies (Faroes/Iceland)

13. Co-operation in other areas (ART 7) • The Faroes and Iceland will co-operate in all relevant fields of common concern including the following • Culture, education, training, sport and youth • Energy • Environment • Health services • Human resource development in the public sector • Research and technological development • Resource management • Telecommunications • Tourism • Transport

14. Institutional framework (ART 8 and 9) • Joint Committee • Subsidiary Bodies • Council of Ministers

15. Accession (ART 11) • The Economic Area (Faroes – Iceland) may be extended to other countries

16. The fish-issue (Joint Declaration) • The Faroes and Iceland agree to identify ways to facilitate fish processing and trade in fish between the Faroes and Iceland, with a view to removing any nuisances without delay. • The free circulation of fish in the economic area may be a reality in the near future.

17. The fish-issue (ART I – GATT 1994) • General Most-Favoured-Nation Treatment • “…with respect to all rules and formalities in connection with importation and exportation...any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.”

18. Globalization in the North Atlantic • A North Atlantic Economic Area • Faroes • Iceland • Other countries in the North Atlantic Region • Economic processes • Integration of the North Atlantic Economies • The free flow of goods, services, capital and persons will boost trade as well as research and development • Cooperation, strategic alliances and mergers among companies • Companies will gradually become more competitive in the world market • Economic growth and increased social welfare