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Iceland - Internal market
Candidate countries conduct negotiations with the European Union (EU) in order to prepare themselves for accession. The accession negotiations cover the adoption and implementation of European legislation (acquis) and, more specifically, the priorities identified jointly by the Commission and the candidate countries in the analytical assessment (or ‘screening’) of the EU’s political and legislative acquis. Each year, the Commission reviews the progress made by candidates and evaluates the efforts required before their accession. This monitoring is the subject of annual reports presented to the Council and the European Parliament.
Commission Report [COM(2011) 666 final – SEC(2011) 1202 final – Not published in the Official Journal].
The 2011 Report reported that the country has a high level of alignment with the European Union (EU) acquis due to their participation in the European Economic Area. However, further progress must be made in order to complete alignment, particularly concerning the free movement of goods, workers, services and capital.
EUROPEAN UNION ACQUIS (according to the Commission’s words)
The principle of the free movement of goods implies that products must be traded freely from one part of the Union to another. In a number of sectors, this general principle is complemented by a harmonised regulatory framework, following the "old approach" (imposing precise product specifications) or the "new approach" (imposing general product requirements). The harmonised European product legislation, which has to be transposed, represents the largest part of the acquis under this chapter. In addition, sufficient administrative capacity to notify the restrictions to trade and to apply horizontal and procedural measures in areas such as standardisation, certification, accreditation, metrology and market surveillance is essential.
The acquis in respect of the free movement of workers states that citizens of an EU Member State have the right to work in another Member State. EU migrant workers must be treated in the same manner as national workers with regard to working conditions, social benefits and tax allowances. The acquis also provides a mechanism for coordinating national social security provisions for those tax contributors and their families who move to another Member State.
Member States are required to remove all restrictions with regard to the free movement of services. Member States must ensure that the right of establishment and the freedom to provide services anywhere in the EU is not hampered by national legislation. In some sectors, the acquis prescribes harmonised rules which must be respected if the internal market is to function; this concerns mainly the financial sector (banking, insurance, investment services and securities markets). Financial institutions may carry out their activities throughout the European Union according to the principle of ‘home country control’ by opening branches or by providing cross-border services. The acquis also provides harmonised rules for some specific professions (craftsmen, traders, farmers, commercial agents), for certain information society services, and matters relating to personal data protection.
Member States must remove all restrictions on the free movement of capital between themselves, within the European Union, but also with third countries (with some exceptions) and adopt EU rules applicable to cross-border payments and to credit transfers concerning transferable securities. The money laundering and financing of terrorism directives require banks and other economic operators to identify their clients and be aware of certain operations, particularly in the case of cash transactions for high-value items. In order to tackle financial crime, it is essential that administrative and enforcement capacities are put in place, particularly by establishing cooperation between those authorities responsible for surveillance, implementing law and carrying out criminal proceedings.
The acquis on public procurement covers the general principles of transparency, equal treatment, free competition and non-discrimination. In addition, specific Community rules apply to the coordination and granting of public works, supplies and services contracts for traditional contracting entities and specific sectors. The acquis also defines the rules relating to the court procedures and means of action available. Its implementation requires specialised bodies.
The acquis relating to intellectual property rights defines the harmonised rules for the legal protection of copyright and related rights. Specific provisions are applicable to the protection of databases, data processing programmes, topographies of semi-conductors, satellite broadcasting and cable retransmission. In the field of intellectual property rights, the acquis details harmonised rules for the legal protection of trademarks and designs. Other specific provisions apply to biotechnological inventions and to pharmaceutical and phytopharmaceutical products. The acquis also establishes a Community trademark system and a Community design system.
The acquis on company law includes rules applicable to the constitution, registration, merger and division of companies. In the field of financial information, the acquis specifies the rules to be complied with regarding the presentation of consolidated annual accounts and provides simplified rules for small and medium-sized enterprises, in particular. The application of international accounting standards is obligatory for certain entities of public interest. Furthermore, the acquis also includes provisions relating to the approval, professional integrity and independence of persons responsible for legal controls.
The Customs union acquis consists almost exclusively of legislation which is directly binding on the Member States. It includes the Community's Customs Code and its implementing provisions; the Combined Nomenclature, Common Customs Tariff and provisions on tariff classification, customs duty relief, duty suspensions and certain tariff quotas; and other provisions such as those on customs control of counterfeit and pirated goods, drugs precursors and the export of cultural goods and on mutual administrative assistance in customs matters and transit. Member States must also have the required implementing capacities, particularly connectivity with the EU’s computerised customs systems. Customs authorities must also have sufficient capacity for implementation and compliance with the specific provisions established in related fields of the acquis, such as foreign trade.
EVALUATION (according to the Commission’s words)
Iceland maintains a high level of alignment with the acquis on the free movement of goods. Further improvement is required concerning horizontal measures and product legislation under the ‘Old Approach’ (which imposes precise product specifications in opposition to the ‘New Approach’ which imposes general specifications which products must meet), particularly in the automobile sector.
Similarly, the country has already achieved a high level of alignment on the free movement of workers. Preparations are continuing to implement the new regulations on the coordination of social security.
Alignment concerning the right of establishment and the freedom to provide services is satisfactory. However, alignment with the Services Directive and transposition of the third postal services directive is not complete. The administrative capacity must be strengthened in order to implement the EU rules and policies effectively. Finally, the country achieved a good level of alignment on financial services, although the reforms remain partially introduced. Implementation of European provisions is incomplete in certain key sectors, such as the insurance and securities sectors, and the monitoring capacity must be improved. The Icesave dispute remains unresolved.
Iceland largely applies the acquis on the free movement of capital, although it is still incomplete due to the large restrictions still applicable to capital. The legal framework has been strengthened, and the administrative capacity of the financial information unit must be improved.
The country achieved a high level of alignment on intellectual property rights and its administrative capacity is appropriate. Measures have been taken to improve the application of provisions.
Implementation of the EU acquis is satisfactory in the field of company law. However, alignment is not yet complete concerning accounting standards and international audit standards.
Customs legislation is largely aligned, although legislative discrepancies still need to be addressed, particularly concerning customs rules, procedures with economic impact, duty free and security aspects. The administrative capacity of the country is insufficient in this field. Lastly, preparations to implement the acquis effectively must be made, particularly concerning the interconnectivity of the European and Icelandic IT customs systems.
- The website of the Directorate-General for Enlargement: Accession negotiations with Iceland