EUROPEAN ECONOMIC AREA
Moribunds Live Longer: 30 Years of the European Economic Area1
Carl Baudenbacher 2
I. Introduction
The European Economic Area (EEA) Agreement entered into force on 1 January 1994 after protracted negotiations and a difficult birth.3 The plan to create an EEA Court consisting of Judges from the Court of Justice of the European Union (CJEU) and from the European Free Trade Association (EFTA) States was rejected by the CJEU in Opinion 1/91.4 Switzerland was not in a position to ratify the agreement after a negative referendum. The people of Liechtenstein voted in favour of the treaty, but since the Principality wanted to maintain its customs union with Switzerland, it postponed ratification.
As a result, although all the seven EFTA States had signed the EEA Agreement, the EFTA pillar consisted of only five states when the Treaty came into force: Austria, Finland, Iceland, Norway and Sweden. Accordingly, the EFTA Surveillance Authority (‘ESA’) and the EFTA Court each had five members.
After the prolonged birth, the EEA also had a troubled youth. On 1 January 1995, Austria, Finland and Sweden joined the EU. Only Iceland and Norway remained members of the EFTA pillar. For a while it even looked as if Norway would also join the EU. Rumour has it that the EU would have continued the EEA Agreement with Iceland as the only member state of the EFTA pillar. The Icelander Thór Vilhjálmsson would have acted as a single judge of the EFTA Court. And since there was a direct flight Keflavík-Luxembourg at the time, he could have been able to live in Iceland.
After a second favourable referendum, Liechtenstein joined the EEA in the EFTA pillar and the number of ESA and EFTA Court members rose again to three.
1. Icelandic Lawyers Associatoin, Reykjavík, 12 September 2024.
2. Prof. Dr. iur. Dr. rer. pol. Carl Baudenbacher is Partner at an international Law firm based in Zurich/Oslo/Stavanger/ Brussels. Visiting Professor London School of Economics. President of the EFTA Court 2003-2017.
3. C. Baudenbacher, Judicial Independence. Memoirs of a European Judge, Springer 2019.
4. Opinion of the Court of Justice of 14 December 1991, Opinion 1/91, EU:C:1991:490.
The first ESA President Knut Almestad hit the nail on the head during the inauguration of the EFTA Court on 4 January 1994 when he remarked that the establishment of independent institutions in the EFTA pillar, namely the ESA and the EFTA Court, is the quintessence of the EEA Agreement.5
Former Minister of Justice of Iceland Björn Bjarnason has rightly stated that no binding decisions can be taken in the EFTA pillar without direct involvement of representatives of the three EEA/EFTA States in the ESA and the EFTA Court.6
Former ESA President Sven Svedman has aptly written that with three members each, the ESA and the EFTA Court are not weak, but vulnerable.7
II. An example of judicialisation of international law
The Free Trade Agreements which were concluded between the EEC and the individual EFTA States in 1972/1973 did not provide for a common court of the contracting parties. Conflicts had to be sorted out by diplomatic means. The EEA Agreement has replaced diplomatic conflict resolution by an international or supranational court. This is referred to as judicialisation of international law.8 Judicialisation has a global and a regional dimension. At the global level, it has led to the establishment of the International Court of Justice, the WTO Appellate Body and the International Criminal Court. At the regional level, the CJEU and the European Court of Human Rights (‘ECtHR’) have played a leading role. The Andean Court of Justice, the African courts, the EFTA Court and the Court of the Eurasian Economic Union have been established under the influence of these two European institutions. The EFTA Court is therefore an important example of the judicialisation of international law. However, it is a special case due to its ties to the jurisprudence of the CJEU. According to Article 6 EEA and Article 3(2) Surveillance and Court Agreement (‘SCA’), the EFTA Court shall follow or take into due account relevant ECJ case law. Nevertheless, the homogeneity principle is not a one-way street. Firstly, the EFTA Court often has to answer legal questions that have not yet been put to the CJEU in this form. And secondly, adjudication is not an exact science. The EFTA Court has therefore also gone its own way on important issues where CJEU case law was available. This has not harmed the homogeneity of single market law nor the good functioning of the EEA single market, on the contrary.
III. Surveillance
As far as surveillance by the ESA is concerned, I will limit myself to three remarks:
5. Report of the EFTA Court 1 January 1994- 30 June 1995.
6. B. Bjarnason, ‘Iceland and the EEA - í norskri skýrslu’, 16 April 2024.
7. S. E. Svedman, ‘Prosperity in the EEA’, in C. Baudenbacher (ed.), The Fundamental Principles of EEA Law, Springer, 2017.
8. C. Baudenbacher, ‘Justizialisierung des Rechts: Kann das Europäische Modell in andere Teile der Welt exportiert werden?’ StudZR 3/2005.
The EFTA Court is therefore an important example of the judicialisation of international law. However, it is a special case due to its ties to the jurisprudence of the CJEU
(1) There is an unjustifiable Norwegian dominance of the surveillance authority. With the exception of a short period when the Icelander Hannes Hafstein was president, the presidency has always been in Norwegian hands.
(2) As Norway is the superpayer, it is able to control, to a considerable extent, the level of surveillance it wants to be subject to. Insofar it is also the superplayer.
(3) Over the course of time, there were huge differences in terms of the quality between individual ESA Colleges, abrupt changes in composition, and even sometimes the rather unfortunate return of College Members to government services after their tenure in Brussels. Having said that, I should emphasise that the current College functions well and that the Icelander Árni Páll Árnason has an excellent reputation.
IV. Judicial control
The EFTA Court is the small sister court of the Court of Justice of the EU (CJEU). The CJEU has been influenced by French legal thinking. This goes, in particular, for the cabinet system, the French working language, the style of the judgments, the office of the Advocate General (‘AG’), and the secrecy of the vote, which means that no dissenting opinions are allowed.
The CJEU has for its part had an impact on the EFTA Court, but only to a certain extent: there are the cabinet system and the prohibition to dissent, but the working language is English and there is no AG. That has consequences for the judicial style: the small EFTA Court cannot allow itself to decree, it must give broad reasons.
The CJEU has for its part had an impact on the EFTA Court, but only to a certain extent: the working language is English and there is no AG. That has consequences for the judicial style: the small EFTA Court cannot allow itself to decree, it must give broad reasons
V. The case-law of the EFTA Court
1. Constitutional principles
As far as methods of interpretation are concerned, teleology, homogeneity and reciprocity are decisive. Teleological interpretation is purposive interpretation. The law in both EEA pillars shall develop in a homogeneous way so that a level playing field for economic operators is guaranteed. Reciprocity means that EU operators must, in principle, enjoy the same rights in the EFTA pillar as EFTA operators enjoy in the EU pillar. Occasionally, the CJEU understands teleology as requesting a dynamic approach. In important cases, the EFTA Court has followed suit.
Virtually all cases in which the EFTA Court was required to clarify constitutional issues were brought by Icelandic judges. This shows that Icelandic judges are rather independent minds.
In Einarsson (E-1/01), the EFTA Court ruled against the direct effect of norms of the EEA Main Agreement.9 InSveinbjörnsdóttir (E-9/97), it recognised EEA state liability,10 and in Karlsson (E-4/01), it defended state liability against an attack by the Norwegian state.11 InKolbeinsson (E-2/10), the EFTA Court indicated that EEA law may provide a basis for State liability for incorrect application of EEA law by national courts.12
2. Other landmark cases
There have been other landmark cases concerning Iceland:
- In E-18/11 Irish Bank, 13 the relationship EFTA Court – national courts of last resort was called ‘more partner-like’ than the relationship CJEU – national courts of last resort in the EU. ‘At the same time, courts against whose decisions there is no judicial remedy under national law will take due account of the fact that they are bound to fulfil their duty of loyalty under Article 3 EEA.’ EFTA citizens and economic operators benefit from the obligation of EU Member States courts of last resort to make a reference to the ECJ (reciprocity).
9. Judgment of the EFTA Court of 22 February 2002, E-1/01
10. Advisory Opinion of the EFTA Court of 10 December 1998, E-9/97
11. Judgment of the EFTA Court of 30 May 2002, E-4/01.
12. Judgment of the EFTA Court of 10 December 2010, E-2/10
13. Judgment of the EFTA Court of 28 September 2012, E-18/11
- E-7/13 Creditinfo Lánstraust14 concerned charges for the re-use of public sector information under the respective Directive. The EFTA Court referred to LBJ’s 1966 US Freedom of Information Act that granted American citizens the right to see the contents of files maintained on them by federal agencies.
- E-15/12 Wahl elaborated on the grounds for refusing entry to Norway to a Norwegian member of the Hells Angels organisation who has no criminal record, under the EU Citizenship Directive 2004/38/EC.15
- In E-18/14 Wow Air,16 the President allowed the application of an accelerated preliminary reference procedure in a case on the allocation of slots at Keflavík International Airport in view of the ‘economic sensitivity of the case’. On the merits, the Court opened the system of grandfather rights, which favoured the established air carriers to competition to a certain extent.
- E-29/15 Sorpa17 dealt with the question whether a municipal waste management body was capable of committing an abuse of a dominant position. The judgment was referenced by the Stockholm City Court/ Market and Patent Court
- In E-16/11 Icesave, 18 the EFTA Court held that Iceland was not liable for deposits in failed banks, provided the state had established a deposit insurance scheme in accordance with EEA Law. In other words, there was no obligation to use taxpayer funds to recapitalise the Icelandic deposit insurance scheme which was overwhelmed by the collapse of the banking system in October 2008 as a consequence of the financial crisis. As far as the law was concerned, the EFTA Court found that there was no legal basis for the liability of the State. The Court added that, from an economic point of view, ‘moral hazard’ was to be avoided. It was the first time, a European court cited economic literature.
Other landmark cases originating mostly (but not always) from Norway include the following:
- In E-3/00 Kelloggs, 19 the EFTA Court acknowledged the precautionary principle in food law as the first court in the EEA. The CJEU followed suit in the Danish vitamins case.20
- In E-1/06 Gaming Machines, E-3/06 Ladbrokes, and E-8/23 Trannel, 21 the EFTA Court dealt with the Norwegian gambling monopolies. Norway is the last state in the EEA that has such a monopoly. The Norwegian courts have not correctly implemented the EFTA Court’s rulings.
- In E-2/06 Norwegian Waterfalls, 22 the EFTA Court held that the ‘hjemfall system’ was unlawful. Licences of unlimited duration for acquiring property rights to waterfalls could only be issued to Norwegian public undertakings, in all other cases the property rights reverted to the State after a certain period of time.
14. Judgment of the EFTA Court of 16 December 2013, E-7/13.
15. Judgment of the EFTA Court of 22 July 2013, E-15/12
16. Judgment of the EFTA Court of 10 December 2014; Order of the President of 30 September 2014, E-18/14.
17. Judgment of the EFTA Court of 22 September 2016, E-29/15
18. Judgment of the EFTA Court of 28 January 2013, E-16/11
19. Judgment of the EFTA Court of 5 April 2002, E-3/00.
20. Judgment of the Court of Justice of 23 September 2003, Commission v Denmark, C-192/01, EU:C:2003:492.
21. Judgments of the EFTA Court of 14 March 2007, E-1/06 ; of 30 May 2007 E-3/06, and of 13 May 2024, E-8/23
22. Judgment of the EFTA Court of 26 June 2007, E-2/06
- In E-5/10 Dr Kottke, 23 Liechtenstein law provided that persons without residence in Liechtenstein who acted as plaintiffs or appellants were, on an application by the defendant or respondent, obliged to provide the latter with security for costs unless international treaties stated otherwise. The EFTA Court held that such a discriminatory provision could be justified on the basis of public interest objectives provided it was necessary and not excessive in attaining legitimate objectives. With this, the EFTA Court went against ESA and the Commission who had both argued that the national rule in question was, as a matter of principle, incompatible with the fundamental freedoms.
- In E-15/10 Norway Post, 24 the EFTA Court ruled that the ESA cannot be granted a margin of discretion regarding complex economic appraisals and competition law decisions which impose fines must be subject to full judicial review.
- In E-14/11 DB Schenker I, 25 a case on access to documents, the EFTA Court in essence found that a private plaintiff may act as a ‘private attorney general’ in the interest of the common good (see also E-11/23 Låssenterent26).
- In E-3/13 and E-20/13 Olsen, 27 the Court recognised the right of establishment of a trust. Subsequent taxation cases were on the same line.
- In E-14/15 Holship, 28 the EFTA Court found that a dockers monopoly to load and unload vessels was incompatible with EEA competition law and with the freedom of establishment.
- E-5/16 Vigeland dealt with the question of whether works whose copyright had expired could be protected under trademark law.29
VI. EFTA Court as a European dialogue partner
1. The EFTA Court and the CJEU
First, the EFTA Court regularly refers to the case law of the Court of Justice, the General Court, and the opinions of Advocates General. In view of the homogeneity rules laid down in the EEA Agreement and in the SCA, this goes without saying. But homogeneity is no one way street.
Second, EU Courts and Advocates General also refer to the EFTA Court. During the period between 1994 and 2017, some 200 EFTA Court judgments were rendered in contested cases, that led to 238 references by the CJEU, AGs and the GC in 151 cases.
23. Judgment of the EFTA Court of 17 December 2010, E-5/10
24. Judgment of the EFTA Court of 18 April 2012, E-15/10
25. Judgment of the EFTA Court of 21 December 2012, E-14/11.
26. Judgment of the EFTA Court of 9 August 2024, E-11/23
27. Judgment of the EFTA Court of 9 July 2014, E-3/13 and E-20/13
28. Judgment of the EFTA Court of 19 April 2016, E-14/15.
29. Judgment of the EFTA Court of 6 April 2017, E-5/16
EU courts have not referred to EFTA Court case law delivered since 2018, while AG’s have referred five times. On 31 July 2024, the Irish High Court referred to an EFTA Court ruling.
The willingness of the EU judiciary to engage in dialogue is firstly linked to the quality of the EFTA Court’s case law.30 Secondly, the actors in the EU pillar will pay attention that the judges of the EFTA Court are completely independent. Thirdly, as a much smaller player, the EFTA Court must be proactive. It must not forget that it is on foreign soil in Luxembourg. It is not enough for the judges of the EFTA Court to see themselves as emissaries of their states and, in case of doubt, to look to their capital city. They must have the will and the ambition to help shape the development of EU law and bring specific EFTA values to bear. This also requires regular scholarly publications and speaking engagements at major events in the EU.
2. The EFTA Court and the ECtHR
First, the EFTA Court refers to ECtHR. Examples of references by the EFTA Court to the case law of the ECtHR include the following: In E-8/97 TV 1000, 31 a case related to the broadcasting of hard-core pornographic movies from Sweden to Norway under the TV Directive 89/552/EEC, reference was made to ECtHR Handyside.32
In TV 1000, the Icelander Thór Vilhjálmsson was Judge Rapporteur. At the same time, he was Vice-President of the ECtHR, something that wouldn’t be possible anymore today. The Strasbourg Court was a part-time institution until 1998.
30. C. Baudenbacher, ‘A new structure for the EFTA Court?’, Rett24.
31. Judgment of the ECtHR of 7 December 1976, Application no. 5493/72.
32. Advisory Opinion of the EFTA Court of 12 June 1998, E-8/97
Thanks to the Icelandic Bacalhau case E-2/03 Ásgeirsson33, I am one of the few continental Europeans who knows how cod is processed. The EFTA Court held that defrosting, heading, filleting, boning, trimming, salting and packing fish that has been imported frozen whole to Iceland from countries outside the EEA does not constitute sufficient working and processing within the meaning of the relevant rules for the product to be considered of Icelandic origin. Fish remains fish. Reference was made to ECtHR Pafitis on the question whether the delay resulting from a reference to the EFTA Court leads to a violation of the right to a fair trial within a reasonable time as guaranteed by Article 6 ECHR.34
In E-14/15 Holship, 35 reference was made on the negative right to freedom of association to ECtHR Sørensen and Rasmussen (52562/99 and 52620/99).36
Second, the ECtHR also refers to the EFTA Court.
The ruling of the ECtHR in Ališić (60642/08, 2014) referred to the case E-16/11 Icesave. 37 The Slovenian Government had invoked that judgment, but the ECtHR found that it was of little relevance to the case.
Much more important are the references to E-21/16 Pascal Nobile in ECtHR Ástráðsson v. Iceland (26374/189)38 on the independence and impartiality of courts, on irregular appointments of judges and thus on the lawful composition of a court of law
Excursion: In E-10/14 Deveci, 39 the EFTA Court held that the EU Charter of Fundamental Rights (in casu: Article 16 on the freedom to conduct a business) may be relevant for the interpretation of EEA law.
Third, two ECtHR judgments concern EFTA Court rulings
The cases ECtHR 47341/15 Konkurrenten40 and E-1/17 Konkurrenten41 concerned an application against the EFTA Court’s dismissal of its complaints against State aid decisions taken by the EFTA Surveillance Authority. The ECtHR dismissed the application.
33. Judgment of the EFTA Court of 12 December 2003, E-2/03
34. Judgment of the ECtHR of 26 February 1998, Application no. 20323/92.
35. Judgement of the EFTA Court of 19 April 2016, E-14/15
36. Advisory Opinion of the EFTA Court of 12 June 1998, E-8/97
37. Judgement of the ECtHR of 11 January 2006, 52562/99 and 52620/99.
38. Judgement of the ECtHR of 1 December 2020, 26374/189
39. Judgement of the EFTA court of 18 December 2014, E-10/14
40. Judgement of the ECtHR of 5 November 2019, 47341/15
41. Judgement of the EFTA court of 25 January 2017, E-1/17
The ruling of the ECtHR 45487/17 Norwegian Federation of Trade Unions42 concerned an application against the judgment of the Supreme Court of Norway that was based on the EFTA Court ruling in E-14/15 Holship 43 The ECtHR dismissed an application by Norway’s dockworkers union against Norway whose Supreme Court had found that the dockworkers’ monopoly in a Norwegian port to run counter to the right to freedom of establishment and the competition rules of the EEA Agreement.
In Konkurrenten, the ECtHR’s Second Section stated that the basis for the presumption established by Bosphorus was in principle lacking when it comes to the implementation of EEA law at domestic level. In Bosphorus, the Grand Chamber held that if an organisation to which a Contracting State has transferred jurisdiction is considered to protect fundamental rights in a manner at least ‘equivalent to the ECHR, it is presumed that said State has not departed from the Convention’s requirements when it merely implements legal obligations flowing from its membership in the organisation.44
In Konkurrenten, the Second Section found that in contrast to EU law, direct effect and primacy were lacking within the framework of the EEA Agreement, and the EEA Agreement did not include the EU Charter of Fundamental Rights or any reference to other legal instruments having the same effect, such as the Convention. The Bosphorus presumption did therefore not apply.
In Holship, the ECtHR’s Fifth Section departed from this case law by finding that fundamental rights form part of the unwritten principles of EEA law. Thus, the absence of a codified fundamental rights instrument in the EEA Agreement was irrelevant to deciding whether the Bosphorus case law applied to the implementation of the EEA Agreement.45
VII. Recalcitrant Norway
1. Nominating judges who are close to the Government
Norway has from the outset tried to install a judge on the EFTA Court who would look to Oslo in case of doubt. Bjørn Haug was the Norwegian State Attorney himself; Per Tresselt was a career diplomat who came to the Court from his position as ambassador to the Russian Federation; Per Christiansen was a high civil servant. When he was to be renewed, the Norwegian administration caused a mess. He was finally prolonged by 3 years instead of 6. This decision was unlawful and had to be repealed. When it came to Per Christiansen’s succession in 2023, Norway was unable to timely nominate a judge.
42. Judgement of the ECtHR of 10 June 2021, 45487/17.
43. Judgement of the EFTA court of 19 April 2016, E-14/15
44. Judgment of the ECtHR of 30 June 2005, Bosphorus Hava Yolları Turizm ve Ticaret Anonim Şirketi v. Ireland, application no. 45036/98, paragraphs 152 et seq. and 155 et seq.
45. See Carl Baudenbacher/Laura Melusine Baudenbacher, The European Court of Human Rights’ Holship Ruling – The End of Dockers’ Monopolies in Europe?, 2021-08-27 - BLaw Reporter - (nobel.law)
2. Drying out the EFTA Court
The Norwegian State Attorney pursued from the outset a strategy of keeping as many cases as possible out of the EFTA Court. Hoyesterett (the Supreme Court of Norway) for its part exercised a 12-year reference boycott against the EFTA Court. It was only lifted after a joint seminar of the two courts in Oslo in 2014.
3. «Room for Manoeuvre» replaces loyalty
Enforcement of the law in the EFTA pillar is to a greater extent in the hands of national courts than in the EU pillar. Professor Christian Franklin of the University of Bergen has therefore rightly stated that the principle of loyalty that is enshrined in Article 3 EEA is even more important in the EEA law context than in the EU law context.46 Knut Almestad also deserves approval for his statement that, ‘good faith is the keystone which supports the EEA edifice, without which the construction might crumble’47.
In the practice of the Norwegian State Attorney, this obligation was, however, replaced by an opaque dogma of ‘room for manoeuvre’ for the Norwegian state.48 In my view, this dogma is unlawful because it breaches the principles of loyalty, reciprocity and homogeneity. It favours the state whereas the legitimate interests of the market actors – producers, workers, consumers, dealers, investors – are disregarded.
As regards the preliminary reference procedure, the State Attorney applies four strategies49: (1) He tells Norwegian courts to refrain from making a reference to the EFTA Court. (2) He argues that the concept of a court or tribunal authorised to make referrals should be interpreted narrowly. (3) If the Norwegian State loses before the EFTA Court, he may tell the Norwegian court not to follow the judgment. (4) If a subsequent parallel case is brought before the CJEU, the State Attorney may participate and ask the CJEU to create a judicial conflict with the EFTA Court.
46.Art. 3 EEA, Principle of loyalty, in Arnesen/Fredriksen/Graver/Mestad/Vedder, Agreement on the European Economic Area. A Commentary, 2018.
47. The Essentials, in: EFTA Court, Ed., The EEA and the EFTA Court: Decentered Integration, Hart, Oxford/Portland Oregon 2015, 299. 48. C. Baudenbacher, ‘ The Norwegian Concept of «Room for Manoeuvre»: A Nail in the EEA’s Coffin» in Heidemann, M., (ed.) The Transformation of Private Law –Principles of Contract and Tort as European and International Law. A liber Amicorun for Mads Andenas, Springer, 2024, pp. 125–148.
49. See, e.g., Carl Baudenbacher/Laura Melusine Baudenbacher/Mads Andenas, Comparative Law Considerations on the Norwegian Wealth Tax, forthcoming.
The most serious example of the latter strategy was the case I.N./Ruska Federacija. 50 I.N., a Russian citizen had fled to Iceland and, after having gone through the usual procedures, obtained Icelandic citizenship. When he wanted to go on holiday to the Adriatic Sea, I.N. was arrested by the Croatian police based on a Red Notice of Interpol Moscow. The Croatian Supreme Court referred questions to the CJEU, and the Norwegian State Attorney participated in the proceedings. The State Attorney wanted the CJEU to create a judicial conflict with an EFTA Court judgment it disliked and contended, inter alia:
- that the duty of loyalty in EEA law goes less far than in EU law; - that Icelanders enjoy less protection against extradition to Russia than EU citizens.
University of Bergen Professor Halvard Haukeland Fredriksen called these arguments put forward by the Norwegian State in the case ‘so weak that it is difficult to understand how they came to be presented to the CJEU’ and criticised ‘the view of the Norwegian government was that the EEA Agreement should be interpreted as not offering an Icelandic (or Norwegian!) citizen the same protection against extradition to Russia as that which EU law offers EU citizens’. (Emphasis added.)51
Advocate General Tanchev rejected the State Attorney’s contentions. The Grand Chamber of the Court followed the Advocate General without even mentioning the State Attorney’s submissions.
4. Judicial revisionism
On 31 October 2017, the EFTA Court, consisting of myself as President and Judge Rapporteur, the Norwegian Judge Per Christiansen and the Icelandic ad hoc Judge Benedikt Bogason (at the time a Justice of the Supreme Court of Iceland, today the President of that Supreme Court) ruled in E-16/16 Fosen-Linjen that a simple breach of European public procurement law may in itself be sufficient to trigger the damages liability of a contracting authority.52
After my resignation from the Court, two Norwegian professors, in interaction with the State Attorney, instigated the Supreme Court of Norway to refer the case for a second time. Ad hoc Judge Bogason wouldn’t sit anymore because the regular Icelandic Judge Páll Hreinsson had recovered from an illness. On 1 January 2018, Hreinsson became President of the EFTA Court. On 1 August 2019, the newly composed EFTA Court overruled the first Fosen judgment holding that European law does not require that any breach of the rules on public procurement is in itself sufficient to award damages for the loss of profit to persons harmed by an infringement (E-7/18).
50. Judgment of the Court of Justice of the EU of 2 April 2020, C-897/19 PPU, EU:C:2020:262.
51. Halvard Haukeland Fredriksen, ‘A “special relationship” built on a patchwork – How the CJEU sees the EEA EFTA States’, EFTAStudies.org
52. Judgment of the EFTA court of 31 October 2017, E-16/16
VIII. Excursus: The Swiss conundrum
In 1992, the EEA was undermined by the Swiss Foreign Ministry (‘MFA’) which wanted the country to join the EU. It urged the Government to lodge an application for EU membership six months before the referendum. After the negative vote, Switzerland was able to conclude two packages of essentially institution-free bilateral agreements with the EU. The Government had pledged that Switzerland would join the EU in the near future. When it became clear that EU membership was out of question, the European Commission demanded that Switzerland accept institutions. From 2008 onwards, the Commission proposed ‘EEA II’ or ‘Docking’ to the ESA and the EFTA Court. Docking would have meant that Switzerland could have maintained its sectoral approach, but would have subject its bilateral agreements with the EU to the jurisdiction of the EFTA Court (with a College Member at the ESA and a Judge at the Court).
However, the MFA opted for the CJEU, the court of the other side, which by definition lacks neutrality, not in an infringement procedure, but a dispute settlement procedure. EEA membership and ‘docking’ were dropped. In 2018, the mechanism which has been laid down in the association agreements with former Soviet Republics was politically accepted by the Government. According to this, conflicts between Switzerland and the EU shall be decided by a pro-forma arbitral tribunal, which, however, must request a binding ruling from the CJEU when EU law or Treaty law with the same content as EU law is at issue.
Since spring of this year, Switzerland is officially negotiating with the EU on the conclusion of a framework agreement. The mechanism with the pro-forma arbitration tribunal in front and the CJEU behind the curtain is, however, no more part of the talks. Switzerland has accepted it without any negotiation.53 The Government doesn’t admit it, but in truth it aims at setting a point of no return on the road to EU membership.
IX. Future of the EEA
The Icelandic attempt to join the EU failed. The attempt to bring the UK to EEA/EFTA failed. The Swiss attempt to go for the model with the pro-forma arbitration will (hopefully) fail. What will happen then, is open. It looks as if the EEA Agreement will for the foreseeable future continue to exist with the three current EFTA States.
The ESA’s problems are its size, the Norwegian dominance and the lack of transparency of the appointment process for the College Members. General principles of EEA law are not enforced to a sufficient extent by the ESA.
The EFTA Court’s main problem is the lack of a panel that would scrutinise the quality and independence of candidates that have been nominated by the Governments. Nevertheless, a few years ago, the ESA rejected a complaint concerning the absence of an independent assessment panel in the EFTA pillar of the European Economic Area similar to the panel established under Article 255 TFEU on flimsy grounds.
53. For the text of the common understanding see here.
I have always said that the judges of the smallest court in the world must have four P’s: they must have prestige and power, show presence and master the protocol. According to the protocol, they are on an equal footing with their colleagues at the large EU Court of Justice. But the protocol must be filled with life.
It seems that judicialisation is reaching its limits at the global level. The United States plays a prominent role in this. The WTO Appellate Body doesn’t function anymore. For a number of years, the US has been blocking candidates. The term of the last sitting AB member ended on 30 November 2020.
The ICJ has been in difficulties for quite some time. In response to rulings by the Court, the US refused to participate in the proceedings in the main action brought by Nicaragua in 1984 and withdrew from the Court’s compulsory jurisdiction in 1986.
It looks as if the EEA Agreement will for the foreseeable future continue to exist with the three current EFTA States
More than 120 states recognise the International Criminal Court, but not China, Israel, Russia and the USA. US soldiers and former US President George W. Bush therefore do not have to answer for any crimes committed in the Iraq war. The ICC has lost reputation as a consequence of the announcement of its prosecutor, Karim Khan, to seek an arrest warrant for Israeli Prime Minister Benjamin Netanyahu and other members of his cabinet on charges of war crimes and crimes against humanity as part of the ICC investigation in Palestine in May 2024.
At the European level, judicialisation is also criticised. Brexit was not least a consequence of the dynamic interpretation of EU law by the CJEU. But in the remaining 27 EU member states, the authority of the CJEU is largely undisputed. The ECtHR is in a more delicate situation. In the UK, calls for withdrawal have been heard for a long time. The Swiss parliament and government have opposed the recent Klimaseniorinnen judgment (53600/20)54 as being ultra vires.
The EFTA Court has never been called into question in Iceland and Liechtenstein. In Norway, however, it has met considerable resistance in government circles. In recent years, this resistance has diminished mainly because the EFTA Court has issued some decidedly pro-government rulings.
Overall, the EEA Agreement has functioned surprisingly well in the first 30 years of its existence. It is doubtful whether the composition of the EFTA pillar will change in the foreseeable future. The French saying ‘c’est le provisoire qui dure’ appears to prove true in the case of the EEA.
54. Judgment of 9 April 2024, 53600/20