In this video, we turn to the institutional model of the European Economic Area, or EEA. In its statements of the past years on institutional matters with non-Member States that are, or shall be, associated to the Union’s internal market, the EU has consistently advocated the EEA institutional system as the model to be followed. What then is this model? Its essential starting point is the principle of homogeneity. That is the idea that EEA Law should be parallel to EU law from which it is derived. In order to ensure this, the EEA Agreement contains rules on the development of the law, on its interpretation, its enforcement, and the settlement of disputes that may arise between the parties.
In the present step we focus on the first of these keywords, that is the rules on the dynamic development of the EEA Agreement. In this respect, we have to distinguish two scenarios. One is the formal revision of the agreement and the other, the changing of its annexes through a less burdensome updating procedure. We will be very brief on the formal revision of the agreement. Like any other agreement, the main body of the EEA Agreement, that is, its fundamental rules, can be changed through a formal revision procedure.
In the context of the EEA Agreement this concerns two distinct matters, namely, the inclusion into the agreement of matters so far not covered by it, and 2) the extension of the agreement to new states. With respect to the extension of the EEA Agreement to new states, Art. 128 EEA Agreement provides that any European state becoming a member of the EU shall, and Switzerland or any European state becoming a member of the EFTA may, apply to become a party to the Agreement. The terms and conditions are the subject of an agreement between the contracting parties and the applicant state. So far this has happened each time that the EU welcomed new Member States, most recently Croatia.
Note that the matter has also been discussed in the context of the issue of Brexit. It has been argued that if the UK were to leave the EU, it could then join the EFTA and through this, eventually also the EEA, thereby maintaining access to the Union’s internal market. Turning now to the updating of the annexes to the EEA Agreement, it should first be noted that it is in these annexes that one can find the detailed rules on the various subject matters covered by the Agreement. This includes, in particular, matters that under EU law are regulated in secondary law, to which the EEA annexes make reference. Now, EU secondary law is very dynamic.
There are new rules and revisions of existing legislation very regularly. For the EEA this raises the question of how to maintain the homogeneity with EU law. This matter is regulated in Art. 102 EEA Agreement, and in the following Articles. I will now describe to you in my own words the system that emerges, in particular, from Art. 102. First of all, it is important to note that new EU secondary legislation is made by the EU institutions. The EEA EFTA States — Iceland, Liechtenstein, and Norway — do not have a say in its adoption, even though they may be affected by it through an updating of the EEA law.
In other words, they do not enjoy decision-making rights with respect to the adoption of such legislation in the framework of EU law. Instead, they enjoy decision-shaping rights, that is, informal influence in union working committees and the like. Conversely, when it comes to the updating of EEA law in light of new EU secondary law, the EEA EFTA States are able to decide on this matter. This happens in the EEA Joint Committee, a board that is composed of representatives of the parties to the EEA Agreement. According to Art. 104 EEA Agreement, the EEA Joint Committee shall take a decision concerning an amendment of an annex to the agreement. In other words, updating is never an automatic event.
Rather, it requires a decision by the EEA Joint Committee. It should be noted that in the EEA Joint Committee, the EEA EFTA States have to speak with one voice when it comes to the core matters of the agreement, that is the internal market. In other words, they have to agree on a common position on whether or not new rules should be adopted into the EEA acquis. In other fields they may take different views. With respect to the time frame for updating EEA annexes, Art. 102 EEA Agreement sets a time period of six months from the date of referral to the EEA Joint Committee.
Or, if that date is later, on the date of entry into force of the corresponding union legislation. If, at the end of this time period, the EEA Joint Committee has not agreed to the amendment of the annex in question, the relevant part of that annex is regarded as provisionally suspended. Though this can be subject to a decision to the contrary by the EEA Joint Committee. In principle, suspension takes effect six months after the end of the first time period mentioned before. Art. 102 also states that, in the event of suspension, the rights and obligations which individuals and economic operators have already acquired under the agreement, shall remain.
Finally, decisions taken by the EEA Joint Committee are binding on the contracting parties. Art. 103 EEA Agreement addresses the situation where a decision of the EEA Joint Committee can be binding on a contracting party only after the fulfilment of national constitutional requirements such as referenda.