Skip main navigation

£199.99 £139.99 for one year of Unlimited learning. Offer ends on 28 February 2023 at 23:59 (UTC). T&Cs apply

Find out more

The EEA two-pillar system

Watch Prof. Christa Tobler introduce the basics on the EEA system with regard to interpretation, supervision and dispute settlement.
Having discussed the dynamic nature of the EEA Agreement, we now turn to its interpretation, international supervision, and the settlement of disputes between the parties. In order to understand these issues, we have to explain some EEA institutions and procedures. I am fortunate to have with me today Dr Georges Baur. Dr Baur is a Liechtenstein national who works as a Deputy Secretary General at the EFTA Secretariat in Brussels. Dr Baur, an important starting point for our topic is the so-called two-pillar system of the EEA. Can you explain what this means?
It means that there are different, though in terms of their function, parallel institutions and procedures on the side of the EU Member States, on the one hand, and on the side of the EEA EFTA States on the other hand. For example, imagine that you are a Liechtenstein citizen working in a EU Member State. And you find out that you are paid less than your colleagues with the nationality of the host state. You complain about this discrimination in a court of your host state. Under certain conditions, the matter may go to the Court of Justice of the EU for a preliminary ruling.
That is a ruling intended to help the national court with the leading questions that need to be clarified in order to be able to solve the case. Now, imagine the same situation, but this time you’re a citizen of a EU Member State, and you work in Liechtenstein. You bring an action to a Liechtenstein court, which can turn to the EFTA Court for what is here called an advisory opinion. The EFTA Court was created especially for the EEA EFTA States for matters of EEA law arising in their territories. So we have different international courts for the same purpose. Is there also a two-pillar system for supervision? And what precisely is supervision?
The EEA supervision procedure aims to ensure that the parties to the EEA Agreement fulfil their obligations. Again, the system is that of two distinct but parallel pillars. On the EU site, the European Commission is the administrative watchdog, so to speak. If it feels that a Member State does not fulfil its obligations under EEA law, the commission can investigate the issue and ask the Member States to comply. If the matter cannot be solved on this level, the commission can take the Member States to the Court of Justice. In the case of a breach of the law, this procedure may need to financial sanctions against the Member State concerned though usually only in a second round before the court.
On EEA EFTA site, the relevant provisions provide for a similar procedure, though this time the watchdog is the EFTA Surveillance Authority. And the case goes to the EFTA Court. Turning now to the interpretation of EEA law. how does the EEA Agreement ensure homogeneity with EU law in this respect? Art. 6 EEA provides that insofar as the provisions of the agreement are identical in substance to corresponding rules of EU law. They must be interpreted in conformity with the relevant ruling of the Court of Justice of the EU given prior to the date of signature of this agreement. This is similar to the Swiss EU Agreements on the free movement of persons and on air transport. Indeed.
But what about this time limit? Well, the EFTA Court has decided that if homogeneity is to be taken seriously, there should be parallel interpretation with EU law also beyond that limit. However, there are certain differences in the scope and purpose of the EEA Agreement as compared to the TFEU, which may under specific circumstances lead to a different interpretation. In the EU, this approach is known as the Polydor principle, named in this manner after decision of the European Court of Justice on this matter. Finally, what about dispute settlement? This is the only point where we do not have a two-pillar system. The dispute settlement mechanism is described in Art. 111 EEA.
It consists of a number of steps beginning with bringing the matter to the EEA Joint Committee and ending, ultimately, at the Court of Justice of the EU. The court will then rule on the interpretation of the EEA law in question. In practise, this has never happened so far, probably because the parties must agree on the calling on the Court. Note that here the ultimate authority on ruling on the meaning of EEA law is with the Court of Justice. This reflects the fact that EEA law is a system providing for the association of the EEA/EFTA States to the EU law system and not the other way around. Thank you very much indeed.
Having briefly sketched the EEA system with regard to the four institutional key words off updating the law, interpretation, international supervision, and dispute settlement, it needs to be said once again, that this was the blueprint from which the EU started when it demanded that a different legal system, namely that of its agreements with Switzerland be revised at the institutional level. We will return to this matter at a later point in our course.

In the European Economic Area (EEA), the group of the European Union (EU) Member States and the group of the EEA/EFTA (European Free Trade Association) Member States each have their own institutions.

In terms of its institutions, the EEA is characterised by a two-pillar system in which each pillar has its own international supervisory and judicial institution. One pillar is for the EU Member States and the other for the EEA/EFTA States. The respective institutions are important in the context of a number of administrative and court procedures that are intended to safeguard respect for the common law.

Further reading

Read on the Polydor principle in Christa Tobler, ‘Context-related Interpretation of Association Agreements. The Polydor Principle in a Comparative Perspective: EEA Law, Ankara Association Law and Market Access Agreements between Switzerland and the EU’, in: Daniel Thym/Margerite Zoeteweij-Turhan (eds), Rights of Third-Country Nationals under EU Association Agreements. Degrees of Free Movement and Citizenship, Leiden: Brill/Nijhoff 2015, 101-126.

Read on dispute settlement in Christa Tobler, ‘Dispute Resolution under the EEA Agreement’, in: Carl Baudenbacher (ed), The Handbook of EEA Law, Cham: Springer 2015, 195-207.

This article is from the free online

Switzerland in Europe: Money, Migration and Other Difficult Matters

Created by
FutureLearn - Learning For Life

Our purpose is to transform access to education.

We offer a diverse selection of courses from leading universities and cultural institutions from around the world. These are delivered one step at a time, and are accessible on mobile, tablet and desktop, so you can fit learning around your life.

We believe learning should be an enjoyable, social experience, so our courses offer the opportunity to discuss what you’re learning with others as you go, helping you make fresh discoveries and form new ideas.
You can unlock new opportunities with unlimited access to hundreds of online short courses for a year by subscribing to our Unlimited package. Build your knowledge with top universities and organisations.

Learn more about how FutureLearn is transforming access to education