Handbook on rules of origin and preferential treatment of imported goods
Service provider:
Free trade agreements often require that a product be wholly obtained in the contracting states or undergo sufficient processing there in order to qualify for preferential treatment under the agreement. Rules of origin set out the conditions under which a product covered by a free trade agreement is considered an originating product. These rules are therefore necessary to distinguish products covered by free trade agreements and eligible for preferential treatment from products that are not eligible for such treatment, the so-called third-country goods.
An importer of goods that meet the rules of origin requirements under the relevant free trade agreement must submit proof of origin in the importing country in support of a claim for preferential treatment of the goods.
Chapter 2
It is important to determine which states are parties to each agreement. Agreements apply only between the states that are parties to them. States that are not parties to a particular agreement are referred to as third countries in relation to that agreement.
The free trade agreements to which Iceland is a party can be divided into two categories: multilateral agreements and bilateral agreements. Multilateral agreements involve more than two parties. Several multilateral agreements have been concluded between the EFTA states on the one hand and individual states on the other. The agreements between the EFTA states and Türkiye, Latvia, Lithuania, etc. are examples of multilateral agreements.
A bilateral agreement is an agreement between two states, for example the free trade agreement between Iceland and Greenland from 1985.
Both bilateral and multilateral free trade agreements are based on the principle of reciprocity. Both or all contracting parties benefit from provisions on preferential tariff treatment when exporting to another contracting party. This does not, however, necessarily mean that the agreements are symmetrical. For example, one contracting party may grant duty-free treatment (0%) for a particular product from the entry into force of the agreement, while another contracting party reduces customs duties on the same product in stages.
In this chapter, the free trade agreements to which Iceland is a party are divided into three categories. First are Iceland’s agreements with the European Community. The second category covers the Convention establishing the European Free Trade Association (EFTA) and EFTA’s free trade agreements with various states. Finally, reference is made to Iceland’s bilateral free trade agreements with Greenland and the Faroe Islands.
2.2.1 Agreements with the European Community
Free Trade Agreement between Iceland and the European Community, 1972
Agreement on the European Economic Area, 1 January 1994
Agreement with the European Coal and Steel Community
The Agreement on the European Economic Area (EEA Agreement) was signed in Porto on 2 May 1992 and entered into force for Iceland on 1 January 1994, cf. Notice No. 31/1993.[2]
The EFTA Convention and the Free Trade Agreement between Iceland and the European Community from 1972 remain in force despite the entry into force of the EEA Agreement. The preferential tariff treatment secured under those earlier agreements remains applicable where corresponding preferences are not provided for under the EEA Agreement, cf. Article 120 thereof.
2.2.2 European Free Trade Association (EFTA) and its agreements with other states
Convention establishing the European Free Trade Association – EFTA, 1970
Agreement between the EFTA States and the Republic of Türkiye, 13 July 1992
Agreement between the EFTA States and the Czech Republic, 1 January 1993
Agreement between the EFTA States and the Slovak Republic, 1 January 1993
Agreement between the EFTA States and Israel, 1 August 1993
Agreement between the EFTA States and Poland, 1 September 1994[10]
Agreement between the EFTA States and Romania, 1 June 1994
Agreement between the EFTA States and Bulgaria, 1 June 1994
Agreement between the EFTA States and Hungary, 1 June 1994
Agreement between the EFTA States and Slovenia, 1 September 1998
Agreement between the EFTA States and Latvia, 1 June 1996
Agreement between the EFTA States and Lithuania, 1 January 1997
Agreement between the EFTA States and Estonia, 1 October 1997
Agreement between the EFTA States and Morocco, 1 December 1999
Agreement between the EFTA States and the Palestinian Authority, date not determined
2.2.3 Bilateral agreements of Iceland
Agreement on trade between Iceland and Greenland, 1 February 1985
Free Trade Agreement with the Faroe Islands, 1 July 1993
[1] The European Community comprises the following 15 states: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom.
[2] See Section C of the Official Gazette No. 31/1993.
[3] The EEA Agreement covers the following 18 states: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom. It should also be noted that the EEA Agreement applies to Jan Mayen but not to Svalbard.
[4] See Section C of the Official Gazette No. 7/1970.
[5] See Section C of the Official Gazette No. 15/1992.
[6] See Section C of the Official Gazette No. 22/1992 and Notice in Section B of the Official Gazette No. 73/1993.
[7] See Section C of the Official Gazette No. 22/1992 and Notice in Section B of the Official Gazette No. 73/1993.
[8] See Section C of the Official Gazette No. 10/1993.
[9] See Section C of the Official Gazette No. 8/1993 and Notice in Section B of the Official Gazette No. 319/1994.
[10] Provisional entry into force on 15 November 1993.
[11] See Section C of the Official Gazette No. 3/1995 and Notice in Section B of the Official Gazette No. 320/1994.
[12] See Section C of the Official Gazette No. 2/1995 and Notice in Section B of the Official Gazette No. 321/1994.
[13] See Section C of the Official Gazette No. 1/1995 and Notice in Section B of the Official Gazette No. 322/1994.
[14] Unpublished. See Notice in Section B of the Official Gazette No. 228/1996.
[15] Unpublished.
[16] Unpublished.
[17] Unpublished.
[18] Unpublished. See Notice in Section B of the Official Gazette No. 813/1999.
[19] Unpublished.
[20] See Section C of the Official Gazette No. 1/1985.
[21] See Section C of the Official Gazette No. 12/1993.
[22] Provisionally applied from 1 September 1992.
See also: Free trade agreements on the website of the Ministry for Foreign Affairs and EFTA free trade agreements.