Kohtuasi

JUDGMENT OF THE COURT

16 June 2026*

(Social security – Article 29(1) of Regulation (EC) No 216/2008 – Article 11(2) of Annex

VIII to the Staff Regulations of the European Union – Transfer of pension rights –

Article 28 EEA – Free movement of workers)

In Case E-30/24,

EFTA Surveillance Authority, represented by Claire Simpson, Melpo-Menie Joséphidès

and Sigurbjörn Bernharð Edvardsson, acting as Agents,

applicant,

v

Iceland, represented by Hendrik Daði Jónsson and Birgir Hrafn Búason, acting as Agents,

defendant,

APPLICATION seeking a declaration that Iceland has failed to fulfil its obligations under

Article 29(1) of Regulation (EC) No 216/2008 and/or Article 28 of the EEA Agreement,

by maintaining in force an administrative practice which precludes the transfer of the

capital value of occupational pensions accrued in Iceland to the pension scheme of the

European Union institutions,

THE COURT,

composed of: Páll Hreinsson, President, Bernd Hammermann and Michael Reiertsen

(Judge-Rapporteur), Judges,

* Translations of national law are unofficial and based on those in the case file.

– 2 –

Registrar: Ólafur Jóhannes Einarsson,

having regard to the written pleadings of the applicant and the defendant, and the written

observations submitted on behalf of:

- the Liechtenstein Government, represented by Dr Andrea Entner-Koch and Dr

Claudia Bösch, acting as Agents,

- the Norwegian Government, represented by Marie Munthe-Kaas and Emil Moss

Skjelland, acting as Agents,

- the European Commission (‘the Commission’), represented by Jean-François

Brakeland, Corneliu Hödlmayr and Bernd-Roland Killmann, acting as Agents,

having regard to the Report for the Hearing,

having heard oral argument of the EFTA Surveillance Authority (‘ESA’), represented by

Melpo-Menie Joséphidès and Sigurbjörn Bernharð Edvardsson; Iceland, represented by

Hendrik Daði Jónsson; the Liechtenstein Government, represented by Dr Andrea Entner-

Koch; the Norwegian Government, represented by Marie Munthe-Kaas; and the

Commission, represented by Bernd-Roland Killmann, Marzena Brauhoff, and Corneliu

Hödlmayr, acting as Agents, at the hearing on 16 September 2025,

gives the following

JUDGMENT

I INTRODUCTION

1 By the present application, ESA asserts that, by maintaining in force an administrative

practice which precludes the transfer of the capital value of occupational pensions accrued

in Iceland to the pension scheme of the European Union institutions (‘PSEUI’), Iceland has

failed to fulfil its obligations under Article 29(1) of Regulation (EC) No 216/2008 of the

European Parliament and of the Council of 20 February 2008 on common rules in the field

of civil aviation and establishing a European Aviation Safety Agency (OJ 2008 L 79, p. 1;

and Icelandic EEA Supplement 2012 No 7, p. 214) (‘EASA Regulation’), and/or Article

28 of the Agreement on the European Economic Area (‘EEA Agreement’ or ‘EEA’).

2 Iceland contests the action.

– 3 –

II LEGAL BACKGROUND

EEA law

3 Article 28 EEA reads:

1. Freedom of movement for workers shall be secured among EC Member States

and EFTA States.

2. Such freedom of movement shall entail the abolition of any discrimination based

on nationality between workers of EC Member States and EFTA States as regards

employment, remuneration and other conditions of work and employment.

3. It shall entail the right, subject to limitations justified on grounds of public policy,

public security or public health:

(a) to accept offers of employment actually made;

(b) to move freely within the territory of EC Member States and EFTA States for

this purpose;

(c) to stay in the territory of an EC Member State or an EFTA State for the purpose

of employment in accordance with the provisions governing the employment of

nationals of that State laid down by law, regulation or administrative action;

(d) to remain in the territory of an EC Member State or an EFTA State after having

been employed there.

4. The provisions of this Article shall not apply to employment in the public service.

5. Annex V contains specific provisions on the free movement of workers.

4 Paragraph 7 of Protocol 1 on horizontal adaptations to the EEA Agreement, entitled ‘Rights

and obligations’, reads:

Rights conferred and obligations imposed upon the EC Member States or their

public entities, undertakings or individuals in relation to each other, shall be

understood to be conferred or imposed upon Contracting Parties, the latter also

being understood, as the case may be, as their competent authorities, public entities,

undertakings or individuals.

5 Article 31 of the Agreement between the EFTA States on the Establishment of a

Surveillance Authority and a Court of Justice (‘SCA’) reads:

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If the EFTA Surveillance Authority considers that an EFTA State has failed to fulfil

an obligation under the EEA Agreement or of this Agreement, it shall, unless

otherwise provided for in this Agreement, deliver a reasoned opinion on the matter

after giving the State concerned the opportunity to submit its observations.

If the State concerned does not comply with the opinion within the period laid down

by the EFTA Surveillance Authority, the latter may bring the matter before the

EFTA Court.

6 The EASA Regulation was incorporated into the EEA Agreement at point 66n of Annex

XIII (Transport) by Decision No 163/2011 of the EEA Joint Committee of 19 December

2011 (OJ 2012 L 76, p. 51; Icelandic EEA Supplement 2012 No 15, p. 58) (‘JCD

163/2011’). Constitutional requirements were indicated by Norway and fulfilled by 11

January 2013 and the decision entered into force on 1 March 2013.

7 Recital 4 of JCD 163/2011 reads:

Regulation (EC) No 216/2008 should therefore be incorporated into the Agreement

in order to allow for the full participation of the EFTA States in the European

Aviation Safety Agency.

8 Article 29 of the EASA Regulation, entitled ‘Staff’, as adapted by JCD 163/2011, read:

1. The Staff Regulations of Officials of the European Communities, the Conditions

of Employment of Other Servants of the European Communities and the rules

adopted jointly by the institutions of the European Communities for purposes of the

application of those Staff Regulations and Conditions of Employment shall apply to

the staff of the Agency, without prejudice to the application of Article 39 of this

Regulation to the members of the Board of Appeal.

2. Without prejudice to Article 42, the powers conferred on the appointing authority

by the Staff Regulations and the Conditions of Employment shall be exercised by the

Agency in respect of its own staff.

3. The Agency’s staff shall consist of a strictly limited number of officials assigned

or seconded by the Commission or Member States to carry out management duties.

The remaining staff shall consist of other employees recruited by the Agency as

necessary to carry out its tasks.

4. By way of derogation from Article 12(2)(a) of the Conditions of employment of

other servants of the European Union, nationals of the EFTA States enjoying their

full rights as citizens may be engaged under contract by the Executive Director of

the Agency.

– 5 –

9 Article 30 of the EASA Regulation, entitled ‘Privileges and immunities’, as adapted by

JCD 163/2011, read:

The Protocol on the Privileges and Immunities of the European Communities

annexed to the Treaties establishing the European Community and the European

Atomic Energy Community shall apply to the Agency.

The EFTA States shall apply to the Agency and to its staff the Protocol of Privileges

and Immunities of the European Union and applicable rules adopted pursuant to

that Protocol.

10 The EASA Regulation was repealed by Regulation (EU) 2018/1139 (OJ 2018 L 212, p. 1;

and Icelandic EEA Supplement 2023 No 62, p. 186), which was incorporated into the EEA

Agreement at point 66zb of Annex XIII (Transport) by Decision No 114/2023 of the EEA

Joint Committee of 28 April 2023 (OJ L, 2023/2294; Icelandic EEA Supplement 2023 No

81, p. 67). The decision entered into force in the EEA on 16 July 2024, thus after the expiry

of the period laid down in the reasoned opinion.

11 Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April

2004 on the coordination of social security systems (OJ 2004 L 166, p. 1; Icelandic EEA

Supplement 2012 No 19, p. 23) (‘Regulation 883/2004’) was incorporated into the EEA

Agreement at point 1 of Annex VI (Social security) by Decision of the EEA Joint

Committee No 76/2011 of 1 July 2011 (OJ 2011 L 262, p. 33; Icelandic EEA Supplement

2011 No 54, p. 46). Constitutional requirements were indicated by Iceland and

Liechtenstein and fulfilled by 31 May 2012. The decision entered into force on 1 June

2012.

European Union law

12 Article 14 of Protocol No 7 on the privileges and immunities of the European Union,

annexed to the EU and FEU Treaties, provides:

The European Parliament and the Council, acting by means of regulations in

accordance with the ordinary legislative procedure and after consultation of the

institutions concerned, shall lay down the scheme of social security benefits for

officials and other servants of the Union.

13 Regulation (EEC, Euratom, ECSC) No 259/68 of the Council of 29 February 1968 laying

down the Staff Regulations of Officials and the Conditions of Employment of Other

Servants of the European Communities and instituting special measures temporarily

applicable to officials of the Commission (OJ, English Special Edition 1968(I), p. 30)

(‘Regulation 259/68’) lays down the Staff Regulations of officials (‘Staff Regulations’)

and the Conditions of Employment of other Servants (‘Employment Conditions’).

– 6 –

14 The second recital of Regulation 259/68 reads:

Having regard to the Protocol on the Privileges and Immunities of the European

Communities, and in particular Article 7 and Articles 12 to 16 thereof;

15 Article 11(2) of Annex VIII (Pension scheme) to the Staff Regulations read, on the expiry

of the period laid down in the reasoned opinion:

An official who enters the service of the Union after:

— leaving the service of a government administration or of a national or

international organization; or

— pursuing an activity in an employed or self-employed capacity;

shall be entitled, after establishment but before becoming eligible for payment of a

retirement pension within the meaning of Article 77 of the Staff Regulations, to have

paid to the Union the capital value, updated to the date of the actual transfer, of

pension rights acquired by virtue of such service or activities.

In such case the appointing authority of the institution in which the official serves

shall, taking into account the official's basic salary, age and exchange rate at the

date of application for a transfer, determine by means of general implementing

provisions the number of years of pensionable service with which he shall be

credited under the Union pension scheme in respect of the former period of service,

on the basis of the capital transferred, after deducting an amount representing

capital appreciation between the date of the application for a transfer and the actual

date of the transfer.

Officials may make use of this arrangement once only for each Member State and

pension fund concerned.

National law

16 Act No 1/1997 on the Pension Fund for State Employees (lög nr. 1/1997 um Lífeyrissjóð

starfsmanna ríkisins) (‘Act No 1/1997’) establishes the Pension Fund for State Employees

(Lífeyrissjóður starfsmanna ríkisins).

17 Article 6 of Act No 1/1997 reads:

The board of the fund shall consist of eight members. The minister appoints four board

members, the board of the Federation of State and Municipal Employees appoints two

board members, the board of the Association of University Graduates appoints one

board member, and the board of the Icelandic Teachers’ Union appoints one board

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member. Alternate members of the same number shall also be appointed by the same

entities. The term of office for board members is three years. The board shall elect a

chairperson from among its members for a term of one year at a time.

18 Article 7 of Act No 1/1997 reads:

The board of the fund shall manage the fund’s affairs. The board shall address all major

decisions regarding the fund’s policy and operations. It shall ensure adequate oversight

of the fund’s accounting and the handling of its finances. The board shall formulate an

investment policy and invest the fund’s assets based on the best available terms

regarding returns and risk at any given time. The board shall adopt articles of

association for the fund in accordance with the provisions of this Act and the provisions

of other laws on pension funds, as applicable. The fund’s articles of association shall

specify, among other things, how the fund’s assets are to be invested.

The Minister shall confirm whether the fund’s articles of association and any

amendments thereto are in accordance with this Act and other laws on pension funds,

after obtaining the opinion of the Financial Supervisory Authority.

19 Article 32 of Act No 1/1997 reads:

The State Treasury guarantees the payment of pensions according to this Act. The

pensions shall be paid monthly, in advance, with one-twelfth of the annual pension paid

each month.

20 Article 41 of Act No 1/1997 reads

The minister is permitted to issue regulations regarding the pension rights of

government employees who come within the scope of the agreement between the Nordic

countries dated 1 June 2001 on the coordination of pension rights under the pension

schemes for government employees. The Pension Fund for State Employees may be

entrusted with the implementation of the agreement. The costs arising from this shall

be paid by the State Treasury.

It is permitted to provide in regulations, cf. paragraph 1, that deviations from the

conditions of this Act regarding the commencement of pension payments may be

allowed if deemed necessary for the coordination of rights under the agreement.

Similarly, it may be decided that the amount of the retirement pension shall be reduced

so that the overall liabilities of the fund do not increase if a government employee

chooses to commence retirement pension payments earlier than provided for under this

Act.

– 8 –

The additional cost arising from the payment of pensions that may result from the

implementation of the agreement shall be calculated, and the State Treasury shall pay

the pension fund that amount.

The calculations shall be based on the same actuarial assumptions as are used for the

assessment of the fund’s liabilities.

Any dispute arising from the application of the agreement may be appealed to the

Minister for resolution.

21 According to the application, the fourth paragraph of Article 1 of Act No 129/1997 on

Mandatory Pension Insurance and on the Activities of Pension Funds (lög um

skyldutryggingu lífeyrisréttinda og starfsemi lífeyrissjóða) (‘Pensions Act’) requires all

employees, and those engaged in commercial operations or self-employment, to join and

contribute to a pension fund from the ages of 16 to 70.

22 The EASA Regulation was implemented into Icelandic law by Article 3 of Regulation No

812/2012 on common rules in the field of civil aviation and establishing a European

Aviation Safety Agency (reglugerð um sameiginlegar reglur um almenningsflug og

stofnun Flugöryggisstofnunar Evrópu). Article 3(a) thereof reads:

Implementation:

With this regulation the following EU regulations enter into force, with those

changes and amendments which follow from Annex XIII to the EEA Agreement,

Protocol 1 to the EEA Agreement and other, relevant provisions:

a. Regulation (EC) No 216/2008 of the European Parliament and of the Council of

20 February 2008 on common rules in the field of civil aviation and establishing a

European Aviation Safety Agency …

III PRE-LITIGATION PROCEDURE

23 On 24 June 2019, ESA received a complaint from an Icelandic citizen that the Icelandic

authorities had refused to transfer his accrued occupational pension rights to the PSEUI.

The complainant had been a staff member of the Icelandic Civil Aviation Authority from

2001 until 2009, at which time he became employed by the European Aviation Safety

Agency (‘EASA’) in Cologne, Germany. The complainant had submitted the pension

transfer request after commencing work for EASA and received a letter from the Icelandic

Social Insurance Administration in 2012, stating that it was not possible to transfer pension

rights acquired in Iceland to other countries or administrations and that this applied to both

social pension from the Social Insurance Administration as well as all the occupational

pension funds in Iceland. The complainant unsuccessfully resubmitted his request in 2019

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via the European Commission Office for Administration and Payment of Individual

Entitlements.

24 On 27 September 2019, ESA informed Iceland of the complaint and requested certain

information. Further correspondence was exchanged between ESA and Iceland.

25 On 10 February 2021, ESA sent a letter of formal notice to Iceland. The letter concluded

that, by maintaining in force an administrative practice which precluded the transfer of the

capital value of occupational pensions accrued in Iceland to the PSEUI, Iceland had failed

to fulfil its obligations under Article 29 of the EASA Regulation and/or Article 28 EEA.

26 In its reply of 23 June 2021, Iceland submitted that Article 29 of the EASA Regulation did

not require Iceland to allow the transfer of accrued pension rights to the PSEUI. Iceland

did not contest the fact that the EASA Regulation had been incorporated into the EEA

Agreement. It also recognised that the text of Article 29 of the EASA Regulation, as

adapted, explicitly states that the Staff Regulations shall apply to the staff of EASA.

Iceland, however, observed that the Staff Regulations had not themselves been

incorporated into the EEA Agreement. Iceland considered, inter alia, that a simple

reference within one EU act to another EU act was insufficient to create an obligation to

implement or transpose the act referred to. It also submitted that there was no obstacle to

the free movement of workers under Article 28 EEA. In Iceland’s view, Article 28 EEA

does not confer rights in relation to employment with agencies to which the EFTA States

are not party.

27 On 15 March 2023, ESA delivered a reasoned opinion to Iceland. It concluded that, by

maintaining in force an administrative practice which precluded the transfer of the capital

value of occupational pensions accrued in Iceland to the PSEUI, Iceland had failed to fulfil

its obligations under Article 29 of the EASA Regulation and Articles 3 and 28 EEA. ESA

required Iceland to take the measures necessary to comply with the reasoned opinion within

two months of receipt.

28 On 15 May 2023, Iceland replied to the reasoned opinion. Iceland maintained its position

that it had not breached Article 29 of the EASA Regulation or Articles 3 and 28 EEA.

IV PROCEDURE AND FORMS OF ORDER SOUGHT

29 On 26 November 2024, ESA lodged an application pursuant to the second paragraph of

Article 31 SCA seeking a declaration that Iceland has failed to fulfil its obligations under

Article 29(1) of the EASA Regulation and/or Article 28 EEA.

30 ESA requests the Court to:

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1. Declare that, by maintaining in force an administrative practice which precludes

the transfer of the capital value of occupational pensions accrued in Iceland to

the pension scheme of the European Union institutions, Iceland has failed to

fulfil its obligations under Article 29(1) of Regulation (EC) No 216/2008 of the

European Parliament and of the Council of 20 February 2008 on common rules

in the field of civil aviation and establishing a European Aviation Safety Agency,

and/or Article 28 of the EEA Agreement.

2. Order Iceland to pay the costs of these proceedings.

31 On 5 December 2024, the President, acting pursuant to Article 107(3) of the Rules of

Procedure (‘RoP’), granted Iceland’s request for an extension of the time-limit for

submitting the defence until 28 February 2025.

32 On 28 February 2025, Iceland submitted its defence, pursuant to Article 107 RoP. Iceland

requests the Court to:

(i) Dismiss the Application.

(ii) Order the EFTA Surveillance Authority to pay the costs of these proceedings.

33 On 24 March 2025, the President, acting pursuant to Article 42 RoP, granted ESA’s request

for an extension of the time-limit for submitting the reply until 2 May 2025.

34 On 2 May 2025, ESA submitted its reply.

35 On 13 May 2025, the President, acting pursuant to Article 42 RoP, granted Iceland’s

request for an extension of the time-limit for submitting the rejoinder until 19 June 2025.

36 On 19 June 2025, Iceland submitted its rejoinder.

37 On 10 July 2025, the Court prescribed measures of organisation of procedure (‘MOP’) in

accordance with Article 56(1) and Article 57(3)(a) and (b) RoP, and in furtherance of

Article 57(1) and Article 57(2)(c) RoP. Those participating in the proceedings before the

Court were invited, first, to make submissions on whether the case-law of the Court of

Justice of the European Union (‘ECJ’) concerning the concept of ‘State’ in relation to the

direct effect of directives was relevant for interpreting the concept of ‘State’ under Article

258 of the Treaty on the Functioning of the European Union (‘TFEU’) and Article 31 SCA,

and to what extent the conduct of the Icelandic pension funds in refusing to transfer

occupational pension capital to the PSEUI could be attributed to the Icelandic State.

Second, they were asked whether ESA could amend its form of order sought, for instance,

by seeking, in the alternative, a declaration that Iceland failed to adopt the necessary

measures to ensure the transfer of occupational pension capital to the PSEUI, and whether

the Court, in any event, could find such a breach of EEA law under Article 31 SCA.

– 11 –

38 Replies to the MOP were received from Iceland, ESA, the Liechtenstein and Norwegian

Governments, and the Commission in July and August 2025.

39 The oral hearing was held on 16 September 2025.

40 Reference is made to the Report for the Hearing for a fuller account of the legal framework,

the facts, the procedure, and the arguments of the parties, which are mentioned or discussed

hereinafter only insofar as is necessary for the reasoning of the Court.

V FINDINGS OF THE COURT

Admissibility

Arguments submitted to the Court

41 Iceland claims that ESA’s action is inadmissible as it constitutes an abuse of process. In its

defence, Iceland contends that ESA has made repeated statements concerning ESA’s

interest in bringing the present case to the Court. Iceland argues that the interest expressed

does not concern the actual dispute at issue in the present case, but rather the broader legal

question that ESA would like the Court to clarify. Iceland is therefore of the opinion that

the present action undermines the integrity of the procedure under Article 31 SCA, as it is

being employed as a vessel to engage in legal debates of a general and academic nature.

42 Second, Iceland contends that ESA has extended the subject-matter of the dispute at the

stage of the application. Iceland refers to differences between the arguments that ESA

raised during the pre-litigation phase of the procedure, which had delimited the action to

Article 29(1) of the EASA Regulation and Article 28 EEA, and those in the application.

43 ESA contests the grounds of inadmissibility put forward by Iceland. It submits that it is

apparent that the action does not constitute an abuse of process. Rather, it concerns a

consistent practice that precludes EASA staff members from transferring the capital value

of their pensions to the PSEUI. This has affected the complainant and other Icelandic

individuals working for EASA, and Iceland has confirmed that the same treatment would

apply to other EEA nationals moving from Iceland to work for EASA.

44 Second, ESA submits that the subject-matter of the application was not extended in relation

to the pre-litigation phase of the procedure and that it clearly relates to Article 29(1) of the

EASA Regulation and Article 28 EEA.

Findings of the Court

45 As regards Iceland’s submission that the present action constitutes an abuse of process, the

Court recalls that the procedure provided for in Article 31 SCA is based on an objective

finding that an EFTA State has failed to fulfil its obligations under the EEA Agreement

– 12 –

(compare the judgment of 4 March 2021 in Commission v UK, C-664/18, EU:C:2021:171,

paragraph 53 and case-law cited).

46 According to settled case-law, ESA enjoys discretion as to whether or not to commence

such proceedings, which is not for review by the Court (see the order of the Court of

24 May 2016 in Gerhard Spitzer v ESA, E-2/16, paragraph 22 and case-law cited, and

compare, to that effect, the judgment of 16 July 2020 in Commission v Romania (Anti-

money laundering), C-549/18, EU:C:2020:563, paragraph 49 and case-law cited).

47 Accordingly, ESA does not have to show a legal interest in bringing proceedings or to state

the reasons why it is bringing an action for failure to fulfil obligations (compare the

judgment of 2 April 2020 in Commission v Poland and Others, Joined Cases C-715/17,

C-718/17 and C-719/17, EU:C:2020:257, paragraph 67 and case-law cited).

48 In the present case, if the subject-matter of the action as set out in the application

corresponds to the subject-matter of the dispute as stated in the letter of formal notice and

in the reasoned opinion, it cannot validly be claimed that ESA misused its powers (compare

the judgment of 3 March 2016 in Commission v Malta, C-12/14, EU:C:2016:135,

paragraph 26 and case-law cited).

49 Iceland’s submission regarding an alleged abuse of process must therefore be rejected as

unfounded.

50 Iceland has further submitted that ESA has raised additional pleas exceeding the scope of

the subject-matter as defined during the pre-litigation procedure. In particular, Iceland

submits that ESA has alleged violations of Articles 29(4) and 30 of the EASA Regulation

in its application, while these violations were not mentioned in the pre-litigation procedure.

51 It should be recalled that the purpose of the pre-litigation procedure is to give the EFTA

State concerned the opportunity to comply with its obligations arising from EEA law or to

present its case effectively against the complaints put forward by ESA. The proper conduct

of that procedure constitutes an essential guarantee not only in order to protect the rights

of the EFTA State concerned, but also so as to ensure that any contentious procedure will

have a clearly defined dispute as its subject-matter (see the judgment of 30 September 2025

in ESA v Norway, E-24/24, paragraph 87 and case-law cited).

52 The Court recalls that the opportunity for the EFTA State concerned to submit its

observations during the administrative procedure, even if it chooses not to make use of it,

is an essential guarantee intended by the SCA; adherence to which is an essential formal

requirement of the procedure for finding that an EFTA State has failed to fulfil its

obligations (see the judgment in ESA v Norway, E-24/24, cited above, paragraph 88 and

case-law cited).

– 13 –

53 The Court recalls, further, that the letter of formal notice issued by ESA to the EFTA State

concerned and subsequently the reasoned opinion delivered by ESA delimit the subject-

matter of the dispute, so that it cannot thereafter be extended. Consequently, the reasoned

opinion and the application must be based on the same grounds and pleas. If a complaint

was not included in the letter of formal notice or subsequently the reasoned opinion, it is

inadmissible at the stage of proceedings before the Court (see the judgment in ESA v

Norway, E-24/24, cited above, paragraph 89 and case-law cited).

54 The Court observes that ESA’s claim has consistently targeted an administrative practice

in Iceland which it alleges precludes the transfer of pension rights to the PSEUI. With

respect to the applicability of Articles 29(4) and 30 of the EASA Regulation, these

provisions are referred to in the pre-litigation documents in the case. References to these

provisions by ESA in the application are generally made in order to provide context for the

pleas concerning Article 29(1) of the EASA Regulation and Article 28 EEA.

55 It follows that the fact that ESA set out in detail a complaint which it had already made

more generally in the context of the pre-litigation procedure did not alter the subject-matter

of the alleged infringement, and has thus had no effect on the scope of the proceedings

(compare the judgment in Commission v Portugal, C-543/08, EU:C:2010:669, paragraph

23 and case-law cited).

56 In the light of the foregoing considerations, the plea of inadmissibility raised by Iceland

must be rejected.

Substance

Arguments submitted to the Court

57 ESA submits that, by maintaining in force an administrative practice which precludes the

transfer to the PSEUI of the capital value of the occupational pensions that EEA nationals

have accrued in Iceland, Iceland is in breach of Article 29(1) of the EASA Regulation

and/or Article 28 EEA.

58 ESA argues that Iceland has consistently maintained that it does not and is not required to

transfer the capital value of occupational pensions accrued in Iceland to the PSEUI, which

has manifested itself by way of a consistent administrative practice in relation to the

complainant and other Icelandic nationals working or seeking to work for EASA.

59 ESA submits that the administrative practice at issue is clearly attributable to the Icelandic

State. While the occupational pension funds operating in Iceland are not part of the

Icelandic State, they nevertheless meet the relevant criteria to be considered an emanation

of the State, so that their actions are attributable to the State.

– 14 –

60 Iceland disputes ESA’s allegation of an administrative practice. Iceland notes, in particular,

that a failure to ensure compliance with EEA law can be established only as a result of

sufficiently documented and detailed proof of the alleged practice, for which the EFTA

State concerned is answerable, and argues that this standard has not been met in the present

case. Iceland concedes that it has not introduced legislation to compel Icelandic pension

funds to facilitate such transfers upon request, but notes that it is under no obligation to do

so.

61 Iceland further observes that only one record has been submitted by ESA as evidence of

the alleged administrative practice of the Pension Fund for State Employees. Iceland

questions whether this isolated strand of correspondence suffices to establish a sufficiently

documented and detailed proof of an administrative practice.

62 Iceland finally submits that the alleged practice is not attributable to the Icelandic State.

The Icelandic State does not directly administer any pension schemes that could come

within the purview of rights existing under the Staff Regulations as the Icelandic system

of mandatory mutual pension funds is privately operated.

The consistent and general nature of the contested practice

63 The Court observes that, according to established case-law, in proceedings pursuant to

Article 31 SCA for failure to fulfil obligations, it is incumbent upon ESA to prove the

allegation that the obligation has not been fulfilled. It is ESA’s responsibility to place

before the Court the information necessary for it to establish that the obligation has not

been fulfilled, and, in doing so, ESA may not rely on any presumption for that purpose (see

the judgment of 12 December 2024 in ESA v Norway, E-16/23, paragraph 35 and case-law

cited).

64 With regard, in particular, to a complaint concerning the actual application of a national

provision, the proof of an EFTA State’s failure to fulfil its obligations requires production

of evidence different from that usually taken into account in an action for failure to fulfil

obligations concerning solely the terms of a national provision. Where the subject-matter

of an action for failure to fulfil obligations concerns the application of a national provision,

the failure can be established only as a result of sufficiently documented and detailed proof

of the alleged practice, for which the EFTA State concerned is answerable. The Court has

held that it must be apparent from such proof that the administrative practice which

infringes EEA law is, to some degree, of a consistent and general nature (see the judgment

in ESA v Norway, E-16/23, cited above, paragraph 36 and case-law cited).

65 The Court observes that a number of different pension funds exist in Iceland. However,

with respect to the evidence of an administrative practice submitted in the present case,

ESA has only documented and sufficiently explained the regulatory framework of the

Pension Fund for State Employees, which, as has been made apparent from the submissions

of the parties, differs from other funds. Accordingly, ESA has not put forth the information

– 15 –

necessary for the Court to establish that the obligation has not been fulfilled in relation to

the other funds operating in Iceland.

66 The Court notes that the existence of a general and consistent practice must be examined

in the light of the facts of each case. Such a case-by-case approach must have regard, inter

alia, to the absolute number of individuals affected by a particular alleged infringement.

This may entail, for example, that where a large number of individuals are affected by a

particular administrative practice, a significant number of examples of that practice must

be brought before the Court to establish a failure to fulfil obligations on this basis (compare

the judgment of 7 June 2007 in Commission v Greece, C‑156/04, EU:C:2007:316,

paragraph 51).

67 Whereas if the absolute number of individuals affected by a particular administrative

practice is small, fewer examples will be necessary. In particular situations, the character

of an infringement rather than a precise number of examples submitted by ESA can be the

deciding factor, if they constitute evidence of a general problem (compare the judgments

of 9 May 1985 in Commission v France, 21/84, EU:C:1985:184, paragraph 13, and of

15 November 2007 in Commission v Germany, C-319/05, EU:C:2007:678, paragraph 81).

68 When ESA has adduced sufficient evidence to show that the authorities of the defendant

EFTA State have developed a practice that is contrary to EEA law, it is incumbent on that

EFTA State to challenge in substance and in detail the information produced and the

consequences flowing therefrom (compare the judgment of 25 October 2007 in

Commission v Ireland, C-248/05, EU:C:2007:629, paragraph 69 and case-law cited).

69 The Court observes in this respect that the present case concerns the non-transferability of

the capital value of accrued occupational pensions to the PSEUI where limited numbers

are affected as few persons who have contributed to the Pension Fund for State Employees

have taken up work within EASA.

70 In that regard, it should be noted, first of all, that although rejecting the existence of an

administrative practice, Iceland stated at the oral hearing that the Pension Fund for State

Employees is under no obligation to order or facilitate the transfer of accrued occupational

– 16 –

pension rights to the PSEUI. Iceland further argued that such transfers would require a

‘reorganisation’ of the pension fund given its closed nature.

71 In the present case, the Court considers, taking into account the context and nature of the

alleged practice, that the evidence provided by ESA satisfies the requirements to establish

the existence of a consistent administrative practice.

72 It follows from the foregoing that the practice alleged by ESA must be deemed to have

been established as regards the Pension Fund for State Employees.

Attribution

73 It must now be assessed whether the contested practice of the Pension Fund for State

Employees can be attributed to Iceland for the purposes of Article 31 SCA.

74 In infringement proceedings brought before the Court under Article 31 SCA, conduct may

be attributable to an EFTA State even where it is carried out by a legally distinct entity, in

particular where such a body is established by law, financed by the EFTA State or by

mandatory contributions, and subject to control by that EFTA State – even where such

control may be of a limited nature (compare the judgment of 5 November 2002 in

Commission v Germany, C-325/00, EU:C:2002:633, paragraphs 18 and 19).

75 The Court observes that the Pension Fund for State Employees is established by law,

namely Act No 1/1997 – unlike other pension funds in Iceland, which are generally

established via private law instruments. The Pension Fund for State Employees is funded

by the Icelandic State and mandatory contributions from fund members and covers

employees in the State’s service that are within the scope of that Act. Its existence dates

back to Act No 72/1919.

76 It follows from the provisions of Act No 1/1997 that the competent Minister has a

considerable role in the fund’s activities. Pursuant to Article 6 of Act No 1/1997, the

competent Minister appoints half of the board members of the Pension Fund for State

Employees and, under Article 7 thereof, the competent Minister also confirms the fund’s

articles of association after obtaining the opinion of the Icelandic financial supervisory

authority.

77 Moreover, under Article 32 of that Act, the Icelandic State guarantees payments made on

the basis of the Act. Under various transitional provisions of the Act, the State has an

obligation to make significant monetary contributions to the fund.

78 In addition, Article 41 of Act No 1/1997 provides for the possibility of the competent

Minister issuing rules and entrusting certain tasks to the Pension Fund for State Employees

in relation to an international agreement. Any disputes arising from the application of that

agreement may be appealed to the competent Minister for resolution.

– 17 –

79 Taken together, the fact that the Pension Fund for State Employees is established by law,

the role of the Icelandic State in financing the Fund, and the competent Minister’s role in

appointing half of the Board Members result in the actions of the Fund being attributable

to Iceland in the context of infringement proceedings under Article 31 SCA.

80 Throughout the proceedings, Iceland has consistently relied on the status of the Pension

Fund for State Employees as being a private legal entity, as reflected, inter alia, in

judgments of the Supreme Court of Iceland and Parliamentary Ombudsman materials, in

order to maintain that the Fund is an autonomous entity legally independent of the

executive, and that its actions cannot be attributed to the Icelandic State, a position that was

reiterated at the hearing. However, in infringement proceedings, once conduct of an entity

is held to be attributable to an EFTA State, that State cannot rely on its classification under

national law to escape the scope of Article 31 SCA (compare the judgment of 12 November

2019 in Commission v Ireland, C-261/18, EU:C:2019:955, paragraphs 89 to 91 and case-

law cited).

81 In conclusion, in view of the special features of the Pension Fund for State Employees, as

laid down by Act No 1/1997, and its connection to the Icelandic State, the Court finds that

its practice which precludes the relevant pension transfers is attributable to Iceland for the

purposes of Article 31 SCA.

The existence of a duty to transfer pension rights

82 The Court notes that EEA law does not detract from the power of the EEA States to

organise their social security systems. In the absence of harmonisation at EEA level, it is

for the legislature of each EEA State to determine the conditions on which social security

benefits are granted. When exercising that power, however, the EEA States must comply

with EEA law and, in particular, with the provisions of the EEA Agreement giving every

EEA national the right to move and reside freely within the territory of the EEA States (see

the judgment of 5 December 2024 in K, E-15/23, paragraph 47 and case-law cited).

83 The Court recalls in this respect that any EEA national who exercises the right of freedom

of movement to seek employment or has been employed in an EEA State other than that

of residence falls within the scope of Article 28 EEA (see the judgment of 5 May 2021 in

Criminal proceedings against N, E-8/20, paragraph 74 and case-law cited).

84 It is settled case-law that an EEA national working in an EEA State other than his or her

State of origin and who has accepted a post in an international organisation or an institution,

body or agency of the European Union also comes within the scope of that provision

(compare the judgment of 22 December 2022 in WP, C-404/21, EU:C:2022:1023,

paragraph 24 and case-law cited). As such, EEA nationals working for an EU institution,

body or agency in another EEA State may not be refused the rights and social advantages

which Article 28 EEA affords them.

– 18 –

85 However, Regulation 883/2004 does not apply in this context, as the staff of such an

institution, body or agency are not subject to national social security legislation as required

by Article 2(1) of that regulation, defining the personal scope thereof (compare the

judgment of 12 May 2021 in CAF, C-27/20, EU:C:2021:383, paragraph 23 and case-law

cited). Rather, co-ordination of pension entitlements is determined by reference to the EEA

law applicable in the context of employment for the EU institution, body or agency in

question.

86 It is therefore appropriate, in the first place, to examine whether Article 29(1) of the EASA

Regulation entails a duty for EEA States to ensure pension transfers to the PSEUI.

87 The Court recalls that the interpretation of a provision of EEA law requires account to be

taken not only of its wording, but of its context and the objectives and purpose pursued by

the act of which it forms part. The legislative history of a provision of EEA law may also

reveal elements that are relevant to its interpretation. Moreover, where a provision of EEA

law is open to several interpretations, preference must be given to the interpretation which

ensures that the provision retains its effectiveness (see the judgment of 7 May 2025 in TC

and AA, Joined Cases E-1/24 and E-7/24, paragraph 92 and case-law cited).

88 With respect to the literal interpretation of Article 29(1) of the EASA Regulation, the

provision states that the Staff Regulations ‘shall apply to the staff of the Agency’. As noted

by ESA, the formulation of the phrase is prescriptive, identifying the rules that are to be

applied to EASA’s staff, irrespective of nationality, residence, or State of origin. It is

therefore evident that an EASA staff member may, in principle, rely on the rights conferred

by the Staff Regulations.

89 Article 11(2) of Annex VIII to the Staff Regulations provides that EU officials are entitled

to transfer the capital value of occupational pensions accrued under different national

systems. The ordinary meaning of the term ‘entitled’ confers on EU officials an individual

right that may be invoked against both EEA States and EU institutions (compare the

judgment in WP, C-404/21, cited above, paragraph 55 and case-law cited).

90 Therefore, a literal interpretation of Article 29(1) of the EASA Regulation, read in

conjunction with Article 11(2) of Annex VIII to the Staff Regulations, indicates that EASA

staff members have a right to transfer accrued pension rights from any EEA State.

91 Iceland submits, however, that Article 29(1) of the EASA Regulation cannot be interpreted

literally as imposing a binding obligation on the EFTA States. In contrast to the situation

under EU law, where the regulation laying down the Staff Regulations applies directly in

the EU Member States pursuant to Article 288 TFEU, those regulations have not been

incorporated into the EEA Agreement.

92 Iceland’s argument relies upon paragraph 7 of Protocol 1 to the EEA Agreement, which

provides that the rights conferred and obligations imposed upon the EU Member States

– 19 –

shall be understood to be conferred or imposed upon the Contracting Parties. Since

obligations for EU Member States do not arise automatically from a mere reference, but

must be read in conjunction with the provisions of the referenced act in order to determine

their content, Iceland submits that paragraph 7 of Protocol 1 to the EEA Agreement is not

triggered. Any obligation for the EFTA States would need to be introduced explicitly

through an adaptation adopted by the EEA Joint Committee.

93 The Court notes that paragraph 7 of Protocol 1 to the EEA Agreement concerns horizontal

adaptations for the provisions of the acts referred to in the Annexes to the Agreement, and

that the specific adaptations necessary for individual acts are set out in the Annex where

the act concerned is listed. It therefore does not, by itself, provide decisive guidance on

whether Article 29(1) of the EASA Regulation imposes a binding obligation on the EFTA

States.

94 The Court further observes that Article 29(1) of the EASA Regulation fulfils the same legal

function within both the EU and EFTA pillars of the EEA Agreement, namely, to extend

the personal scope of the Staff Regulations to EASA’s staff. In this context, the Staff

Regulations necessarily ‘shall apply’ to all staff employed by EASA, without regard to

their nationality. That the Staff Regulations have not been incorporated into the EEA

Agreement cannot be used to deprive Article 29(1) of the EASA Regulation of its effect.

95 The literal interpretation of Article 29(1) of the EASA Regulation is confirmed by a

contextual interpretation thereof and by the relevant Joint Committee Decision. As a result

of the adaptations provided for in JCD 163/2011, Article 29(4) of the EASA Regulation

explicitly permits the recruitment of EFTA nationals as EASA staff members. Iceland

argues that this adaptation to the EASA Regulation illustrates that, if the Contracting

Parties had intended the Staff Regulations to apply to the EFTA States, they would have

enacted a corresponding adaptation.

96 The Court notes, however, that the objective of the adaptation provided for in Article 29(4)

of the EASA Regulation is, as is apparent from recital 4 of JCD 163/2011, to allow for the

full participation of the EFTA States in EASA. Without such an amendment, EFTA

nationals would have been ineligible, in general, for employment in EASA. The adaptation

provided for in Article 29(4) of the EASA Regulation, in offering the opportunity for EFTA

nationals to become EASA staff, thus presupposes that there should be no difference in the

rights of staff, regardless of whether they come from EFTA States or from the EU Member

States.

97 The Court further observes that an adaptation was included for one of the employment

conditions only – namely eligibility on the basis of nationality, as provided for in Article

29(4) of the EASA Regulation. In particular, the applicability of the Staff Regulations in

respect of staff members from the EFTA States in accordance with Article 29(1) indicates

– 20 –

that the Staff Regulations and the Employment Conditions annexed to Regulation 259/68

were otherwise intended to apply in full.

98 Indeed, the ECJ has consistently held that the right to transfer provided for in Article 11(2)

of Annex VIII to the Staff Regulations entails, as a corollary, a duty on Member States to

adopt the measures necessary to facilitate such transfers (compare the judgments of 20

October 1981 in Commission v Belgium, 137/80, EU:C:1981:237, paragraph 13, and in

WP, C-404/21, cited above, paragraph 38 and case-law cited).

99 The effective operation of a system for the portability of pension rights necessarily

presupposes cooperation by national authorities, for instance in determining a calculation

method to make it possible to transfer pension rights to the PSEUI (compare the judgment

of 5 December 2013 in Časta, C-166/12, EU:C:2013:792, paragraph 37 and case-law

cited).

100 The argument advanced by Iceland in this context – that the obligations on the part of the

EU Member States to ensure the portability of pension rights cannot be transposed to the

EEA context – cannot therefore be accepted. Full participation in EASA cannot entail that

Iceland would gain the benefits of participation, including facilitating the eligibility of its

nationals to take up posts therein, without taking up the reciprocal obligations prescribed

by that regulation, including ensuring the effectiveness of the rights granted to EASA staff

under the Staff Regulations.

101 The system for the transfer of retirement pension rights provided for in Article 11 of

Annex VIII to the Staff Regulations seeks, by coordinating the PSEUI with national

schemes, to facilitate movement from national, public or private employment to the EU

administration and thereby ensure that access is had to the best-qualified staff with

appropriate professional experience (compare the judgment of 4 February 2021 in DQ,

C-903/19, EU:C:2021:95, paragraph 23 and case-law cited). If individuals were unable to

benefit from their rights under the Staff Regulations, employment at EASA would become

less attractive, which would be at variance with the shared interest of the Contracting

Parties in facilitating the recruitment of future staff members from all EEA States in order

to engage the best expertise available.

102 Contrary to the assertions of Iceland and the Norwegian Government, these findings are

not called into question by the judgments of 4 July 2013 in Gardella, C-233/12,

EU:C:2013:449, and in WP, C-404/21, cited above, in which the ECJ held that, in the

absence of an explicit legal basis, the persons concerned did not have a right to transfer

pension rights, but instead a right of aggregation. Unlike in those cases, in the present case

the Staff Regulations explicitly apply to EASA staff, pursuant to Article 29(1) of the EASA

Regulation.

103 It must therefore be concluded that, by maintaining in force an administrative practice, in

respect of members of the Pension Fund for State Employees, which precludes the transfer

– 21 –

of the capital value of occupational pensions accrued in Iceland to the PSEUI, Iceland has

failed to fulfil its obligations under Article 29(1) of the EASA Regulation.

104 As a failure to fulfil obligations on the basis of the EASA Regulation has thus been

established, it is unnecessary to examine the action in respect of Article 28 EEA (see, to

that effect, the judgment of 28 June 2011 in ESA v Iceland, E-12/10, paragraph 62 and

case-law cited).

VI COSTS

105 Under Article 121(2) RoP, where each party succeeds on some and fails on other heads,

the Court may order that the costs shall be shared or that each party shall bear its own costs.

Since ESA and Iceland have been partially successful, each party shall bear its own costs.

The costs incurred by the Liechtenstein Government, the Norwegian Government, and the

Commission are not recoverable.

– 22 –

On those grounds,

THE COURT

hereby:

1. Declares that, by maintaining in force an administrative practice, in

respect of members of the Pension Fund for State Employees, which

precludes the transfer of the capital value of occupational pensions

accrued in Iceland to the pension scheme of the European Union

institutions, Iceland has failed to fulfil its obligations under Article 29(1)

of Regulation (EC) No 216/2008 of the European Parliament and of the

Council of 20 February 2008 on common rules in the field of civil aviation

and establishing a European Aviation Safety Agency.

2. Dismisses the application as to the remainder.

3. Orders each party to bear its own costs.

Páll Hreinsson Bernd Hammermann Michael Reiertsen

Delivered in open court in Luxembourg on 16 June 2026.

Ólafur Jóhannes Einarsson Páll Hreinsson

Registrar President

1, rue du Fort Thüngen, L-1499 Luxembourg. Telephone: +352 42 108-1

E-mail: [email protected]

Case E-30/24-51

Luxembourg, 16 June 2026

Sent via e-EFTACourt

Dear Sir/Madam,

Subject: Case E-30/24 – EFTA Surveillance Authority v Iceland

Please find enclosed a copy of the Judgment delivered in open court on

16 June 2026 in Case E-30/24 – EFTA Surveillance Authority v Iceland.

On behalf of the Registrar.

Yours faithfully,

Bryndís Pálmarsdóttir

Senior Administrator

Encl.