Kohtuasi

Avenue des Arts 19H, 1000 Brussels, tel: +32 2 286 18 11, www.eftasurv.int

ORIGINAL

IN THE EFTA COURT

APPLICATION

submitted pursuant to Article 31(2) of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice by

THE EFTA SURVEILLANCE AUTHORITY

represented by Claire Simpson, Melpo-Menie Joséphidès, and Sigurbjörn Bernharð Edvardsson,

Department of Legal & Executive Affairs, acting as Agents,

AGAINST

ICELAND

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.

Brussels, 26 November 2024

Case No: 91345

Document No: 1431581

Registered at the EFTA Court under NºE-30/24-01 on 26 day of November 2024.

Page 2

Table of Contents

1 INTRODUCTION AND SUMMARY OF PLEAS-IN-LAW ..................................... 3 2 PRE-LITIGATION PROCEDURE ........................................................................ 4 3 RELEVANT LAW ................................................................................................. 6

3.1 EEA Law ................................................................................................... 6

3.2 National law .............................................................................................. 9

4 THE AUTHORITY’S SUBMISSIONS................................................................. 11 4.1 FIRST PLEA: BREACH OF ARTICLE 29(1) OF THE EASA REGULATION ………………………………………………………………………………….11

4.1.1 Introduction and Iceland’s Administrative Practice .............................. 11

4.1.2 The Scope of the Obligations imposed under Article 29 of the Regulation: Article 29(1) may require States to take action ............................... 14

4.1.3 The Binding Nature of the Obligations imposed under Article 29 of the Regulation in this Case...................................................................................... 20

4.1.4 Conclusion .......................................................................................... 24

4.2 SECOND PLEA: BREACH OF ARTICLE 28 EEA .................................. 25

4.2.1 Iceland’s Practice restricts the Free Movement of Workers ................ 25

4.2.2 Iceland’s Arguments are Unfounded ................................................... 26

4.2.3 Conclusion .......................................................................................... 34

5 CONCLUSION .................................................................................................. 34 SCHEDULE OF ANNEXES ...................................................................................... 35

Page 3 1 INTRODUCTION AND SUMMARY OF PLEAS-IN-LAW

1. The present application was prepared with support from Ciarán Burke and Per-Arvid

Sjøgård, Legal Officers of the Authority’s Internal Market Directorate.

2. This application concerns Iceland’s refusal, by way of a consistent administrative

practice, to allow staff members of the European Union Aviation Safety Agency

(“EASA” or “the Agency”) to transfer the capital value of their occupational pensions

accrued in Iceland to the pension scheme of the European Union institutions

(“PSEUI”). The fact that Iceland refuses to permit such transfers is uncontested.

3. The Authority submits that:

i. FIRST PLEA: such a refusal is in breach of Article 29(1) of Regulation

(EC) No 216/2008 on common rules in the field of civil aviation and

establishing a European Aviation Safety Agency (“the EASA

Regulation” or “the Regulation”);1 and/or

ii. SECOND PLEA: such a refusal is in breach of Article 28 EEA, the

freedom of movement of workers.

4. In respect of the First Plea, the Court’s ruling in this case will inter alia clarify the

important point of whether a prescriptive reference (“the Staff Regulations … shall

apply”) to an act which has not been incorporated into the EEA Agreement can, in the

particular circumstances of the case, have EEA law consequences for the relevant

EFTA State (here, Iceland).

5. The First and Second Pleas are made both cumulatively and alternatively. Thus, while

a finding of a breach under the First Plea would, in the Authority’s submission, reinforce

its arguments under the Second Plea, the Authority submits that Iceland’s obligations

1 Regulation (EC) No 216 of the European Parliament and of the Council of 20 February 2008, OJ L 79, 19.3.2008, p.1, incorporated into the EEA Agreement by Decision of the EEA Joint Committee No 163/2011 of 19 December 2011: see further footnote 17 below.

Page 4 under Article 28 EEA (the Second Plea) apply irrespective of whether Article 29(1) of

the EASA Regulation imposes obligations on Iceland in this case (the First Plea).

2 PRE-LITIGATION PROCEDURE

6. On 24 June 2019, the Authority received a complaint (“the Complaint”) from an

Icelandic citizen (“the Complainant”) that the Icelandic authorities had refused to

transfer his occupational pension rights, which had accrued in Iceland, to the PSEUI.2

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

2001 until 2009,3 at which time he became employed by EASA in Köln, Germany. He

submitted the pension transfer request after commencing work for EASA, and received

a refusal from the Icelandic Social Insurance Administration in 2012.4 The Complainant

unsuccessfully resubmitted his request (via the European Commission Office for

Administration and Payment of Individual Entitlements or “PMO”) in 2019.5

7. On 27 September 2019, the Authority informed Iceland of the Complaint and requested

certain information.6 Further correspondence was exchanged between the Authority

and Iceland.7

2 See the Complaint form at Annex A.1. 3 See an e-mail from the Icelandic Transport Authority confirming the Complainant's employment with the Icelandic Civil Aviation Administration from 2 February 2001 to 28 February 2009, and a certificate issued by the Icelandic Civil Aviation Administration confirming the commencement of the Complainant's employment in 2001: Annex A.2 (English original and English translation, respectively) and Annex A.2a (Icelandic original of certificate). 4 See the transfer refusal of the Icelandic Social Administration, dated 2 July 2012 (“the 2012 Refusal”) at Annex A.3 (English translation) and Annex A.3a (Icelandic original). See more generally the decision of 4 June 2019 of the Authority Responsible for Concluding Contracts of Employment of the European Commission (“the 2019 Commission Decision”) (Annex A.4), which confirms at pp. 1 and 5 that the 2012 Refusal took place. 5 See letter from the European Commission (PMO) (Annex A.5), confirming receipt of the Complainant’s new application dated 28 February 2019 for transfer of his relevant Icelandic pension rights to the PSEUI, and e-mail from the European Commission (PMO) to the Complainant dated 20 October 2021 (Annex A.6), confirming that the PMO’s reminders to the concerned Icelandic pension schemes (regarding the Complainant’s pension transfer request) remain unanswered. 6 Request for Information (“RQI”), Annex A.7. 7 See e.g. Reply to the RQI, Annex A.8; Extract from letter following up to the package meeting of 28 May 2020, Annex A.9; Reply of 13 August 2020 to the letter following the package meeting, Annex A.10.

Page 5

8. On 10 February 2021, the Authority sent a letter of formal notice to Iceland.8 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.

9. In its reply of 23 June 2021,9 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 that the EASA Regulation had been incorporated into the EEA

Agreement. It also recognised that: “[t]he text of Article 29 of the EASA Regulation, as

adapted, explicitly states that the EU Staff Regulations shall “apply to the staff of the

Agency”.”10 It however observed that the EU Staff Regulations11 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.”12 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”.13

10. On 15 March 2023, the Authority delivered a reasoned opinion (“the Reasoned

Opinion”) to Iceland.14 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. The Authority required Iceland

to take the measures necessary to comply with the Reasoned Opinion within two

months of receipt, i.e. by 15 May 2023 (“the Compliance Date”).

8 “Letter of Formal Notice”, Annex A.11. 9 Reply to the Letter of Formal Notice, Annex A.12. 10 Ibid, p.2. 11 i.e. Council Regulation (EEC, EURATOM, ECSC) No 259/68 of 29 February 1968 laying down the Staff regulations of Officials and the Conditions of Employment of Other Servants of the European Communities (“Council Regulation No 259/68”), OJ L 56, 4.3.68, p.1, as amended. See further paragraph 19 below. 12 Reply to the Letter of Formal Notice, Annex A.12, p.2. 13 Ibid, pp.2-3. 14 Annex A.13.

Page 6

11. On 15 May 2023, Iceland replied to the Reasoned Opinion.15 Iceland maintains its

position that it has not breached Article 29 of the EASA Regulation or Articles 3 and

28 EEA.

12. The Authority therefore submits the present Application to the Court.16

3 RELEVANT LAW

3.1 EEA Law

13. Article 3 EEA provides:

“The Contracting Parties shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Agreement.

They shall abstain from any measure which could jeopardize the attainment of the objectives of this Agreement.

Moreover, they shall facilitate cooperation within the framework of this Agreement.”

14. Article 7 EEA provides:

“Acts referred to or contained in the Annexes to this Agreement or in decisions of the EEA Joint Committee shall be binding upon the Contracting Parties and be, or made, part of their internal legal order as follows:

(a) an act corresponding to an EEC regulation shall as such be made part of the internal legal order of the Contracting Parties. […]”

15. Article 28 EEA provides:

“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

15 Reply to the Reasoned Opinion, Annex A.14. 16 EFTA Surveillance Authority decision (10 July 2024) to refer the case to the EFTA Court, Annex A.15.

Page 7

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) […]

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.”

16. The EASA Regulation was incorporated into the EEA Agreement by Decision of the

EEA Joint Committee No 163/2011 of 19 December 2011.17 It entered into force in the

EEA on 1 March 2013.

17. Article 29 of the EASA Regulation, entitled “Staff”, provides (emphasis added):

“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.

17 OJ L 76, 15.2.2012, p.51 (“JCD No 163/2011” or just “the JCD”). The EASA Regulation has been repealed by Regulation (EU) 2018/1139 of the European Parliament and of the Council of 4 July 2018 on common rules in the field of civil aviation and establishing a European Union Aviation Safety Agency, and amending Regulations (EC) No 2111/2005, (EC) No 1008/2008, (EU) No 996/2010, (EU) No 376/2014 and Directives 2014/30/EU and 2014/53/EU of the European Parliament and of the Council, and repealing Regulations (EC) No 552/2004 and (EC) No 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No 3922/91, OJ L 212, 22.8.2018, p.1 (“Regulation (EU) 2018/1139” or “the New EASA Regulation”). Regulation 2018/1139 was incorporated into the EEA Agreement by Decision of the EEA Joint Committee No 114/2023 of 28 April 2023, OJ L 2294, 09.11.2023, p.1. It entered into force in the EEA on 16 July 2024, thus after the Compliance Date. Regulation 2018/1139 does not therefore form part of this Application.

Page 8

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 [or EFTA]18 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.]19”

18. Article 30 of the EASA Regulation, entitled “Privileges and immunities”, provides

(emphasis added):

“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 Union20 and applicable rules adopted pursuant to that Protocol.]”21

19. Council Regulation No 259/68 (EEC, Euratom, ECSC)22 lays down, in one legal

instrument, the Staff Regulations of officials (“the Staff Regulations”) and the

Conditions of Employment of other Servants (“the Conditions of Employment”) of the

European Union. Article 11(2) of Annex VIII (Pensions) to the Staff Regulations

provides, and provided at the Compliance Date (emphasis added):

“[…] 2. 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,

18 As adapted by point 3(a) of the Annex to JCD No 163/2011. 19 As adapted by point 3(m) of the Annex to JCD No 163/2011. 20 Protocol (No 7) on the privileges and immunities of the European Union (“the Protocol on Privileges and Immunities” or just “the Protocol”), OJ 2016 C 202 p. 266. 21 As adapted by point 3(n) of the Annex to JCD No 163/2011. 22 See footnote 11 above.

Page 9

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; […]”

20. Article 11(2) of Annex VIII to the Staff Regulations also applies to temporary staff such

as the Complainant, by virtue of Article 39(2) of the Conditions of Employment, which

provides: “Article 11(2) and (3) of Annex VIII of the Staff Regulations shall be applied

by analogy to servants within the meaning of Article 2 of these Conditions of

Employment”. Article 2 relates to “temporary staff”.

3.2 National law

21. Article 1, fourth paragraph, of Act No. 129/1997 on Mandatory Pension Insurance and

on the Activities of Pension Funds (lög um skyldutryggingu lífeyrisréttinda og starfsemi

lífeyrissjóða) as amended (“the 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 70.23

22. Article 19(1) and (2) of the Pensions Act provide inter alia that individuals should not

lose earned pension rights because they cease to make contributions to a particular

fund, nor should they lose or gain rights because they divide their contributions

between more than one pension fund. The provision provides, at paragraphs three

and four:

23 The Icelandic original reads: “Öllum launamönnum og þeim sem stunda atvinnurekstur eða sjálfstæða starfsemi er rétt og skylt að tryggja sér lífeyrisréttindi með aðild að lífeyrissjóði frá og með 16 ára til 70 ára aldurs.” The Icelandic pension system is based on three pillars. The first is a tax-financed public pension. The second is a mandatory occupational system, to which Article 1, fourth paragraph of the Pensions Act refers. The third is a voluntary personal pension scheme, whereby wage earners can save a portion of their earnings. See further Reply to the RQI (Annex A.8), pp.2-3.

Page 10

[[3] “Contributions and, in consequence, the entitlements arising from them may be transferred between pension funds when the receipt of pension commences, for the purpose of facilitating the implementation of this Article.

[4] Pension contributions of foreign nationals emigrating from Iceland may be reimbursed, provided that this is not prohibited under an international agreement to which Iceland is party. Such reimbursement may not be limited to only part of the contributions, except on a legitimate actuarial basis.”24

23. The EASA Regulation was implemented into Icelandic national 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).25 It provides, in relevant

part:

“Implementation:

With this regulation the following EU regulations enter into force, with those changes and amendments which follow from Annex XIII of 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 […].”26

24. For completeness, the Authority notes that Regulation No. 812/2012 was repealed and

replaced by Regulation No. 270/2024,27 carrying the same title, which entered into

24 Official translated version of the Pensions Act, accessible here: Lög um skyldutryggingu lífeyrisréttinda og starfsemi lífeyrissjóða. The original Icelandic states: “[3] Heimilt er að flytja iðgjöld og þar með réttindi sem þeim fylgir milli lífeyrissjóða þegar að töku lífeyris kemur í því skyni að auðvelda framkvæmd þessarar greinar. [4] Heimilt er að endurgreiða iðgjöld til erlendra ríkisborgara þegar þeir flytjast úr landi enda sé slíkt ekki óheimilt samkvæmt milliríkjasamningi sem Ísland er aðili að. Óheimilt er að takmarka endurgreiðsluna við tiltekinn hluta iðgjaldsins nema á tryggingafræðilega réttum forsendum.” 25 Regulation No. 812/2012 was originally adopted based, inter alia, on Article 146(2) of the Icelandic Aviation Act (lög um loftferðir) No. 60/1998. This latter act was repealed and replaced by the New Aviation Act No. 80/2022, with entry into force on 14 July 2022. Under Article 257(2) of the New Aviation Act, Regulation No. 812/2012 remained in force until it was repealed and replaced by Regulation No. 270/2024 (implementing the New EASA Regulation): see footnote 27 below. 26 The Icelandic original reads: “Með reglugerð þessari öðlast gildi eftirfarandi reglugerðir Evrópuþingsins og ráðsins og framkvæmdastjórnarinnar með þeim breytingum og viðbótum sem leiðir af XIII. viðauka samningsins um Evrópska efnahagssvæðið, bókun 1 um altæka aðlögun og öðrum ákvæðum hans: a) Reglugerð Evrópuþingsins og ráðsins (EB) nr. 216/2008 frá 20. febrúar 2008 um sameiginlegar reglur um almenningsflug og um stofnun Flugöryggisstofnunar Evrópu […]” 27 Regulation No. 270/2024 was issued by the relevant Minister under Article 20, first paragraph, of the New Aviation Act No. 80/2022.

Page 11 force on 2 March 2024. Regulation No. 270/2024 contains a provision (Article 4) in

similar terms to Article 3 of Regulation No. 812/2012 (cited above). It implements

Regulation (EU) 2018/1139 (the New EASA Regulation), which replaced the EASA

Regulation, into national law. As noted above at footnote 17, the New EASA Regulation

entered into force on 16 July 2024 in the EEA, thus after the Compliance Date set by

the Authority’s Reasoned Opinion. Regulation No. 812/2012 is therefore the national

regulation in force at the Compliance Date.

4 THE AUTHORITY’S SUBMISSIONS

4.1 FIRST PLEA: BREACH OF ARTICLE 29(1) OF THE EASA REGULATION

4.1.1 Introduction and Iceland’s Administrative Practice

25. It is undisputed that the EASA Regulation was, at the Compliance Date, incorporated

into the EEA Agreement. Iceland recognises that Article 29(1) of the EASA Regulation

“explicitly”28 provides that “[t]he […] Staff Regulations … shall apply to the staff of the

Agency.”

26. Under Article 11(2) of Annex VIII to the Staff Regulations (“Article 11(2)”), Agency staff

who are EEA nationals, such as the Complainant, are entitled to have transferred to

the PSEUI the capital value of their occupational pensions accrued in Iceland:

“An official who enters the service of the Union [e.g. EASA] 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 […] 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. […]”29

28 Reply to the Letter of Formal Notice, Annex A.12, p.2. 29 Emphasis added.

Page 12

27. The wording of these provisions is clear. Indeed, the prescriptive formulation in Article

29(1) leaves little room for doubt, at least if the words are given their plain, natural

meaning (“the Staff Regulations … shall apply”). Iceland does not and will not however

ensure that the treatment foreseen in Article 11(2) applies to EEA nationals employed

by EASA. Throughout the pre-litigation procedure, 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.30 Iceland has drawn the Authority’s attention to Article

19(4) of the Icelandic Pensions Act, which provides for the reimbursement of pension

contributions of foreign nationals on emigration. It is unclear to the Authority whether

Iceland considers that – in principle – such a provision might meet the requirements of

Article 11(2), at least for non-Icelandic EEA nationals. Iceland has however confirmed

that such a rule does not apply to Icelandic nationals and that, in order not to

discriminate against its own nationals, it will not apply such a rule to other EEA

nationals, either.31 Thus, it is undisputed that Iceland will not grant or otherwise secure

the rights provided for under Article 11(2) in respect of EFTA State or other EEA

nationals.

28. Concretely, Iceland’s position has manifested itself by way of a consistent

administrative practice in relation to the Complainant32 and other Icelandic nationals

working (or seeking to work) for EASA.33 As explained in a letter from EASA to the

Authority:

“The persistent refusal of the Icelandic authorities to adhere to the EEA rules not only compromises the entitlements of our Icelandic staff members, including Mr Steinþórsson [the Complainant], but also contravenes established legal

30 See e.g. Reply to the Letter of Formal Notice, Annex A.12, Reply to the Reasoned Opinion, Annex A.14, Reply to the follow-up letter to the package meeting, Annex A.10, p.2. 31 See Reply to the follow-up letter to the package meeting, Annex A.10, p.2 and Reply to the RQI, Annex A.8, pp.2-3. 32 See the documents referred to at footnotes 4 and 5 above. 33 In addition to the documents specifically related to the Complainant, see also: an email of 4 February 2019 from the Icelandic authorities to EASA at Annex A.16 (English translation) and Annex A.16a (Icelandic original), refusing such a transfer in relation to an Icelandic colleague of the Complainant; the Complaint form (Annex A.1), p.2, in which the Complainant refers to two other Icelandic colleagues who would (otherwise) be entitled to make transfers to the PSEUI; the Reply to the follow-up letter to the package meeting, Annex A.10, p.1, para. 2, confirming that the Icelandic Ministry’s response is not specific to the Complainant, and is “based on general information about the implementation [sic] applicable rules in similar cases”; and the letter of 16 April 2024 from the Executive Director of EASA to the President of the EFTA Surveillance Authority (“the EASA Letter”), Annex A.17.

Page 13

frameworks governing cross-border employment within the European Economic Area. […]

The denial of the transfer of pension rights places our Icelandic staff at a distinct disadvantage vis-à-vis their EU counterparts, thereby infringing upon their vested legal entitlements.

In addition to the negative impact on actual individual cases, such refusal is likely to deter potential candidates of Icelandic nationality from accepting EASA offers of employment, thereby having an impact on EASA recruitment of Icelandic staff members. Prior to offering a contract of employment, our Agency must now inform the Icelandic candidates of the practice of their national authorities regarding pension rights.”34

29. This practice of the Icelandic authorities has, to date, related to Icelandic nationals.

Iceland has however confirmed that the same practice (no transfer of pension rights)

would apply to other EEA nationals moving from Iceland to work for EASA.35 This

confirmation evidences that Iceland’s refusal practice applies to all EEA nationals

leaving Iceland to work for EASA. The Authority submits that this, and the practice

described and evidenced in paragraphs 27 and 28 above, together evidence a

consistent and general administrative practice within the meaning of the case-law.36

30. The Authority accordingly submits that, by maintaining in force an administrative

practice which fails to ensure that EEA nationals may transfer to the PSEUI the capital

value of the occupational pensions they have accrued in Iceland, Iceland is in breach

of Article 29(1) of the EASA Regulation. The breach is also supported by an

interpretation of Iceland’s obligations under Article 3 EEA.

34 EASA Letter, Annex A.17, pp. 1-2. 35 See the documents cited at footnote 31 above and Annex A.10, p.1, para, 2. 36 That is, the practice must be “to some degree, of a consistent and general nature”: see e.g. Case E- 6/12 EFTA Surveillance Authority v Norway, para. 58 and the case-law cited. See also paras 60-63 thereof, where the Court took into consideration statements made by the State about its practice as evidence of the nature and extent of the administrative practice. It is settled case-law of the CJEU that any official document issued by the authorities of the EEA State concerned may be considered a valid source of information for the purposes of initiating infringement proceedings against that State, see e.g. judgment of 11 December 2014 in Commission v Greece, Case C-677/13, EU:C:2014:2433, para. 66, and case-law cited. For other examples of the CJEU relying on statements from a State as evidence of that State’s consistent practice, see e.g. judgments of 26 April 2005 in Commission v Ireland, C-494/01, EU:C:2005:250, para. 74, and of 5 March 2009 in Commission v Spain, C-88/07, EU:C:2009:123, para. 61.

Page 14

31. Iceland has, in correspondence, raised a number of arguments why no such breach

exists:

i. First, Iceland argues that Article 29 of the EASA Regulation does not

place obligations on States, but rather on EASA as an employer. In other

words, it argues that the scope of Article 29 is limited, and does not apply

to States;

ii. Second, Iceland argues that even if the Staff Regulations are capable of

placing obligations on States, no such obligations apply to Iceland. This

is because the Staff Regulations are not themselves incorporated into

the EEA Agreement. In other words, Iceland claims that any reference to

the Staff Regulations in Article 29 of the EASA Regulation is ineffective

– that such references have no binding effect.

32. These arguments are addressed in turn.

4.1.2 The Scope of the Obligations imposed under Article 29 of the Regulation: Article 29(1) may require States to take action

33. By its first argument, Iceland contends that the wording of Article 29 of the EASA

Regulation does not place obligations on the EFTA States, but rather on the Agency

itself. It refers inter alia to the fact that the adaptation text added at Article 29(4) refers

only to the ability of nationals of EFTA States to be employed by EASA, and does not

place any specific obligations on the EFTA States.37

34. The Authority acknowledges that the text of Article 29(1), “[t]he […] Staff Regulations

… shall apply to the staff of the Agency,” does not identify which actor must apply the

Staff Regulations (albeit that the obligation to apply the Staff Regulations to Agency

staff is itself clear, beyond any doubt). In line with settled case-law, the Authority has

therefore considered the legislative context and purpose pursued by the provision and

the act of which it forms part, and the preference which must be given to the

37 See e.g. Reply to the Letter of Formal Notice, Annex A.12, p.2 and Reply to the RQI, Annex A.8, p.2.

Page 15 interpretation which ensures the provision retains its effectiveness.38 The Authority

submits that consideration of all these factors points to an interpretation of Article 29(1)

which is capable of placing obligations on EFTA (and EU) States, not just the Agency

itself, and which may therefore require Iceland to act in the present case.39

35. First, by requiring the Staff Regulations to be applied to Agency staff, Article 29(1) of

the EASA Regulation makes the Staff Regulations part of the critical legislative context.

The Staff Regulations thus ‘operationalise’ Article 29(1). Indeed, without the Staff

Regulations (or Conditions of Employment), Article 29(1) is ineffective. The Staff

Regulations must therefore logically be consulted in order to determine which party or

person must act. It is plain from the text of the relevant provision of the Staff

Regulations, in this case, Article 11(2), that staff have a right to the transfer of the

relevant capital value of acquired pension rights to the PSEUI. Where such pension

rights derive from an occupational pension fund of a State, the relevant State (or State

body) must actually transfer that capital value to the PSEUI, in order for the staff

member to enjoy their rights – that is, in order for the rights to be effective. Thus, where

such rights are acquired in Icelandic occupational pensions, Iceland must permit or

facilitate the relevant transfer of the capital value accrued to the PSEUI.

36. Second, the multiple adaptations made by JCD No 163/2011 make clear that not only

the effect, but also the intention, when incorporating the EASA Regulation into the EEA

Agreement was, inter alia, to place obligations on the EFTA States. Point 3(a) of the

Annex to the JCD provides that the term ‘Member State(s)’ shall be understood as also

meaning the EFTA States. In this way, obligations are expressly placed on Iceland

under, for example, Article 10 (oversight and enforcement) and Article 11 (recognition

of certificates) of the EASA Regulation, in the same way that such obligations apply to

the EU Member States. The fact that Article 29(1) does not expressly identify any actor

on which an obligation is placed does not mean that Iceland or the other EEA States

(or even EASA itself) suddenly have no obligations at all under that provision. Rather,

38 Judgment of 25 January 2024, Case E-2/23 A Ltd v Finanzmarktaufsicht (“A Ltd”), para. 43 and the case-law cited. 39 See further Section 4.1.3 below. The Authority uses the terms “capable of” and “may”, because whether an obligation applies to a State (rather than the Agency) will depend on which particular provision of the Staff Regulations is relevant.

Page 16 it means that the Staff Regulations must be consulted to identify where the

responsibility lies.

37. The CJEU has considered the relevant provision of the Staff Regulations in the present

case, namely Article 11(2), and it is settled case-law that Article 11(2) is capable of

placing obligations on EU Member States. This is so, despite the fact that there is no

express reference to EU Member States in Article 11(2), either. As the CJEU held in

Case 137/80 Commission v Belgium, the Staff Regulations, even in the absence of

any express reference to a State, place obligations on an EU Member State insofar as

their cooperation is necessary to give effect to those regulations.40

38. In that case, similarly to the argument of Iceland in respect of Article 29(1), Belgium

argued that the scope of Article 11(2) of the Staff Regulations was limited to the legal

relations between the European Community employer and its servants, and did not

require Belgium (or any other State) to ensure the relevant capital transfer could take

place.41 Belgium referred to the fact that Article 11(2) did not expressly require States

to act. This argument about the scope of Article 11(2) was rejected by the CJEU. It

held that the Staff Regulations did place obligations on EU Member States (in other

words, Member States fell within the scope of the regulations) in so far as their

cooperation was necessary in order to give effect to those regulations.42 The

right/entitlement under Article 11(2) was intended to ensure that EU officials could

retain their national rights and have them taken into account under the EU scheme. If

Member States were entitled to refuse to lay down rules for the transfer of pension

rights, this would deprive EU staff of the very right granted to them under Article 11(2).43

40 Judgment of 20 October 1981, Commission v Belgium (“Commission v Belgium"), Case 137/80, C:1981:237. See also judgment of 16 December 2004, Gregorio My v ONP (“Gregorio My”), C-293/03, C:2004:821, paras. 44-49. 41 See pp. 2400-2401 of the original case report, [1981] ECR 2393. 42 Case 137/80 Commission v Belgium, para. 8. 43 Ibid, paras. 11-13. See also judgment of the CJEU of 22 December 2022, WP v INS (“WP”), C-404/21, EU:C:2022:1023, para. 38, confirming, by reference to Commission v Belgium, that the Staff Regulations are binding on Member States in so far as their cooperation is necessary to give effect to those regulations. In other words, Member States fell within the scope of the Staff Regulations where action on their part was needed to make the provision in question effective.

Page 17

39. The question of whether Article 11(2) of the Staff Regulations requires action on the

part of States has thus been settled in the case-law of the CJEU. That States must

take action is also underpinned by their obligations under Articles 4(3) TEU and/or 3

EEA to take all appropriate measures, whether general or particular, to ensure

fulfilment of the obligations arising out of the EEA Agreement.44

40. This is precisely the case here. Article 29(1) of the Regulation and the related Article

11(2) of the Staff Regulations require action on Iceland’s part to be effective. Iceland’s

argument that the absence of an express reference in Article 29(1) to EFTA States

(and, by implication, to EU Member States) is determinative in this case is unsupported

by case-law. It would also logically lead to the undesirable situation in which, because

no State actor is expressly identified, Article 29(1) of the EASA Regulation is wholly or

partly ineffective.45

41. Third, Iceland has observed that Article 30 of the EASA Regulation was expressly

adapted to require the EFTA States to “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”.46 It argues that, because Article 29 was not so adapted, this

demonstrates that Article 29 was not intended to place obligations on EFTA States.

This argument does not however help Iceland’s case.

42. Article 30 clearly places (by Iceland’s own admission47) an obligation on Iceland to

apply (“[t]he EFTA States shall apply”) to the Agency’s staff “the applicable rules

44 See e.g. judgment of 15 July 2015 in Case E-2/15 EFTA Surveillance Authority v Iceland, para. 18 and the case-law cited, and judgment of 30 April 1998 in Case E-7/97, ESA v Norway, para. 16. See also, in relation to Article 5 of the EEC Treaty (Article 4(3) TEU), Case 137/80 Commission v Belgium, para. 9: “Consequently, where a provision of the Staff Regulations requires national measures for its application, the Member States are bound under Article 5 of the EEC Treaty to adopt all appropriate measures, whether they be general or particular”. 45 See Case 137/80 Commission v Belgium, paras. 10-13, where the CJEU rejected on this basis such an interpretation in relation to Article 11(2) of the Staff Regulations. See also E-2/23 A Ltd, para. 43 and the case-law cited (preference must be given to the interpretation which ensures a provision’s effectiveness). See further judgment of 10 December 2010 in Case E-2/10, Kolbeinsson, para. 46 46 See e.g. Reply to the RQI, Annex A.8, p.2: “A different approach is taken in the adaptation text to Article 30 of Regulation (EC) 216/2008, where the adaptation text expressly places the obligation upon the EFTA States to apply to the Agency and its staff the Protocol of Privileges and Immunities of the EU and applicable rules adopted pursuant to that Protocol.” 47 Ibid.

Page 18 adopted pursuant to [the] Protocol”. The Protocol provides a legal basis for the

adoption of measures relating to staff employed by the EU. The Staff Regulations were

indeed adopted pursuant to the Protocol, more precisely pursuant to Article 7 and

Articles 12 to 16 of the Protocol, together with Article 24 of the Treaty of Brussels.48

Thus, by way of an express provision in JCD No 163/2011, Iceland has accepted the

obligation to apply (and be bound by, to the extent relevant) the Staff Regulations, as

they constitute applicable rules adopted pursuant to the Protocol. The Staff

Regulations must therefore be applied by Iceland, where (as here) relevant.

43. Fourth, Recital 4 of the Preamble to JCD No 163/2011 records the purpose behind

incorporating the EASA Regulation, thus together with the relevant adaptations, into

the EEA Agreement:

“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.”49

44. This, in the Authority’s submission, shows the intention fully to involve the EFTA States

(and by extension their nationals) in the work of EASA.50 This is also reflected in Point

3(m) of the Annex to the JCD, which, by adding a new Article 29(4) to the Regulation,

ensured that EFTA State nationals could be employed by EASA. If the intention had

been to limit the extent to which the Staff Regulations would then apply to such

nationals, an adaptation could have been made to Article 29(1). However, this did not

take place. Instead, the adapted text of Article 29(4), read in the context of Article 29(1),

48 See the Preamble to the Staff Regulations, which records the legal basis for their adoption. See in particular Article 14 of the Protocol on Privileges and Immunities, while the Treaty of Brussels (Treaty establishing a Single Council and a Single Commission of the European Communities) may be found at OJ 152 13.7.1967, pp.2-17 (see in particular Article 24). 49 Emphasis added. Recitals may help explain the purpose and intent behind an instrument, which may subsequently help determine the scope of a legal act, see e.g. judgment of the Grand Chamber of the CJEU of 3 September 2024 in Illumina, Grail v Commission, Joined Cases C-611/22 P and C-625/22 P, EU:C:2024:677, paras. 187-203, and judgments of the EFTA Court of 11 December 2012 in Case E- 2/12, HOB Vín, para. 60, and of 28 January 2013 in Case E-16/11, Icesave, where the EFTA Court considered the recitals of Directive 94/19/EC when construing the relevant provisions of that directive. 50 This intention can also be seen in other adaptations made by the JCD. For example, at point 66n of Annex XIII to the EEA Agreement: adaptation (o) ensures that important documents are also produced in Icelandic and Norwegian, on a par with the official languages of the EU, while adaptation (t) provides for the right to communicate with EASA in Icelandic and Norwegian, and adaptation (r) provides that EFTA State nationals shall be eligible as members of the EASA Boards of Appeal.

Page 19 suggests that the intention was that the relevant parts of the Staff Regulations and

Conditions of Employment should apply in full to EFTA State nationals. Article 29(4)

provides (emphasis added):

“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.”

45. Article 12(2)(a) of the Conditions of Employment provides the rule that (save in

exceptional cases), temporary staff must be nationals of the EU Member States. The

derogation from this provision ensures that EFTA State nationals are included. But the

fact that a “derogation” to the Conditions is made in Article 29(4) of the Regulation must

also logically imply that these Conditions (in the absence of any other derogation or

limitation) otherwise apply in full, in line with Article 29(1). Article 29(1) provides that

“[t]he Staff Regulations of Officials of the European Communities, the Conditions of

Employment of other Servants of the European Communities […] shall apply to the

staff of the Agency […].” By including a derogation (in Article 29(4)) only in relation to

one of the Conditions, this strongly suggests that the Staff Regulations and Conditions

of Employment (which form part of the one same legal act)51 are otherwise intended to

apply in full.

46. Finally, the Authority observes that the objectives of the EASA Regulation aim at

achieving a uniform level of application and implementation across Europe, in respect

of civil aviation safety.52 Full participation of the EFTA States in the Agency, as

foreseen in Recital 4 of the Preamble to the JCD, contributes to achieving such

uniformity across the EEA. By refusing to transfer pension rights acquired in Iceland to

the PSEUI (and thereby disincentivising people who have worked in Iceland from

applying to EASA), Iceland undermines the Agency’s ability to choose qualified staff

51 As explained at paragraph 19 above, the Staff Regulations and Conditions of Employment are together laid down in the Annex to the same act, Council Regulation Council Regulation No 259/68 (EEC, Euratom, ECSC). 52 The Regulation’s “principal objective” is “to establish and maintain a high uniform level of civil aviation safety in Europe” (Article 2(1), emphasis added), through the means of, inter alia, “uniform implementation of all necessary acts by the national aviation authorities and the Agency within their respective areas of responsibility” (Article 2(3)(d), emphasis added).

Page 20 from Iceland compared with other EEA States.53 Such an approach is inconsistent with

the stated aim of achieving uniformity across the EEA.

47. For the above reasons, the Authority submits that Article 29(1) must be interpreted in

a manner that is capable of placing obligations on EFTA (and EU) States, not just on

the Agency itself, and which may therefore require Iceland to act in the present case.54

4.1.3 The Binding Nature of the Obligations imposed under Article 29 of the Regulation in this Case

48. By its second argument, Iceland contends that, because the Staff Regulations are not

themselves incorporated into the EEA Agreement, any reference to them in Article 29

of the EASA Regulation is ineffective. In such circumstances, Iceland argues that no

obligations by reference to the Staff Regulations can be placed upon it. Iceland refers

in particular to Article 7 EEA, and to the fact that the Staff Regulations are not referred

to or contained in the Annexes to the EEA Agreement.55

49. The Authority does not dispute that the Staff Regulations are not incorporated as such

into the EEA Agreement. However, the Authority submits that the reference to the Staff

Regulations in Article 29 of the EASA Regulation is not without legal effect.

50. First, the Authority recalls that the EASA Regulation is a regulation which, within the

meaning of Article 7 EEA, is referred to in the Annexes to the EEA Agreement (Annex

III, points 66a, 66r, 68a and 66n) and the related JCD No 136/2011. It is undisputed

that the EASA Regulation is incorporated into the EEA Agreement and is in force.

53 As the CJEU has held, the objective of Article 11(2) of the Staff Regulations is to facilitate movement from national employment to, in this case, the Agency in Germany, thus ensuring that the Agency has the best possible chance of being able to choose qualified staff who already possess suitable experience: Case 137/80 Commission v Belgium, para. 11 and C-293/03 Gregorio My, para. 44. Iceland’s refusal practice however impinges on EASA’s ability to recruit staff who have worked in Iceland: see the extract from the EASA Letter (Annex A.17) quoted in paragraph 27 above. 54 See further Section 4.1.3 below. The Authority uses the terms “capable of” and “may”, because whether an obligation applies to a State (rather than the Agency) will depend on which particular provision of the Staff Regulations is relevant. 55 See e.g. Reply to the Letter of Formal Notice, Annex A.12, p. 1.

Page 21 Iceland was accordingly obliged, under Article 7 EEA, to make the EASA Regulation

part of its legal order.

51. Iceland incorporated the EASA Regulation, including Article 29 thereof, into its national

legal order by Article 3 of Regulation No. 812/2012, which provided that the EASA

Regulation would come into force with the changes which followed from Annex XIII

(thus the adaptations following from the JCD) and Protocol 1 to the EEA Agreement,

and “other, relevant provisions.”56

52. Under Article 3 EEA and settled case-law, EFTA States must ensure the full application

of the relevant provisions of EEA law (here the Regulation) not only in fact but also in

law. They must abstain from the application of rules which are liable to jeopardise the

achievement of the objectives pursued by the Regulation and deprive it of its

effectiveness.57

53. As considered under Section 4.1.2 above, Article 29(1) of the Regulation, as

incorporated, clearly requires the Staff Regulations to be applied to Agency staff where

relevant. This will entail an obligation on EEA States to act insofar as their cooperation

is necessary to give effect to the relevant regulations.58 Contrary to Iceland’s view

however, this does not mean that a general obligation is thereby placed on Iceland to

implement or transpose the Staff Regulations as a whole.59 Rather, Iceland’s obligation

(and therefore the subject-matter of the breach) is to give full effect to Article 29(1) of

the Regulation. Effectiveness of this provision requires: (i) having recourse to certain

parts of the Staff Regulations, which effectively ‘clothe’ the bare bones of Article 29(1);

and (ii) giving those parts effect.

56 See paragraph 23 and the related footnotes 25 and 26 above. 57 See e.g. judgment of 2 October 2015 in Case E-3/15 Municipality of Vaduz, para. 33 and judgment of 27 July 2013 in Case E-15/12 Wahl v Iceland, paras. 51-54. These cases relate to the national implementation of directives, but the Authority submits that the principles set out therein must also apply, a fortiori, to the implementation of regulations. 58 See Case 137/80 Commission v Belgium, para. 8, considered further at paragraphs 37-38 above. 59 See Reply to the Letter of Formal Notice, Annex A.12, p.2. Iceland, in an e-mail dated 16 June 2021 to the Authority (Internal Market Affairs Directorate) (Annex A.18), has referred to a statement apparently made by the European Commission’s Legal Service that an act cannot be made part of the EEA Agreement by mere reference to it in another legal act which has been so incorporated. This is not however the point at issue in the present case.

Page 22

54. On this point and second, the Authority recalls that it is not unprecedented for EEA

law to refer to normative standards or rules which are not themselves part of EEA law,

but which nevertheless influence or affect the way in which EEA law applies. For

example, Article 28(3)(b) of Directive 2004/38/EC60 refers to “the best interests of the

child, as provided for in the United Nations Convention on the Rights of the Child of 20

November 1989.” It thereby requires EEA States (including Iceland) to take this “best

interests” standard into account when taking expulsion decisions, even though this

standard is not itself incorporated ‘as such’ into the EEA Agreement: see Case E-2/20

Norwegian Government v L, where the Court confirmed that the relevant assessment

should be made inter alia in the light of the best interests of the child.61

55. Third, the adaptation text to Article 29 and to Article 30 of the EASA Regulation

strongly suggests that the intention was to place obligations on the EFTA States to

give effect to the relevant provisions of the Staff Regulations, in order to make Article

29(1) of the Regulation effective: see paragraphs 36 and 41-45 above. The opposite

interpretation, namely that EFTA States are under no obligation to respect or give effect

to individual rights conferred by the Staff Regulations, cannot credibly be inferred from

the adaptation text. It also cannot be reconciled with the principle of effectiveness of

rights granted to individuals under the EEA Agreement,62 pursuant also to the principle

of sincere cooperation in Article 3 EEA.

56. Iceland has argued that the adaptation text in Article 29(4) of the Regulation was

intended simply to ensure the “employability” of EFTA State nationals and not to fully

ensure their equal treatment with EU nationals under the Staff Regulations (thus under

60 Incorporated into the EEA Agreement by Decision of the EEA Joint Committee No 158/2007 (OJ L 124, 8 May 2008, p. 20, and EEA Supplement 2008 No 26, p. 17). 61 See para. 50 of the judgment of 21 April 2021, Case E-2/20 Norwegian Government v L, and similarly the judgment of the Grand Chamber of the CJEU of 8 May 2018 in K.A. and Others, Case C-82/16, EU:C:2018:308, para. 93. See also Judgment of the Grand Chamber of the CJEU of 12 July 2013 in Joined Cases C-584/10 P, C-593/10 P and C-595/10 P (the ‘asset freezing cases’), EU:C:2013:518. There, the standards within the Charter of the United Nations, which Charter is referred to generally in Article 3 TEU, were considered relevant to determining the EU’s scope of action. Again, a simple reference in the text to an extraneous norm did not entail that this norm became part of EU law. However, the standards set out by that norm did circumscribe the EU’s freedom of action and served as an interpretative canon for how the EU rules in question could be applied, praeter legem. 62 In line with the Court’s settled case-law, where a provision of EEA law is open to several interpretations, preference must be given to the interpretation which ensures a provision retains its effectiveness: Case E-2/23 A Ltd, para. 43 and the case-law cited.

Page 23 Article 29(1)).63 However, this fails to recognise that Article 29(1) and (4) form part of

a single provision and must be read together. As submitted at paragraphs 43-45 above,

the fact that a ‘derogation’ to just one part of the Conditions of Employment is provided

for in Article 29(4), indicates rather that those Conditions and the Staff Regulations

were otherwise intended to apply to EFTA State nationals under Article 29(1), where

relevant. Iceland’s interpretation instead leads to a situation where EFTA States would

enjoy the right for their own nationals to be employed by the Agency, without the

corresponding obligation to respect all the conditions of their employment.

57. Such an interpretation would result in an unequal arrangement, with a lack of

reciprocity between the EU Member States on the one hand, and the EFTA States on

the other, in two ways. First, Icelandic nationals would benefit from the right to have

the actuarial value of their pension rights accumulated in an EU Member State

transferred upon taking up employment at the Agency, without the reciprocal right of

EEA nationals (including Icelandic nationals) to receive the same benefit in relation to

rights accumulated in Iceland. Second, the EU and its Member States would have

granted the right of full participation in the Agency to the EFTA States and Iceland,

including the right of their/Icelandic nationals to be employed by the Agency, without a

reciprocal obligation for Iceland to give effect (as the EU Member States must) to the

relevant Staff Regulations.

58. Such an interpretation would thus permit the EFTA States to unilaterally dictate, to a

certain extent, the terms of employment of those working for EASA who are EFTA or

EU nationals and have previously worked (and accumulated pension rights) in an

EFTA State. This runs contrary to the objective of establishing a dynamic and

homogeneous European Economic area, which can only be achieved if both EFTA and

EU citizens enjoy, relying upon EEA law, the same results in both the EU and EFTA

pillars of the EEA.64

63 See Reply to the Letter of Formal Notice, Annex A.12, p.2, para. 3. 64 See e.g. judgment of 21 December 2012, Case E-14/11, Schenker North AB and Others v EFTA Surveillance Authority, para. 118 and the case-law cited. See also judgment of the CJEU of 2 April 2020 in I.N., Case C-897/19, EU:C:2020:262. There, the CJEU took note (para. 4 of the judgment) of the aim of Article 1(1) of the EEA Agreement of creating a homogeneous EEA. It went on to find that where

Page 24

59. Such undesirable outcomes are avoided by an interpretation of Article 29(1) whereby

the Staff Regulations do apply to EFTA State nationals, where relevant. This

construction is further supported by the second paragraph of Article 30 of the

Regulation. As submitted at paragraphs 41-42 above, this second paragraph, added

by the JCD, provides that the EFTA States must apply to Agency staff the applicable

rules adopted pursuant to the Protocol on Privileges and Immunities. Crucially, such

applicable rules include the Staff Regulations referred to in Article 29(1), the provision

at issue in the present case.

60. Finally, the Authority observes that Iceland’s reasoning is inconsistent with regard to

references to rules contained in unincorporated legal acts, namely the Protocol on

Privileges and Immunities on the one hand and the Staff Regulations and Conditions

of Employment on the other. Iceland does not contest that it may derive obligations

from the Protocol on Privileges and Immunities in relation to EASA staff.65 Yet Iceland

contests that it may derive obligations from the Staff Regulations and Conditions of

Employment. The Authority observes however that while both the Protocol and the

Conditions of Employment are referred to in the same JCD No 163/2011, neither is

incorporated as such in the EEA Agreement. Iceland has given no clear rationale for

treating them differently.

4.1.4 Conclusion

61. For the above reasons, Iceland’s argument, that the reference to the Staff Regulations

in Article 29(1) of the EASA Regulation has no legal effect in relation to Iceland in this

case, must be rejected. The Authority accordingly concludes that, by maintaining in

force an administrative practice which fails to ensure that EEA nationals may transfer

to the PSEUI the capital value of the occupational pensions they have accrued in

Iceland, Iceland has failed to fulfil its obligations under Article 29(1) of the EASA

Regulation.

EFTA State nationals were in an objectively comparable situation to EU citizens, the same treatment should apply (namely the application by analogy of its ruling in Petruhhin, C-182/15, EU:C:2016:630, para. 56): see in particular paras. 56-58 and 75 of the judgment. 65 Reply to the RQI, Annex A.8, p.2.

Page 25 4.2 SECOND PLEA: BREACH OF ARTICLE 28 EEA

4.2.1 Iceland’s Practice restricts the Free Movement of Workers

62. Article 28 EEA provides that freedom of movement for workers must be secured among

EU Member States and EFTA States. It is settled case-law that this entails the right for

EEA nationals to leave their home State to go to another EEA State to work, without

being placed at a disadvantage.66 Measures liable to hinder or make less attractive the

exercise of fundamental freedoms are an encroachment on those freedoms, which

require justification, even where such measures apply without discrimination on

grounds of nationality.67

63. In the present case, Iceland has confirmed68 that it will not allow the transfer of the

capital value of occupational pensions accrued in Iceland, by Icelandic and other EEA

nationals, to the PSEUI, in circumstances where such nationals will be employed by

EASA, an EU agency established in Köln, Germany.

64. The Authority submits that such a practice renders it less attractive for the EEA national

in question to leave employment in Iceland for that in another EEA State.69 This is

because inclusion of the capital value of their occupational pensions in that of the

PSEUI presents a number of potential advantages for the EEA national, such as

greater pension disbursal, an increased lump sum and periodic payments, or a

reduced tax burden on accrued contributions.70

66 See e.g. judgments of the CJEU of 15 December 1995 in Bosman, Case C-415/93, EU:C:1995:463, paras. 94-96; 11 September 2007 in Commission v Germany, Case C-318/05, EU:C:2007:495, paras. 114-115; 12 July 2012 in Commission v Spain, Case C-269/09, EU:C:2012:439, paras. 52-54; and 13 July 2016 in Pöpperl, Case C-187/15, EU:C:2016:550, paras. 23-24. 67 See e.g. judgments of 19 April 2016 in Case E-14/15 Holship Norge AS v Norsk Transportarbeiderforbund, para. 115 and the case-law cited, of 26 January 1999 in Terhoeve, C-18/95, EU:C:1999:22, para. 39, and of 27 January 2000 in Graf, Case C-190/98, EU:C:2000:49, para. 18. 68 See the administrative practice described at paragraphs 27-29 above. 69 EASA has indeed confirmed that, “[i]n addition to the negative impact on actual individual cases, such refusal is likely to deter potential candidates of Icelandic nationality from accepting EASA offers of employment, thereby having an impact on EASA recruitment of Icelandic staff members. Prior to offering a contract of employment, our Agency must now inform the Icelandic candidates of the practice of their national authorities regarding pension rights.” See the EASA Letter (Annex A.17), pp.1-2. 70 The existence of such potential advantages has not been contested by Iceland.

Page 26

65. Iceland’s failure to permit such a capital transfer therefore constitutes a restriction on

the free movement of workers. Under settled case-law, Iceland must demonstrate that

the restrictive measure is suitable, proportionate and justified by overriding reasons in

the public interest.71 Iceland has however failed to provide any such justification.72

66. Instead, Iceland makes essentially two arguments why Article 28 EEA does not confer

relevant rights in the present case. These arguments are addressed in turn.

4.2.2 Iceland’s Arguments are Unfounded

67. First, Iceland argues that Article 28(1) EEA does not confer rights in relation to

organisations or institutions to which the EFTA States are not party. It observes that

while the JCD incorporating the EASA Regulation gave the EFTA States participation

rights in EASA, and while they for all practical purposes are to be regarded members,

EASA remains an EU agency.73 It claims that, because the Staff Regulations are not

incorporated into the EEA Agreement, there is no obligation for it to provide for the

transfers of capital value at issue in the present case.74 The Authority submits that

these arguments must be rejected.

68. Firstly, as set out in Sections 4.1.2 and 4.1.3 above, the relevant point is that the EASA

Regulation is incorporated into the EEA Agreement. By its Article 29(1), the EASA

Regulation imposes certain obligations on Iceland, by reference to the relevant

provisions of the Staff Regulations – in this case, Article 11(2).

69. Secondly, Iceland’s claim, that Article 28 EEA does not apply because EASA is an EU

agency, misses the point and is unsupported by case-law. It is settled case-law of the

71 See e.g. judgments of 5 May 2021, Case E-8/20 Criminal Proceedings against N (“N”), paras. 91-95, and of 16 May 2017, E-8/16 Netfonds, para. 117. See also judgment of 5 June 2018 in Coman and others, Case C-673/16, EU:C:2018:385, para. 41 and case-law cited. 72 The Authority recalls that the burden of proving that restrictions on fundamental freedoms may be justified rests upon the State, which must adduce an analysis of the appropriateness and proportionality of the measures adopted and specific evidence supporting its arguments: see e.g. Case E-9/11 EFTA Surveillance Authority v Norway, paras. 88-89, Case E-8/20 N, para. 125, and Case E-2/12 HOB-Vín ehf., para. 82. 73 Reply to the Letter of Formal Notice, Annex A.12, pp. 2-3. 74 Ibid.

Page 27 CJEU that the free movement of workers under Article 45 TFEU applies to EU nationals

irrespective of whether they move Member State to work for an EU institution or

agency,75 or for example to work for an international organisation governed by

international law.76 Thus, where an individual moves to an EEA State to work, Article

28 EEA will apply,77 irrespective of the type of entity or organisation, and irrespective

of whether or not the State in question is a party to or member of that particular body.

70. Accordingly, Iceland’s argument that it is not party to EASA – with the result that Article

28 EEA does not apply – must be rejected. The Authority recalls further that EASA is

a creation of EU law, established and governed by the EASA Regulation. The EASA

Regulation is in turn incorporated into the EEA Agreement. As Iceland itself

recognises, “according to Joint Committee Decision No 163/2011 incorporating

Regulation (EC) No 216/2008 [the EASA Regulation] into the EEA Agreement, the EEA

EFTA States have participation rights in the EASA and for all practical purposes are

regarded to be members.”78 Iceland’s argument essentially amounts to the claim that,

although the EASA Regulation, inter alia establishing EASA, has been incorporated

into the EEA Agreement, Article 28 of that same EEA Agreement does not apply to

those seeking to work there (in Germany). Such an argument has no legal basis and

must be rejected.

71. Second, Iceland argues, by reference to the cases of C-233/12 Gardella and C-

404/21 WP, that the terms of employment in EU agencies are derived exclusively from

agency acts and associated instruments, and that Article 28 EEA is not engaged and

75 See e.g. judgment of 22 December 2022, WP v INS (“WP”), C-404/21, EU:C:2022:1023, para.24 (where an individual who had previously worked in Italy commenced work with the European Central Bank) . 76 As the CJEU has held, a person “does not lose his status as worker for the purposes of Article 48(1) of the Treaty because he holds employment with an international organisation”: see judgment of 15 March 1989, Echternach and Moritz (“Echternach and Moritz”), Joined Cases 389/87 and 390/87, EU:C:1989:130, para. 11 (which case related to the European Space Agency, an international organisation governed by international law and located in the Netherlands). See also judgment of 4 July 2013, Gardella v INPS (“Gardella”), C-233/12, EU:C:2013:449, paras. 25-27 and the case-law cited. In that particular case, Mr Gardella worked for the European Patent Office, an international body established by the Munich Convention (European Patent Convention) of 5 October 1973 and having its head office in Munich. 77 Assuming that the other conditions for the application of Article 28 EEA are met, such as employment. 78 Reply to the Letter of Formal Notice, Annex A.12, p. 2.

Page 28 consequently has not been breached.79 The Authority submits that this argument is not

well-founded, as follows.

72. Firstly, as set out at paragraphs 69-70 above, a case such as the present one does

come within the scope of Article 28 EEA, which is therefore engaged. The fact that

some other, employment-specific acts or norms might also apply, cannot displace the

basic application of Article 28 EEA. The same argument as that made by Iceland was

considered and rejected by the CJEU in the seminal case of Echternach and Moritz,

Joined Cases 389/87 and 390/87. That case concerned a German national working

in the Netherlands for the European Space Agency, an international organisation

governed by a special statute under international law. The Netherlands argued that the

legal relationship of the German national with the host country was governed solely by

that special statute (namely a protocol on privileges and immunities), and therefore

that Article 48 of the EEC Treaty did not apply. The CJEU rejected this argument, ruling

that such a national did not lose his status as a worker within the meaning of Article 48

of the EEC Treaty, even though the special statute (also) applied. This had the

consequence that he and his family could benefit from relevant rights and privileges

under EEC law.80

73. Secondly, the cases of C-233/12 Gardella and C-404/21 WP concern different material

facts from the present case. The reasons why the CJEU did not grant relief to the

worker in those cases do not apply here.

74. In C-233/12 Gardella, the relevant employer was the European Patent Office (“EPO”),

an international organisation based in Munich. While the free movement provisions of

Article 45 TFEU did apply,81 the CJEU observed that no additional facilitating EU law

79 Slides of the Icelandic Government for a meeting with the Authority of 17 January 2023, Annex A.19, p.4. 80 In that particular case, the rights deriving from Regulation No 1612/68 of the Council of 15 October 1968 on freedom of movement of workers within the Community: see Joined Cases 389/87 and 390/87, Echternach and Moritz, paras. 9-12. 81 C-233/12 Gardella, paras. 25-27.

Page 29 measures, such as the Staff Regulations, applied to the EPO.82 It noted further that the

EPO’s rules on pensions required the body managing the EPO’s pension scheme to

give its permission before any transfer of the capital value of pension rights could take

place.83 In these circumstances (“thus”), the CJEU considered that Mr Gardella’s

situation fell to be assessed by comparison with workers moving within the Union to

work for an employer who was not an EU institution or international organisation, and

with self-employed citizens.84 In such cases, the relevant provisions of EU law (the

TFEU and Regulation Nos 1408/71 and 883/2004) did not provide for the transfer of

the capital value representing previously-acquired pension rights. Rather, they were

based on the principle of aggregation of periods. Accordingly, in the circumstances of

the case, Article 45 TFEU alone could not oblige a Member State to provide for such

capital transfers or to conclude an international agreement to that effect.85 Rather, the

principle of aggregation of pension periods was to be applied.86

75. In the present case however, EASA is a creation of EU law, established and governed

by the EASA Regulation, which is in turn incorporated into the EEA Agreement. EASA

must, under Article 29(2) of the Regulation, apply the Staff Regulations to its own staff,

including EFTA State nationals.87 Accordingly, and contrary to the situation in

Gardella, the employer (EASA) must apply an EEA law measure which further

facilitates the free movement of workers: in this case, permitting the transfer of the

capital value of previously acquired pension rights to the PSEUI.88 Even if Article 29 of

the Regulation does not oblige Iceland to apply the relevant provisions of the Staff

Regulations (quod non), it is clear that EASA must do so. By failing to permit the capital

82 Ibid, paras. 28-29, and see also paras. 14-15 and 48 (no agreement existed between the Member State and the EPO which provided for the possibility of a transfer of the capital value of the relevant pension rights). 83 Ibid, para. 30. 84 Ibid, paras. 27-32. 85 Ibid, paras. 33-36. 86 Ibid, paras. 45-49. 87 The Authority therefore submits that, similarly to the case of Forcheri, the legal position of staff of EASA in the EEA States in which they are employed comes within the scope of the EEA Agreement on a dual basis: by reason of their post with EASA, and because they must enjoy all the benefits flowing from EEA law for nationals of the EEA States in relation to freedom of movement: see the judgment of 13 July 1983, Forcheri v Belgium, Case 152/82 EU:C:1983:205, para. 9, which paragraph is also referred to in the Opinion of Advocate General Darmon in Joined Cases 389/87 and 390/87 Echternach and Moritz (EU:C:1989:35) at paras. 37-38. 88 As the CJEU held in Case 137/80 Commission v Belgium, para. 11, the intention of Article 11(2) of Annex VIII to the Staff Regulations is to facilitate the free movement of workers.

Page 30 value of transfers to which EASA staff members would otherwise be entitled under

Article 29, Iceland unlawfully hinders their rights of free movement under Article 28

EEA. Independently therefore of whether the Authority is correct in respect of its First

Plea (breach of Article 29(1) of the Regulation), the Authority submits that, where EEA

law measures exist to facilitate free movement (here Article 29(1) of the Regulation

and Article 11(2) of the Staff Regulations), and where such measures apply to the

employer (EASA),89 Iceland’s failure to apply or give effect to such measures

constitutes a breach of Article 28 EEA (the Second Plea).

76. In short, while Article 28 EEA applied in Gardella and also applies in the present case,

the difference is that in the present case the Staff Regulations also apply, and must,

on any view, be applied by EASA. This has the effect of further facilitating the free

movement of workers under Article 28 EEA.90 Once such facilitating measures exist,

denying their application necessarily impinges upon the full extent of the rights of free

movement the worker would otherwise have enjoyed. In Gardella on the other hand,

no such additional facilitating measures applied: no arrangement existed to permit the

transfer of the capital value of the pension rights. In such a context, the worker could

only rely on the ‘basic’ EU law free movement rights which (at the time) entailed only

aggregation of periods and not capital transfers. It was in this specific context that,

logically, the CJEU found that the absence of such a capital transfer facility was not

required by, and therefore not in breach of, Article 48 TFEU.

77. In C-404/21 WP, again, just as in Gardella: (i) the Staff Regulations did not apply to

the employing entity (here the European Central Bank (“ECB”))91; and (ii) some sort of

agreement or arrangements between the ECB and the Member States would therefore

89 The Authority observes that Iceland (and the other EFTA States) chose, via the JCD and the incorporation of the EASA Regulation into the EEA Agreement, to make EASA subject to such free movement requirements. 90 Indeed, the CJEU has held that the intention of Article 11(2) of Annex VIII to the Staff Regulations is precisely to facilitate the free movement of workers: see Case 137/80 Commission v Belgium, para. 11 and C-293/03 Gregorio My, para. 44. 91 While the ECB is an EU institution, it has its own legal personality, separate from the European Union, and the Staff Regulations do not apply to it: see C-404/21 WP, paras. 32-34.

Page 31 have been required in order to permit the transfers of capital value.92 Again therefore,

WP can be distinguished from the present case, where it is undisputed that the Staff

Regulations apply to EASA, the employing entity, which must apply such regulations

to its staff. The relevant rules are therefore in place: all that remains is for Iceland to

permit the transfer. Indeed, there is no doubt that, under Article 29(1) of the Regulation

(and Article 11(2) of the Staff Regulations), an EU citizen moving from an EU Member

State to work for EASA would be able to transfer the capital value of his/her pension

scheme to the PSEUI.

78. The Authority therefore submits, thirdly, that the principle of homogeneity also supports

the conclusion that EEA or EFTA State nationals moving to work for EASA must

similarly be permitted to transfer the capital value of occupational pensions accrued in

Iceland to the PSEUI. As the Court has held:

“[…] Homogeneous interpretation and application of common rules is essential for the effective functioning of the internal market within the EEA. The principle of homogeneity therefore leads to a presumption that provisions framed in the same way in the EEA Agreement and EC law are to be construed in the same way. […]” 93

The Authority submits, in line with its submissions in Section 4.1 above, that there are

no relevant differences in the scope or purpose of the EASA provisions as incorporated

into the EEA Agreement, compared with those in the EU legal order. Accordingly, and

in order to promote the effective functioning of the EEA internal market, the provisions

should be construed and applied in a way which promotes homogeneity with their

operation in the EU.

92 C-404/21 WP, paras. 35-43. Indeed, the CJEU observed that, under the ECB conditions of employment, the ECB was required to negotiate and enter into agreements or arrangements to facilitate the relevant pension transfers with the relevant Member State. In the absence however of an such agreement or arrangement, the Member State was not required to provide for such a transfer (albeit that, once the ECB had opened such negotiations, the Member State was required to participate actively and in good faith with a view to entering into such an agreement). 93 Judgment of 8 July 2008 in Joined Cases E-9/07 and 10/07 L’Oréal Norge AS, para. 27. See also judgment of 26 June 2007 in Case E-2/06 ESA v Norway, para. 59 and judgment of 26 July 2016 in Case E-28/15 Jabbi, para. 60.

Page 32

79. Finally, the Authority recalls that, under the principle of loyal cooperation (Article 3

EEA), States must take all appropriate measures to ensure fulfilment of the obligations

arising under the EEA Agreement, and must abstain from measures that could

jeopardise the attainment of its objectives.94 This means that where, as here, the EFTA

States have agreed to extend the scope of the EEA Agreement via amendments to its

annexes (the EASA Regulation), such an extension may limit, as in this case, an EFTA

State’s discretion to set rules, including in the area of free movement.95 Thus, in the

present case, to the extent that Iceland has agreed to participate in EASA, it is no

longer free to restrict the rights of EEA nationals as if no such participation had taken

place. This means that Iceland has committed to give effect to Article 29(1) of the EASA

Regulation, and to the relevant Staff Regulations referred to therein, and to refrain from

compromising the free movement objectives reflected in those Regulations96 and in

the EEA Agreement itself.97

80. Accordingly:

i. where, via Article 29(1) of the EASA Regulation, a measure to facilitate

the free movement of workers applies (Article 11(2) of Annex VIII to the

Staff Regulations); and

ii. where EASA is ready to apply, as it must, that facilitating measure to the

Complainant and other EEA nationals,98

Iceland’s practice99 of refusing the relevant capital transfers under Article 29(1) and

Article 11(2) jeopardises the free movement objectives of those provisions (and those

of the EEA Agreement) and fails to ensure their effectiveness.

94 See, e.g. judgment of 4 July 2023 in Case E-11/22 RS, paras. 41, 44 and Case 137/80 Commission v Belgium, para. 9. 95 See judgment of 1 February 2006 in Case E-17/15, Ferskar kjötvörur ehf., paras. 48-49. 96 See Case 137/80 Commission v Belgium, para. 11 and C-293/03 Gregorio My, para. 44, where the CJEU held that the intention of Article 11(2) of Annex VIII to the Staff Regulations was to facilitate the free movement of workers. 97 See e.g. Recital 8 to the EEA Agreement, which underlines the important role played by individuals in the EEA through the exercise of the rights conferred on them by the EEA Agreement and through the judicial defence of those rights. 98 See e.g. the EASA Letter, Annex A.17. 99 The practice as described in Section 4.1.1 above.

Page 33

81. The Authority’s position on this point finds support in the case of C-293/03 Gregorio

My.100 There, the CJEU held that the duty of genuine cooperation and the obligation

to facilitate the achievement of the Union’s tasks (Article 10 EC), read together with

the Staff Regulations, precluded national legislation which failed to take into account,

for the purposes of entitlement to a national early retirement pension scheme, periods

of employment under the European Community pension scheme. The CJEU’s

reasoning was that such legislation was likely to discourage employment with an EU

institution, and that such consequences could not be accepted in light of the duties and

obligations laid down in Article 10 EC.101

82. It is noteworthy that the CJEU invoked and relied upon the duty of sincere cooperation

in circumstances where the provisions governing the free movement of workers did not

apply (because Mr My’s situation was purely internal to Belgium), nor did a particular

provision of the Staff Regulations expressly regulate the matter.102 Nevertheless, the

CJEU took into account the objective of the Staff Regulations as a whole (facilitating

and encouraging employment with the Community administration), to find that Article

10 EC obliged Belgium to facilitate the achievement of such employment by permitting

‘Community employment periods’ to be taken into account under its national pension

scheme. The CJEU’s approach underscores the importance and strength of States’

duty of sincere cooperation, to ensure fulfilment of obligations arising out of relevant

EU or EEA law.

83. The Authority submits that similar reasoning applies here, a fortiori in a situation where

the free movement provisions and specific provisions of the Staff Regulations (Article

11(2)103) do apply. By restricting rights of EEA nationals to take up employment with

EASA (an agency within the scope of the EEA Agreement), Iceland discourages both

the exercise of free movement rights and employment with that agency. This runs

contrary to Iceland’s obligations under Article 3 EEA to abstain from any measure

100 Cited in footnote 40 above. 101 C-293/03 Gregorio My, paras. 45-48. 102 The CJEU did however make reference to and build upon its case-law in relation to Article 11(2) of Annex VIII to the Staff Regulations (Case 137/80 Commission v Belgium): see C-293/03 Gregorio My, paras. 44-48. 103 Engaged via Article 29 of the EASA Regulation.

Page 34 which could jeopardise the attainment of the free movement objectives of the EEA

Agreement and to facilitate cooperation within the framework of the Agreement.

4.2.3 Conclusion

84. In light of the above, the Authority submits that, by engaging in an administrative

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

accrued in Iceland to the PSEUI, Iceland has failed to fulfil its obligations under Article

28 EEA.

5 CONCLUSION

Accordingly, the Authority requests the Court to:

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.

Claire Simpson Melpo-Menie Joséphidès

Sigurbjörn Bernharð Edvardsson

Agents of the EFTA Surveillance Authority

Page 35

SCHEDULE OF ANNEXES

No

Description

Referred to in

this Application

at paragraph(s)

Number of

pages

A.1 Complaint form (24 June 2019) 6, 27 3

A.2

E-mail from the Icelandic Transport Authority confirming employment with the Icelandic Civil Aviation Administration (14 November 2024) - English original version;

Certificate issued by the Icelandic Civil Aviation Administration confirming employment (31 May 2002) – Translation

6

3

A.2a

Certificate issued by the Icelandic Civil Aviation Administration confirming employment (31 May 2002) – Original Icelandic version

6

1

A.3 Transfer refusal of the Icelandic Social Administration (2 July 2012) – Translation

6

4

A.3a Transfer refusal of the Icelandic Social Administration (2 July 2012) – Original Icelandic version

6

6

A.4 The 2019 Commission Decision (4 June 2019)

6 5

A.5 Letter from Commission to the Complainant (February 2019)

6 2

A.6 E-mail from the European Commission (PMO) to the Complainant (20 October 2021)

6 2

A.7 ESA’s request for information (27 September 2019)

7 3

A.8 Iceland's response to the request for information (21 November 2019)

7, 21, 25, 27, 33, 41, 42, 60

4

A.9 Extract from ESA's letter following up after Package Meeting of 28 May 2020

7 2

A.10 Iceland's reply to ESA's follow-up letter (13 August 2020)

7, 27 2

A.11 Letter of Formal Notice (10 February 2021)

8 9

Page 36

A.12 Reply to Letter of Formal Notice (23 June 2021)

9, 27, 33, 53, 56, 67, 70

3

A.13 Reasoned Opinion (15 March 2023) 10 18

A.14 Reply to Reasoned Opinion (15 May 2023)

11, 27 1

A.15 Court Referral Decision (10 July 2024)

12 3

A.16 E-mail from the Icelandic authorities to EASA (4 February 2019) – Translation

27 2

A.16a E-mail from the Icelandic authorities to EASA (4 February 2019) – Original Icelandic version

27 2

A.17 EASA Letter to the President of ESA (16 April 2024)

27, 46, 64, 80 2

A.18 E-mail from Iceland to the Authority (16 June 2021)

53 2

A.19 Slides from the Icelandic Government for a meeting with ESA (17 January 2023)

71

15

Government of Iceland Ministry for Foreign A airs

Reykjavík, 28 February 2025

To the President and Members of the EFTA Court

Statement of Defence

submitted pursuant to Article 107 of the Rules of Procedure of the EFTA Court by

the Government of Iceland

represented by Mr. Hendrik Daði Jónsson, Legal Adviser, Ministry for Foreign A airs,

and Mr. Birgir Hrafn Búason, Deputy Director General, Ministry for Foreign A airs, acting as Agents in

Case E-30/24

EFTA Surveillance Authority

v Iceland

in which the EFTA Surveillance Authority requests the EFTA Court to 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.

The Government of Iceland has the honour of lodging the following Statement of Defence.

Registered at the EFTA Court under NºE-30/24-08 on 28 day of February 2025.

2

Table of Contents

Table of Contents .............................................................................................................................................. 2

I. Introduction................................................................................................................................................ 3

II. Pre-Litigation Procedure and Admissibility ..................................................................................... 4

III. First Plea: No Breach of Article 29(1) of the EASA Regulation ..................................................... 7

3.1 The Legal Significance of Non-Incorporated Acts under the EEA Agreement ............ 8

3.2 The Legal Significance of Article 29(1) of the EASA Regulation ..................................... 14

3.2.1 The Ordinary Meaning of Article 29(1) .............................................................................. 16

3.2.2 The Context of Article 29(1) .................................................................................................. 20

3.2.3 The Object and Purpose of Article 29(1) .......................................................................... 28

3.2.4 Conclusion ................................................................................................................................. 35

3.3 The Effectiveness of Article 29(1) ............................................................................................ 35

3.4 The Relevance of the Principle of Reciprocity ................................................................... 37

3.5 Ramifications for Legal Certainty ........................................................................................... 39

3.6 Connection with Fundamental Rights and jus cogens norms ....................................... 40

IV. Second Plea: No Breach of Article 28 EEA ....................................................................................... 42

V. The Existence of an Administrative Practice .................................................................................. 44

VI. Conclusion ................................................................................................................................................ 48

Schedule of Annexes ...................................................................................................................................... 50

3

I. Introduction

1. By a letter dated 29 November 2024, the Registrar of the EFTA Court served the

Government of Iceland the Application of the EFTA Surveillance Authority (“the

Authority”), dated 26 November 2024, which was received by the Court,

electronically, on that day.

2. The Authority seeks a declaration from the EFTA Court that, by maintaining in force

an administrative practice which precludes the transfer of the capital value of

occupational pensions in Iceland to the pension scheme of the European Union

institutions (“the 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 Agency1 (“the EASA Regulation”), and/or Article 28 of the

EEA Agreement.

3. In the Court’s letter of 29 November 2024, the Government of Iceland was invited,

with reference to Article 107 of the Rules of Procedure of the EFTA Court (“the Rules

of Procedure”), to lodge a defence within two months from the date of the

notification, that is by Wednesday 29 January 2025. On 5 December 2024, the

Registrar of the EFTA Court informed the Government that the President of the EFTA

Court had, pursuant to Article 107(3) of the Rules of the Procedure, granted an

extension of the time-limit for the submission of the defence until 28 February

2025.

4. In this Statement of Defence, the Government of Iceland will demonstrate that the

Application is manifestly unfounded and should be dismissed.

(i) Firstly, Article 29(1) of the EASA Regulation does not impose an obligation

on Iceland to require Icelandic occupational pension funds to execute

transfers of accrued pension rights to the PSEUI.

1 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 repealing Council Directive 91/670/EEC, Regulation (EC) No 1592/2002 and Directive 2004/36/EC, OJ L 79, 19.3.2008, p. 1.

4

(ii) Secondly, the non-implementation by Iceland of an instrument of the

European Union’s internal institutional law does not entail any restriction

on the free movement of persons under Article 28 of the EEA Agreement.

(iii) Thirdly, the situation in Iceland which the Authority wrongly alleges to

infringe the EEA Agreement does not constitute an administrative practice

of the Icelandic State.

II. Pre-Litigation Procedure and Admissibility

5. The Government of Iceland recalls that, within the EFTA pillar, the good functioning

of the European Economic Area through compliance with the provisions of the EEA

Agreement is a joint endeavour of the EFTA States and the EFTA Surveillance

Authority, harnessed through active dialogue and good cooperation.

6. In the event that the EFTA Surveillance Authority considers that an EFTA State has

failed to fulfil an obligation under the EEA Agreement, it has recourse to the

procedure under Article 31 of the Surveillance and Court Agreement, which may

result in a Direct Action against that EFTA State before the EFTA Court. In such cases,

it is incumbent upon the Authority to prove, firstly, the existence of an obligation

and, secondly, that the obligation has not been fulfilled.

7. The Authority must undertake this task with due diligence and engagement with

the EFTA State concerned through the pre-litigation procedure. As the case-law of

the EFTA Court holds:

When assessing the admissibility of a claim before the Court, it must be borne in

mind that the purpose of the pre-litigation procedure is to give the EFTA State

concerned an opportunity, on the one hand, to comply with its obligations under

EEA law and, on the other hand, to avail itself of its right to defend itself against

the charges formulated 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. 2

2 E-13/23 EFTA Surveillance Authority v The Kingdom of Norway, judgment of 20 December 2024,

para 64.

5

8. On that last point, it is established that “the letter of formal notice issued by ESA

to the EFTA State and the reasoned opinion delivered by ESA delimit the subject-

matter of the dispute, so that it cannot afterwards be extended.”3

9. The Government of Iceland considers that the Authority has fallen short of this

standard throughout the course of the pre-litigation procedure.

10. The Government recalls that it has sought to engage actively with the Authority for

the duration of the pre-litigation procedure. As such, it has made e orts to

understand the Authority’s legal arguments and to respond to them with rebuttals

and with key questions regarding the ramifications of the Authority’s

argumentation for other provisions of the EEA Agreement.

11. In turn, the Authority has been unwilling to extend to the Government the courtesy

of responding to its legal arguments or to the questions raised. This applies both

to the pre-litigation procedure and to the Application, which, in fact, wholly

misrepresents the positions clearly articulated by the Government of Iceland in its

exchanges with the Authority.

12. In this regard, the Government of Iceland considers it material to note that the

Authority and its o cials have made repeated and public statements about their

interest in bringing the case to litigation. The interest expressed concerns not the

actual dispute but the broader legal question which the Authority would like for

the EFTA Court to clarify.

13. The Government refers here to paragraph 4 of the Application where the Authority

states that “[i]n respect of the First Plea, the Court’s ruling in this case will inter alia

clarify the important point of whether a prescriptive reference […] to an act which

has not been incorporated into the EEA Agreement can, in the particular

circumstances of the case, have EEA law consequences for the relevant EFTA State”.

14. This echoes the press release issued by the Authority to publicise its adoption of

the Reasoned Opinion in the case, wherein the responsible College Member of the

Authority stated that the “case raises cross-cutting legal questions about how to

interpret the EEA Agreement, beyond the specific complaint”. He further underlined

3 ibid para 63.

6

that “[i]n pursuing this matter, ESA aims to clarify these questions and thus to

contribute to legal certainty more broadly”.4 It should be noted that the same

responsible College Member authored a published article which drew attention to

the interesting nature of the horizontal legal questions raised by the case.5

15. The Government of Iceland is therefore of the opinion that the present litigation

constitutes an abuse of process on the part of the Authority which undermines the

integrity of the Direct Action procedure before the EFTA Court. The procedure forms

an integral part of the EEA Agreement’s compliance mechanism and is intended to

resolve genuine and specific disputes. It should not be used as a vessel to engage

in legal debates of a general and academic nature.

16. Further, the Government of Iceland submits that several statements made by the

Authority, in support of its First Plea in law, allege violations of provisions of the

EEA Agreement which fall outside the scope of the present dispute. The pre-

litigation procedure has delimited the dispute to concern Article 29(1) of the EASA

Regulation and Article 28 of the EEA Agreement. As a result, the following disguised

additional pleas advanced by the Authority must be dismissed as inadmissible as

they are charges of violations of provisions outside the scope of the present

dispute as delimited in the pre-litigation procedure:

(i) In the Reasoned Opinion, the Authority has stated that the conduct which it

attributes to the Icelandic State and which the present dispute concerns

“constitutes a breach of Article 3 of the EEA Agreement”. The Authority

renews this statement in paragraphs 30 and 83 of the Application.

(ii) In the Application, the third point of the first limb of the Authority’s First

Plea in law is that Iceland has failed to fulfil its obligations under Article 30

of the EASA Regulation.

4 EFTA Surveillance Authority, ‘Iceland in breach of EEA rules over refusal to transfer pension

rights to EASA’ (Press Release, 15 March 2023) <https://www.eftasurv.int/newsroom/updates/iceland-breach-eea-rules-over-refusal- transfer-pension-rights-easa>.

5 Stefan Barriga and Michael Sánchez Rydelski, ‘Die EFTA-Überwachungsbehörde als Hüterin des EU-Binnenmarktrechts Mandat, aktuelle Verfahren und Herausforderungen’ (2023) 44 Liechtensteinische Juristen-Zeitung 3, p. 136-142.

7

(iii) In the Application, the third point of the second limb of the Authority’s First

Plea in law is that Iceland has violated its obligations under Article 29(4) of

the EASA Regulation.

III. First Plea: No Breach of Article 29(1) of the EASA Regulation

17. The Government of Iceland recalls the Reasoned Opinion in which the Authority

posited that “[t]he principal question to be assessed in the present case is whether

Article 29 of the EASA Regulation, as incorporated into the EEA Agreement, confers

upon EFTA nationals working for EASA the right to have their occupational pensions

transferred to the PSEUI.” This is echoed in paragraphs 44, 56 and 59 of the

Application.

18. The Government of Iceland continues to contest this posturising by the Authority.

19. On the part of the Government, there exists no uncertainty as to the fact that EASA

sta members of any nationality, be they Icelanders or EEA nationals or third

country nationals, are entitled to the full enjoyment of their existing rights under

the EU Sta Regulations. These rights follow from the application of that

instrument to them pursuant to Article 29(1) of the EASA Regulation.

20. What the Government of Iceland rejects is the Authority’s argument that the

incorporation of Article 29(1) of the EASA Regulation into the EEA Agreement has

had the legal e ect of amending the EU Sta Regulations to the degree that the

rights and obligations undertaken by the parties to that instrument are additionally

conferred and imposed upon Iceland, and thus enforceable as provisions of the

EEA Agreement by proxy.

21. Over the course of the past six years, the Government of Iceland has consistently

maintained that the Authority’s novel and maximalist interpretation of Article 29(1)

of the EASA Regulation is unfounded and lacks support in the provisions of the EEA

Agreement, as well as established principles of treaty interpretation. While the

Authority’s legal arguments have undergone multiple transformations throughout

the pre-litigation procedure, each iteration has served to deliver an outcome which,

in the Authority’s view, represents an overriding and indispensable intention of the

Contracting Parties. The Authority therefore insists that its interpretation of Article

8

29(1) should prevail, notwithstanding its systemic inconsistencies and overall

incoherence with other provisions of the EEA Agreement. The Government submits

that the Authority’s arguments are fundamentally flawed and must be rejected.

3.1 The Legal Significance of Non-Incorporated Acts under the EEA Agreement

22. As the Authority states in paragraph 4 of the Application, the present litigation is

pursued to seek to clarify whether a reference in a provision of EEA law to an

extraneous legal instrument can have “EEA legal consequences” for the EFTA States.

23. At the outset, the Government of Iceland recalls that, in harmonising among its

Contracting Parties a legal framework that constitutes only a part of the body of

European Union law, it is inevitable that the EEA Agreement contains references to

legal instruments that are themselves not part of EEA law.

24. Hence, in the context of the present dispute, there is nothing remarkable about the

fact that incorporated acts vesting competences in bodies of the European Union

also make reference to the EU institutional law that governs those bodies.

25. In fact, provisions like the one at issue here have been made part of the EEA

Agreement since Decision of the EEA Joint Committee No 74/1999 of 28 May 19996

(“JCD No 74/1999”) incorporated the Regulation establishing what is now the

European Medicines Agency (EMA) into Chapter XIII of Annex II to the EEA

Agreement.

26. These provisions have been in force in an EEA context for over 25 years without any

controversy as to their legal meaning. It is therefore perplexing that, two decades

after the incorporation of the first of approximately two dozen such provisions, the

EFTA Surveillance Authority for the first time began questioning an EFTA State about

its compliance with one of the extraneous instruments of EU institutional law

referred to therein.

27. While this horizontal legal question is neither new nor so complex as to warrant

adjudication, its centrality to the Authority’s First Plea necessitates further

elaboration. Therefore, before addressing the specific issue of the interpretation of

6 Decision of the EEA Joint Committee No 74/1999 of 28 May 1999 amending Protocol 37 and

Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement, OJ L 284, 9.11.2000, p. 65.

9

Article 29(1) of the EASA Regulation, the Government of Iceland will explain the

Contracting Parties’ understanding of the legal significance of references to non-

incorporated acts in EEA law, an understanding which has already been confirmed

by the EFTA Court.

28. At the outset, the Government of Iceland refers to two foundational principles of

international law: pacta sunt servanda and State consent. The first entails that a

State is bound by the obligations it has undertaken. The second a rms that a State

can only be bound by the obligations it agrees to. It follows that an international

obligation cannot bind a Party that has not accepted it, as is codified in Article 34

of the Vienna Convention on the Law of Treaties.7

29. These principles are foundational to the EEA Agreement. The Agreement in its

entirety is binding on the Contracting Parties, and this includes the acts referred to

in the Annexes.8 These acts are to be made part of the internal legal orders of the

Contracting Parties and their content is adapted by Protocol 1 to the Agreement to

shift them from the EU to the EEA legal context. All provisions of EEA law are equally

authentic in the 25 languages listed in Article 129 of the Agreement.

30. To maintain homogeneity in the European Economic Area, the Contracting Parties

are to continuously amend the Annexes to include new EU legal acts within the

scope of the Agreement. Such incorporation is not automatic but requires the

adoption of a dedicated Decision of the EEA Joint Committee. This reflects the fact

that homogeneity is an act of State consent, as the Contracting Parties have not

transferred legislative powers to any institution of the European Economic Area.9

31. It follows that an act that has not been incorporated into an Annex to the EEA

Agreement is not binding on the Contracting Parties.

32. The Authority has conceded this much,10 but appears to consider it to be without

significance. In the Letter of Formal Notice, the Authority argued that “[t]o the

extent that secondary legislation, which has been made part of EEA law, requires

7 Vienna Convention on the Law of Treaties (“VCLT”) (adopted 23 May 1960, entered into force

27 January 1980) 1151 UNTS 331. 8 See: Articles 1(2) and 119 of the EEA Agreement. 9 See, inter alia: Protocol 35 to the EEA Agreement. 10 See: Letter of Formal Notice, Annex A.11 to the Application, p. 7; Reasoned Opinion, Annex A.13

to the Application, p. 9; Application, para 49.

10

an instrument of EU law, such as the EU Sta Rules [sic] to be observed, that

instrument applies fully in the context of, and as specified by, that piece of

legislation”11 (emphasis added). In fact, the Authority has listed provisions of the

EU Sta Regulations alongside actual provisions of the EEA Agreement under the

heading “EEA Law” in the Letter of Formal Notice, the Reasoned Opinion and the

Application.12

33. This argumentation gives reason to pause. How can a non-incorporated act have

as much legal force as an act which the Contracting Parties have expressly agreed

to incorporate? How can a non-incorporated act confer rights or impose obligations

on the Contracting Parties if it is not subject to paragraph 7 of Protocol 1 to the EEA

Agreement? How can a provision of such an act apply in an EEA context when it has

not been authenticated in the languages listed in Article 129 of the Agreement and

published in the EEA Supplement to the O cial Journal of the European Union? If

the impetus for this reasoning was homogeneity, what implications would an

amendment of the referenced instrument by the European Union have on

application under the EEA Agreement, which expressly precludes the transfer of the

Contracting Parties’ sovereign legislative competences?

34. The Government of Iceland has posed these questions to the Authority.13 The

Authority has not answered them, neither in the pre-litigation procedure nor in the

Application. Presumably, the Authority is reticent because it cannot answer these

questions in a manner that simultaneously delivers its desired outcome and

maintains coherence with the EEA Agreement. The reason for this is that, since the

entry into force of the EEA Agreement, the Contracting Parties have consistently

applied an entirely opposing legal approach to provisions referring to non-

incorporated acts than the one which the Authority is advocating for in the present

case.

35. Indeed, such provisions in acts being considered for incorporation into the EEA

Agreement are specifically flagged for individual scrutiny, in accordance with the

11 Letter of Formal Notice, Annex A.11 to the Application, p. 7. 12 See: Letter of Formal Notice, Annex A.11 to the Application, section 3, point (14); Reasoned

Opinion, Annex A.13 to the Application, p. 5, Application, section 3.1, paras 19-20. 13 See: Slides 11, 12 and 15 of the Presentation of the Government of Iceland to the Authority of

17 January 2023, Annex A.19 to the Application.

11

applicable rules of the Standing Committee of the EFTA States (“the EFTA Standing

Committee”).14 The Working Groups which process acts for incorporation must

assess whether such a provision can apply in an EEA context as such or whether it

must be adapted.

36. The EFTA Standing Committee’s Subcommittee V on Legal and Institutional Matters

(“Subcommittee V”) has issued guidance to the Working Groups on the principles

relevant to that assessment:15

9. Acts referred to or contained in the Annexes or Protocols to the Agreement

are binding upon the Contracting Parties and are to become part of their

internal legal orders.

10. Acts which do not appear in the Annexes or in the Protocols are not binding

on the EFTA States. References to such acts in incorporated acts do not lead

to an indirect incorporation of those acts into the EEA Agreement.

11. The general principle is that a reference to a non-incorporated act does not

create legal obligations outside the scope of the individual incorporated act.

This includes, for example, provisions which refer to existing obligations of

the EU Member States. In some cases, the provisions containing such

references may not be e ectively and uniformly applied by the EFTA States

without relying on the provisions of non-incorporated acts or by following

the procedures contained therein. This may result in the unfortunate

situation where the EFTA States are either unable to adequately comply with

these provisions that follow from the referred provisions or the EFTA

Surveillance Authority is unable to monitor compliance. In such situations,

an adaptation clarifying how that reference should be read in the context of

the EEA Agreement may be appropriate.

14 Decision of the Standing Committee of the EFTA States No 1/2014/SC of 8 May 2014 on

procedures for the incorporation of EU acts into the EEA Agreement and repealing Decision No 1/2012/SC of 30 April 2012; see also: European Free Trade Association, ‘Handbook on EEA EFTA procedures for incorporating EU acts into the EEA Agreement’ (2nd edn, EFTA Bulletin) <https://www.efta.int/sites/default/files/publications/bulletins/EFTA-Bulletin-October- 2016-updated.pdf>.

15 Subcommittee V on Legal and Institutional Questions, ‘Principles applying to references to non-incorporated acts’ (Legal Note by the Secretariat, 22 September 2022) (Annex 9 to the Defence), paras 9-11.

12

37. The necessity of an adaptation can be determined by recourse to one question:

does the provision require action by the Contracting Parties in respect of the non-

incorporated act referred to?

38. If the answer is a rmative, then the Contracting Parties have a binding obligation

prescribed by the EEA Agreement requiring specific performance and the relevance

of the non-incorporated act may need to be addressed through adaptation. If the

answer is negative, then an adaptation is not necessary unless the Contracting

Parties specifically seek to have the EFTA States enjoy rights and obligations in

respect of the non-incorporated instrument.

39. The standard for this assessment is whether the provision confers rights or imposes

obligations within the meaning of paragraph 7 of Protocol 1 to the EEA Agreement,

which reads as follows:

7. RIGHTS AND OBLIGATIONS

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.

40. By way of example, Article 22(2) of Regulation (EU) 2018/848 of the European

Parliament and of the Council of 30 May 201816 (“the Organic Production

Regulation”), which is incorporated into the EEA Agreement, confers on Member

States the right to grant derogation from organic production rules under the

Regulation where that Member State “has formally recognised an event as a natural

disaster as referred to in Article 18(3) or Article 24(3) of Regulation (EU) No

1305/2013”, which is not incorporated into the EEA Agreement. It follows that the

EFTA States cannot apply the derogation under the Organic Production Regulation

as it is contingent on compliance with an instrument which is not part of EEA law.

The provision was therefore adapted upon incorporation into the EEA Agreement

16 Regulation (EU) 2018/848 of the European Parliament and of the Council of 30 May 2018 on

organic production and labelling of organic products and repealing Council Regulation (EC) No 834/2007, OJ L 150, 14.6.2018, p. 1.

13

to refer, as regards the EFTA States, “to criteria established under national law in

the EFTA States.”17

41. For comparison, Article 55 of the Organic Production Regulation governs the

operation of the Organic Production Committee and makes references, for that

purpose, to Regulation (EU) No 182/2011 of the European Parliament and of the

Council of 16 February 201118, which is an instrument of EU institutional law which

has not been incorporated into the EEA Agreement. While Article 55(2) and (3)

explicitly states that provisions of Regulation (EU) No 182/2011 shall apply, these

provisions do not confer rights or obligations on the Contracting Parties within the

meaning of paragraph 7 of Protocol 1. As a result, this provision is not adapted in

the case of the Organic Production Regulation nor in the case of parallel provisions

in dozens of acts incorporated into the EEA Agreement.19

42. The logic underpinning this adaptation practice has been confirmed by the case-

law of the EFTA Court, which already addressed a question concerning the EEA legal

e ect of non-incorporated instruments in Case E-2/23 A Ltd v Finanzmarktaufsicht.20

The instrument in question were joint guidelines issued by the European

Supervisory Authorities (ESAs), pursuant to Articles 16 of their respective founding

Regulations.21 Those provisions imposed obligations on two sets of actors: firstly,

17 Adaptation (b) in point 54b of Chapter XII of Annex II to the EEA Agreement, introduced by

Decision of the EEA Joint Committee No 31/2022 of 4 February 2022, OJ L 175, 30.6.2022, p. 49. See also: Explanatory Note, ‘Incorporation of Regulation (EU) 2018/848 into the EEA Agreement (18 December 2020) (Annex 12 to the Defence).

18 Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers, OJ L 55, 28.2.2011, p. 13.

19 See, inter alia: Article 43 of Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market surveillance and compliance of products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011, OJ L 169, 25.6.2019, p.1.

20 E-2/23, A Ltd v Finanzmarktaufsicht, judgment of 25 January 2024. 21 Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November

2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC, OJ L 331, 15.12.2010, p. 12 (“the EBA Regulation”); Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC, OJ L 331, 15.12.2010, p. 48 (“the EIOPA Regulation”); Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC, OJ L 331, 15.12.2010, p. 84 (“the ESMA Regulation”).

14

on the ESAs to adopt guidelines and, secondly, on the competent authorities of the

Contracting Parties to “make every e ort to comply” with them.

43. The question before the EFTA Court was whether a declaration of compliance by a

competent authority had a binding e ect on the courts of the Contracting Parties

to the degree that they were themselves obliged to make every e ect to comply

with the guidelines. The EFTA Court was resolute in answering this question in the

negative, stressing that legal obligations could not stem from the guidelines as

they did not form part of EEA law:

The Joint Guidelines are not a legal act that has been incorporated into the EEA

Agreement and, as such, are not binding upon the Contracting Parties pursuant

to Article 7 of the EEA Agreement. Therefore, the Joint Guidelines issued by EIOPA

cannot be regarded as producing binding legal e ects, in and of themselves, as

a matter of EEA law.22

44. In light of the foregoing, the Government of Iceland submits that the legal

significance of non-incorporated acts referred to in provisions of the EEA

Agreement is beyond dispute. The rights and obligations of the Contracting Parties

stem from the provisions of the EEA Agreement and not from extraneous

instruments referred to therein. The question of whether a provision of EEA law

requires action by a Contracting Party in respect of a non-incorporated instrument

can be settled by recourse to paragraph 7 of Protocol 1 to the EEA Agreement.

Accordingly, the Government of Iceland will proceed to address the alleged

violation of Article 29(1) of the EASA Regulation.

3.2 The Legal Significance of Article 29(1) of the EASA Regulation

45. At the time of the compliance date set out in the Reasoned Opinion, the EASA

Regulation was referred to in point 66n of Annex XIII to the EEA Agreement.23

22 E-2/23 (n 20), para 72. 23 The EASA Regulation was repealed under the EEA Agreement by Decision of the EEA Joint

Committee No 114/2023 of 28 April 2023 amending Annex II (Technical regulations, standards, testing and certification) and Annex XIII (Transport to the EEA Agreement (OJ L, 2023/2294, 9.11.2023 p. 1), which entered into force on 16 July 2024. The Government will employ the present tense when referring to the EASA Regulation throughout the Statement of Defence. For the avoidance of doubt, any reference to the EASA Regulation should be understood as referring to the way it applied when it was in force under the EEA Agreement.

15

46. It is undisputed that the Government of Iceland fulfilled its obligations under

Article 7(a) of the EEA Agreement in respect of the Act. What is in dispute is whether,

and to what extent, Article 29(1) of the EASA Regulation confers rights and imposes

obligations on Iceland, its public entities, undertakings and nationals.

47. The Government of Iceland submits that Article 29(1) does neither. Rather, much

like Article 55 of the Organic Production Regulation, its e ect is to apply an

instrument of EU institutional law, as it exists outside of the EEA Agreement, to a

new body of the European Union. The Authority, however, contends that the fact

that the referenced instrument prescribes rights and obligations within its area of

application necessarily means that they apply as provisions of EEA law.

48. In ascertaining the legal implications of Article 29(1), the Government of Iceland

refers to the peremptory norms of international law regarding treaty interpretation,

as codified in Article 31(1) of the Vienna Convention on the Law of Treaties.24 These

norms hold that a treaty shall be interpreted in good faith in accordance with the

ordinary meaning to be given to its terms in their context and in the light of its

object and purpose.

49. The settled case-law of the EFTA Court on the interpretation of EEA law is congruent

with these norms, holding 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.”25

50. This approach is also consistent with the case-law of the Court of Justice of the

European Union, which holds that “the meaning and scope of terms for which

[Union] law provides no definition must be determined by considering their usual

meaning in everyday language, while also taking into account the context in which

they occur and the purposes of the rules of which they are part.”26

24 VCLT (n 7). 25 E-17/24 Söderberg & Partners AS v Gable Insurance AG in Konkurs, judgment of 5 February

2025, para 40. 26 C-549/07, Friederike Wallentin-Hermann v Alitalia – Linee Aeree Italiane SpA,

ECLI:EU:C:2008:771, para 17. See, also: C-292/82 Firma E. Merck v Hauptzollamt Hamburg-Jonas, ECLI:EU:C:1983:335, para 12; C-285/12 Aboubacar Diakité v Commissaire général aux réfugiés et aux apatrides, ECLI:EU:C:2014:39, para 27; C-201/13 Johan Deckmyn and Vrijheidsfonds VZW v Helena Vandersteen and Others, ECLI:EU:C:2014:2132, para 19.

16

51. The Government will proceed with elaborating how Article 29(1) of the EASA

Regulation should be interpreted in accordance with the applicable rules on

interpretation.

3.2.1 The Ordinary Meaning of Article 29(1)

52. The ordinary meaning of the terms of Article 29(1) of the EASA Regulation is

determined by consulting the text of the provision as it has been incorporated into

the EEA Agreement. The Government recalls that this requires consulting, in

addition to the text of the act itself, the horizontal adaptations in Protocol 1 to the

Agreement, the sectoral adaptations in Annex XIII, and the specific adaptations set

out in point 66n thereof.27

53. Article 29(1) of the EASA Regulation reads as follows:

The Sta Regulations of O cials 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 Sta Regulations and Conditions of Employment shall

apply to the sta of the Agency, without prejudice to the application of Article 39

of this Regulation to the members of the Board of Appeal.

54. The ordinary meaning of the provision evokes a legal e ect of expanding the scope

of application of at least three instruments of European Union institutional law to

include, in addition to their pre-existing scopes, the sta of EASA. The text does not

imply that the provisions of those instruments are incorporated into the EASA

Regulation, rather the sta of EASA is included in the scope of the referenced legal

regime. This is consequential for any additional meaning ascribed to Article 29(1)

27 This follows from the introductory provision of Protocol 1 on Horizontal Adaptations which

sets out that: “[t]he provisions of the acts referred to in the Annexes to the Agreement shall be applicable in accordance with the agreement and this Protocol, unless otherwise provided in the respective Annex. The specific adaptations necessary for individual acts are set out in the Annex where the act concerned is listed.”

See, also: Sven Norberg et al. EEA Law: A Commentary on the EEA Agreement (CE Fritzes 1993), p. 78-79; European Free Trade Association, ‘Adaptation texts to EU acts upon incorporation into the EEA Agreement’ (“Adaptations Note”) (Legal Note by the Secretariat, EFTA 2019) <https://www.efta.int/sites/default/files/publications/bulletins/efta_bulletin_legal_notes. pdf>.

17

by the horizontal, sectoral and specific adaptations in Protocol 1, Annex XIII and

point 66n thereof.

55. While Protocol 1 applies to the EASA Regulation in its entirety, most of its provisions

do not have any discernible practical relevance for the application of Article 29(1).

Paragraph 7 of Protocol 1 is, nevertheless, consequential for the present legal

dispute.

56. While it already follows from Article 7 of the EEA Agreement that an act referred to

in an Annex is binding on the Contracting Parties and to be made part of their

internal legal orders, additional adjustments are necessary to adapt the content of

the acts to shift them from their previous EU context to their expanded EEA scope

of application. Paragraph 7 of Protocol 1 is the indispensable additional element

which transforms the rights and obligations which the provisions of an act ascribe

to EU Member States, their public entities, undertakings or individuals into the

rights and obligations of all EEA Contracting Parties and their corresponding

entities, undertakings or individuals.

57. As Protocol 1 does not address EU institutions, agencies or bodies, other than the

European Commission, specific adaptations are necessary when the rights and

obligations conferred or imposed upon any such entity in respect of EU Member

States are also to apply to the EFTA States.28 In the case of EU agencies, this has

been e ected through standard adaptation text which ensures that any reference

to EU Member States in an agency act is further understood to include the EFTA

States. Adaptation (a) to the EASA Regulation served this purpose in relation to

rights and obligations of EASA in respect of the EU Member States and, it follows,

the EFTA States, by stating that:

Unless otherwise stipulated below, and notwithstanding the provisions of

Protocol 1 to the Agreement, the term 'Member State(s)' contained in the

28 See, inter alia: EFTA, Adaptations Note (n 27) p. 43, 52; European Free Trade Association, ‘The

Two-Pillar System of the EEA Agreement: Legal Framework and Overview of Cases Raising Two-Pillar Challenges’ (Legal Note by the Secretariat, EFTA 2019) <https://www.efta.int/sites/default/files/publications/bulletins/efta_bulletin_legal_notes. pdf>, p. 20-22; ‘Working Paper on EU Agencies’ (“Agencies Note”) (Note by the Secretariat, 19 October 2022) (Annex I to the Defence), p. 18-19; EFTA Working Group on Financial Services, ‘The use of the general adaptation regarding “Member States” in di erent areas’ (Note by the Secretariat, 15 November 2019) (Annex II to the Defence), paras 10-14.

18

Regulation shall be understood to include, in addition to its meaning in the

Regulation, the EFTA States. Paragraph 11 of Protocol 1 shall apply.

58. The Government notes that the legal e ect that the adaptation is understood to

have, and its underlying rationale, is explained in relevant Explanatory Notes to the

Decisions of the EEA Joint Committee incorporating the Regulations on EASA into

the EEA Agreement.29

59. The Government of Iceland submits that the above constitutes a comprehensive

overview of the provisions necessary to determine the ordinary meaning of the

terms of Article 29(1) of the EASA Regulation.

60. It follows from these provisions that any obligation which Article 29(1) imposes

upon the EU Member States, as such or in relation to EASA, is thus also imposed

upon Iceland as an EEA Contracting Party, pursuant to either Paragraph 7 of Protocol

1 to the EEA Agreement or adaptation (a) to the EASA Regulation.30

61. However, the Government of Iceland submits that a plain reading of Article 29(1)

confirms that it neither confers rights nor imposes obligations on EU Member

States, their public entities, undertakings or nationals, so as to trigger the

application of Protocol 1 or adaptation (a).

62. It follows that Article 29(1) does not impose positive obligations on the EU Member

States in respect of these instruments. Those obligations already exist under those

instruments and are not altered by the EASA Regulation. The material change is

that EASA sta become rightsholders under these instruments. This means that the

sta is secured the enjoyment of the rights as they are set out in those instruments,

as they have been adopted and already exist independently of the EASA Regulation.

29 See: Explanatory Note by the Secretariat, ‘Incorporation of Regulation (EC) No 1592/2002 of

the European Parliament and of the Council of 15 July 2002 on common rules in the field of civil aviation and establishing a European Aviation Safety Agency’ (22 June 2004) (Annex 3 to the Defence), paras 4 to 8; Explanatory Note, ‘Incorporation of the new EASA Regulation into the EEA Agreement’ (7 July 2011) (Annex 4 to the Defence), p. 1; Explanatory Note, ‘Incorporation into the EEA Agreement of Regulation (EU) 2018/1139 on common rules in the field of civil aviation and establishing a European Union Aviation Safety Agency (EASA)’ (31 March 2022) (Annex 5 to the Defence), p. 1.

30 For the sake of clarity, it should be noted that adaptation (a) only applies to specific references to the term Member State, in the singular or in the plural.

19

63. The Government of Iceland notes that the EFTA Surveillance Authority’s

fundamental misunderstanding concerns the conceptual distinction between an

instrument applying and a positive obligation to apply it.

64. The Authority has based its argument on there being an uncertainty as to which

actor is to apply the referenced instruments to the sta of EASA.31 This leads the

Authority to its unfounded conclusion that Iceland should be among the many

actors who participate in applying these instruments. The Government notes that

this conclusion is not based on an interpretation of Paragraph 7 of Protocol 1, to

which the Authority has made no reference, but rather on what the Authority

perceives would make the rights of EASA sta most e ective.

65. While the Government will address the Authority’s arguments on e ectiveness later

in the Defence, it submits that there is no uncertainty in the meaning of the terms

of Article 29(1) of the EASA Regulation which would require clarification through

supplementary means of interpretation.

66. In fact, any perceived uncertainty as to the meaning of Article 29(1) in the English

language can be resolutely elucidated by having reference to the other equally

authentic language versions of the EASA Regulation.32 In Icelandic, the term “gilda”

is used to specify that the referenced instruments apply to the sta of EASA. If the

provision was instead to require the application of the rules by any actor, the

relevant term in the Icelandic language would be “beita”.33 The Danish, German and

Swedish language versions employ etymological cognates to the Icelandic term:

these are “gælder”, “gelten” and “gälla”, respectively. The Norwegian language

version specifies that the instruments “får anvendelse på” (literally, they have

application to) the sta of EASA. That formulation is also employed in the Dutch

31 Reasoned Opinion, Annex A.13 to the Application, p. 8; Application, para 34. 32 Article 129(1) of the EEA Agreement specifies that: “[t]he texts of the acts referred to in the

Annexes are equally authentic in the Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages as published in the O cial Journal of the European Union and shall for the authentication thereof be drawn up in the Icelandic and Norwegian languages and published in the EEA Supplement to the O cial Journal of the European Union.”

33 See, for example: adaptation (n) to the EASA Regulation in the Icelandic language as published in EEA Supplement No. 15/58 to the O cial Journal of the European Union, 15.3.2012.

20

language version where the instruments “van toepassing op” the sta of EASA. The

French and Spanish language versions use pronominal verbs to interlink the

referenced instruments and the sta of EASA. In French, the instruments

“s’appliquent au personnel de l’Agence”, that is, they apply themselves to the sta

of the Agency. Similarly, in Spanish, the instruments “[s]e aplicará al personal de la

Agencia”. It is clear from all of these language versions that no actor is entrusted

with the obligation of applying the referenced instruments to the sta of EASA, but

rather that these instruments are made to apply as such to the agency sta .

67. With reference to the above, the Government of Iceland submits that the ordinary

meaning of the terms of Article 29(1) of the EASA Regulation, as incorporated into

the EEA Agreement, is clear. The meaning is that three or more extraneous

instruments of European Union law, of which the EU Sta Regulations is one, apply

to the sta of EASA, in the form that they have been adopted and exist outside of

the EASA Regulation. Nothing in the text of Article 29(1), nor of the other provisions

of the EEA Agreement which have application to that article, entail or imply that

Iceland is to undertake to apply those instruments to the sta of the agency.

68. The Government submits that this understanding is further reinforced by having

recourse to supplementary means of treaty interpretation.

3.2.2 The Context of Article 29(1)

69. The Government of Iceland submits that the context in which Article 29(1) of the

EASA Regulation is to be interpreted supports the understanding, that already

follows from the ordinary meaning of its terms, that a reference to the application

of non-incorporated acts in the EU legal order does not have the consequence of

rendering those acts provisions of the EEA Agreement. That context comprises, in

addition to the text of the provision itself, other provisions of the EASA Regulation

referring to non-incorporated acts, as well as of other agency acts which have been

incorporated into the EEA Agreement. This context is further informed by the

preparatory works associated with the incorporation of these instruments into the

Agreement and exchanges between the Contracting Parties about their meaning.

70. The immediate context of Article 29(1) is its placement within the structure of the

EASA Regulation, namely in Section II of Chapter III thereof. Chapter III is titled “the

21

European Aviation Safety Agency” and Section II is titled “Internal Structure”. It

follows that Article 29(1) is among the provisions of the EASA Regulation which is

concerned with the internal a airs and operation of EASA as an agency. Adjacent

provisions in this Section of the Regulation are concerned with the legal personality

and capacity of EASA, its legal liability and the location of its o ces.34 These

provisions of the Regulation are distinct in their substance from the provisions of

Chapters I and II, titled “Principles” and “Substantive Requirements” respectively,

both of which lay down common rules in the field of civil aviation in the European

Economic Area.

71. Further, the contested reference to the EU Sta Regulations in Article 29(1) is not

an isolated case of a non-incorporated act being referred to in the EASA Regulation.

Rather, it exists within a context of multiple other references to non-incorporated

acts, namely in Articles 15(2), 29(1) and (2), 30, 58(1) and (4), 60(2), (4) and (9), 61(1),

63, and 65(1)-(7).

72. Contrary to what the Authority alleges in paragraph 60 of the Application, the

Government of Iceland submits that a uniform approach must be applied to

interpreting the legal significance of all these referenced instruments under the

EEA Agreement.

73. The Authority has repeatedly argued that, if the Contracting Parties had intended

to exclude the EFTA States from being bound by the EU Sta Regulations, they could

have introduced an adaptation to that e ect.35 However, this claim directly

contradicts the actual adaptation practice of the Contracting Parties in the EASA

Regulation. In fact, the Contracting Parties have only introduced adaptations where

their intention was for the EFTA States to have rights and obligations in respect of

referenced non-incorporated instruments.

34 See, for example: Article 28 on Legal status, location, local o ces; Article 31 on Liability; and

Article 32 on the Publication of documents. 35 Letter of Formal Notice, Annex A.11 to the Application, p. 8; Reasoned Opinion, Annex A.13 to

the Application, p. 11; Application, para 44.

22

74. This is the case for the references to Regulation (EC) No 1049/2001 of the European

Parliament and of the Council of 30 May 200136 (“the Public Access Regulation”) in

Articles 15(2) and 58(1), the Conditions of Employment of Other Servants of the

European Union37 (“the Conditions of Employment”) referred to in Articles 29(1) and

(4) of the Regulation, and the Protocol on Privileges and Immunities of the

European Union38 (“the Protocol on Privileges and Immunities”) referred to in

Article 30. These instruments are all referenced in the same manner as the EU Sta

Regulations, that is, they all “apply” to either the sta of the Agency or to the

Agency as such.

75. Adaptation (f) in point 66n of Annex XIII to the EEA Agreement introduces paragraph

5 of Article 15 of the EASA Regulation, which entails that the Public Access

Regulation shall apply to documents of EASA regarding the EFTA States. The

provision reads as follows:

5. Regulation (EC) No 1049/2001 of the European Parliament and of the Council

of 30 May 2001 regarding public access to European Parliament, Council and

Commission documents shall, for the application of the Regulation, apply to

any documents of the Agency regarding the EFTA States as well.

76. Adaptation (m) introduces paragraph 4 of Article 29 of the EASA Regulation, which

entails that the Executive Director of EASA may engage EFTA nationals under

contract. The provision reads as follows:

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

36 Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001

regarding public access to European Parliament, Council and Commission documents, OJ L 145, 31/05/2001, p. 43.

37 Article 29(1) refers to the former title of the Conditions of Employment which was applicable at the time of the adoption of the EASA Regulation: “Conditions of Employment of Other Servants of the European Communities”. For the sake of consistency, the Government will refer to the Conditions of Employment under their current title.

38 Article 30 refers to the former title of the Protocol which was applicable at the time of the adoption of the EASA Regulation: “Protocol on the Privileges and Immunities of the European Communities annexed to the Treaties establishing the European Community and the European Atomic Energy Community“. For the sake of consistency, the Government will refer to the Protocol under its current title.

23

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

Director of the Agency.

77. Adaptation (n) adds a subparagraph into Article 30, which obliges the EFTA States

to apply the Protocol on Privileges and Immunities to EASA. The provision reads as

follows:

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

and Immunities of the European Union and applicable rules adopted pursuant

to that Protocol.

78. All three adaptations have the e ect of conferring rights and imposing obligations

that would otherwise not exist. Yet, the Authority’s First Plea is entirely contingent

on all three adaptations being legally superfluous. This reasoning cannot hold: if

the adaptations were not necessary to yield their legal results, then they would not

have been introduced.

79. Thus, the fact that provisions providing for the application of the Public Access

Regulation, the Conditions of Employment and the Protocol and Privileges and

Immunities to EASA or EASA sta have been incorporated into the EEA Agreement

does not automatically entail that the rights and obligations existing under those

instruments are conferred upon all EEA Contracting Parties, their public entities,

undertakings or individuals. The rights and obligations follow from adaptations (f),

(m) and (n) sine qua non.

80. The Government notes that this understanding of the Contracting Parties of the

legal e ect of these adaptations and their underlying rationale is evidenced by the

Explanatory Notes to the Decisions of the EEA Joint Committee incorporating the

EASA Regulations into the EEA Agreement. This is also the case for the previous and

subsequent versions of those adaptations in Regulation (EC) No 1592/2002 of the

European Parliament and of the Council of 15 July 200239 (“the 2002 EASA

39 Regulation (EC) No 1592/2002 of the European Parliament and of the Council of 15 July 2002

on common rules in the field of civil aviation and establishing a European Aviation Safety Agency, OJ L 240, 07.9.2002 (“the 2002 EASA Regulation”), p. 1.

24

Regulation”) and in Regulation (EU) 2018/1139 of the European Parliament and of

the Council of 4 July 201840 (“the 2018 EASA Regulation”).41

81. The Government of Iceland further submits that the parallel provisions in other

agency acts which are referred to in the Annexes to the EEA Agreement inform the

context of Article 29(1) of the EASA Regulation. These are:

(i) Article 48 of Regulation (EC) No 178/2002 of the European Parliament and of

the Council of 28 January 200242 referred to in points 41 of Part 7.1 of Chapter

I and of Chapter II of Annex I and point 54zzzc of Chapter XII of Annex II;

(ii) Article 6 of Regulation (EC) No 1406/2002 of the European Parliament and

of the Council of 27 June 200243 referred to in point 56o of Annex XIII;

(iii) Article 75 of Regulation (EC) No 726/2004 of the European Parliament and of

the Council of 31 March 200444 referred to in point 15zb of Chapter XIII of

Annex II;

(iv) Article 103 of Regulation (EC) No 1907/2006 of the European Parliament and

of the Council of 18 December 200645 referred to in point 12zc of Chapter XV

of Annex II;

40 Regulation (EU) 2018/1139 of the European Parliament and of the Council of 4 July 2018 on

common rules in the field of civil aviation and establishing a European Union Aviation Safety Agency, and amending Regulations (EC) No 2111/2005, (EC) No 1008/2008, (EU) No 996/2010, (EU) No 376/2014 and Directives 2014/30/EU and 2014/53/EU of the European Parliament and of the Council, and repealing Regulations (EC) No 552/2004 and (EC) No 216/2008 of the European Parliament and of the Council and Council Regulation (EEC) No 3922/91 (“the 2018 EASA Regulation”), OJ L 212, 22.8.2018, p. 1.

41 See: Explanatory Note by the Secretariat, Annex 3 to the Defence, paras 20-21. 42 Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January

2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety, OJ L 31, 1.2.2002, p. 1.

43 Regulation (EC) No 1406/2002 of the European Parliament and of the Council of 27 June 2002 establishing a European Maritime Safety Agency (“the EMSA Regulation”), OJ L 208, 5.8.2002, p. 1.

44 Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 laying down Union procedures for the authorisation and supervision of medicinal products for human use and establishing a European Medicines Agency (“the EMA Regulation”), OJ L 136, 30.4.2004, p. 1.

45 Regulation (EC) No 1907/2006 of the European Parliament and of the Council of 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), establishing a European Chemicals Agency, amending Directive 1999/45/EC and

25

(v) Article 28 of Regulation (EC) No 713/2009 of the European Parliament and of

the Council of 13 July 200946 referred to in point 47 of Annex IV;

(vi) Article 68 of Regulation (EU) No 1093/2010 of the European Parliament and

of the Council of 24 November 201047 referred to in point 31g of Annex IX;

(vii) Article 68 of Regulation (EU) No 1094/2010 of the European Parliament and

of the Council of 24 November 201048 referred to in point 31h of Annex IX;

(viii) Article 68 of Regulation (EU) No 1095/2010 of the European Parliament and

of the Council of 24 November 201049 referred to in point 31i of Annex IX;

(ix) Article 67 of Regulation (EU) 2016/796 of the European Parliament and of the

Council of 11 May 201650 referred to in point 42f of Annex XIII;

(x) Article 95 of Regulation (EU) 2018/1139 of the European Parliament and of

the Council of 4 July 201851 referred to in point 66zb of Annex XIII;

(xi) Article 30 of Regulation (EU) 2018/1971 of the European Parliament and of

the Council of 11 December 201852 referred to in point 5czr of Annex XI;

(xii) Article 34 of Regulation (EU) 2019/881 of the European Parliament and of the

Council of 17 April 201953 referred to in point 5cp of Annex XI; and,

repealing Council Regulation (EEC) No 793/93 and Commission Regulation (EC) No 1488/94 as well as Council Directive 76/769/EEC and Commission Directives 91/155/EEC, 93/67/EEC, 93/105/EC and 2000/21/EC (“the REACH Regulation”), OJ L 396, 30/12/2006, p. 1.

46 Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (“the ACER Regulation”), OJ L 211, 14.8.2009, p. 1.

47 The EBA Regulation (n 21). 48 The EIOPA Regulation (n 21). 49 The ESMA Regulation (n 21). 50 Regulation (EU) 2016/796 of the European Parliament and of the Council of 11 May 2016 on

the European Union Agency for Railways and repealing Regulation (EC) No 881/2004 (“the ERA Regulation”), OJ L 138, 26/05/2016, p. 1.

51 The 2018 EASA Regulation (n 40). 52 Regulation (EU) 2018/1971 of the European Parliament and of the Council of 11 December 2018

establishing the Body of European Regulators for Electronic Communications (BEREC) and the Agency for Support for BEREC (BEREC O ce), amending Regulation (EU) 2015/2120 and repealing Regulation (EC) No 1211/2009 (“the BEREC Regulation”), OJ L 321, 17.12.2018, p. 1.

53 Regulation (EU) 2019/881 of the European Parliament and of the Council of 17 April 2019 on ENISA (the European Union Agency for Cybersecurity) and on information and communications technology cybersecurity certification and repealing Regulation (EU) No 526/2013 (Cybersecurity Act) (“the ENISA Regulation”), OJ L 151, 7.6.2019, p. 15.

26

(xiii) Article 30 of Regulation (EU) 2019/1149 of the European Parliament and of

the Council of 20 June 201954 referred to in point 11 of Annex V.55

82. The Government of Iceland underscores that all these provisions have been

incorporated into the EEA Agreement in a manner consistent with the incorporation

of Article 29(1) of the EASA Regulation. Namely, the provisions concerning the

applicability of the EU Sta Regulations and other instruments of European Union

institutional law have been incorporated without being subject to specific

adaptations. In the case of all of these acts, specific adaptations set out

derogations from the Conditions of Employment of Other Servants of the Union, to

enable the employment of EFTA State nationals within each respective agency.

Finally, an adaptation has in all cases been introduced to the relevant provision

applying the Protocol on Privileges and Immunities to the agency, to the e ect that

the obligations of EU Member States set out therein are conferred also upon the

EFTA States in respect of that agency.

83. As further evidence for the legal significance of the adaptations, the Government

of Iceland refers to the relevant sections of the Explanatory Notes justifying the

necessity of their adoption to produce the intended legal e ect.56

84. Further to the above, the Government submits that this understanding of the

Contracting Parties, reflected in the Explanatory Notes, has also been borne to bear

in written exchanges between them in relation to the incorporation of agency acts

into the EEA Agreement. In particular, the Government refers to the following

excerpt from a Non-Paper submitted by the Subcommittee V to the European

Commission on 18 November 2022, following discussions that arose in respect of

54 Regulation (EU) 2019/1149 of the European Parliament and of the Council of 20 June 2019

establishing a European Labour Authority, amending Regulations (EC) No 883/2004, (EU) No 492/2011, and (EU) 2016/589 and repealing Decision (EU) 2016/344 (“the ELA Regulation”), OJ L 186, 11/07/2019, p. 21.

55 Regulation (EU) 2019/1149 was incorporated into Annex V by Decision of the EEA Joint Committee No 319/2023 of 8 December 2023 amending Annexes V (Free movement of workers) and VI (Social security) and Protocol 31 (On cooperation in specific fields outside the four freedoms) to the EEA Agreement, the entry into force of which is pending.

56 See: Annex 6 to the Defence which contains Explanatory Notes concerning the incorporation of the EMSA Regulation, the EMA Regulation, the REACH Regulation, the ACER Regulation, the EBA Regulation, the EIOPA Regulation, the ESMA Regulation, the ERA Regulation, the BEREC Regulation, the ENISA Regulation, and the ELA Regulation.

27

adaptations concerning the Protocol on Privileges and Immunities in the meeting

of the EEA Joint Committee on 28 October 2022 (emphasis added):57

4. Adaptations regarding the status of Protocol 7 on the Privileges and Immunities

of the European Union illustrate the above. Furthermore, the usual practice when

the EU sets up Agencies is to stipulate in the founding acts of such Agencies that

Protocol 7 shall apply to the Agency and its sta . As Protocol 7 is annexed to both

the TEU and TFEU, the EU Member States are of course fully bound by its provisions

and, consequently, obliged to apply the privileges and immunities contained

therein to the relevant Agency. As the EEA EFTA States are not parties to the

Protocol and the Protocol is not part of the EEA Agreement, the fact that an

incorporated Agency act specifies that the Protocol applies to the Agency

entails no obligations for the EEA EFTA States vis -à-vis the Agency or its sta .

As a result, adaptations are introduced to the e ect that the EEA EFTA States shall

also extend the privileges and immunities to the Agency and its sta .

85. Following the submission of the Legal Note, the Contracting Parties agreed to

standardise their approach to the incorporation of such adaptation texts, along

with Joint Declarations clarifying their legal significance (that is, the absence

thereof) in an EU legal context.58

86. With reference to the above, the Government of Iceland submits that the context

which informs the interpretation of Article 29(1) of the EASA Regulation reinforces

the conclusion that the legal e ect of extraneous instruments of Union law is

merely to extend their application to new entities, not to create new rights and

obligations of the Contracting Parties thereunder. Indeed, the contextual sources

referred to evidence that the interpretation adopted by the EFTA Surveillance

Authority in respect of Article 29(1) conflicts with the legal understanding applied

by the Contracting Parties and reflected in their adaptation practice for more than

57 ‘Incorporation of EASA, Cybersecurity and Cedefop Regulations into the EEA Agreement: Legal

implications of adaptations concerning privileges and immunities of EU Agencies’ (Non-Paper submitted by Subcommittee V) (Annex 7 to the Defence), para 4.

58 Response from the European Commission to the Non-Paper, e-mail to the EFTA Secretariat of 28 November 2022 (Annex 8 to the Defence; see also: Joint Declaration by the Contracting Parties to Decisions of the EEA Joint Committee No 22/2023 of 3 February 2023, No 27/2023 of 28 April 2023, No 28/2023 of 3 February 2023; No 109/2023 of 28 April 2023, No 114/2023 of 28 April 2023, No 319/2023 of 8 December 2023, and No 327/2023 of 8 December 2023.

28

two decades. The position of the EFTA Surveillance Authority cannot be held

without simultaneously concluding that a number of the provisions of the EEA

Agreement, introduced through specific adaptations to agency acts, are without

legal e ect.

87. In clear terms, the Authority is of the position that the EFTA States should be

considered bound by obligations against their clearly expressed intentions and

without their consent. Such an approach goes against fundamental principles of

international law and should be rejected.

3.2.3 The Object and Purpose of Article 29(1)

88. The Government now turns to elaborating the object and purpose against which

the incorporation of the EASA Regulation into the EEA Agreement should be

interpreted. While the present dispute pertains to the EASA Regulation adopted in

2008, the terms of participation of the EFTA States in the agency were agreed upon

already in the 2002 Regulation. As a result, the Government will also refer to

instruments associated with the incorporation of the 2002 Regulation since they

are relevant to evidence the intention of the Contracting Parties.

89. Over the course of the pre-litigation procedure, the EFTA Surveillance Authority has

progressively developed a theory of the intention of the Contracting Parties in

incorporating the EASA Regulation into the EEA Agreement which underpins the

meaning it seeks to ascribe to Article 29(1).

90. The Authority holds that the intention of the Contracting Parties with the

incorporation of the EASA Regulation into the EEA Agreement was to enable the full

participation of the EFTA States in the agency. This is reflected in the specific

adaptations made to that e ect and in recital (4) in the preamble of Decision of the

EEA Joint Committee No 163/201159 (“JCD No 163/2011”), which incorporated the

Regulation into the EEA Agreement, and which states that the incorporation should

“allow for the full participation of the EFTA States in [EASA].”

91. The Authority submits the recital as evidence of the Contracting Parties’ “intention

fully to involve the EFTA States (and by extension their nationals) in the work of

59 Decision of the EEA Joint Committee No 163/2011 of 19 December 2011 amending Annex XIII

(Transport to the EEA Agreement, OJ L 76, 15.3.2022, p. 51.

29

EASA” (emphasis added).60 Indeed, the Authority has made clear that the

involvement of EFTA State nationals as employees of EASA is part and parcel of

what it understands the full participation of the EFTA States in the work of the

agency to entail. The Government recalls, in this regard, that in its Reasoned

Opinion, the Authority even went so far as to say that the purpose of the

incorporation of the EASA Regulation was to “obviate” any disincentivising of

“participation in the EASA by EFTA-national sta ”.61

92. The Government of Iceland submits that the Authority is correct in stating that the

objective of incorporating the EASA Regulation into the EEA Agreement was inter

alia to enable the full participation of the EFTA States in the work of EASA. That

being said, the Authority’s characterisation of the Contracting Parties’ intent is

unduly narrow and misidentifies the specific outcome they sought to achieve.

93. To understand the object and purpose of incorporating the EASA Regulation into

the EEA Agreement, it is, firstly, relevant to survey all the substantive recitals in JCD

No 163/2011, which together convey a unified message. These are:

(2) 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 repealing Council

Directive 91/670/EEC, Regulation (EC) No 1592/2002 and Directive 2004/36/EC

has as its principal objective to establish and maintain a high uniform level

of civil aviation safety within the Union.

(3) The activities of the European Aviation Safety Agency may a ect the level of

civil aviation safety within the European Economic Area.

(4) 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.

60 Application, para 44. 61 Reasoned Opinion, Annex A.13 to the Application, p. 11.

30

94. It should be noted that these recitals mirror the corresponding recitals (2) to (4) in

Decision of the EEA Joint Committee No 179/2004 of 9 December 2004,62 which

incorporated the 2002 EASA Regulation into the EEA Agreement.

95. Secondly, it is relevant to consult the recitals in the preamble of the EASA

Regulation, which largely reflect corresponding recitals in the 2002 EASA

Regulation. The Government recalls that, in accordance with paragraph 1 of

Protocol 1 to the EEA Agreement, while the preambles of incorporated acts are “not

adapted for the purposes of the Agreement”, “[t]hey are relevant to the extent

necessary for the proper interpretation and application, within the framework of

the Agreement, of the provisions contained.” The Government submits that recitals

(1), (12), (15), (23), (27), and (31) to the EASA Regulation are relevant for this purpose,

in particular the following excerpts thereof (emphasis added):

(1) A high and uniform level of protection of the European citizen should at all

times be ensured in civil aviation, by the adoption of common safety rules

and by measures ensuring that products, persons and organisations in

the Community comply with such rules and with those adopted to protect

the environment. This should contribute to facilitating the free movement

of goods, persons and organisations in the internal market.

…

(12) There is a need for better arrangements in all the fields covered by this

Regulation so that certain tasks currently performed at Community or

national level should be carried out by a single specialised expert body .

There is, therefore, a need within the Community's existing institutional

structure and balance of powers to establish a European Aviation Safety

Agency (hereinafter referred to as the Agency) which is independent in

relation to technical matters and has legal, administrative and financial

autonomy. To that end, it is necessary and appropriate that it should be a

Community body having legal personality and exercising the implementing

powers which are conferred on it by this Regulation.

62 Decision of the EEA Joint Committee No 179/2004 of 9 December 2004 amending Annex XIII

(Transport) to the EEA Agreement, OJ L 161, 23.6.2005, p.1.

31

…

(15) The e ective functioning of a Community civil aviation safety scheme in

the fields covered by this Regulation requires strengthened cooperation

between the Commission, the Member States and the Agency to detect

unsafe conditions and take remedial measures as appropriate.

…

(23) The Commission and the Member States should be represented within a

Management Board in order to control e ectively the functions of the

Agency. This Board should be entrusted with the necessary powers to

establish the budget, verify its execution, adopt the appropriate financial

rules, establish transparent working procedures for decision making by the

Agency and appoint the Executive Director. […] .

…

(31) It is a general objective that the transfer of functions and tasks from the

Member States, including those resulting from their cooperation through

the Joint Aviation Authorities , to the Agency should be e ected e ciently,

without any reduction in the current high levels of safety, and without any

negative impact on certification schedules. […].

96. Three key things should be understood from these recitals. Firstly, the EASA

Regulation pursues a high-level of aviation safety through a unified legal

framework. Secondly, the attainment of that objective is considered to be better

served by vesting pre-existing competences of the Commission and the Member

States, including those pertaining to cooperation within the Joint Aviation

Authorities (“the JAA”), in a dedicated agency within the European Union’s

institutional structure. Thirdly, that agency should be independent and enjoy legal,

administrative and financial autonomy, but be subject to the management of the

Commission and the Member States through its Management Board.

97. This echoes the broader trend of agencification within the European Union, which

has accelerated since the late 1990s to cover most specialised policy fields.

Integrating the growing number of EU agencies and their role in the internal market

into the institutional framework of the EEA Agreement has been an acute challenge

32

for the Contracting Parties to address.63 EASA was one of the first agencies which

the Contracting Parties had to accommodate within the EEA Agreement, with the

EFTA States being involved in conceptual discussions about its future

establishment as early as 1998.64

98. While it was undisputed that the Regulation’s substantive provisions directly

concerned fields harmonised by the EEA Agreement, the concentration of hard and

soft competences for the application of those rules in EASA tested the Agreement’s

central premise of substantive homogeneity in the absence of institutional

convergence. Further, EASA was intended to subsume the role previously played by

the JAA as the forum within Europe for aviation safety standard setting. As a result,

the incorporation of the EASA Regulation into the EEA Agreement placed the EFTA

States in a situation where competences they had previously entrusted to an

international organisation of which they were members would shift to an internal

organ of the European Union where their capacity to influence decision-making

would ipso facto be diminished.

99. This was reflected in the position of the EFTA States in the negotiations for the

incorporation of the 2002 EASA Regulation into the EEA Agreement. In a

Memorandum submitted to the European Commission on 22 March 2004, the EFTA

States stated that they considered “it essential that they retain the balance of

rights and obligations enjoyed in the context of JAA as well as acknowledging the

principles of the EEA Agreement and the principle of Community autonomy in

decision making.”65 This underpinned the position of the EFTA States that they

should be secured full participation in the agency’s Management Board on equal

63 See: Agencies Note (n 28), Annex 1 to the Application, paras 1-6; Erlend Leonhardsen, ‘The EEA

EFTA States and EU Agencies: Getting Along or Going Alone’ (SSRN, 21 September 2015) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2663412>; Tarjei Bekkedal, ‘Third State participation in EU agencies: Exploring the EEA precedent’ (2019) 56(2) Common Market Law Review 381; Finn Arnesen et al., Agreement on the European Economic Area: A Commentary (Nomos Verlagsgesellschaft 2018) p. 11, 24, 71, 468-470, 760-761.

64 Working Group on Transport, ‘EFTA Participation in the European Aviation Safety Agency’ (Background Note by the Secretariat, 26 March 2001) (Annex 10 to the Defence), p. 4.

65 Standing Committee of the EFTA States, ‘Memorandum on the outstanding issues relating to the incorporation of Regulation (EC) No 1592/2002 on common rule in the field of civil aviation and establishing a European Aviation Safety Agency’ (Annex I to Minutes No. 1040923, 22 March 2004) (Annex 11 to the Defence), para 4.

33

terms as the EU Member States, including voting rights. The rationale for this

position is elaborated in the following excerpt from the 2004 Memorandum:66

7. As Iceland and Norway currently have full voting rights in JAA, it is crucial

that these rights are upheld for the EEA EFTA Member States in the

Management Board when it adopts decisions related to administrative

tasks and internal functions of the Agency, e.g. when adopting the

Agency’s programme of work; adopting guidelines for the allocation of

certification tasks to national aviation authorities or qualified entities in

agreement with the Commission; establishing procedures for making

decisions by the Executive Director as referred to in Articles 43 and 44;

appointing the members of the Board of Appeal pursuant to Article 32.

100. The position of the European Commission, expressed at a meeting between the

Contracting Parties on 24 March 2004, was that, “with respect to EEA EFTA

participation in the EASA Management Board, the Commission could not and would

not grant voting rights to non-EU Member States in a Community Agency. Although

having carefully taken into account the arguments that EEA EFTA [sic] have put

forward regarding Norway’s and Iceland’s voting rights in the Joint Aviation

Authority the fact remained that EASA had now been established as a Community

Agency, and as such, third country voting rights could not be accepted.”67

101. The Government of Iceland submits that these views of the Contracting Parties,

expressed and recorded in the context of the negotiations for the incorporation of

the 2002 EASA Regulation, are material to interpreting the meaning of the

agreement struck. This entailed: firstly, that the EFTA States would be secured full

participation in EASA, without voting rights; secondly, that the EFTA States would

participate in the financial contribution of the European Union to the budget of the

agency; thirdly, that the EFTA States would apply the Protocol on Privileges and

Immunities to the agency; and, fourthly, that EFTA nationals would be eligible for

66 ibid., para 7. 67 Standing Committee of the EFTA States, ‘Informal Consultation Meeting with the Commission

on the Outstanding Issues Relating to the Incorporation of Regulation (EC) No 1592/2002 on Common Rules in the Field of Civil Aviation and Establishing a European Aviation Safety Agency’ (Minutes by the Secretariat, 24 March 2004) (Annex 11 to the Defence), para 7.

34

employment in EASA. This has since become the standard model for the

participation of the EFTA States in decentralised agencies of the European Union.68

102. There are no records of exchanges between the Contracting Parties that give

credence to the Authority’s contention that the objective of the “full participation”

of the EFTA States in EASA concerned or encompassed the involvement of EFTA

nationals in its work. On the contrary, the existing records make clear that the

object and purpose of EASA participation concerns statecraft, i.e. to secure State

participation in decision-making within bodies of the European Union whose work

impacts the EFTA States.

103. Sta of EASA do not serve in a national capacity and their allegiance in carrying out

their duties is to their employer, not to the State of which they are citizens. This

much is clear from the EU Sta Regulations, applicable to EASA Sta , which

stipulate that:

An o cial shall carry out his duties and conduct himself solely with the interests

of the Union in mind. He shall neither seek nor take instructions from any

government, authority, organisation or person outside his institution. He shall

carry out the duties assigned to him objectively, impartially and in keeping with

his duty of loyalty to the Union.69

104. It follows that the Authority’s argument, that the objective of full EFTA State

participation in an agency and the eligibility of EFTA State nationals for

employment therein are one and the same, is unsupported and cannot hold.

Indeed, adaptations on the employability of EFTA nationals in EU agencies serve an

objective that is ancillary to the primary objective of full participation. For Iceland,

the objective of employability is two-fold: firstly, it strengthens an agency’s

competence in matters concerning Iceland and Icelandic conditions and, secondly,

it enables Icelandic nationals to attain expertise relevant for future employment of

such individuals in Icelandic administration. As regards the motivation of the

European Union, the Government refers to records of the EFTA Secretariat from the

68 See: section 4.2 of the Agencies Note (n 28) (Annex I to the Defence). 69 Article 11 of Regulation No 31 (EEC), 11 (EAEC), laying down the Sta Regulations of O cials

and the Conditions of Employment of Other Servants of the European Economic Community and the European Atomic Energy Community, OJ 45, 14.6.1962, p. 1385.

35

negotiations of the incorporation of the 2002 EASA Regulation which cite its

agreement to the adaptation on employability on the basis that “it would be in the

interest of the Agency to engage the best expertise available”.70

3.2.4 Conclusion

105. Considering the foregoing, the Government of Iceland submits that the Authority’s

interpretation of Article 29(1) of the EASA Regulation is unfounded, legally

incoherent and entirely unsupported by the provisions of the EEA Agreement. The

text, context, and object and purpose of Article 29(1) make clear that it extends the

application of a pre-existing instrument of EU institutional law to EASA sta ,

without prescribing any new rights or obligation for the Contracting Parties under

that external instrument. The Authority’s selective reliance on a single recital in JCD

No 163/2011, while disregarding all other applicable sources of interpretation, to

deliver the most onerous outcome possible for the Icelandic State, further belies

the obligation to interpret treaties in good faith. It follows that the Authority’s First

Plea in law must fail.

106. The Government of Iceland will nevertheless continue to address the subsidiary

arguments made by the Authority in support of its interpretation of Article 29(1).

3.3 The E ectiveness of Article 29(1)

107. The Authority has sought to invoke the principle of e ectiveness to substantiate its

First Plea.71 This principle has application under the EEA Agreement, both as a

general principle of public international law and more specifically as a principle of

EEA law derived from Article 3 of the Agreement.72 In the context of the

implementation of an EEA act into the internal legal order of a Contracting Party,

the principle of e ectiveness requires that implementing rules “do not render it

practically impossible or excessively di cult to exercise the rights in question”.73

The settled case-law of the EFTA Court further requires that “where a provision of

70 Subcommittee II on Free Movement of Services and Capital, ‘European Aviation Safety Agency

(EASA)’ (Background Note for meeting of 7 June 2001, 6 June 2001), p 3. 71 Application, paras 34, 52, 53, and 55. 72 See: Páll Hreinsson, ‘General Principles’ in C. Baudenbacher, The Handbook of EEA Law

(Springer 2016), 376-378; E-2/10 Þór Kolbeinsson v the Icelandic State, judgment of 10 December 2010, para 46.

73 Arnesen et al., Agreement on the European Economic Area: A Commentary (n 63), p. 263-264, citing E-11/12 Beatrix Koch and others, judgment of 13 June 2013, para 121.

36

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

interpretation which ensures that the provision retains its e ectiveness”.74

108. In this context, it is worth noting that Article 29(1) of the EASA Regulation is not

open to several interpretations and there is, consequently, no need to have

recourse to the principle of e ectiveness for that purpose.

109. Nevertheless, the Authority has, throughout the pre-litigation procedure and in the

Application, made several mutually inconsistent arguments in relation to the

obligations of the Government of Iceland under the principle of e ectiveness in

respect of Article 29(1).

110. The Government of Iceland recalls that the Authority has, throughout the pre-

litigation procedure, repeatedly mistaken the subject of the present dispute as

being the application of the EU Sta Regulations to sta of EASA who are nationals

of the EFTA States. This misunderstanding is still reflected in arguments made by

the Authority in the Application, specifically in paragraph 44. Although

misinformed, the Authority came to the correct conclusion as regards the

e ectiveness of Article 29(1) of the EASA Regulation in the Letter of Formal Notice

and the Reasoned Opinion, when it stated:

On this basis, the Authority considers that any interpretation that would amount

to disapplying the possibility for EFTA nationals to rely on the EU Sta

Regulations as foreseen by Article 29(1), would obstruct the full e ectiveness of

those persons’ right to be employed by the EASA on the same footing as EU

nationals.75

111. Indeed, for Article 29(1) to be e ective, the instruments of EU institutional law

referred to therein must apply to all EASA sta and be enforceable in the legal order

in which EASA is constituted, which is the EU legal order.76 The negative obligation

that Iceland has undertaken with the incorporation of Article 29(1) of the EASA

Regulation prohibits the Government of Iceland from taking any action which

74 E-17/24 (n 25), para 40. 75 Reasoned Opinion, Annex A.13 to the Application, p. 9, cf. Letter of Formal Notice, Annex A. 11

to the Application, p. 7. 76 See: Article 28(1) of the EASA Regulation.

37

would amount to disapplying the application of the relevant EU institutional law,

as it exists in the EU legal order, to any sta member of EASA of any nationality.

112. In the Application, the Authority has adopted a new theory of e ectiveness to

achieve its desired legal outcome. As such, the Authority now argues that

“[e] ectiveness of this provision requires: (i) having recourse to certain parts of the

Sta Regulations, which e ectively ‘clothe’ the bare bones of Article 29(1); and (ii)

giving those parts e ect.”77

113. This statement encapsulates in full the feebleness of the Authority’s case. The

Authority is not arguing for Article 29(1) of the EASA Regulation to be interpreted so

that it retains its e ectiveness. Instead, the Authority wants Article 29(1) to be a

vessel through which the EU Sta Regulations can attain additional e ect by

applying them as if they were actual provisions of the EEA Agreement.

114. Such an argument corrupts the purpose of the principle of e ectiveness, which

serves to protect the rights conferred by the EEA Agreement upon individuals and

undertakings, not rights which the EFTA Surveillance Authority would prefer for it

to entail. It follows that the Authority’s arguments in this regard must be dismissed.

3.4 The Relevance of the Principle of Reciprocity

115. In support of its First Plea, the Authority has made repeated references to the

principle of reciprocity under the EEA Agreement.78 In the Reasoned Opinion, the

Authority argued that an interpretation of Article 29(1) of the EASA Regulation which

would not require the EFTA States to apply the EU Sta Regulations would “amount

to a lop-sided arrangement with a lack of concomitant reciprocity between the EU

Member States on the one hand, and the EFTA States on the other.”79 The Authority

elaborated upon this in paragraph 57 of the Application where it stated inter alia

that this would mean that “the EU and its Member States would have granted the

right of full participation in the Agency to the EFTA States and Iceland, including

the right of their/Icelandic nationals to be employed by the Agency, without a

77 Application, para 53. 78 Letter of Formal Notice, Annex A.11 to the Application, p. 8; Reasoned Opinion, Annex A.13. to

the Application, p. 9 and 11; Application, para 57. 79 Reasoned Opinion, p. 11.

38

reciprocal obligation for Iceland to give e ect (as the EU Member States must) to

the relevant Sta Regulations” (emphasis added).80

116. Here, the Government of Iceland submits that the Authority mistakes the principle

of reciprocity for a contrived notion of fairness in the agreements reached between

the Contracting Parties.

117. The principle of reciprocity, the textual basis for which is recital 4 to the EEA

Agreement, entails that rights conferred by the EEA Agreement may be invoked by

EEA nationals and undertakings throughout the EEA. Thus, Article 29(1) of the EASA

Regulation is a provision of the EEA Agreement which is enforceable before courts

of the Contracting Parties. The EU Sta Regulations are an instrument of EU

institutional law which can be enforced within the EU legal order by sta of EU

institutions.

118. This principle does not curtail the capacity of the Contracting Parties to mutually

agree on the form that their cooperation takes in new provisions of the EEA

Agreement adopted by the EEA Joint Committee.

119. In any event, the Authority’s opinion here is entirely baseless. As the Government

of Iceland has already demonstrated, the creation of EASA resulted in a loss of

reciprocal rights for the EFTA States in the area of European aviation safety

regulation. The EFTA States sought to avert that outcome by securing full

participation in EASA on the basis of reciprocal and equal rights. Ultimately, it was

the European Union which did not agree to those terms on the basis that the

reciprocity, which applies to rights of individuals and undertakings in the European

Economic Area, could not be extended to the rights of the Contracting Parties to

participation in the internal bodies of the Union.

120. It follows that the Authority’s argument here, much like its argument in respect of

e ectiveness, relates not to a point of law, but to a point of policy. As a result, the

Government of Iceland protests it as an outrageous and unjustified incursion into

the domain of Iceland’s foreign relations. Accordingly, the Government of Iceland

80 Application, para 57.

39

calls on the Authority withdraw the allegations made in paragraph 57 of the

Application.

3.5 Ramifications for Legal Certainty

121. Throughout the course of the pre-litigation procedure, the EFTA Surveillance

Authority has failed to articulate a consistent legal rationale as to the legal

significance of the EU Sta Regulations under the EEA Agreement.81 The Authority’s

latest iteration, as outlined in the Application, is that Article 29(1) of the EASA

Regulation requires Iceland to implement and apply the EU Sta Regulations

“where relevant”.82

122. In this context, the Government of Iceland stresses that the attainment of the

objective of the EEA Agreement is dependent upon the existence of legal certainty.

The settled case-law of the EFTA Court holds that legal certainty is a “fundamental

principle of EEA law”, which may be invoked by individuals, undertakings and

Contracting Parties without distinction.83 In particular, this principle requires “that

rules of EEA law be clear and precise, so that interested parties can ascertain their

position in situations and legal relationships governed by EEA law”.84

123. The principle of legal certainty requires both substantive and formal clarity of legal

rights and obligations. EEA law is derived from provisions of the EEA Agreement,

including the acts referred to in the Annexes. Acts become binding as EEA law upon

incorporation into the Agreement by a decision of the EEA Joint Committee which

introduces a reference to the act, as published in the O cial Journal of the

European Union, into the relevant Annex or Protocol. The provisions of Part VII of

the Agreement and Protocol 1 thereto entail that rights and obligations in those

acts apply in an EEA legal context and are judicially enforceable. Every incorporated

act and decision of the EEA Joint Committee is authenticated in the Agreement’s 25

81 Compare: Letter of Formal Notice, A.11. to the Application, p. 7; Reasoned Opinion, Annex A.13.

to the Application, p. 9-10. 82 Application, paras 53, 56 and 59. 83 E-1/04 Fokus Bank ASA v the Norwegian State, represented by Skattedirektoratet, judgment

of 23 November 2004, para 37; E-9/11 EFTA Surveillance Authority v the Kingdom of Norway, judgment of 16 July 2012, para 99; Joined Cases E-5/04, E-6/04 and E-7/04 Fesil and Finn ord and other, para 163; Joined Cases E-17/10 and E-6/11 The Principality of Liechtenstein and VTM Fundmanagement AG v EFTA Surveillance Authority, para 141.

84 E-17/10 and E-6/11 (n 83), para 142.

40

equally authentic o cial languages and published in the O cial Journal of the

European Union and the EEA Supplement thereto. None of these essential legal

certainty requirements are met in the case of the EU Sta Regulations, which the

Authority nevertheless insists forms part of EEA law.

124. The Government of Iceland therefore submits that the Authority’s argument that

Iceland is obliged to apply the EU Sta Regulations “where relevant” is wholly

incompatible with the principle of legal certainty. It is necessarily premised on

accessible and certain rights under EU law becoming obscurely applicable under

EEA law. Further, those rights would evolve dynamically within the EU legal order,

as the EU Sta Regulations are progressively amended. However, as the EEA

Agreement precludes the transfer of sovereign legislative competences, those

rights would be static in respect of Iceland. In this regard, the Government of

Iceland observes that the EU Sta Regulations have been subject to 38 alterations,

including amendments and corrigenda, since the incorporation of the EASA

Regulation into the EEA Agreement. It follows from all of the foregoing that the

Authority’s arguments must be rejected on grounds of incompatibility with the

principle of legal certainty.

3.6 Connection with Fundamental Rights and jus cogens norms

125. Finally, the Government of Iceland will address the arguments made by the

Authority that the application of EEA law is influenced by external “normative

standards or rules”.85 The Authority has referred here to the United Nations

Convention on the Rights of the Child,86 a source of fundamental rights, and to the

Charter of the United Nations,87 the supreme instrument of the rules-based

international order, the provisions of which constitute jus cogens or peremptory

norms of international law.88

126. At the outset, and with reference to Section 3.1. above, the Government of Iceland

submits that the same principles apply when a provision of EEA law requires

85 Application, para 54. 86 Convention on the Rights of the Child (adopted 20 November 1980, entered into force 2

September 1990) 1577 UNTS 3. 87 Charter of the United Nations (“UN Charter”) (adopted 26 June 1945, entered into force 24

October 1945) V UNCIO 335, amendments in 557 UNTS 143, 638 UNTS 308 and 892 UNTS 119. 88 See, as regards supremacy, Article 103 of the UN Charter.

41

specific performance by a Contracting Party in relation to an extraneous standard

as is the case for any referenced instrument of EU law. In the Authority’s example,

Article 28 of Directive 2004/38/EC of the European Parliament and of the Council

of 29 April 200489 imposes obligations on EU Member States when they adopt

expulsion decisions against nationals of EU Member States and EFTA States. One of

those criteria is “the best interest of the child, as provided for in the United Nations

Convention on the Rights of the Child of 20 November 1989”. It follows from

paragraph 7 of Protocol 1 to the EEA Agreement that the obligation imposed upon

the EU Member States in Article 28 of the Directive is, under the EEA Agreement,

also imposed upon the EFTA States. This is the di erence between Article 28 of the

Directive and Article 29(1) of the EASA Regulation.

127. The fact that the reference to the Convention on the Rights of the Child was not

adapted upon incorporation reflects the fact that all Contracting Parties to the EEA

Agreement are themselves parties to that treaty, and thus under an obligation to

respect its provisions in all their actions, including those governed by EEA law. The

EFTA Court cited this fact inter alia when it recognised that “the best interests of

the child represents a fundamental principle that forms part of the general

principles of EEA law.”90

128. The Government of Iceland submits that the EU Sta Regulations cannot be

compared with the Convention on the Rights of the Child or with the UN Charter, as

the Authority proposes. The EU Sta Regulations have narrow application to

o cials of the European Union, as opposed to the general application inherent to

fundamental rights. The EU Sta Regulations are subject to regular amendment at

the pleasure of the Union legislators, as opposed to the Convention on the Rights

of the Child and the UN Charter which are static. Finally, the EU Sta Regulations

have no wider acceptance of their legal value outside of the legal order in which

89 Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the

right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC, OJ L 158, 30.4.2004, p. 77.

90 E-15/24 A v B, judgment of 12 December 2024, paras 52-53.

42

they apply, as is the case for jus cogens norms contained in the treaties referred to

by the Authority.

129. On this last point, it is pertinent to note that, while the Authority insists that the

binding e ect produced by an “external standard” is “irrespective of whether the

EFTA States are themselves signatories or parties to the instrument referred to”, 91

this argument has only been substantiated by making reference to standards which

all Contracting Parties have formally accepted as being legally binding. Indeed, the

Authority’s baseless claim requires the complete disregard of the principles of

pacta sunt servanda and of State consent, inherent not only to the EEA Agreement

but to treaty-making itself. It follows that the Authority’s argument must fail.

IV. Second Plea: No Breach of Article 28 EEA

130. The Government of Iceland recalls paragraph 5 of the Application, wherein the

Authority states that while the finding of a breach under the First Plea would

“reinforce its arguments under the Second Plea, the Authority submits that

Iceland’s obligations under Article 28 EEA (the Second Plea) apply irrespective of

whether Article 29(1) of the EASA Regulation imposes obligations on Iceland in this

case”. Having demonstrated that the Authority’s First Plea is manifestly unfounded

and must fail in its entirety, the Government will consider the Second Plea in

isolation. Further, as is elaborated in Section V, since the Authority mischaracterises

the situation in Iceland as an administrative practice, the Government of Iceland

will assess the Second Plea on the basis of the actual situation in Iceland, which is

that Icelandic law does not compel mandatory mutual pension funds to carry out

transfers of pension entitlements out of Iceland.

131. The Authority argues that the situation in Iceland whereby individuals cannot

transfer the capital value of their accrued pension rights in mandatory mutual

pension funds to the PSEUI constitutes a restriction of the free movement of

workers in violation of Article 28 of the EEA Agreement.92 Pursuant to Article 28 of

the Agreement, the Contracting Parties are to abstain from adopting measures

liable to hinder or make less attractive the enjoyment of this fundamental freedom.

91 Reasoned Opinion, Annex A.13 to the Application, p. 9. 92 Application, paras 63-64.

43

132. The Government of Iceland recalls that Article 28 of the EEA Agreement does not

apply to employment in the public service. It further does not govern the right of

EEA nationals to be employed in the institutions of the European Union, which is

governed by instruments of EU institutional law, including those discussed in

Section III. It is for this reason that adaptation texts must expressly provide for any

right of EFTA nationals to be employed in EU agencies, as is the case with EASA.

133. Nevertheless, EEA nationals are considered “workers” when they exercise the right

to free movement to take up employment for an international organisation, or an

EU institution, in the territory of another Contracting Party. Iceland is thus

prohibited from imposing a restriction within the meaning of Article 28 on such a

worker. This applies equally to agencies in which Iceland participates, such as EASA,

and those in which it does not participate, such as the European Fisheries Control

Agency (EFCA). However, that does not mean that an omission by Iceland of

positively implementing the rules applicable to the sta of the relevant

organisation entails a restriction on the fundamental freedom prescribed by Article

28 of the EEA Agreement, especially where that freedom does not secure any right

to be employed by that organisation.

134. If an obligation for Iceland to compel the transfer of entitlements from pension

funds to the PSEUI could be derived from Article 28 of the EEA Agreement, the fact

that this is a fundamental freedom of general application and the principle of equal

treatment would necessarily require the portability of pension entitlements for all

workers, not solely those who are EU o cials. The cross-border enjoyment of social

security rights under EEA law is governed by Regulation (EC) No 883/2004 of the

European Parliament and of the Council of 29 April 200493, which does not provide

for the transferability of pension entitlements between social security systems.

135. For the avoidance of doubt, the Government of Iceland considers it pertinent to

stress that the Complainant and any other sta member of EASA is, by virtue of

their status of workers under EEA law, not deprived of any of their rights pursuant

to Article 29 of the EEA Agreement or the provisions of Regulation (EC) No 883/2004.

In accordance with those EEA law obligations, all individuals in the EEA, including

93 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 L 166, 30.4.2004, p. 1.

44

employees of EASA, retain their accrued rights in Icelandic pension funds

regardless of their place of residence.

136. The Government of Iceland therefore submits that the Authority’s Second Plea is

unfounded and must be dismissed.

V. The Existence of an Administrative Practice

137. As the Government of Iceland has demonstrated, the Authority’s Pleas in Law must

be dismissed because they are premised on a legal interpretation that is manifestly

unfounded and systemically incoherent with the EEA Agreement. It follows that it

is not strictly necessary to address the Authority’s arguments in relation to the

conduct which it alleges to breach non-existent obligations. Nevertheless, the

Government of Iceland will, for the sake of completeness, also refute the

Authority’s allegation as regards the existence of an administrative practice in

Iceland of refusing to allow the transfer of pension rights to the PSEUI.

138. The Government recalls that the Application, in its entirety, is premised on the

Authority’s assertion that Iceland maintains “a consistent administrative practice”

refusing to allow sta members of the EASA to transfer the capital value of their

“occupational pensions” accrued in Iceland to the PSEUI.94

139. The Government of Iceland contests this framing by the Authority and rejects as

incorrect any allegation that an administrative practice to that e ect is in place and

practiced by Icelandic authorities.

140. An administrative practice infringing EEA law is held to exist where the conduct of

an EEA State or its public entities is contrary to the obligations incumbent on that

State to uphold, as set out in the provisions of the EEA Agreement. As the settled

case-law of the EFTA Court holds, “even if the applicable national legislation [of an

EEA State] itself complies with EEA law, a failure to fulfil obligations may arise due

to the existence of an administrative practice which infringes EEA law when the

practice is, to some degree, of a consistent and general nature.”95

94 Application, para 28. 95 E-6/12 EFTA Surveillance Authority v Kingdom of Norway, judgment of 11 September 2013, para

58.

45

141. An administrative practice contrary to EEA law is therefore a distinct type of

violation of the EEA Agreement, separate from other types of violations such as a

failure to make an act referred to in an Annex to the Agreement a part of an EEA

State’s internal legal order, in accordance with Article 7 of the Agreement,96 or the

failure by an EEA State to take action to fulfil an obligation under a provision of the

EEA Agreement,97 or the maintenance by an EEA State of national legislation

contrary to the EEA Agreement.98

142. While such infringements may, in theory, overlap, an infringement arising from an

administrative practice requires that the conduct alleged to contradict applicable

EEA obligations must be attributable to the EEA State which has undertaken to fulfil

those obligations. As the EFTA Court held in its judgment in E-16/23 EFTA

Surveillance Authority v the Kingdom of Norway, “the failure can be established

only as a result of su ciently documented and detailed proof of the alleged

practice, for which the EEA State concerned is answerable ” (emphasis added).99

The Government of Iceland submits that this standard is not met in the present

dispute.

143. The Authority has substantiated the existence of an administrative practice on the

fact that it has received a complaint stating that “the Icelandic authorities had

refused to transfer [the Complainant’s] occupational pension rights which had

accrued in Iceland, to the PSEUI” which was reflected by “a refusal from the

Icelandic Social Insurance Administration in 2012”.100

144. In a series of exchanges with the EFTA Surveillance Authority since 2019, the

Government of Iceland has consistently accepted as factual the situation of the

Complainant where he has been unable to transfer the capital value of his accrued

rights in his mandatory mutual pension fund to the PSEUI. However, in spite of the

Government’s best e orts, the Authority has persistently mischaracterised that

96 See, for example: E-10/24 EFTA Surveillance Authority v Iceland, judgment of 5 December 2024,

para 24. 97 See, for example: E-8/11, EFTA Surveillance Authority v Iceland, judgment of 14 December 2011,

para 36. 98 See, for example: E-3/00, EFTA Surveillance Authority v the Kingdom of Norway, judgment of

5 April 2001, para 43. 99 E-16/23 EFTA Surveillance Authority v Kingdom of Norway, judgment of 12 December 2024,

para 36. 100 Application, para 6.

46

situation as constituting administrative action for which the Icelandic State is

answerable.

145. As was elaborated in the Government’s letter to the Authority of 13 August 2020,

the Icelandic pension system consists of three pillars: (i) a tax-funded public

pension; (ii) mandatory mutual pension funds; (iii) voluntary supplementary

personal pension savings.

146. Of these pillars, only the first is directly administered by the Icelandic State, that is

the public pensions which are under the purview of the Icelandic Social Insurance

Administration. Public pensions are financed by the Icelandic Treasury and not by

contributions from individuals. These pensions serve the purpose of securing a

minimum income to retirement age individuals resident in Iceland. Entitlements in

the public pension system are therefore determined though a means test based on

an individual’s actual income, including active income from their mandatory

mutual pension fund. As a result, individuals do not have any accrued pension

rights in the public pension system which could theoretically be transferred out of

that system.

147. It follows that the Icelandic State does not directly administer any pension

schemes which could hypothetically come within the purview of rights existing

under the EU Sta Regulations. In fact, the Authority’s Application makes clear that

it pertains not to the public pension system in Iceland, but rather to system of

mandatory mutual pension funds governed by Act No. 129/1997 on Mandatory

Pension Insurance and the Activities of Pension Funds (“the Act”).101 The Icelandic

system of mandatory mutual pension funds is privately operated and not within

the competences of the Icelandic Social Insurance Administration nor of any other

Icelandic authority.102

101 For the avoidance of doubt, the Government considers it important to note the distinction

between mandatory mutual pensions, which constitute the second pillar of the Icelandic pension system, and the concept of ‘occupational pension funds’ which are governed by EEA law and implemented into the Icelandic legal order by Act No. 78/2007 on Occupational retirement pension funds. As of 2025, no occupational pension funds operate in Iceland. Such funds would be considered as administering supplementary personal pension savings, within the meaning of the third pillar of the Icelandic pension system.

102 Of relevance here is the judgment of the Supreme Court of Iceland of 29 October 2015, in Case No. 115/2015, where the Court confirmed that mandatory mutual pension funds administering

47

148. The Act establishes a system of collective insurance among workers in the Icelandic

labour market whereby they are obliged to pay set contributions into a mandatory

mutual pension fund of their choosing. As stated, these pension funds are private

entities governed by Icelandic law and they are collectively owned and operated

by their members. The Act enumerates specific obligations for the operation of

pension funds which are aimed at the security and stability of the system’s

collective guarantee for all insured persons. Beyond those legal obligations,

pension funds are, like other private undertakings in Iceland, free and autonomous

to act in any manner not otherwise prohibited by law.

149. Icelandic law places no express obligations on mandatory mutual pension funds to

carry out transfers of entitlements between pension funds or reimbursements to

members exiting the system. The Act does specify, for the sake of legal clarity, that

pension funds may carry out such transfers of their own volition and, further, that

they may reimburse the capital value of accrued entitlements to third country

nationals exiting the Icelandic labour market. The decision to carry out such

transactions is the prerogative of the pension fund in question. The reason for this

is that a mandatory mutual pension fund constitutes the collective property of its

members and is, as such, protected by the right to property under inter alia the

Icelandic Constitution and the European Convention on Human Rights.

150. As regards the question of transferring accrued pension rights out of Iceland, the

Government of Iceland observes that neither the Act nor other provisions of

Icelandic law have specifically envisaged such a possibility. Such transfers are

neither specifically authorised nor prohibited by Icelandic law. The reason for this

is that the Icelandic system of mandatory mutual pension funds is set up as a

closed system for the Icelandic labour market, as is the case for other such pension

systems in the EEA.

151. With the above in mind, the Government of Iceland notes that the Complainant is

in a situation where his privately-operated mandatory mutual pension fund has

refused to execute a transfer, which he has requested, of the capital value of his

accrued pension rights to the PSEUI. The pension fund has cited its assessment

the savings of public employees are not administrative bodies within the meaning of the Administrative Procedures Act No. 37/1993.

48

that such a transfer would not be compatible with Icelandic law. That assessment

is harmonious with the advice given to the complainant by the Icelandic Social

Insurance Administration in 2012, which the Authority has mistaken as an

administrative decision refusing to execute the transfer.

152. While the decision of the Complainant’s pension fund not to authorise a transfer

of accrued pension rights out of Iceland makes reference to a plausible

interpretation of Icelandic law, the Government of Iceland submits that this does

not make the pension fund’s decision an action for which the Icelandic State is

answerable. It follows that it cannot constitute an administrative practice of the

Government of Iceland.

153. Contrary to what is alleged by the Authority, the Government of Iceland has in place

no practice which precludes the possibility of transfers. Rather, the Government

has not introduced legislation which would compel pension funds to undertake

such transfers upon request. As the Government demonstrated in its submissions

on the Authority’s First and Second Pleas, it is under no obligation to introduce

such legislation.

154. However, even if such a legal obligation existed under the EEA Agreement (quod

non), the Application would still have to fail since it seeks a form of order that is

premised on the existence of an administrative practice of the Icelandic State,

which does not exist.

VI. Conclusion

155. With reference to the foregoing and for the reasons stated, the Government of

Iceland submits that the Application is flagrantly and manifestly unfounded.

156. The Government of Iceland therefore requests the Court to:

1. Dismiss the Application.

2. Order the EFTA Surveillance Authority to pay the costs of these proceedings.

49

For the Government of Iceland,

Hendrik Daði Jónsson Birgir Hrafn Búason

Agents

50

Schedule of Annexes

Annex 1 Subcommittees I-IV – Working Paper on EU Agencies (Agencies’ Note) – Note by the Secretariat – 19 October 2022

Annex 2 Working Group on Financial Services – The use of the general adaptation regarding Member States in di erent areas – Note by the Secretariat – 15 November 2019

Annex 3 Explanatory Note for the Incorporation of the 2002 EASA Regulation into the EEA Agreement – 22 June 2004

Annex 4 Explanatory Note for the Incorporation of the EASA Regulation into the EEA Agreement – 7 July 2011

Annex 5 Explanatory Note for the Incorporation of the 2018 EASA Regulation into the EEA Agreement – 31 March 2022

Annex 6 Explanatory Notes for the Incorporation of Various Agency Acts into the EEA Agreement

Annex 7 Non-Paper submitted by Subcommittee V to the European Commission on Adaptations Concerning Privileges and Immunities of EU Agencies – 18 November 2022

Annex 8 Correspondence between the European Commission and the EFTA Secretariat on the Non-Paper of Subcommittee V – 28 November 2022

Annex 9 Subcommittee V – Principles applying to references to non-incorporated acts in the EEA Agreement – Legal Note by the Secretariat – 22 September 2022

Annex 10 Working Group on Transport – EFTA Participation in the European Aviation Safety Agency – Background Note by the Secretariat – 26 March 2011

Annex 11 Standing Committee – Informal Consultation Meeting with the Commission on the Outstanding Issues Relating to the Incorporation of Regulation (EC) No 1592/2002 – Minutes by the Secretariat and Memorandum

Annex 12 Explanatory Note for the Incorporation of Regulation (EU) 2018/848 into the EEA Agreement – 18 December 2020

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

E-mail: [email protected]

Case E-30/24-10

Luxembourg, 5 March 2025

Sent via e-EFTACourt

Dear Sir/Madam,

Please find enclosed copies of the application from the EFTA Surveillance Authority,

dated 26 November 2024, initiating proceedings before the EFTA Court in Case E-

30/24 – EFTA Surveillance Authority v Iceland, and the defence from Iceland, dated

28 February 2025. Copies of annexes to the application and the defence can be

requested by contacting the Registry.

The application was received electronically on 26 November 2024, and entered in the

register of the Court (reg. No E-30/24-1) under Case No E-30/24 on that day.

The defence was received electronically on 28 February 2025 and entered in the register

of the Court on that day (reg. No E-30/24-8).

In accordance with Article 20 of the Statute of the EFTA Court, the Governments of the

EFTA States, the Union and the European Commission are entitled to submit statements

of case or written observations, in English, to the Court within two months from the date

of this notification, i.e. by Monday, 5 May 2025.

On behalf of the Registrar.

Yours faithfully,

Bryndís Pálmarsdóttir

Senior Administrator

Encl.