E-16/25

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

Brussels, 12 June 2025 Case No: 94047 Document No: 1537444

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 Hildur Hjörvar, Sigurbjörn Bernharð Edvardsson, Sigrún Ingibjörg Gísladóttir, and Melpo-Menie Joséphidès

Department of Legal & Executive Affairs,

acting as Agents,

AGAINST

ICELAND

seeking a declaration that Iceland has failed to adopt the measures necessary to make the Act referred to at points 12zc and 12zzq of Chapter XV and point 6 of Chapter XXIX of Annex II to the Agreement on the European Economic, (Regulation (EU) 2019/1148 of the European Parliament and of the Council of 20 June 2019 on the marketing and use of explosives precursors, amending Regulation (EC) No 1907/2006 and repealing Regulation (EU) No 98/2013) as adapted by Protocol 1 to the Agreement, part of its internal legal order.

Registered at the EFTA Court under NºE-16/25-01 on 12 day of June 2025.

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Table of Contents

1 INTRODUCTION ............................................................................................ 3 2 PRE-LITIGATION PROCEDURE .................................................................... 3 3 LAW ................................................................................................................ 5 4 SUBMISSIONS ............................................................................................... 6 5 CONCLUSION ................................................................................................ 8 6 SCHEDULE OF ANNEXES .......................................................................... 10

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1 INTRODUCTION

1. By this Application, the EFTA Surveillance Authority (“ESA”) brings an action under

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

Surveillance and a Court of Justice (“SCA”). The Act in this application establishes

harmonised rules concerning the marketing, possession, and use of explosive

precursors.1

2. ESA seeks a declaration from the Court that Iceland has failed to adopt the

measures necessary to make the Act referred to at point12zc and 12zzq of Chapter

XV and point 6 of Chapter XXIX of Annex II to the Agreement on the European

Economic (“EEA” or “the EEA Agreement”) (Regulation (EU) 2019/1148 of the

European Parliament and of the Council of 20 June 2019 on the marketing and use

of explosives precursors, amending Regulation (EC) No 1907/2006 and repealing

Regulation (EU) No 98/2013)2 (“the Act”), as adapted by Protocol 1 to that

Agreement, part of its internal legal order, as required by Article 7 of the EEA

Agreement.

2 PRE-LITIGATION PROCEDURE

3. The time limit to adopt the measures necessary to implement the Act and to notify

these to the EFTA Surveillance Authority expired on 16 March 2024. Having

received no notification from Iceland setting out the measures which it had adopted

to implement the Act, ESA sent a letter of formal notice to Iceland on 1 July 2024,

concluding that as Iceland had failed to take the necessary measures to make the

Act part of Iceland’s legal order, it had failed to fulfil its obligations under Article 7

of the EEA Agreement.3 ESA requested that the Icelandic Government submit its

observations within two months of receipt of the letter, i.e. by 1 September 2024.

4. The Icelandic Government did not reply to the letter of formal notice. However, on

27 August 2024, the Icelandic Government submitted a Form 1, dated 26 August

2024.4 The Form 1 did not indicate any measures which had been taken to

implement the Act, nor give the text of any such national measures, nor indicate the

1 This application is based on College Decision 077/25/COL (Annex A.1 to this Application). 2 OJ L 186, 11.7.2019, p. 1, as corrected by OJ L 231, 6.9.2019, p. 30. 3 Document No. 1462693; Annex A.2 to this Application. 4 Document No. 1478140; Annex A.3 to this Application.

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date of entry into force of any such measures, nor indicate whether the Act had

been partially or fully implemented. Instead, under the heading “please specify how

and when the outstanding provisions are going to be implemented”, Iceland stated

the following:

“In Iceland following the incorporation of Regulation (EU) 2019/1148 into the EEA

Agreement, the intension [sic] is to repeal a provision in the Icelandic Act on

Weapons No. 16/1998 regarding authorisation for the general public to have and

use certain substances according to Regulation 98/2013, as well as provisions in

the Icelandic Regulation No. 510/2018 on explosives and explosives precursors as

regards authorisation to the general public to import, use or have access to

explosive precursors.”

The Form’s standard text indicated that ESA would be informed of any further

measures adopted to complement or amend the implementation and of any

amendments to the notified measures. No national implementing measures were

attached to the Form 1.

5. By email of 27 August 2024, ESA informed the Icelandic Government that the Form

1 was missing crucial information, including the title of the national implementing

measures, an attachment of the national implementing measures, and the type of

implementation which the notified measures were considered to ensure.5 ESA

requested that the Icelandic Government resubmit the Form 1 with the requisite

information. ESA furthermore advised the Icelandic Government that until it

received a complete Form 1, it could not close the case for non-incorporation of the

Act.

6. In the correspondence between ESA and the Icelandic Government which followed,

Iceland did not provide the requested information, nor submit a complete Form 1,

despite ESA’s repeated requests.6 On 2 October 2024, ESA advised the Icelandic

Government that ESA would adopt a reasoned opinion in the case in the absence

of a notification of implementing measures. On the same date, Iceland

5 Document No. 1487926; Annex A.4 to this Application. 6 Idem.

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acknowledged the reminder but provided no further updates on the implementation

of the Act.

7. In light of the absence of a response to the letter of formal notice from Iceland and

the above communication, ESA maintained the view that the Act had not been

made part of the Icelandic internal legal order as required by Article 7 EEA, and

delivered a reasoned opinion on 13 November 2024.7 Iceland was given two

months in which to take the measures necessary to comply with the reasoned

opinions, i.e. no later than 13 January 2025.

8. The Icelandic Government did not reply to the reasoned opinion. ESA has received

no further communication from Iceland on the matter.

9. When the deadline set in the reasoned opinion expired, Iceland had neither

informed ESA of any measures it had adopted to make the Act part of its internal

legal order, nor was ESA in the possession of any other information which indicated

that the Act had been made part of Iceland’s internal legal order.

10. Since Iceland had not complied with the reasoned opinion by the deadline set

therein, ESA on 11 June 2025 decided to bring the matter before the Court pursuant

to Article 31 SCA.8

11. For the sake of completeness, ESA notes that at the point of lodging the present

application, Iceland has neither made the Act part of its internal legal order, nor has

it informed ESA of having done so.

3 LAW

12. Article 3, first and second paragraph, 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.”

7 Document No. 1481674; Annex A.5 to this Application. 8 College Decision 077/25/COL.

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13. 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 be 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.

[…]“

14. Article 31 SCA provides:

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

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

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

the matter after giving the State concerned the opportunity to submit its

observations.

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

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

the EFTA Court.”

4 SUBMISSIONS

15. Article 3 EEA imposes upon the EEA EFTA States the general obligation to take all

appropriate measures, whether general or particular, to ensure fulfilment of the

obligations arising out of the EEA Agreement.9

16. Under Article 7 EEA, the EEA EFTA States are obliged to implement all acts

referred to in the Annexes to the EEA Agreement, as amended by decisions of the

EEA Joint Committee. According to settled case-law, the lack of direct legal effect

of acts referred to in decisions by the EEA Joint Committee makes timely

implementation crucial for the proper functioning of the EEA Agreement also in

Iceland. The EEA EFTA States find themselves under an obligation of result in that

regard.10

9 See, inter alia, Case E-6/18 ESA v Iceland, judgment of 14 May 2019, paragraph 16. 10 Ibid., paragraph 17.

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17. Decision of the EEA Joint Committee No 66/2024 to the EEA Agreement by, inter

alia, adding the Act. Decision No 66/2024 entered into force on 16 March 2024.11

The time limit for the EEA EFTA States to adopt the measures necessary to make

the Act part of their internal legal orders expired on the same day.

18. The Form 1 dated 26 August 2024 submitted by Iceland was incomplete and did

not contain any of the information necessary to constitute notification of a national

measure implementing the Act. In this, ESA notes that under Article 7 EEA,

Regulations are to be made part of the internal legal order of the EEA EFTA States

as such. Despite multiple reminders and requests for submission of a complete

Form 1 indicating the national measures undertaken to implement the Act, no

further information on national implementing measures has been provided by

Iceland.

19. The question whether an EEA EFTA State has failed to fulfil its obligations must be

determined by reference to the situation as it stood at the end of the period laid

down in the reasoned opinion.12 The Icelandic Government has not thus far sought

to contest ESA’s assertion that Iceland had not adopted the measures necessary

to make the Act a part of its internal legal order by the expiry of the time limit set in

the reasoned opinion.

20. ESA submits that it follows from the principle of sincere cooperation, read together

with the principle of effectiveness as reflected in Article 3 EEA, and from Article 7

EEA, that the EFTA States must notify, in a timely manner, national measures which

implement an EEA Act into national law. In the case of Regulations, such

notification must sufficiently clearly and precisely indicate that the Act has as such

been made part of national law.13 This is necessary to comply with the State’s

obligations under Article 7 EEA and to enable the Authority to serve its role under

Article 108(1) EEA and Article 5(1)(a) SCA. Moreover, ESA is empowered under

Article 6 SCA to request all necessary information from the EEA EFTA States in

order to carry out its duties.

11 No constitutional requirements were indicated in respect of the Decision. 12 See, inter alia, Case E-6/06 ESA v The Principality of Liechtenstein [2007] EFTA Ct. Rep. 238, paragraph 20. 13 See, mutatis mutandis, C-543/17 European Commission v Kingdom of Belgium, ECLI:EU:C:2019:573, paragraph 51.

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21. The Form 1 dated 26 August 2024 completely failed to meet these minimum

requirements. It only indicated an intention to make legislative and regulatory

changes in Iceland to comply with the Act. The Form 1 neither indicated that these

measures had already been taken, nor did it indicate that the Act as such had been

implemented into national law.

22. Moreover, ESA’s requests for further information and for the submission of a

complete Form 1 were not complied with, except to indicate that the Icelandic

Government needed to look at the matter more closely and would provide further

information later. No further information has been received by ESA, and Iceland

has not submitted a complete Form 1.

23. Insofar as Iceland has cited complexities in implementing the Act into the national

legal order, ESA notes that it is settled case-law that provisions, practices, or

situations arising from the domestic legal order of an EFTA State cannot justify a

failure to fulfil obligations arising under EEA law.14

24. For completeness’ sake, ESA notes that its independent investigation has not

revealed any measures to implement the Act as such into national law, nor any

relevant amendments to the national legal instruments cited in the Form 1 submitted

by Iceland on 26 August 2024.

25. As a result, ESA submits that Iceland has failed to fulfil its obligations under Article

7 EEA, by failing to make the Act part of its internal legal order.

5 CONCLUSION

26. Accordingly, ESA requests the Court to:

1. declare that Iceland has failed to fulfil its obligations under Article 7 of the

EEA Agreement by failing to make the Act referred to at point 12zc and

12zzq of Chapter XV and point 6 of Chapter XXIX of Annex II to the

Agreement on the European Economic, (Regulation (EU) 2019/1148 of the

European Parliament and of the Council of 20 June 2019 on the marketing

and use of explosives precursors, amending Regulation (EC) No

14 See (mutatis mutandis) Case E-19/14 ESA v Norway, [2015] EFTA Ct. Rep. 300, paragraph 49.

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1907/2006 and repealing Regulation (EU) No 98/2013) as adapted by

Protocol 1 to the Agreement, part of its internal legal order, and

2. order Iceland to bear the costs of these proceedings.

Hildur Hjörvar Sigurbjörn Bernharð Edvardsson

Sigrún Ingibjörg Gísladóttir Melpo-Menie Joséphidès

Agents of the EFTA Surveillance Authority

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6 SCHEDULE OF ANNEXES

No

Description

Referred to in

this Application

at paragraph(s)

Number of

pages

A.1 College Decision 077/25/COL 1, 10

A.2 Letter of Formal Notice 3 2

A.3 Iceland’s Form 1 4 2

A.4 Email communication 5, 6 6

A.5 Reasoned Opinion 7 4

Government of Iceland Austurhöfn government.is Ministry for Foreign A airs 101 Reykjavík +354 545 9900

Reykjavík, 18 August 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 Ms. Hanna Rún Sverrisdóttir, Legal Adviser, Ministry of Justice, acting as Agents in

Case E-16/25

EFTA Surveillance Authority v

Iceland

in which the EFTA Surveillance Authority seeks a declaration that Iceland has failed to adopt the measures necessary to make the Act referred to at points 12zc and 12zzq of Chapter XV and point 6 of Chapter XXIX of Annex II to the EEA Agreement, as adapted by Protocol 1 thereto, part of its internal legal order.

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

Registered at the EFTA Court under NºE-16/25-05 on 18 day of August 2025.

2

I. Introduction

1. By a letter dated 16 June 2025, the Registrar of the EFTA Court served the Government

of Iceland with the Application of the EFTA Surveillance Authority (“the Authority”),

dated 12 June 2025, which the Court had received electronically on that day.

2. The Authority seeks a declaration from the EFTA Court that Iceland has failed to adopt

the measures necessary to make Regulation (EU) 2019/1148 of the European

Parliament and of the Council of 20 June 2019 on the marketing and use of explosives

precursors, amending Regulation (EC) No 1907/2006 and repealing Regulation (EU) No

98/20131, referred to in points 12zc and 12zzq of Chapter XV and point 6 of Chapter

XXIX of Annex II to the EEA Agreement (“the Agreement”), as adapted by Protocol 1 to

the Agreement, (“the Act”), part of its internal legal order, as required by Article 7 of

the Agreement.

3. In the Court’s letter of 16 June 2025, the Government of Iceland was invited, with

reference to Article 107 of the Rules of Procedure of the EFTA Court, to lodge a defence

within two months from the date of the notification, that is by Monday 18 August 2025.

II. Submissions

4. The Government of Iceland does not dispute the facts of the case, as presented in

Section 2 of the Application. Namely, the Government acknowledges that the

measures necessary to implement the Act into the Icelandic legal order had not been

adopted by the deadline set out in the Authority’s Reasoned Opinion, that is by 13

January 2025.

5. The Government of Iceland will therefore not contest the declaration sought by the

Authority under Section 5 of the Application.

6. The Government wishes to inform the Court, however, that a national regulation

implementing the Act into the Icelandic legal order was adopted on 15 August 2025

and is currently pending publication in the O cial Gazette of Iceland, after which it

will enter into force.

1 OJ L 186, 11.7.2019, pp. 1.

3

III. Conclusion

7. The Government of Iceland does not contest the declaration sought by the Authority

under Section 5 of the Application.

For the Government of Iceland,

Hendrik Daði Jónsson Hanna Rún Sverrisdóttir

Agents

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

E-mail: [email protected]

Case E-16/25-8

Luxembourg, 22 August 2025

Sent via e-EFTACourt

Dear Sir/Madam,

Please find enclosed copies of the application from the EFTA Surveillance Authority

dated 12 June 2025 initiating proceedings before the EFTA Court in Case E-16/25 –

EFTA Surveillance Authority v Iceland, and the defence from Iceland dated 18 August

2025. Copies of annexes to the application can be requested by contacting the Registry.

The application was received electronically on 12 June 2025, and entered in the

register of the Court (reg. No E-16/25-1) under Case No E-16/25 on that day.

The defence was received electronically on 18 August 2025 and entered in the register of

the Court on that day (reg. No E-16/25-5).

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 Wednesday, 22 October 2025.

On behalf of the Registrar.

Yours faithfully,

Bryndís Pálmarsdóttir

Senior Administrator

Encl.