”Single Economic Area”
Faroes – Iceland
THE HOYVÍK AGREEMENT
Herluf Sigvaldsson
Department of Foreign Affairs
Prime Minister’s Office
The objective of the Agreement (ART 1)

The establishment of a single economic
area comprised by the Faroes and Iceland
where any discrimination on the basis of
nationality, place of establishment, or the
place of origin of goods is prohibited.
The substantive scope of the Agreement (ART 3)
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The core of the Agreement lies in the "four
freedoms"
– The free movement of goods, services, capital and
persons
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Trade in goods
Trade in services
Movement of persons and right to residence
Movement of capital and investment
Right of establishment
Competition, state monopolies, state aid and public
procurement
Co-operation in other areas
Most-Favoured-Nation Treatment (ART 4)
Natural persons
 Legal persons
 Originating goods

National Treatment (ART 5)
Any discrimination between Icelandic
natural persons and Faroese natural
persons on the basis of nationality is
prohibited.
 Any discrimination between legal persons,
on the basis of their place of
establishment, is prohibited.
 Any discrimination between originating
goods is prohibited.

Mutual Commitments (ART 5)
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Trade in goods
– Tariffs and quantitative restrictions, by any
name or for any reason and measures having
equivalent effect shall be prohibited.

Trade in services
– Any discrimination, in law or in fact, against a
service provider shall be prohibited.
Mutual Commitments (ART 5)

Movement of persons and right to
residence
– Any discrimination, in law or in fact, regarding
the right to residence or free movement of
persons, shall be prohibited.
– Access to schools, universities and other
institutions of learning shall be granted
without discrimination.
Mutual Commitments (ART 5)

Movement of capital and investment
– Any discrimination, in law or in fact, regarding
the free movement of capital or investment,
on the basis of the destination of the capital
or the place of investment shall be prohibited.

Right of establishment
– Any discrimination, in law or in fact, as
regards the right of establishment, shall be
prohibited.
Mutual Commitments (ART 5)

Competition
– Any discrimination in rules on competition or
their application shall be prohibited.

State monopolies
– In their operations, state monopolies shall not
accord discriminatory treatment, in law or in
fact.
Mutual Commitments (ART 5)

State aid
– State aid or aid through state resources in any
form whatsoever, directed at an economic
activity shall be granted without
discrimination.
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Public procurement
– Any discrimination relating to public
procurement, in law or in fact, shall be
prohibited.
Mutual Commitments (ART 5)
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Trade in agricultural goods
– Appropriate and proportionate measures may
be taken unilaterally with regard to seriously
detrimental imports of specific agricultural
products in chapters 1, 2, 4, 5, 12, 15, 16 and
21 in the Harmonized Commodity Description
and Coding System.
Exceptions from national treatment (ART 6)
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Veterinary and phytosanitary rules
(Faroes/Iceland)
Foreign ownership and establishment in the
sectors of fisheries and fish processing (Iceland)
Foreign ownership and establishment in the
fisheries sector (Faroes)
The Hydrocarbon Activities Act (Faroes)
Investments by governments or governmental
bodies (Faroes/Iceland)
Co-operation in other areas (ART 7)

The Faroes and Iceland will co-operate in all relevant
fields of common concern including the following
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Culture, education, training, sport and youth
Energy
Environment
Health services
Human resource development in the public sector
Research and technological development
Resource management
Telecommunications
Tourism
Transport
Institutional framework (ART 8 and 9)
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Joint Committee
– Subsidiary Bodies
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Council of Ministers
Accession (ART 11)
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The Economic Area (Faroes – Iceland)
may be extended to other countries
The fish-issue (Joint Declaration)
The Faroes and Iceland agree to identify
ways to facilitate fish processing and trade
in fish between the Faroes and Iceland,
with a view to removing any nuisances
without delay.
 The free circulation of fish in the economic
area may be a reality in the near future.
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The fish-issue (ART I – GATT 1994)
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General Most-Favoured-Nation Treatment
– “…with respect to all rules and formalities in
connection with importation and
exportation...any advantage, favour, privilege
or immunity granted by any contracting party
to any product originating in or destined for
any other country shall be accorded
immediately and unconditionally to the like
product originating in or destined for the
territories of all other contracting parties.”
Globalization in the North Atlantic

A North Atlantic Economic Area
– Faroes
– Iceland
– Other countries in the North Atlantic Region

Economic processes
– Integration of the North Atlantic Economies
– The free flow of goods, services, capital and persons will boost
trade as well as research and development
– Cooperation, strategic alliances and mergers among companies
– Companies will gradually become more competitive in the world
market
– Economic growth and increased social welfare