As part of our “Brexit and MSE” series, today we look at another possible model of a post -Brexit trading relationship between the UK and the EU based on the agreement between the EU and Norway – one of the territories in the European Economic Area.

The EEA Agreement

Through the Agreement on the European Economic Area (the “EEA Agreement”), which came into force 1 January 1994, three of the EFTA States – Norway, Iceland and Liechtenstein – (the “EEA Countries”) have become part of the EU internal market (“Single Market”). Switzerland is not part of the EEA Agreement.

The EEA Agreement covers the four freedoms (goods, capital, services and persons). In addition the competition and state aid rules and horizontal areas related to the four freedoms apply.

All relevant EU legislation in the field of the Single Market is integrated into the EEA Agreement and thus applies to the EEA (being EU countries and the EEA Countires).

In order to be applicable in the EEA, EU acts have to be incorporated into the EEA Agreement and thereafter implemented in each EEA Country in accordance with their internal legislation procedure.

In addition to the four freedoms the EEA agreement also covers the following horizontal policies:

  • consumer protection
  • company law
  • environment
  • social policy
  • statistics.

The EEA Agreement provides for cooperation in in relation to research and technological development, education, training and youth, employment, tourism, culture, civil protection, enterprise, entrepreneurship and small and medium-sized enterprises.

The EEA Agreement does not cover the following policies:

  • common agriculture and fisheries policies
  • customs union
  • common trade policy
  • common foreign and security policy
  • justice and home affairs (the EEA Countries are however part of the Schengen area);
  • direct and indirect taxation
  • economic and monetary union

State aid

Through the EEA Agreement the European Union state aid rules apply to Norway. EEA state aid rules are being incorporated into the EEA Agreement Annex XV and must be implemented in Norwegian law by law or regulation. Under the EEA Agreement the EEA Countries are to create a supranational Surveillance which shall oversee that the EEA Agreement is complied within the EEA Countries. This body is the EFTA Surveillance Agency (ESA). ESA monitors state aid granted by Iceland, Liechtenstein and Norway in the same way as the European Commission does in the EU. ESA adapts Commission guidance to the EFTA Countries and publishes them on its website.

The state aid rules are relevant for the Norwegian state owned broadcaster (NRK).

As to state aid to promote the production of Audio Visual Works this is comprised by the exemption according to Art. 107 (3) d of the Treaty on the Functioning of the European Union (TFEU) – aid to promote culture and heritage conservation.

A similar “cultural exception” is not explicitly included in the EEA Agreement , but is by ESA interpreted into the EEA Agreement Article 61 (3) c). The guidelines for audiovisual production issued by the Commission normally allows an aid intensity of 50% , but ” difficult ” films and budget films can be supported higher. ESA has assumed that Norwegian films are ” difficult ” to produce due to the limited number of people who speak Norwegian. The current aid scheme has allowed state aid up to 100% support in some instances.

Audio Visual Media Services Directive

The Audio Visual Media Services Directive (“AVMSD“) is incorporated in the Norwegian Broadcasting Act, the Norwegian Broadcasting Regulations and the Norwegian Copyright Act.

More specifically:

  • the country of origin principle for regulating audio visual services apply.
  • locally produced TV programmes in Norway are deemed “European Works” for the purposes of European production quotas under the AVMSD

Implementation of the GDPR

Norway has implemented the EU Data Protection Directive and has initiated steps for implementing the GDPR. The GDPR will be implemented to Norwegian Law by adopting a new Act on Personal Data. It is expected that the new act will enter into force similar to implementation in the EU. In connection with the preparation the Norwegian it has also been initiated work to revise certain sector specific data protection law to ensure compliance with the GDPR.

Free movement of goods and persons

Through the EEU Agreement there has been established free movement of goods/persons between Norway and the EU.

There are no restrictions on movement of cast and crew or of physical goods such as DVD. As regards DVDs there are no general taxes, however import of DVDs are subject to Norwegian VAT (some exemptions apply if value of the goods shipped to a private resident in Norway and value of the goods is less than NOK 350 (including shipping and handling)).