WORLD TRADE WT/REG21/1/Rev.1
5May1997
ORGANIZATION(97-1930)
Original: English
AGREEMENT BETWEEN THE EUROPEAN COMMUNITY
AND THE FAROE ISLANDS (GOVERNMENT OFDENMARK)
Revision
Thefollowing textreproduces theAgreement between theEuropean Community andthe
Government ofDenmark andtheHome Government oftheFaroe Islands.1
____________________
Agreement between theEuropean Economic Community,
oftheonepart,andtheGovernment ofDenmark and
theHome Government oftheFaroe Islands, oftheother part
THE EUROPEAN COMMUNITY
oftheonepart,and
THEGOVERNMENTOFDENMARKANDTHEHOMEGOVERNMENTOFTHEFAROE
ISLANDS,
oftheother part,
RECALLING thestatus oftheFaeroes asaself-governing integral partofoneoftheMember
States oftheCommunity;
RECALLING theResolution oftheCouncil of4February 1974ontheproblems oftheFaeroes;
CONSIDERINGthevitalimportancefortheFaeroesoffisheries,whichconstitutetheiressential
economic activity, fishandfishery products being theirmain export articles;
CONSIDERING theimportance ofthefisheries relationship laiddown intheAgreement on
fisheries between theContracting Parties, whoconfirm thatthetradeaspects ofthisAgreement should
notaffect thefunctioning oftheFisheries Agreement andthat,consequently, thevolume ofthemutual
fisheries possibilities under thatAgreement should continue tobemaintained atasatisfactory level;
1TheAnnexes andProtocols thereto havebeensubmitted totheSecretariat forconsultation by
interested Members (Office 3006).WT/REG21/1/Rev.1
Page2
DESIRING toconsolidate andtoextend theeconomic relations existing between theCommunity
andtheFaeroes andtoensure, withdueregard forfairconditions ofcompetition, theharmonious
development oftheircommerce forthepurpose ofcontributing tothework ofconstructing Europe;
RESOLVEDprogressivelytoeliminatetheobstaclestosubstantiallyalltheirtrade,inaccordance
withtheprovisions oftheGeneral Agreement onTariffs andTrade (GATT) 1994 concerning the
establishment offreetrade areas;
DECLARING theirreadiness toexamine, inthelightofanyrelevant factor, andinparticular
ofdevelopments intheCommunity, thepossibility ofdeveloping anddeepening theirrelations where
itwould appear tobeuseful intheinterests oftheireconomies toextend them tofields notcovered
bythisAgreement;
CONSIDERING that,tothisend,anAgreement between theEuropean Economic Community,
oftheonepart, andtheGovernment ofDenmark andtheHome Government oftheFaroe Islands,
oftheother part(hereafter referred toasthe'initial Agreement ')wassigned on2December 1991;
CONSIDERING thatanAgreement intheformofanExchange ofLetters between theEuropean
Community, oftheonepart,andtheGovernment ofDenmark andtheHome Government oftheFaroe
Islands, oftheother part,amending Tables IandIIoftheAnnex toProtocol 1oftheinitial Agreement
(hereafter referred toasthe'Agreement intheform ofanExchange ofLetters ')wassigned on
8March 1995;
CONSIDERING that,pursuant totheaccession oftheRepublic ofAustria, theRepublic of
Finland andtheKingdom ofSweden totheEuropean Union on1January 1995, thearrangements
applicable totrade infishandfishery products between theFaeroes andtheCommunity should be
adjusted inorder tomaintain trade flows between theFaeroes, ontheonehand, andthenewMember
States, ontheother;
CONSIDERING that,asaresult oftheadoption bytheCommunity ofacommon definition
oforigin forpetroleum products, itisnecessary tomake adjustments totheprovisions affecting these
products;
CONSIDERING that,inorder totakeaccount ofcertain developments intrade between the
Community andtheMember States ofEFTA, itisnecessary tomake adjustments totheprovisions
concerning thedefinition oftheconcept of'originating products 'andmethods ofadministrative
cooperation;
CONSIDERING that,inorder totakeaccount ofthespecific production offishfeedonthe
Faeroes, itisnecessary tomake adjustments totheprovisions applicable toimports ofcertain agricultural
products;
CONSIDERING that,inorder tohelpensure itscorrect functioning, aProtocol onmutual
administrative assistance incustoms matters should beincorporated intothisAgreement;
CONSIDERING that,inorder toconform withcertain modifications tothenomenclature of
thecustoms tariffs oftheContracting Parties affecting products referred tointheinitial Agreement,
itisnecessary toupdate thetariff nomenclature ofthese products;
CONSIDERING that,inorder toprovide formore flexibility, itisappropriate toempower
theJoint Committee todecide onamendments totheprovisions oftheProtocols tothisAgreement;WT/REG21/1/Rev.1
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CONSIDERING that,forthesakeofclarity, theinitial Agreement andtheAgreement inthe
form ofanExchange ofLetters should bereplaced byacomposite newtextintheform ofthis
Agreement;
TAKING INTO ACCOUNT thatthebilateral tradeAgreements between Finland andSweden
andtheFaeroes cease tobeinforce ontheentry intoforce ofthisAgreement;
HAVE DECIDED, inpursuit ofthese objectives andconsidering thatnoprovisions ofthis
Agreement maybeinterpreted asexempting theContracting Parties from theobligations which are
incumbent onthem under other international agreements,
TOCONCLUDE THIS AGREEMENT:
Article 1
TheaimofthisAgreement is:
(a) topromote through theexpansion ofreciprocal tradetheharmonious development ofeconomic
relations between theCommunity andtheFaeroes andthustofoster intheCommunity and
intheFaeroes theadvance ofeconomic activity, theimprovement ofliving andemployment
conditions, andincreased productivity andfinancial stability,
(b) toprovide fairconditions ofcompetition fortrade between theContracting Parties,
(c) tocontribute inthisway,bytheremoval ofbarriers totrade, totheharmonious development
andexpansion ofworld trade.
Article 2
ThisAgreement shallapply toproducts originating intheCommunity ortheFaeroes:
(i) which fallwithin Chapters 25to97oftheHarmonized System, other thanthose listed in
Annex IItotheTreaty establishing theEuropean Community, andother thanthose listed in
Annex ItothisAgreement;
(ii) which arespecified inProtocols 1,2and4tothisAgreement, with dueregard tothe
arrangements provided forinthose Protocols.
Article 3
Nonewcustoms dutyonimports shallbeintroduced intrade between theCommunity and
theFaeroes.
Article 4
1. TheCommunity shallabolish customs duties onimports from theFaeroes.
2. TheFaeroes shallabolish customs duties onimports fromtheCommunity: tothisendAnnex II
setsouttheprovisions contained inthecustoms andfiscal legislation oftheFaeroes.WT/REG21/1/Rev.1
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Article 5
Theprovisions concerning theabolition ofcustoms duties onimports shallapply alsotoimport
duties ofafiscal nature.
TheFaeroes mayreplace animport dutyofafiscal nature orthefiscal element ofanimport
dutybyaninternal tax.
Article 6
Nonewcharge having aneffect equivalent toacustoms dutyshallbeintroduced intradebetween
theCommunity andtheFaeroes.
ChargeshavinganeffectequivalenttocustomsdutiesonimportsintradebetweentheCommunity
andtheFaeroes shallbeabolished.
Article 7
Nocustoms dutyonexports orcharge having equivalent effect shallbeintroduced intrade
between theCommunity andtheFaeroes.
Customs duties onexports andcharges having equivalent effect shallbeabolished.
Article 8
Protocol 1laysdown thetarifftreatment andarrangements applicable tocertain fishandfishery
products released forfreecirculation intheCommunity orimported intotheFaeroes.
Article 9
Protocol2laysdownthetarifftreatmentandarrangementsapplicabletocertainproductsobtained
byprocessing agricultural products.
Article 10
1. Intheevent ofspecific rulesbeing established asaresult oftheimplementation ofitsagricultural
policy orofanyalteration ofthecurrent rules, theContracting Party inquestion mayadapt the
arrangements resulting fromthisAgreement inrespect oftheproducts which arethesubject ofthose
rules oralterations.
2. Insuchcases theContracting Party inquestion shalltakedueaccount oftheinterests ofthe
other Contracting Party. TothisendtheContracting Parties mayconsult eachother within theJoint
Committee established byArticle 31.
Article 11
Protocol 3laysdown therules oftheconcept of'originating products 'andmethods of
administrative cooperation.WT/REG21/1/Rev.1
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Article 12
AContracting Party which isconsidering thereduction oftheeffective levelofitsduties or
charges having equivalent effect applicable tothird countries benefiting from most-favoured-nation
treatment, orwhich isconsidering thesuspension oftheirapplication, shall, asfarasmaybepracticable,
notify theJointCommittee notlessthan30daysbefore suchreduction orsuspension comes intoeffect.
Itshalltakenoteofanyrepresentations bytheother Contracting Party regarding anydistortions which
might result therefrom.
Article 13
1. Nonewquantitative restriction onimports ormeasures having equivalent effect shall be
introduced intrade between theCommunity andtheFaeroes.
2. TheContracting Parties shallabolish quantitative restrictions onimports andanymeasures
having aneffect equivalent toquantitative restrictions onimports.
Article 14
1. TheCommunity reserves theright tomodify thearrangements applicable tothepetroleum
products falling within headings Nos. 2710, 2711, ex2712(excluding ozokerite, lignite waxandpeat
wax)and2713ofthecombined nomenclature onadoption ofdecisions under thecommon commercial
policy forpetroleum products oronestablishment ofacommon energy policy.
Inthisevent, theCommunity shalltakedueaccount oftheinterests oftheFaeroes; tothis
enditshallinform theJointCommittee, which shallmeetunder theconditions setoutinArticle 33(2).
2. TheFaeroes reserves therighttotakesimilar action should itbefaced withlikesituations.
3. Subject toparagraphs 1and2,thisAgreement shallnotprejudice thenon-tariff rulesapplied
toimports ofpetroleum products.
Article 15
1. TheContracting Parties declare theirreadiness tofoster, sofarastheiragricultural policies
allow, theharmonious development oftrade inagricultural products towhich thisAgreement does
notapply.
2. TheContracting Parties shallapply theirrules inveterinary, health andplant health matters
inanon-discriminatory fashion andshallnotintroduce anynewmeasures thathavetheeffect ofunduly
obstructing trade.
3. TheContracting Parties shallexamine, under theconditions setoutinArticle 35,anydifficulties
thatmight ariseintheirtradeinagricultural products andshallendeavour toseekappropriate solutions.
Article 16
TheHome Government oftheFaroe Islands shalltakethenecessary control measures toensure
thecorrect application ofthereference price fixed ortobefixed bytheCommunity, referred toin
Article 2ofProtocol 1.WT/REG21/1/Rev.1
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TheContracting Parties shallensure thecorrect application ofthedefinition oftheconcept
of'originating products 'andmethods ofadministrative cooperation, laiddown inProtocol 3.
Article 17
Protocol 4laysdown thespecial provisions applicable toimports ofcertain agricultural products
other thanthose listed inProtocol 1.
Article 18
Protocol 5laysdown theprovisions onmutual assistance between administrative authorities
incustoms matters.
Article 19
TheContracting Parties reaffirm theircommitment togrant eachother most-favoured-nation
treatment inaccordance withtheGATT 1994.
ThisAgreement shallnotpreclude themaintenance orestablishment ofcustoms unions, free
trade areas orarrangements forfrontier trade, except insofarastheyalterthetrade arrangements
provided forinthisAgreement, inparticular theprovisions concerning rules oforigin.
Article 20
TheContracting Parties shallrefrain fromanymeasure orpractice ofaninternal fiscal nature
which, whether directly orindirectly, discriminates between theproducts ofoneContracting Party
andlikeproducts originating intheterritory oftheother Contracting Party.
Products exported totheterritory ofoneoftheContracting Parties maynotbenefit from
repayment ofinternal taxation inexcess oftheamount ofdirect orindirect taxation imposed onthem.
Article 21
Payments relating totrade ingoods andthetransfer ofsuchpayments totheMember State
oftheCommunity inwhich thecreditor isresident ortotheFaeroes shallbefreefromanyrestrictions.
Article 22
ThisAgreement shallnotpreclude prohibitions orrestrictions onimports, exports orgoods
intransit justified ongrounds ofpublic morality, lawandorder orpublic security, theprotection of
lifeandhealth ofhumans, animals orplants, theprotection ofnational treasures ofartistic, historic
orarchaeological value, theprotection ofindustrial andcommercial property, orrulesrelating togold
orsilver.
Suchprohibitionsorrestrictionsmustnot,however,constituteameansofarbitrarydiscrimination
oradisguised restriction ontrade between theContracting Parties.
Article 23
Nothing inthisAgreement shallprevent aContracting Party from taking anymeasures:WT/REG21/1/Rev.1
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(a) which itconsiders necessary toprevent thedisclosure ofinformation contrary toitsessential
security interests;
(b) which relate totrade inarms, munitions orwarmaterials ortoresearch, development or
production indispensable fordefence purposes, provided thatsuchmeasures donotimpair the
conditions ofcompetition inrespect ofproducts notintended forspecifically military purposes;
(c) which itconsiders essential toitsownsecurity intimeofwarorserious international tension.
Article 24
1. TheContracting Parties shallrefrain from anymeasure likely tojeopardize thefulfilment of
theobjectives ofthisAgreement.
2. They shalltakeanygeneral orspecific measures required tofulfiltheirobligations under this
Agreement.
Ifeither Contracting Party considers thattheother Contracting Party hasfailed tofulfil an
obligationunderthisAgreement,itmaytakeappropriatemeasuresundertheconditionsandinaccordance
withtheprocedures laiddown inArticle 29.
Article 25
1. Thefollowing areincompatible withtheproper functioning ofthisAgreement insofarasthey
mayaffect trade between theCommunity andtheFaeroes:
(i) allagreements between undertakings, decisions byassociations ofundertakings andconcerted
practices between undertakings which haveastheirobject oreffect theprevention, restriction
ordistortion ofcompetition asregards theproduction ofortrade ingoods;
(ii) abuse byoneormore undertakings ofadominant position intheterritories oftheContracting
Parties asawhole orinasubstantial partthereof;
(iii) anypublicaidwhichdistortsorthreatenstodistortcompetitionbyfavouringcertainundertakings
ortheproduction ofcertain goods.
2. Should aContracting Party consider thatagiven practice isincompatible withthisArticle,
itmaytakeappropriate measures under theconditions andinaccordance withtheprocedures laiddown
inArticle 29.
Article 26
Where anincrease inimports ofagiven product isorislikely tobeseriously detrimental to
anyproduction activity carried onintheterritory ofoneoftheContracting Parties andwhere this
increase isdueto:
(i) thepartial ortotalreduction intheimporting Contracting Party, asprovided forinthis
Agreement, ofcustoms duties andcharges having equivalent effect levied ontheproduct in
question; andWT/REG21/1/Rev.1
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(ii) thefactthattheduties orcharges having equivalent effect levied bytheexporting Contracting
Party onimports ofrawmaterials orintermediate products usedinthemanufacture ofthe
product inquestion aresignificantly lower thanthecorresponding duties orcharges levied by
theimporting Contracting Party:
theContracting Party concerned maytakeappropriate measures under theconditions andinaccordance
withtheprocedures laiddown inArticle 29.
Article 27
IfoneoftheContracting Parties finds thatdumping istaking place intrade withtheother
Contracting Party, itmaytakeappropriate measures against thispractice inaccordance withthe
Agreement onImplementation ofArticle VIoftheGATT 1994, under theconditions andinaccordance
withtheprocedures laiddown inArticle 29.
Article 28
Ifserious disturbances ariseinanysector oftheeconomy orifdifficulties arisewhich could
bring about serious deterioration intheeconomic situation ofaregion, theContracting Party concerned
maytakeappropriate measures under theconditions andinaccordance withtheprocedures laiddown
inArticle 29.
Article 29
1. Intheevent ofaContracting Party subjecting imports ofproducts liable togiverisetothe
difficulties referred toinArticles 26and28toanadministrative procedure, thepurpose ofwhich is
toprovide rapid information onthetrend oftrade flows, itshallinform theother Contracting Party.
2. Inthecases specified inArticles 24to28,before taking themeasures provided fortherein
or,incases towhich paragraph 3(d)ofthisArticle applies, assoonaspossible, theContracting Party
inquestion shallsupply theJoint Committee withallrelevant information required forathorough
examination ofthesituation withaviewtoseeking asolution acceptable totheContracting Parties.
Intheselection ofmeasures, priority mustbegiven tothose which leastdisturb thefunctioning
ofthisAgreement.
Thesafeguard measures shallbenotified immediately totheJointCommittee andshallbethe
subject ofperiodical consultations within theCommittee, particularly withaviewtotheirabolition
assoonascircumstances permit.
3. Fortheimplementation ofparagraph 2,thefollowing provisions shallapply:
(a) asregards Article 25,either Contracting Party mayreferthematter totheJoint Committee
ifitconsiders thatagiven practice isincompatible withtheproper functioning ofthisAgreement
within themeaning ofArticle 25(1).
TheContracting Parties shallprovide theJointCommittee withallrelevant information and
shallgiveittheassistance itrequires inorder toexamine thecaseand,where appropriate,
toeliminate thepractice objected to.WT/REG21/1/Rev.1
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IftheContracting Party inquestion failstoputanendtothepractice objected towithin the
period fixed bytheJointCommittee, orintheabsence ofagreement intheJointCommittee
within three months ofthematter being referred toit,theContracting Party concerned may
adopt anysafeguard measures itconsiders necessary todealwiththeserious difficulties resulting
from thepractices inquestion; inparticular itmaywithdraw tariff concessions;
(b) asregards Article 26,thedifficulties arising fromthesituation referred tointhatArticle shall
bereferred forexamination totheJointCommittee, which maytakeanydecision needed to
putanendtosuchdifficulties.
IftheJointCommittee ortheexporting Contracting Party hasnottaken adecision putting an
endtothedifficulties within 30daysofthematter being referred, theimporting Contracting
Party isauthorized tolevyacompensatory charge ontheproduct imported.
Thecompensatory charge shallbecalculated according totheincidence onthevalue ofthe
goods inquestion ofthetariffdisparities inrespect oftherawmaterials orintermediate products
incorporated therein;
(c) asregards Article 27,consultation intheJointCommittee shalltakeplacebefore theContracting
Party concerned takes theappropriate measures;
(d) whereexceptionalcircumstancesrequiringimmediateactionmakepriorexaminationimpossible,
theContracting Party concerned may, inthesituations specified inArticles 26,27and28and
alsointhecaseofexport aidshaving adirect andimmediate incidence ontrade, apply forthwith
theprecautionary measures strictly necessary toremedy thesituation.
Article 30
Where oneormore Member States oftheCommunity ortheFaeroes isindifficulties oris
seriously threatened withdifficulties asregards itsbalance ofpayments, theContracting Party concerned
maytakethenecessary safeguard measures. Itshallinform theother Contracting Party forthwith.
Article 31
1. AJointCommittee ishereby established which shallberesponsible fortheadministration of
thisAgreement andshall ensure itsproper implementation. Forthispurpose, itshall make
recommendations andtakedecisions inthecases provided forinthisAgreement. These decisions
shallbeputintoeffect bytheContracting Parties inaccordance withtheirownrules.
2. Forpurpose oftheproper implementation ofthisAgreement theContracting Parties shall
exchange information and,attherequest ofeither Party, shall holdconsultations within theJoint
Committee.
3. TheJoint Committee shalladopt itsownrules ofprocedure.
Article 32
1. TheJoint Committee shallconsist ofrepresentatives oftheContracting Parties.
2. TheJoint Committee shallactbymutual agreement.WT/REG21/1/Rev.1
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Article 33
1. EachContracting Party shallpreside inturnovertheJointCommittee, inaccordance withthe
agreements tobelaiddown initsrules ofprocedure.
2. TheChairman shallconvene meetings oftheJoint Committee atleastonceayearinorder
toreview thegeneral functioning ofthisAgreement.
TheJoint Committee shall, inaddition, meetwhenever special circumstances sorequire, at
therequest ofeither Contracting Party, inaccordance withtheconditions tobelaiddown initsrules
ofprocedure.
3. TheJointCommittee maydecide tosetupanyworking party thatcanassist itincarrying out
itsduties.
Article 34
1. TheJoint Committee mayamend theprovisions oftheProtocols tothisAgreement.
2. Intheevent ofmodifications tothenomenclature ofthecustoms tariffs oftheContracting Parties
affecting products referred tointhisAgreement, theJointCommittee mayadapt thetariffnomenclature
ofthese products toconform withsuchmodifications.
Article 35
1. Where aContracting Party considers thatitwould beuseful inthecommon interest ofboth
Contracting Parties todevelop therelations established bythisAgreement byextending themtofields
notcovered thereby, itshallsubmit areasoned request totheother Contracting Party.
TheContracting Parties mayinstruct theJointCommittee toexamine thisrequest and,where
appropriate, tomake recommendations tothem, particularly withaviewtoopening negotiations.
2. Theagreements resulting from thenegotiations referred toinparagraph 1willbesubject to
ratification orapproval bytheContracting Parties inaccordance withtheirownprocedures.
Article 36
Attherequest oftheFaeroes, theCommunity willconsider
- improving theaccess possibilities forspecific products,
- extending itstariffconcessions forFaeroese fishery products toinclude newfishspecies caught
byFaeroese fishing vessels based andoperating intheNorth Atlantic, ortoinclude fishery
products pertaining thereto notcurrently produced bytheFaeroese fishing industry. These
newfishspecies orfishery products could beimported freeofdutyintotheCommunity, subject
tothenecessary quantitative limitations should thenewfishspecies orfishery products beof
asensitive nature intheCommunity.
Article 37
TheAnnexes andProtocols tothisAgreement shallform anintegral partthereof.WT/REG21/1/Rev.1
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Article 38
EitherContractingPartymaydenouncethisAgreementbynotifyingtheotherContractingParty.
ThisAgreement shallcease tobeinforce 12months afterthedateofsuchnotification.
Article 39
ThisAgreement shallapply, ontheonehand, totheterritories towhich theTreaty establishing
theEuropean Community isapplied andunder theconditions laiddown inthatTreaty and,ontheother
hand, totheterritory oftheFaeroes.
Article 40
1. ThisAgreementisdrawnupinduplicateintheDanish,Dutch,English,French,German,Greek,
Italian,Portuguese,Spanish,SwedishandFaeroeselanguages,eachofthesetextsbeingequallyauthentic.
2. Itwillbeapproved bytheContracting Parties inaccordance withtheirownprocedures.
3. Itshallenterintoforce on1January 1997, provided thattheContracting Parties havenotified
eachother before thatdatethattheprocedures necessary tothisendhavebeencompleted. After this
date,thisAgreement shallenterintoforceonthefirstdayofthethirdmonth following suchnotification.
4. Theprovisions ofthefollowing Agreements shallcease tobeinforce ontheentry intoforce
ofthisAgreement:
- theAgreement between theEuropean Economic Community, oftheonepart,andthe
Government ofDenmark andtheHome Government oftheFaroe Islands, oftheother
part,signed on2December 1991,
- theAgreement intheformofanexchange ofletters between theEuropean Community,
oftheonepart,andtheGovernment ofDenmark andtheHome Government ofthe
Faroe Islands, oftheother part,amending Tables IandIIoftheAnnex toProtocol
1oftheabove-mentioned Agreement, signed on8March 1995,
- thebilateral trade agreements between Finland andSweden andtheFaeroes.
Done atBrussels onthesixth dayofDecember intheyearonethousand ninehundred and
ninety-six.
FortheEuropean Community
FortheGovernment ofDenmark andtheHome Government oftheFaroe Islands