WT/TPR/M/273/Add.1  
6 March 2013  
(13-1228)  Page: 1/60  
Trade Policy Review Body 
13 and 15 November 2012  Original: English/ anglais/ inglés  
 
 
TRADE POLICY REVIEW 
ICELAND  
RECORD OF THE MEETING 
Addendum 
Chairperson: H.E. Mr. Eduardo Muñoz Gómez (Colombia) 
 
This document contains the advance written questions, and replies provided by Iceland.1 
 
 
Organe d'examen des politiques commerciales 
13 et 15 novembre 2012 
EXAMEN DES POLITIQUES COMMERCIALES 
ISLANDE  
COMPTE RENDU DE LA RÉUNION 
Addendum 
Président: S.E. M. Eduardo Muñoz Gómez (Colombie) 
 
Le présent document contient les questions écrites communiquées à l'avance et les 
réponses fournies par l'Islande.1 
 
 Órgano de Examen de las Políticas Comerciales 
13 y 15 de noviembre de 2012 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
I
SLANDIA  
ACTA DE LA REUNIÓN 
Addendum 
Presidente: Excmo. Sr. Eduardo Muñoz Gómez (Colombia) 
 
En el presente documento figuran las preguntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por la Islandia.1 
 
  
                                               
1 In English only./En anglais seulement./En ingles solamente. WT/TPR/M/273/Add.1 
 
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REPLIES PROVIDED BY ICELAND TO ADVANCE WRITTEN QUESTIONS 
  
ARGENTINA 
 
Report by the Secretariat (WT/TPR/S/273) 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs 
 
(a) Applied MFN tariff 
According to paragraph 21, Iceland grants at leas t MFN treatment to all trading partners. The MFN 
tariff includes 8,513 lines at the eight-digit HS level (HS2012) in 2012, of which 94.9 per cent are 
duty free or have ad valorem  duties (Table III.2 and Chart III.1). Over 70 per cent of all tariff lines 
are duty free. 
 
Question 1 Does Iceland plan to narrow this difference between the ad valorem bound and applied rates? If so, what specific measures will it be taking to achieve that objective? 
 
Answer 
This question is directly related to the negotiations in the Doha Round, to reduce bindings in the 
WTO. Iceland has been and will participate actively  in these negotiations when they will continue. 
 (v) Import prohibitions, restrictions, and licensing 
Paragraph 35 states that the only major changes to import licence and/or permit requirements are 
under Regulation No. 448/2012 on Defence Against Animal Diseases, which amended some rules covering imports of animal products (see more details on SPS and TBT-related measures in section (3)(iv)): 
 
 Imports of live animals are prohibited, with the exception of import consignments 
licenced by the Minister for Industries and Innovation on the basis of 
recommendations from the Chief Veterinary Officer. Imports of animal products also 
require the permission of the Minister;  
 imports of plants and plant products require a licence from the Agricultural Research 
Institute, and imports of animal fodder, fertilizers, and seeds from the Agricultural Authority of Iceland (MAST); 
 narcotics and psychotropic substances require an import licence from the Ministry 
of Welfare; 
 
 imports of radioactive goods require the permission of the Icelandic Radiation 
Protection Institute; 
 
 firearms and ammunition imports require a permit from the Commissioner of the 
Icelandic Police; 
 
 machines for public works must be registered with the Administration of Occupational 
Safety and Health before import and insp ected by the Administration after import; 
and 
 toxic chemicals and other goods with health and environment concerns are subject to 
a conditional prohibition, with imports only allowed subject to certain conditions and 
approval from the Ministry for the Environment and the Environmental and 
Food Agency.  WT/TPR/M/273/Add.1 
 
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  Question 2 
What are the functions exercised by the Ministry of Agriculture and the Ministry of Fisheries in this 
respect? How does the Foodstuffs Committee [IS note: Food and Veterinary Authority] operate in coordinating food quality and safety standards and regulations? 
 
Answer 
The Ministry of Industries and Innovation (formerl y the Ministry of Fisheries and Agriculture) is 
responsible for policy making and regulation. It also grants import licences where necessary upon 
recommendation of the Food and Veterinary Author ity. The Food and Veterinary Authority is an 
implementation agency responsible for the executio n of the legislation in question, including food 
safety control, general import and export proc edure, as well as animal and plant health. For 
regional enforcement the Food and Veterinary Authority is assisted by the Local Health 
Committees, which act under the supervision of the Authority.  
Question 3 
Could Iceland please provide information regarding the regime for the importation of live animals?  
Answer 
According to Art. 2 of Act No. 54/1990 all import of live animals is forbidden. The Minister of 
Industries and Innovation has the right to give derogation to this rule upon recommendation from the Chief Veterinary Officer (CVO). The CVO has to make a risk assessment in each case when 
there is an application to the Minister for import s of live animals. The risk has to be based on 
international risk assessment following standards laid down by OIE and not the least articles of the SPS agreement. 
 
Question4 Are there any plans to review the current formalities for importing live animals? 
 
Answer 
No, the current policy is to keep up the strict legislation regarding the ban on live animal imports and to preserve the very good animal health status of the country.  
 
(2) M
EASURES DIRECTLY AFFECTING EXPORTS  
(v) Intellectual property rights 
 
Geographical indications  
Paragraph 117 states that Iceland does not have any specific legislation that covers geographical 
indications. However, provisions in the Trademarks Act and the Competition Act provide protection to these indications. The Trade Marks Act contains provisions that prohibit the use of deceptive trademarks, including geographical indications. Furthermore, the registration of a mark that 
causes confusion regarding its origin, or of a trademark for wines and spirits that implies a 
geographical name, unless the product originates at the location in question, is also prohibited. Misleading use of geographical indications is also implicitly forbidden under the Competition Act. 
The authorities also stated that a few collective marks containing geographical indications have 
already been registered in Iceland.  
Question 5 
Could Iceland provide further information on the provisions of the Trademarks Act and the Competition Act as regards the protection of these geographical indications?  
Answer 
The Trademark Act No. 45/1997, as amended, cont ains provisions that protect Geographical 
Indications as required by the TRIPS Agreement an d so does the Act on the Surveillance of Unfair 
Business Practices and Market Transparency No. 57/ 2005. The Consumer Agency is responsible for 
the enforcement of Act No. 57/2005.  
Names of products comprising a GI or potential GI at national level are protected under Article 
14.1.2 of the Trademark Act. According to the Article, a trademark may not be registered if the mark is likely to cause confusion, for instance, as to the type of product, condition or origin. Further, a trademark for wines and spirits which im plies a geographical name for wine or spirits WT/TPR/M/273/Add.1 
 
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  may not be registered unless the product originates at the location in question, cf. Article 14.3. In 
Article 36 the use of deceptive signs is prohibited. All trademark applications are subject to the same  conditions and the GI-conditions are therefore 
considered even when the application in question involves non-agricultural products.  
 
With regard to the Act No. 57/2005, Article 9 (f) states that commercial practices are misleading if these are likely to deceive consumers or are of su ch a nature that consumers are granted incorrect 
information for the purpose of influencing their deci sion concerning trade. This refers to incorrect 
information concerning the rights, qualification and other factors pertaining to the vendor's 
circumstances or those of his representative, his position in the market, duties, trademarks and other software rights. 
 
I. TRADE POLICIES BY SECTOR 
(1) A
GRICULTURE  
(iii) Agriculture policies 
 (a) Trade policies 
 
Paragraph 14 states that under its Uruguay Round Schedule, Iceland reserved the right to provide export subsidies for 1,797 tonnes of sheep meat up to a limit of SDR 9.3 million, and 3.16 million 
litres of milk up to a limit of SDR 2.6 million. However, according to the notifications made to the 
Committee on Agriculture, Iceland did not provide any export subsidies between 31 August 1998 
and 31 August 2008. However, under Regulation No. 535/2003 on Price Equalization for Exports of Goods made from Agricultural Raw Materials, the Ministry for Fisheries and Agriculture may 
authorize the Customs Office to refund the ex porter the difference between the cost of raw 
materials in the international and domestic markets. In 2011, ISK 2.7 million (about US$ 23,274) was budgeted for the price compensation mechanism. 
Question 6 
Could Iceland please explain the circumstances that led it to consider that these refunds to exporters are not a way of subsidizing exports?  
Answer 
In 2011, a total of 2.7 million ISK (about US$ 23,274) were allocated to the measure in the state 
budget. However, the total utilized amount was 1.8 million ISK (about US$ 15,750) according to 
the Icelandic State Account. The measure is thus of a highly limited application. As stated the aim 
of the measure is to compensate producers for higher costs of raw material due to the domestic agricultural policy. 
 
(b) Domestic support 
 Paragraph 15 states that under Regulation No. 913/2010 on dairy production, support is provided 
through production quotas, direct payments, and minimum producer prices. The national 
production quota is set each year by the Minister  of Fisheries and Agriculture and is divided among 
producers based on historical production. Production in excess of quotas is permitted provided all 
such production is exported. Direct payments  are based on the number of animals (headage 
payments) and the size of a producer's quota (support entitlements). Headage payments are provided for up to 100 cows, with full payment for each of the first 40 dairy cows then at a 
reducing rate for each additional cow. The average payment per cow in 2011 was ISK 22,000 (see 
Table IV.4 for total annual budgetary allocations).  Question 7 
How does this programme affect tr ade, both domestic and foreign? 
 Answer 
A system of production quotas is applied for dair y farms. The production quota for each dairy farm 
is a specific share of the production quota for the whole country, which is based on sales in the 
previous year, to ensure an appropriate supply of  milk and dairy products for the domestic market. 
If a dairy purchases milk from an individual farm er exceeding his production quota the dairy shall 
export dairy products equivalent to the milk in excess. The measure is governed by the Act on the Production, Pricing and Sale of Agricultural Products No. 99/1993, and Regulation No. 913/2010 on 
Support Entitlements for Milk Production on Registered Farms and Direct Payments to Dairy WT/TPR/M/273/Add.1 
 
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  Farmers for the year 2011. Production over the year ly quotas has to be exported. However, due to 
low export prices limited interest is for trade externally.  Secretariat Report (WT/TPR/S/273) 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS 
(iv) Standards and other technical requirements 
 (b) Sanitary and phytosanitary measures 
With respect to Table III.10 "provisionally prohibited imports, 2012" (page 45): 
Question 8 
Could Iceland explain why imports of live animals as well as their genetic substances (Act No. 54/1990) and products of animal origin  (Act No. 25/1993 and Regulation No. 448/2012) 
are provisionally prohibited? 
 Answer 
Due to the geographic isolation and restricted im ports of live animals and their genetic substances 
for centuries, animals in Iceland are free from many infectious agents known to be endemic in many parts of the world. It is estimated that on ly a small number of known infectious agents found 
in other parts in the world can be found in Iceland. Therefore, animals in Iceland are 
immunologically naïve to various transmissible agen ts. The animals least resistant to diseases are: 
horses, sheep, cattle and goats. Previous disease outbreaks in Iceland show that the susceptibility 
of the Icelandic stocks to novel pathogens is extremely high. This is not only the case for 
pathogens known to cause severe diseases but also for agents that are considered to cause only 
mild clinical symptoms in other countries. This situation makes Icelandic livestock highly vulnerable to the introduction of infectious agents or new strains of infectious agents not endemic 
in the country. 
 Question 9 Could Iceland specify whether these prohibitions ar e related to the outbreak of a disease regulated 
by the World Organisation for Animal Health (OIE)? 
 Answer 
Previous imports of live sheep have in the past centuries brought several diseases to Iceland previously not introduced, for example Scrapie, Sheep scab, Paratuberculosis, Jaagsiekte and Maedi/Visna. Therefore Iceland needs strict import legislation to control imports of live animals. In 
this way previous experiences from importation of live animals (mainly sheep) to Iceland have 
disclosed the high risk of accidental introductions of new transmissible agents to the country that may have unforeseeable catastrophic consequences   
Question 10 
Does Iceland only import pets?  
Answer 
According to Article 2 of Act No. 54/1990 on import of animals all import of live animals is 
forbidden. The Chief Veterinary Officer (CVO) is pe rmitted to deviate from this ban regarding pets, 
cf. Article 4a of the Act. Such a permit is base d on the condition that the importer commits to 
comply in every respect with all conditions of Re gulation No. 935/2004 on the importation of pets 
(companion animals) and dog semen into Iceland. The CVO is working within the Icelandic Food and Veterinary Authority (MAST) which is the inst itution performing the task of monitoring the 
import of pets to Iceland. All information and ne cessary forms can be obtained on the www.mast.is 
 Question 11 
Under what conditions could Iceland permit impo rts of raw meat and other animal by-products? 
 Answer 
Article 10 of Act No 25/1993 on Animal Diseases and Disease Prevention stipulates a ban against import of raw meat and raw eggs. The same applies to non-disinfected raw skins and hides, farmyard manure and compost mixed with manure, import of which is not authorised. According to WT/TPR/M/273/Add.1 
 
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  Article 4 of Regulation No. 448/2012 on measures to  prevent the introduction of animal diseases 
and contaminated products into Iceland, the Indust ries and Innovation of Fisheries and Agriculture 
has the authority, following a positive recommendation from MAST, to permit the importation of products otherwise prohibited by the aforementi oned Article 10, the recommendation has to be 
based on international risk assessment following standards laid down by OIE, CODEX and not the 
least articles of the SPS agreement, of which Icel and is a member, cf. Article 9 of Regulation No. 
448/2012. The required permit from the Ministry and the certificates in order to permit importation 
are listed in the aforementioned Regulation. Thes e documents have to be shown before customs 
clearance can take place.  CANADA 
 Report by the Secretariat (WT/TPR/S/273) 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(1) GENERAL CONSTITUTION AL AND LEGAL FRAMEWORK 
 
Paragraph 4, page 11 
 This section contains no reference to the Court of Arbitration (Gerðardómur), as referenced in law 53/1989 um samningsbundna gerðardóma (Laws on contract bound Arbitration). Canada 
understands that under this law, parties can bring a dispute before an arbitral tribunal, provided a 
contract is in place, and that the arbitration ruling is final and cannot be appealed to another court.   
Question 1 
Could Iceland provide more information on the status and operation of the Court of Arbitration and confirm the nature of the Court's relationship with other aspects of the legal system?  
 
Answer 
According to the Act No. 53/1989 on contractual arbitration, parties to a dispute can voluntarily resort to such a "ad hoc" dispute settlement alternative. The Court of Arbitration is thus not a 
permanent court and not a part of the general court system. Parties can agree to submit a dispute 
to arbitration concerning civil matters in respect of which they may reach a settlement. The parties 
must agree to abide by the findings of the arbitral body. A court of law shall dismiss a case if it is 
subject to or has been settled by such arbitration.  The 3 arbitrators must fulfill the requirements to 
serve as district court judges and the case is decided by a majority decision. Some procedural matters can be referred to the general courts for ruling. 
 
For further information on the Act No. 53/1989 on contractual arbitration, please consult the unofficial English translation of the act prov ided by the Iceland Chamber of Commerce at: 
http://www.vi.is/files/Act%20on%20Contr actual%20Arbitrati on_849555187.pdf. 
 
IV. TRADE POLICIES AND PRACTICES BY MEASURE (3) MEASURES AFFECTING PRODUCTION AND TRADE 
(iv) Standards and other technical requirements 
 Paragraph 85, page 45 
 
Although a number of notifications have been submitted to the WTO, particularly on agriculture and regional trade agreements, as of end-July 201 2 a considerable number of regular notifications 
remained outstanding. In particular, Iceland's most recent annual domestic support notification 
covered the years 2001 to 2003. 
 Question 2 
Could Iceland please indicate when it will submit its annual domestic support notifications for more 
recent years to the Committee on Agriculture?  
Answer 
Iceland intends to submit its outstanding domestic support notifications before end of February 
2013. 
 WT/TPR/M/273/Add.1 
 
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  IV. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) MEASURES AFFECTING PRODUCTION AND TRADE (iv) Standards and other technical requirements  
Paragraph 85, page 45 
 According to the WTO Secretariat Report, "imports of raw meat and other products covered by 
Regulation No. 448/2012 may be permitted by the Minister of Fisheries and Agriculture upon the 
recommendation of MAST."  Question 3 
What factors are used by MAST in developing  its recommendation on whether to permit the 
imports of raw meats and other products? 
Answer 
According to Article 4 of Regulation No. 448/2012 on measures to prevent the introduction of 
animal diseases and contaminated products into Iceland the Minister of Industries and Innovation 
has the authority, following a positive recommendation from MAST, to permit the importation of products otherwise prohibited by Article 3 of Act No. 25/1993 on animal diseases and defenses 
against these. The recommendation has to be based on international risk assessment following 
standards laid down by OIE, CODEX and not least re levant articles of the SPS agreement, of which 
Iceland is a member, cf. Article 10 of Regulati on No. 448/2012. The required permit from the 
Ministry of Industries and Innovation
2 and the certificates in order to permit importation are listed 
in Regulation No. 448/2012. The text of the regulation is available at: 
http://www2.mast.is/Uploads/document/Re glugerdir/Reglugerd448_2012english.pdf. 
 
IV. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) MEASURES AFFECTING PRODUCTION AND TRADE (iv) Standards and other technical requirements 
 
Paragraph 84, 86; page 45-46  According to the WTO Secretariat Report, "products arriving from outside the EEA must be 
accompanied by certificates showing: …that the animals from which the products were derived 
were not given growth-promoting substances…." As well, according to the WTO Secretariat Report, Iceland is a member of the Codex Alimentarius 
and the World Organization for Animal Health. In a recent Codex commission meeting, Codex 
members voted in favour of new maximum residu e limits (MRLs) for ractopamine in animals. 
 
Question 4 
As a member of Codex Alimentarius, on what basis does Iceland require documentation that 
"animals from which products were derived we re not given growth-promoting substances"? 
Answer 
It should be stated that at the above mentioned recent Codex commission meeting, Iceland voted 
against a new maximum residue limits (MRLs) for ract opamine in animals, as did other countries in 
the European Economic Area – i.e. the EU and Norway. This was based on the fact that Iceland has never permitted the use of growth-promoting subs tances in animals, both the use of hormones 
and antibacterial substances. Iceland deems it is th e appropriate level of protection for the public 
health of the Icelandic population, not to be exposed to any possible residues from these substances in imported products of animal origin. 
 
IV. TRADE POLICIES AND PRACTICES BY MEASURE (3) MEASURES AFFECTING PRODUCTION AND TRADE (iv) Standards and other technical requirements 
 
Table III.10, page 45  
According to Regulation 448/2012 (found on http://stjornartidindi.is/Advert.aspx?ID=4868a848-
2b30-455a-bd7e-435bb6433679), [translated from Icelandic to English], "when applying for the 
                                               
2 On 1 September 2012 the Ministry of Fisheries and Agri culture, the Ministry of Industry and part of the 
Ministry of Economic Affairs were merged into  a new Ministry of Industries and Innovation. WT/TPR/M/273/Add.1 
 
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  import of raw or first time for permission under product…the importer shall provide the Ministry of 
Industries and Innovation with the necessary information about the product under consideration and approval before the product is dispatched from the exporting country."  
Question 5 
Could Iceland indicate how far in advance of shipment from the exporting country the importer 
should seek necessary approvals? 
Answer 
Usually it takes 1-3 weeks to process an applicat ion, provided that the importer provides the 
appropriate information. 
 IV. TRADE POLICIES AND PRACTICES BY MEASURE (3) MEASURES AFFECTING PRODUCTION AND TRADE 
(iv) Standards and other technical requirements 
 Paragraph 87, page 46 
 
According to the WTO Secretariat Report, in practice, documents (i.e. certificates) [concerning the importation of chilled and frozen meat and meat products] must be submitted to MAST, which 
processes them and makes a recommendation to the Ministry of Industries and Innovation, which 
must give prior approval for each import consignment of frozen products.  Question 6 
How long does this recommendation and approval process take for each import consignment of 
frozen product? 
Answer 
It is normally done in one day and documents are sent by e-mail. 
 
Question 7 
Does this process have a cost for importers? 
Answer 
The process is free of charge. 
 IV. TRADE POLICIES BY SECTOR (1) AGRICULTURE 
(iii) Agriculture policies 
 Paragraph 7, page 57 
 
The Secretariat Report indicates that the Farmers' Association of Iceland represents farmers in discussions on agriculture policy and has been cont racted by the Icelandic Food and Veterinary 
Authority (MAST) to process direct payments to farmers.  
 Question 8 Could Iceland please clarify the different roles of MAST and the Farmer's Association of Iceland 
with regards to these direct payments? For example, does MAST determine the eligibility and 
amount of these payments? Is the farmers' association reimbursed for administrative and 
operating costs?  
Answer 
The Farmer's Association handles calculation and payments of agricultural support (e.g. direct 
payments) based on farmer entitlement units, according to the relevant legislation. The Farmer's Association is also responsible for providing information to farmers on their payment rights. However, MAST has overall responsibility for the payment procedure. MAST is responsible for all 
changes to and keeping records of lists of entitl ement holders. The Farmer's association receives 
reimbursements for their work relating to the administration of payments.  WT/TPR/M/273/Add.1 
 
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  IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE (iii) Agriculture policies  
(a) Trade policies 
 Paragraph 14, page 59 
 
Iceland reported that it did not provide any ex port subsidies between 1998 and 2008. However, 
under Regulation No. 535/2003 on Price Equalization for Exports of Goods made from Agricultural 
Raw Materials, the Ministry of Industries and Innovation may authorize the Customs Office to 
refund the exporter the difference between the cost of raw materials in the international and 
domestic markets. According to the Secretaria t Report, ISK 2.7 million (about US$ 23,275) was 
budgeted for the price compensation mechanism in 2011.  
 
Question 9 What types of raw materials are eligible for reimbursement?  
Answer 
The raw materials eligible for reimbursement are milk, semi skimmed milk, cream, milk powder, 
low fat powder, butter, cheese, eggs, meat of beef, sheep, pigs, chicken and horse meat. 
 
Question 10 
What are the criteria for program eligibility?  
Answer 
The Applicants have to send an application to the Ministry. Products in question should be 
processed agricultural products, and the application must specify different basic raw material and 
ingredients in the products, recipe and information regarding customs classification. The measure is to compensate producers for higher costs of raw material due to the domestic agricultural policy. 
In 2011 the total utilized amount were 1.8 m illion ISK (about US$ 15,750) according to the 
Icelandic State Account. The measure is thus of a highly limited application, even given the limited amount available.  
 
Question 11 Is receiving the refund contingent on export of the final product?  
Answer 
The final product cannot be sold within the customs area of Iceland. 
 IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE 
(iii) Agriculture policies  
(a) Trade policies 
 Paragraph 19, page 59  
The Secretariat Report indicates that in addition  to direct payments and minimum prices, dairy 
processors also benefit from indirect support for breeding, land cultivation, and development 
programs.  
 
Question 12 Could Iceland please provide examples of this indirect support? 
Answer 
Dairy farmers are eligible for several general support measures, which are of indirect support to 
their operations. Such programs may entail re-cultivation, grain cultivation (rare in Iceland for climate reasons), grazing control and land utilization, economic and management consultation, 
educational programs, transition to organic/environmentally sound farming, environmental efforts, 
maintenance of land drainage an calcium spreading of fields. Breeding support relates to development work and relates to keeping of livestock breeding records and artificial insemination. WT/TPR/M/273/Add.1 
 
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  Environmental programs which may entail diversification aspects include the Regional Afforestation 
Projects, the Land Reclamation Forests Project and the Land Healing program.  Report by Iceland (WT/TPR/G/273) 
 III. TRADE POLICY OBJECTIVES AND DEVELOPMENT (5) EUROPEAN UNION ACCESSION NEGOTIATIONS 
 
Paragraph 61, page 14  It is noted that upon accession to the European Union, Iceland would as a new Member State join 
the trade agreements of the EU. 
 Question 13 
Could Iceland specify whether accession to the European Union will be subject to a national 
referendum? 
Answer 
According to the Parliamentary resolution on the membership application to the EU, a referendum 
shall be held on the accession agreement, ensuring the Icelandic nation the final say on whether to 
join the EU.  
 COLOMBIA 
 
Government Report, WT/TPR/G/273 
 
(2) FOREIGN TRADE 
(i) General 
 According to paragraph 17 of the Government Report, "[a]s a remote and insular island in the far 
north, faced with difficult topography and climate, Iceland's economy depends to a large extent on 
few sectors. External trade is therefore of vita l importance to Iceland. Imports and exports of 
goods and services amount to around 40 per cent of GDP. Fisheries products have historically accounted for the overwhelming majority of exports and foreign currency income. They still are, 
but aluminium products have grown to account for a comparable share of export earnings and GDP 
in recent years. Icelandic exports are becoming more diverse every year due to a growing science and research community and high-tech industry". 
 
Question 1 Which of Iceland's policies have generated the gr owth of the science and research community and 
the high-tech industry, which has led to the diversification of their exports? 
 Answer 
The growth has to a great extent been driven  by the private sector. The Government has 
enhanced this development by increasing allo cations to the competitive funds on research, 
development and innovation. In addition the Act on Support to Innovative Companies No. 152/2009 opens for a possibility to reimburse SMEs through the income tax for up to 20% of their 
R&D expenditure - up to a modest annual maximum. 
 Fishing 
 
According to pages 13 and 14 of the Government Report, "Aid for Trade-related activities represent a substantial part of Iceland's ODA, approximately 28 per cent. These activities are mainly within the priority sectors of fisheries an d renewable energy, as sustainable use of natural 
resources is one of three focus areas in the Strategy for Iceland's International Development 
Cooperation. Within these two sectors, ODA has been targeted towards technical assistance and infrastructure, as well as productive capacity building. The latter includes education and training of 
government officials from developing countries at the UNU Geothermal and Fisheries Training 
programmes in Iceland. In addition, contributi ons have gone towards geothermal energy and 
fishery research and development, as well as policy and administrative management within these 
sectors. Priority is given to sub-Saharan Africa and least developed countries, and funds are 
channelled through multilateral organizations and bilateral partners". WT/TPR/M/273/Add.1 
 
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  Question2 
Although other countries are larger recipients of this type of cooperation, the Colombian 
government would like to know more about the productive capacity and research and development programmes in the Icelandic fisheries sector. 
 
Answer 
Fisheries have been at the core of Iceland's bilateral development efforts since its inception, as a 
result of requests from developing countries for cooperation in an area where Iceland possesses 
both expertise and experience. Iceland has bu ilt up significant knowledge of development 
cooperation in the fisheries sector through the years and today the fisheries sector is included in both bilateral and multilateral cooperation. Fisheries have been identified as a priority sector under 
the Strategy for Iceland's International Develo pment Cooperation 2011-2014 and allocations to 
projects in fisheries amounted to 20% of Iceland's ODA in 2011.   
Capacity Building programmes 
 In regards to capacity building Icelandic authorities have contributed both bilaterally through the 
Icelandic International Development Agency (ICEID A) and multilaterally to various international 
organizations. These efforts include education and training, as well as institutional capacity building.   
Support to Quality Assurance for Fish Marketing Project in Uganda 
The project is a cooperation of ICEIDA and the Ug andan authorities. The overall objective of the 
Project is to reduce poverty among fishing communities through improved quality and safety of 
fish for the domestic, regional and export market as well as improving the livelihoods of fish 
dependent communities. The immediate objective is to increase volume of marketed fish both in the domestic and export markets through reductio n in post-harvest losses. The project includes 
the building up of human resources, capacity building  and construction in order to assure quality in 
fishing and fish processing.   Assistance to the Fisheries Sector in Mozambique 
The support was initiated in 2009 and is based in a trilateral agreement between Iceland, Mozambique and Norway. The programme aims to strengthen the fisheries sector's contribution in improving food and nutrition security for the population; improve living conditions for the 
communities of artisanal fishermen; increase the industrial fisheries' contribution to achieving the 
national objective of poverty eradication; increase net contribution from the sector to the country's 
balance of payments in a framework of a more ef fective fisheries administration which promotes 
sustainable exploitation of the fish resources. The programme focuses not only on the 
development of competence and capacity in the fisheries institutions as such, but also on the implications this support has for the development of the sector at large and for poverty alleviation.  
Training courses in cooperation with the Caribbean Regional Fisheries Mechanism (CRFM) 
The Ministry for Foreign Affairs provided funds fo r two training courses carried out by CRFM in 
2009-2010 under Iceland's Island Growth Initiative. The Initiative was founded to increase 
cooperation between Iceland and Small Island Developing States (SIDS).  
 
1. Caribbean Stock Assessment Training Course: The overall objective of the training course 
was to contribute to the development of institutional capacity required for achieving more 
effective and active fisheries management and policy in the Caribbean region. 
2. Leadership Training for Heads of National Fisheries Department in the CARICOM states: The 
main purpose of the training course was to strengthen leadership skills of key fisheries 
people who are responsible for promoting and facilitating fisheries management and 
development at the national and regional levels in the Caribbean. 
 
The United Nations University's Fisheries Training Programme in Iceland 
The most prominent capacity building measure f unded by Icelandic authorities is the United 
Nations University's Fisheries Training programme (UNU-FTP), which has operated in Iceland since 
1998. Its main objective is to support developing countries achieve their development goals in 
fisheries through training, education and institut ional capacity building. From inception, 263 
specialists from developing countries have attended the programme. In addition, UNU-FTP also provides grants for further studies at the Universi ty of Iceland and conducts training workshops in 
developing countries.  WT/TPR/M/273/Add.1 
 
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  Support to DOALOS 
The organization's role is to provide states and intergovernmental institutions a range of legal and 
technical services, such as information, advice an d assistance as well as conducting research and 
preparing studies in relation to UN conventions on the law of the sea. Iceland has contributed to 
trust funds under DOALOS that relate specifically  to offshore issues in developing countries. 
 PROFISH 
Iceland is one of the states which initiated the establishment of the PROFISH-program within the World Bank in 2005, with the purpose of stre ngthening sustainable fisheries management, 
promote economic growth, ensure healthy fish stock and enhance their yield. In addition to financial support, Iceland has seconded an employee to the program in, in order to further 
strengthen the cooperation with the bank. 
 Research and development programmes 
 
Strengthening the Capacity of the Benguela Current Commission (BCC) to implement an 
Ecosystem approach to Fisheries (EAF) management in Namibia, Angola and South Africa 
ICEIDA partnered with the United Nations Development Programme and the Governments of Angola, Namibia and South Africa in 2008-2011 to develop an ecosystem approach to control the waters of South Africa, Namibia and Angola. The support focused on building up of human resources and the training of researchers.  
 
Research, Monitoring and Development of the Fisheries in the Cahora Bassa Resevoir in 
Mozambique 
Mozambique's Fisheries Research Institute and ICEIDA partnered in 2006-2011 on a project which involved research on a reservoir in the Cahora Ba ssa Damn that has been utilised for fish farming. 
The overall objective of the project was to contribu te to the sustainable utilisation of the fisheries 
resources of Cahora Bassa Reservoir through the development of scientifically based management 
plans, the implementation of which was to in crease food security, livelihood standard and 
employment of the local lakeshore-communities.  
Small Scale Offshore Fishery Technology Development in Malawi 
The Small-Scale Offshore Fishery Technology De velopment Project (SOFTDP), a community-based 
project, was initiated in 2005 and implemented by ICEIDA in collaboration with the Directorate of 
Fisheries, now under the Ministry of Industries an d Innovation. The overall goal was to aid in the 
development of an offshore fishery to allow small-scale fishers to expand their operations to under-exploited resources in the deep offshore wa ter demersal and pelagic zones of Lake Malawi. 
The aim was to improve both food security and in come of rural fishing communities. This was done 
by developing appropriate offshore fishing technology and creating awareness of navigational safety for the small-scale fishery on Lake Malawi. Th is was concluded during the first five year pilot 
phase of the project. In the second phase the technology was developed further and promoted in 
the fishing communities. The project was based in the Nankumba Peninsula in the Mangochi 
District and had three main components: Gear and Craft Technology, Fishery Research and Capacity Building. The project concluded in 2009. 
 
NACA – Strategies for Development of Asian Reservoir and Lake Fisheries Management 
ICEIDA partnered with the Network of Aquacultur e Centres in Asia-Pacific (NACA) in 2006-2010 to 
identify research and development needs for the e ffective utilisation of reservoirs and lakes in Sri 
Lanka, Thailand, China, India, Nepal and Pakistan for fish production and develop capacity for the management of such fisheries.  
Paragraph 57 of the Government Report states that "[a] Generalised System of Preferences (GSP 
scheme) was first introduced in Iceland in 2001 and is not limited in time. Duties on goods 
originating in the least developed countries of the world, as defined by the UNCTAD/Committee on 
Enterprise, Business Facilitation and Development, shall be waived in conformity with procedures 
applicable to duties on goods originating in the European Economic Area according to the EEA Agreement. The rules of origin applied do not pr ovide for the possibility of cumulation. The scheme 
covers the same products as the EEA Agreement". 
 Question 3 In 2001 Iceland introduced the Generalised System of  Preferences, which is not limited in time. Is 
it still in force?  WT/TPR/M/273/Add.1 
 
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  Answer 
Yes, the system is still in force. 
 Question 4 
Which least developed countries have made use of this System? 
 
Answer 
In the period 2007-2011, Bangladesh has 60% of all imports from GSP countries, Cambodia with around 14%, Sudan with 5% and Ethiopia around 4%. Other countries have less than 1% of all 
imports from GSP countries.  
Question 5 
What has been their degree of benefit? 
 
Answer 
In the years 2007- 2011 the average ratio of import s from GSP countries as a proportion of total 
imports is 0.1%. 
 
Secretariat Report, WT/TPR/S/273 
 Summary 
 
Paragraph 16 of the Secretariat Report states that "[i]n the aftermath of the global financial crisis 
in 2008, the banking system collapsed. Domestic banks found themselves heavily indebted to 
domestic and foreign depositors and lenders with little hope of repaying their liabilities. As a result, 
the domestic and foreign operations were separated, the banks were liquidated and new banks created to run domestic operations. The recapitalization of these institutions resulted in a 
significant fiscal outlay on the part of government. The economic effects were severe as the 
exchange rate depreciated by more than 70 per cent, an IMF-sponsored programme was implemented and capital controls introduced. Since then, the banking sector has recovered 
although the size of the sector has decreased considerably. However, risks remain mainly in the 
form of a high number of non-performing loans". 
 Question 6 
Please describe in detail the capital controls that Iceland has adopted in order to help its financial 
sector to recover. 
 
Answer 
Stabilizing the exchange rate became the main goal of monetary policy in the immediate aftermath 
of the financial crisis of 2008. This goal was supported by capital account restrictions that were imposed in late 2008 in order to stem dest abilizing capital outflows and prevent further 
depreciation of the krona. Capital controls were thus an important part of the economic 
programme Iceland followed during its cooperation with the IMF. The depreciation of the krona in the aftermath of the financial and economic cris is of 2008 came to a halt during the middle of 
2009, initially supported by significant foreig n exchange market interventions but stopped 
following improved enforcement of the capital controls in early winter 2009.   
The short-term stabilization benefits of the capital controls have been very significant. However, 
the negative effects on efficiency and trade accumulate with time. The safeguard measures 
invoked by Iceland in 2008 under Article 43 of the EEA Agreement are temporary in nature. The 
Icelandic authorities are aware of their EEA obligation to make a best effort to remove the 
controls. A strategy for lifting of controls on capital outflows was therefore announced by the 
authorities in March 2011. Capital inflows had been liberalized in October 2009. The speed of 
capital account liberalization is conditioned on the macroeconomic situation, the strength of 
balance of payments outlook, reserve adequacy and the need to safeguard financial stability. The 
strategy envisages a gradual reduction in the overhang of potentially volatile offshore krona positions and other preparations for the lifting of controls on capital outflows of residents. The 
legal mandate for the controls expires at the end of 2013 and the authorities are making efforts to 
remove the controls and normalise capital markets within that timeframe, without putting economic and financial stability too much at risk. However, it will depend on internal and external economic and financial conditions whether that will prove possible. A big impediment is the large 
sum of ISK-denominated assets in the form of  deposits and government bonds held by non-WT/TPR/M/273/Add.1 
 
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  residents locked in by the controls. These were originally over 600 billion ISK or over a third of 
GDP but are currently estimated at over 400 billion ISK, which amount to around 25% of GDP. It 
will depend on both external factors and furthe r progress in strengthening confidence in the 
economy, government finances and financial system at what speed this position will be reduced to 
levels deemed sufficient to lift controls on domestic residents. The capital account liberalisation 
strategy presupposes that macro-prudential rules limiting risks in foreign currency denominated balance sheets of domestic financial institutions will be adopted. This includes, inter alia, 
restrictions on foreign currency imbalances and maturity mismatches between foreign assets and 
liabilities. Also under consideration are possible rules on foreign currency-denominated lending by domestic credit institutions to unhedged borrowers.  
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(1) GENERAL CONSTITUTION AL AND LEGAL FRAMEWORK 
 
According to paragraph 27 of the Secretariat Report, "[i]n general, the main objective of Iceland's 
investment policy is to provide a favourable climate for investment, through Iceland's access to the EEA market, low tax rates, liberal investment policies, and a stable business environment with 
few restrictions on foreign ownership. The main legislation on foreign investment is Act No. 
34/1991 (as amended) on Investment by Non-residents in Business Enterprises, and Act No. 99/2010 on Incentives for Initial Investment in Iceland (Chapter III(3)(iii))".  
Question 7 
New legislation was enacted in 2010 on incentives for initial investment in Iceland. Financial aid according to business size is mentioned. What does this aid consist of and what are the tax 
incentives for projects outside the Reykjavik ar ea? Do these incentives also apply to foreign 
investment?  
Answer 
The authorization of the Government to grant incent ives in the form of regional aid are restricted 
by the obligations of the Government of Icelan d under Articles 16–64 of the Agreement on the 
Economic Area. These obligation and authorisations  are further detailed in the EFTA Surveillance 
Authority's (ESA) Decision of 6 December 2006 (No. 378/06/COL) on the maps of assisted areas 
and levels of aid (Iceland), published on 28 February in the EEA Supplement to the Official Journal of the European Union No. 11, p. 28, showing in  which areas in Iceland regional aid may be 
granted in the years 2007 to 2013.  
 An incentive in the form of regional aid pursua nt to the Act No. 99/2010 will normally not exceed 
15% of the defined investment cost of the investme nt project for which an application is made. For 
a medium-sized enterprise, the maximum incentive is 25% of the investment cost, and for a small 
enterprise the maximum incentive is 35% of the investment cost. In cases where the investment cost of an investment project exceeds EUR 50 m illion, the proportion of maximum permitted aid 
will be reduced to the levels provided in line with the total investment cost. 
 According to the Article 8 of the Act, regional aid may take the form of a direct public cash grant 
for the investment project in question to the company that has been formed for the new 
investment and which will construct and operate the investment project. This shall constitute an initial cash grant, which accrues at the start of the project and regards the maximum incentive 
pursuant to the Article 7. 
 Under Article 9, regional aid can take the form of derogations from taxes or public levies relating to the investment project in question.  
Regional aid under Article 10 may take the form of a sale or lease by the State or a municipality of 
land or a site owned by the State or a municipality for the investment project in question to the company which is formed for the purpose of the new investment and constructs and operates the 
investment project at a price under the normal market price.  
 The government authorities are permitted to grant for new investments in Iceland, irrespective of 
the location of the investment project accordin g to the Article 10. The authorization of the 
Government to grant non-regional incentives are however, restricted by the obligations of the 
government of Iceland under Articles 16–64 of the Agreement on the Economic Area.  WT/TPR/M/273/Add.1 
 
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  A general incentive in respect of a new investment  under Article 11 may take the form of training 
aid to meet the incurred cost of training personnel in connection with a new investment. The maximum training cost aid is EUR 2 million for each investment project. It may also take the form of an incentive in respect of new investments in research and development (Article 14). 
 
The investment project may also take the form of an incentive to enterprises in respect of environment-related new investments which contain improvement or innovation in environmental 
protection, i.e. reduced use of energy or redu ced emissions of greenhouse gasses (Article 15) 
These incentives apply to foreign investment.  Paragraph 58 of the Secretariat Report states that "Icelandic private sector entities have in recent 
years increased their presence in developing countries and participated more actively in projects 
promoting progress and prosperity, e.g. in the fiel d of renewable energy. In light of the changed 
circumstances in the Icelandic economy, analysis is underway within the Ministry for Foreign 
Affairs on possibilities for promoting private se ctor engagement in development cooperation". 
 Question 8 
In which developing countries have Icelandic private sector entities increased their presence? 
 
Answer 
Icelandic private sector entities have in recent years increased their presence in various developing 
countries, including Mexico, Turkey, Viet Nam, Ni caragua, El Salvador, Chile, Ethiopia, Kenya, 
Djibouti, Rwanda, Uganda, Indonesia, China and Papua New Guinea. These efforts have primarily 
been in the field of renewable energy, but also to some extent in fisheries. 
 
Sanitary and Phytosanitary (SPS) Measures  
The Report mentions that Iceland has not submitted SPS notifications since 2005-2006. According 
to paragraph 12, "Iceland has applied EU legislation on SPS matters, with the exception of veterinary issues, which were exempt from the EEA Agreement. Since November 2011, the exemption has been limited to trade in live animals and animal germplasm while Iceland also 
continues restrictive import policies on fresh meat, raw eggs, and animal products not for 
human consumption. The strict control of imports of animals and animal products is justified on the grounds that Iceland's livestock breeds have developed in isolation for several centuries and 
are susceptible to transmittable diseases. Furtherm ore, domestic production of animals and animal 
products are also subject to strict controls".  
Paragraph 83 lists the existing legislation that is applied to SPS matters. The latest measures are 
"Regulation No. 448/2012  on measures to prevent the introduction of animal diseases and 
contaminated products. The Act bans the import of some animal and plant products on health and safety grounds and provides for conditions under which exceptions to the ban can be made […]. 
Regulations Nos. 1043/2011 and 1044/2011 , passed in November 2011, cover trade in 
animal products from within and from outside the EEA".  
In light of the above, Colombia invites Iceland to  notify the sanitary and phytosanitary measures 
that have been adopted over the past six years.  
 
Answer 
Iceland has recently made the relevant notifications which should be circulated to all members in 
the course of the week.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS (i) Customs procedures 
 
According to paragraph 10 of the Secretariat Re port, "compared with other OECD countries […], 
importing into Iceland takes longer (14 days compared with 11 in other high income OECD 
countries), and is more expensive (US$1,674 compared with US$1,085). The main reason for the 
relatively high cost of importing goods is the cost of ports and terminal handling, and of internal transport".  WT/TPR/M/273/Add.1 
 
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  Question 9 
Has Iceland considered implementing any measures or procedures in order to reduce the costs associated with import operations? 
 
Answer 
Our main emphasis for improvements in these matters are to make customs clearance procedures 
more efficient and swifter. In that regard it could be mentioned that customs clearance in Iceland 
is relatively fast and 99% of all customs clearances is made electronically. As stated in the report 
the main reason for the high cost of importing go ods is the cost of ports and terminal handling, 
and of internal transport.  
 
In many ways the Icelandic economy is dependent on imports. It is therefore extremely important 
that the import operations are facilitated to the highest degree possible. However, it is difficult to implement procedures to reduce the costs of the fa ctors that contribute the most towards the cost 
of import operations. This is the fact that Icelan d is one of the most sparsely populated countries 
in the world and is far away from main trading partners. This is difficult to overcome.  
(2) MEASURES DIRECTLY AFFECTING EXPORTS 
(i) Procedures  Paragraph 48 of the Secretariat Report states that "[a]ccording to the World Bank, exporting from 
Iceland takes longer than in other OECD countries and other countries in the region (19 days 
in Iceland compared with 10 in other high income OECD countries) and is more expensive (US$1,532 in Iceland compared with US$1,032 in other high income OECD countries). The main 
reasons for the relatively high cost of exporting goods are the cost of ports and terminal handling 
and internal transport".  
Question 10 
Has Iceland considered implementing any measures or procedures in order to reduce the costs associated with export operations? 
 
Answer 
Iceland is constantly seeking ways and methods that facilitate trade and export as much as 
possible. Iceland is a strong supporter of the multilateral trading system and has furthermore 
established, through its regional co-operation, an extensive network of free trade agreements. 
However, it is a fact that Iceland is one of the most sparsely populated countries in the world and is far away from main trading partners with relevant transportation costs. This is difficult to 
overcome.  
 (iv) Export finance, insurance and guaran tees, promotion, and marketing assistance 
 
Paragraph 56 of the Secretariat Report states that "[t]he Export Credit Guarantee Department of 
the New Business Venture Fund (NSA) was created to provide export credit insurance and guarantees. However, the NSA operates primarily as a venture capital fund that invests directly in 
start-up companies as well as in other venture capital funds (see section (3)(iii)). According to the 
authorities, the Export Credit Guarantee Department's guidelines are based on the OECD Arrangement on Export Credits and on the regulati ons established by members of the Bern Union. 
According to the authorities, the Export Credit Guarantee scheme has been essentially dormant for 
the past six years, during which the State has provided only insignificant amounts in export credits".  
Question 11 
It would appear from this text that Icelandic exporting companies maintain total liquidity. Is there a reason why the guarantee scheme has not been used? 
 
Answer 
The reason is that the credit guarantee scheme ha s not proven to be the effective instrument for 
the exporting firms as initially anticipated.  
 WT/TPR/M/273/Add.1 
 
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  (1) MEASURES DIRECTLY AFFECTING IMPORTS 
(v) Intellectual property rights  (a) Copyrights 
 
Paragraph 95 of the Secretariat Report states that "[c]opyrights in Iceland are protected under the Act No. 73/1972 on Copyright, which is administered  by the Ministry of Education, Science and 
Culture. The Act was amended several times as EU rules were transposed into Icelandic law 
(Table III.11). Under the present legislation copyrigh t protection is afforded to literary and artistic 
works for the author's, producer's or creator's life plus 70 years".  
According to paragraph 96 of the Secretariat Report, "Iceland works with other Nordic countries to 
coordinate a common policy through a working group made up of copyright experts from Denmark, Norway, Finland, Sweden, and Iceland. It also participates in the EFTA working group on 
intellectual property and has observer status in the EU contact committees for Directive 2001/29 
on the harmonization of certain aspects of copyrigh t and related rights in the information society, 
and Directive 2001/84 on the resale right for the benefi t of the author of an original work of art". 
 
Table III.11 National legislation on copyright, 2012 
Icelandic legislation Corresponding EU legislation 
Act No. 73/1972 on Copyright  
Terms of Protection  
Act No. 145/1996 Directive 2006/116/EC 
on the term of protection of copyright and certain 
related rights 
Act No. 9/2006  
Protection of semiconductor topographies, databases and computer programs  
Act Nos. 78/1993 and 78/1993 Council Directive 87/54/EEC 
on the legal protection of topographies of 
semiconductor products 
Act No. 60/2000 Directive 96/9/EC 
on the legal protection of databases 
Act Nos. 57/1992, 145/1996, 60/2000 and 9/2006 Directive 2009/24/EC 
on the legal protection of computer programs 
Resale rights  
Act No. 97/2006 Directive 2001/84/EC 
on the resale right for the benefit of the author of an 
original work of art 
Satellite and ca ble transmission   
Act 145/1996 Council Directive 93/83/EEC 
on the coordination of certain rules concerning 
copyright and rights related to copyright applicable to 
satellite broadcasting and cable retransmission 
Copyright in the information society   
Act No. 9/2006 Directive 2001/29/EC 
on the harmonization of certain aspects of copyright 
and related rights in the information society 
Source : European Commission (2011), Screening report Iceland, Chapter 7 - Intellectual property 
law, pp. 3-4. Viewed at: http://ec.europa.eu/enlargement/candidate-countries/iceland/index_en.htm [July 2012]. 
 
Question 12 Under the legislation currently in force, how does Iceland regulate copyright and related rights in 
digital media and Internet, as well as the liability of Internet service providers (ISPs)? 
 WT/TPR/M/273/Add.1 
 
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  Paragraph 97 of the Secretariat Report states that "[i]n October 2009, the authorities launched the 
copyright reform initiative, which foresaw a new draft Copyright Bill in 2012. However, this has been delayed till 2014 due to lack of funds. Th e main focus of the reform initiative is to: 
 
• Maintain Nordic legal unity; 
• promote respect for copyright with regard to cultural and economic importance 
for society; 
• promote efficient and preventive enforcement procedures; 
• promote legal alternatives for users; • promote balance between right holders and users; • launch information and awareness initiatives for right holders and users; and 
• stress the importance of international cooperation". 
 Question 13 
Although the proposed reform initiatives have been outlined, Colombia would like to know what 
substantive issues are addressed by the new draft Copyright Bill. Question 14  
Please provide a more detailed explanation of the information and awareness measures for right 
holders and users that Iceland has considered implementing.  
 
Question 15  
Exactly what efficient and preventative enforc ement procedures have been included in the 
aforementioned reform because they are considered viable in copyright matters?  
Question 16  
Does this bill seek to regulate the liability of ISPs in any way?  
Joint answer (questions 12-16) 
The question from the Columbian authorities, "und er the legislation currently in force, how does 
Iceland regulate copyright and related rights in digital media and Internet, as well as the liability of Internet service providers (ISPs)?", gives rise to considerations on the relationship between 
copyright, regulation of media, freedom of expres sion and censorship, data protection and the role 
and liability of telecom operators (internet service providers). To answer this question fully one 
would have to draw on the relative provisions of  the copyright act, the media act, the e-commerce 
act, the telecommunications act and the act on attachment and injunctions. 
 
Under the current regime of the above listed legal ac ts there is no regulatory body responsible for 
regulating copyright and related rights in digital media and the internet. The Icelandic Media 
Commission has a regulatory function of monitori ng audio-visual and print media in Iceland, 
including internet media, that are registered with the Commission. The E-commerce Act No. 30/2002, which transposes EU Directive 31/2000/EC on E-commerce, provides for the 
exemption from liability for telecom operators for hosting and delivering material through internet 
protocol networks. This has not prevented Icelandic courts from affirming injunctions sought against national operators of websites that have  played a role in the distribution of pirated 
copyright material. A recent amendment to the Ic elandic Copyright Act, Art. 59A, now provides 
that an injunction can be placed against a telecom operator for the provision of access to website that may be the source of infringing copyrighted material. This applies both for blocking access to 
national and foreign websites. 
 
As for question 13 there is not one draft copyright b ill as such, but rather a series of bills that are 
to be presented annually over the period of the refo rm initiative. The first bill became law in 2010, 
as amendment Act No. 93/2010. The purpose of this act was to clear the permission of libraries 
and museums to make their own copies of protected work for preservation purposes, for making works in such institutions available to users digitally on their premises, to widening the scope of 
exemption from exclusive rights granted to visu ally impaired people, to extend the extended 
collective licensing scheme for reprography and digitally equivalent methods to works of foreign authors, to introduce sanctions for contributory liability of copyright infringement, to prescribe in 
secondary legislation requirements for accreditation for copyright collection societies to fulfil the 
prerequisite conditions of directive 2006/123/EC, to introduce selected provisions from directive 2004/48/EC into the Iceland copyright act for dest ruction of infringing copies and equipment, 
calculation of damages, right to information from police and public prosecutors on the progress 
investigation of infringement cases, adoption of injunctions against intermediaries that may WT/TPR/M/273/Add.1 
 
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  contribute to copyright infringement (telecom operators). The substantive provisions of the 
upcoming draft amendment act to the copyright act include a revised chapter I (exclusive right of authors) and revision of provisions  on extended collective licensing. 
 
The Minister of Education, Science and Culture has stressed the importance of making legal 
alternatives in the field of music and film on-line available to users, so that they may refrain from seeking illegal alternatives. "Legal alternatives" for users refers to a series of meetings that the 
Ministry held with producers, publishers and righ t holders to encourage them to make their digital 
cultural content available for internet users is such a way that they would refrain from use illegal sources to gain access to such material. This refers both to a common problem in Iceland where internet users often do not have the option of le gal access to copyrighted material on the grounds 
that right holders have excluded the "territory of  Iceland" from their distribution network, and 
where available that right holders adopt a pricing policy and business models that will attract internet users. In relation to this issue it has to be mentioned that neit her e.g. iTunes, Spotify, 
NetFlix nor Amazon make their content legally  available in the territory of Iceland.  
On the issue of information awareness the Ministry has been working on distribution of information 
via a special web portal that will promote those le gal alternatives available, provide answers to 
common questions on what users may or may not do with copyrighted material. In addition the 
web portal contains also information for the right holders and academics in the field of intellectual property. The Ministry also takes part in an initiative conducted by the Icelandic Patent Office on training officials from the customs authorities and police. Further initiatives include promotion of 
copyright in the national curriculum for grammar schools. 
 
As for introduction of efficient and preventive enforcement measures the Icelandic Authorities have 
amended the Icelandic copyright act in line with Directive 2004/48/EC, even though that directive 
will not be adopted for EEA agreement, cf. more detailed explanation above on the substantive 
provisions of amendment Act No. 93/2010. In this respect the most effective measure is the 
possibility to obtain injunction against a telecom op erator for giving access to certain websites that 
may contribute to the illegal distribution of infringing copyrighted material. 
 
As for reply to question No. 16 on plans to regula te the liability of internet  service providers, the 
enforcement measures provided in Art. 59a of  the Icelandic copyright act do not imply a 
contributory liability for giving access to such websites. A blocking against certain websites in the form of an injunction against the telecom operator is therefore not regarded as having legal 
implications for the telecom operator in the form  of sanctions or duty to pay damages to the 
affected rightholders. In this respect it is worth to mention that the rightholders organizations have demanded the establishment of a public entity having the powers at administrative level to 
order blocking access to certain websites contributing to distribution of infringed copyrighted 
material. This suggestion is under consideration with the Icelandic authorities.  (b) Patents 
 
Paragraph 103 of the Secretariat Report states that "[a]n amendment was also made to allow for greater cooperation between Nordic Patent Offices and enable them to act as one. Compulsory 
licences are also allowed for the export of pharmaceutical products to developing countries facing 
severe health problems".  
Colombia would like to know more precisely how compulsory licences for the export of 
pharmaceutical products to developing countries facing severe health pr oblems are regulated.  
 Question 17 
Have any such licences been issued? If so, please send us the relevant summary information. 
 
Answer 
The authority to grant compulsory licences was insert ed in the Patent Act in 2005, cf. Art. 49(5) of 
the Act. The conditions for grant of such licen ce are outlined in Regulation No. 1011/2006. 
Compulsory licences are, subject to the fulfilment of all conditions (Art. 4), granted only by a 
District Court (Articles 5 and 6). The compulsory licence holder is only authorized to manufacture 
the pharmaceutical product specified in the licence and may only export the product to countries specified in the licence (Art. 7). Eligible countries for import of products are those who fulfil the conditions of Art. 3 of the Regulation. The co mpulsory licence holder is obliged to publish 
information on the licence on his website or a site hosted by the WTO (Art. 9). Information in this WT/TPR/M/273/Add.1 
 
- 20 - 
 
  regard should also be sent to the IPO (Art. 9(3)), which notifies the TRIPS Council of the 
compulsory licence (Art. 10). 
 
For an English translation of the Regulation, see: 
http://www.els.is/media/banners/Regulat ion%20on%20compulsory%20licenses.pdf. 
 IV. TRADE POLICIES BY SECTOR 
(1) AGRICULTURE 
(iii) Agriculture policies  Question 18 
What are the ad valorem equivalents of the compound  tariffs on agricultural products, in particular 
milk and meat products, horticultural products, plants and coffee? 
 
Answer 
Due to administrative restraints the ad valorem eq uivalents for the relevant agricultural products 
have not been calculated recently. No duties are applied to most horticultural products, limited 
duties are applied to important plants and coffee can be imported duty free. 
 According to paragraph 14 of the Secretariat Report, "[u]nder its Uruguay Round Schedule, Iceland reserved the right to provide export subs idies for 1,797 tonnes of sheep meat up to a limit 
of SDR 9.3 million, and 3.16 million litres of milk up to a limit of SDR 2.6 million. However, 
according to the notifications made to the Commit tee on Agriculture, Iceland did not provide any 
export subsidies between 31 August 1998 and 31 August 2008. However, under Regulation No. 
535/2003 on Price Equalization for Exports of Goods made from Agricultural Raw Materials, the 
Ministry of Industries and Innovation  may authorize the Customs Office to refund the exporter the 
difference between the cost of raw materials in the international and domestic markets. In 2011, 
ISK 2.7 million (about US$ 23,274) was budgete d for the price compensation mechanism". 
 
Question 19 What are the annual amounts that are given per product to Icelandic exporters in order to equalize 
the prices of imported and domestic raw materials used in their production? 
 
Answer 
In 2011, a total of 2.7 million ISK (about US$ 23,274) were allocated in the state budget. 
However, the total utilized amount was 1.8 m illion ISK (about US$ 15,750) according to the 
Icelandic State Account. Individual breakdown cannot be provided since the application provides 
such a few companies and products, as this might disclose privileged trade information. 
 (b) Domestic support  
Paragraph 21 of the Secretariat Report states that "[a] levy collected at the wholesale level 
for marketing sheep meat amounted to ISK 13 million in 2010". According to paragraph 22, "[u]nder Regulation No. 4/2011, production of tomatoes, cucumbers and sweet peppers is also 
supported by direct payments linked to production as well as through electricity subsidies and 
marketing and research programmes".  
Question 20 
Could the Government of Iceland provide more detailed information on the objective of these 
production subsidies and on how they work? 
 
Answer 
According to Art. 20 of the Agricultural Act (the Act on the Production, Pricing and Sale of 
Agricultural Products, No. 99/1993,) a levy shall be collected at the wholesale level. The collected 
amount shall be utilized locally for promotion activity. In 2010 this amount was 13 million ISK 
(about US$ 112,069).  The market measures applied to vegetable production, are based on an Agreement between the 
Government and the Farmers' Association concerni ng the framework of support to horticulture. 
The current Agreement took effect in 2002 and has been extended throughout 2015. The measures are implemented through the Agricultural Act. The agreement was concluded as a part of the adjustment program for horticultural farmers when customs tariffs for vegetables were 
abolished, except for seasonal production of cabbage grown outdoors, mainly falling within HS-WT/TPR/M/273/Add.1 
 
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  heading 0704, and 0706. The objectives of the me asures prescribed by the current Agreement 
correspond to Article 57 of the Agricultural Act and are relevant for all policy measures applied in the sector:   
a. to lower consumer prices on imported as well as domestic horticultural 
products;  
b. to improve the efficiency and competit iveness of domestic horticulture for the 
benefit of both producers and consumers;  
c. to improve the income base of horticultural producers;  d. and to improve the production and marketing opportunities of domestic 
production when it is sufficient in both quantity and quality. 
 
No market measures are applied to vegetable production and processing, except for customs duties, tariff rate quotas, and certain limited support schemes.  
 
Under an associated arrangement to the Agreement between the Government and the Farmers' Association concerning the framework of support to horticulture, implemented through the state 
budget, the Icelandic government provides for support for distribution of electricity for the benefit 
of greenhouse farmers. The amount availabl e in 2011 is approximately 213 million ISK. The 
support is administered by the Ministry of Industries and Innovation and granted through 
cooperation with the distribution companies linking it to individual farmers. 
 
According to the Agreement between the Government and the Farmers' Association concerning the framework of support to horticulture, support is provided for promotion, research, development 
and projects for educational purposes. The available amount in 2011 is approximately 31 million 
ISK. The amount is paid to the Agricultural Pr oductivity Fund, and the funds are allocated to 
farmers based on operational instructions set by the Association of Horticultural Producers. 
 
Question 21 The Secretariat Report mentions that the most recent notification from Iceland on domestic support to the WTO Committee on Agriculture was for the calendar years 2001, 2002, and 2003. 
Colombia invites the Icelandic Government to update these notifications. 
 Answer 
Iceland intends to present its outstanding domestic support notifications before end of February 2013.  
EU 
 
Secretariat Report, WT/TPR/S/273 
 
III TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS (vi) Contingency measures 
 
Page 30, Para 38 - Anti-dumping and subsidies 
In paragraph 38 it is mentioned that: "Under th e Regulations, a claim concerning dumping or 
subsidies must be made to the Minister, who refers it to the Committee on Anti-Dumping and 
Countervailing Duties. The Committee may make preliminary findings to reject or uphold the claim. If the claim is upheld, the Committee may impose preliminary anti-dumping or countervailing duties for up to twelve months and must notify, in the Official Gazette , that it 
intends to start a full investigation. In addition, the complaining party and other interested persons 
(including exporters, importers, and the Governme nt of the exporting country) must be directly 
informed of the investigation. During the investigation, which should not take longer than one 
year, the Committee may hold hearings and invite interested parties to make submissions. The 
final decisions of the Committee are published in the Official Gazette. If the Committee decides to 
impose anti-dumping or countervailing duties on imports of a product (cannot be applied 
simultaneously) the maximum period is five years, renewable if a complaining party can show that 
removal of the measure would lead to injury."  WT/TPR/M/273/Add.1 
 
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  Question 1 
Could Iceland explain how the provisions described  here above comply with articles 17.3 and 17.4 
of the Agreement on subsidies and countervailing measures and articles 7.3 and 7.4 of the AD 
Agreement, according to which "provisional measures shall not be applied sooner than 60 days 
from the date of initiation of the investigation and the application of provisional measures shall be 
limited to as short a period as possible, not exceeding four months."? On the basis of the information recalled above, the provisions of the regulations that govern AD and SCM that Iceland 
is applying seem to be inconsistent with WTO agreements since they allow the application of 
measures before the initiation of an investigation, from the moment that the claim is upheld, and the duration of these preliminary measures may be up to 12 months, instead of the 4 months that WTO agreements provide. 
Answer 
The Committee on Anti-Dumping and Countervailing Duties is authorised in the Customs Law to 
impose anti-dumping and countervailing duties temporarily until further information is available, if 
a delay is considered likely to cause damage. The committee is therefore only authorised but not 
obliged to do so. It is also correct that the customs law only restricts the application of preliminary anti-dumping or countervailing duties for up to 12 months but not 4 months, as the WTO 
agreement provides.  
 In this regard it should be noted that The Customs Law does not prevent the Committee on Anti-Dumping and Countervailing Duties from applying pr eliminary measures for a shorter period, e.g. 
in accordance with the rules in the aforemention ed Agreements. It should further be noted that 
according to Icelandic norms on statutory interpretation Icelandic law should be construed in accordance with Iceland's international obligation. Icelandic law thus does not prevent that Iceland 
can fulfil its obligations under the WTO agreements. 
 As stated in paragraph 83 of the report, Iceland has not resorted to anti-dumping or countervailing 
measures. If Iceland were to impose Anti-Dumping or Countervailing Duties such application it 
would be applied in compliance with the rele vant WTO agreements including AD and SCM. 
 (3) MEASURES AFFECTING PRODUCTION AND TRADE  
(iv) Standards and other technical requirements 
(b) Sanitary and phytosanitary measures Page 44, Para 81 
This section of the report describes the policy and legislation on food safety as well as animal and 
plant health. It is reported that Iceland, as a me mber of the EEA has applied EU legislation on SPS 
matters but that Iceland continues restrictive import policies on fresh meat, raw eggs and animal 
products not for human consumption.  
Question 2 
Could Iceland clarify whether they have undertaken a scientifically valid risk analysis to justify the 
severe restrictions on imports of fresh meat and meat products? In this case, could they submit 
more information on the risk analysis carried out? 
 Answer 
A scientifically valid risk analysis has been carried out regarding the risk involved in the importation of raw meat. There it is concluded that it cannot be excluded that the importation of raw pork, broiler meat and beef could have a negative impact on the public health in Iceland. The 
assessment is that such importation would lead to a higher proportion of meat on the market in 
Iceland, in which zoonotic agents would be present. In addition it is likely that the meat would contain more virulent strains of bacteria than has previously been detected in Iceland. It is also concluded that all actions that could alter the curr ent animal disease status in Iceland should be 
taken with caution and must be given thorough consideration so that accidental introductions of 
new transmissible agents with unforeseen catastrophic consequences do not take place. This is due to the centuries of isolation of Icelandic liv estock breeds, i.e. cattle (dairy cows), horses, 
sheep and goats and therefore the animals are su sceptible, i.e. are immunologically naïve to 
various transmissible agents common overseas, some of which are even considered as harmless.  WT/TPR/M/273/Add.1 
 
- 23 - 
 
  Question 3 
Could Iceland clearly define the restricted products? In particular, could Iceland clarify whether 
there is secondary legislation that defines more in detail the restricted products listed in Table 
III.10?   
Answer 
The primary legislation on restricted products can be found in article 10 of the Act No. 25/1993 on 
animal diseases and prevention against them. The secondary legislation on this subject is the 
Regulation No 448/2012.  
Question 4 
Could Iceland explain in which manner the trade restrictions could be lifted? In case a Ministerial decree will be issue, could Iceland clarify which are the criteria that will be followed for imposing such trade restrictions?  
 
Answer 
Art. 10 of Act No. 25/1993 on Animal Diseases and Disease Prevention stipulates a ban against 
import of raw meat and raw eggs. The same applies to non-disinfected raw skins and hides, 
farmyard manure and compost mixed with manure, import of which is not authorised.  
According to Article 4 of Regulation No. 448/2012 on measures to prevent the introduction of 
animal diseases and contaminated products into Ic eland, the Minister of Industries and Innovation 
has the authority, following a positive recommendation from MAST, to permit the importation of products otherwise prohibited by the aforementi oned Article 10 the recommendation has to be 
based on international risk assessment following standards laid down by OIE, CODEX and the SPS 
agreement, of which Iceland is a member, cf. Arti cle 9 of Regulation No. 448/2012. The required 
permit from the Ministry and the certificates in  order to permit importation are listed in the 
aforementioned Regulation. These documents have to be shown before customs clearance can 
take place.  
Question 5 
Could Iceland confirm that they will commit to publish a list of tradable products and a list of risk 
mitigation measures that meet the appropriate level of protection? 
Answer 
Iceland has no intention of publishing such a list.  However, Iceland can confirm that all products 
that meet the criteria listed in Regulation No. 448/2012 will be allowed for imports.  The text of the 
regulation is available at:  http://www2.mast.is/Uploads/document/Re glugerdir/Reglugerd448_2012english.pdf. 
IV. TRADE POLICIES BY SECTORS 
(2) FISHERIES  
(ii) Policies 
 
Page 67, Para 37 - Fees and taxes on exports of fish products  According to the report, the main legislation for fishery is the Fisheries Management Act 1990. In 
August 2006, the Fisheries Management Act was consolidated to include all amendments up to 
that date and re-issued as Act. No. 116/2006. According to publicly available information, it seems that a provision in Act No. 116/2006 on Fisheries Management has not been applied. The provision 
at stake would allow for the deduction of a premium from a vessel's catch quota due to catch 
which is exported to an approved auction market without the final weighing and recording of the catch having taking place in Iceland. Against this background: 
 
Question 6 Could Iceland clarify whether the provision in Act 116/2006 has been, in addition to not been 
applied, abrogated or simply suspended? 
Answer 
The abovementioned provision is applied in Icelan d. The deduction from a vessel's catch quota is 
5% if the catch is not weighed in Iceland before export, which is the general legal requirement, while exporters can be exempted from that duty pr ovided that the exported fish is weighed in an WT/TPR/M/273/Add.1 
 
- 24 - 
 
  auction market abroad which has been approved by the Icelandic Directorate of Fisheries. The 
weight recorded at such markets is generally a minimum weight while in Icelandic harbours the exact weight is recorded. Further, it has been sci entifically estimated that the weight loss (drip) 
during export may amount to 5%. Thus, the rationale for the deduction is to secure, as far as 
possible, equal status of quota holders regardless of whether their catch is weighed directly after 
landing or in an approved auction market abroad. Thus the measure in question is a fisheries management issue rather than being a trade issue. 
(4) SERVICES  
(i) Financial sector  (a) Banking 
 
Pages 71- 75 - Ownership of companies with  fishing operations and primary fish 
processing companies 
 
According to the report, the Government of Iceland bailed out and took control of some financial institutions.  
 
Question 7 Could Iceland clarify whether the bailed out, government controlled financial institutions control stakes (shares, loans) in fishing companies and primary processing companies? 
 
If yes, could Iceland provide information on th e size of such ownership, e.g. total amounts 
involved, percentage of the publicly controlled ownership vis-à-vis  total capitalization of the 
fisheries sector? 
 Answer 
Iceland can only inform about the relevant legal prov isions that stipulate the permitted activities of 
financial undertakings. The detailed information requested is however not available.   Chapter IV of Act No. 161/2002 on Financial Undertakings lists authorized activities for commercial 
banks, savings banks and credit undertakings (Articles 20- 23). For the purpose of this question 
Article 22 is of the most importance. 
 
According to Article 20 of the Act the activities of commercial banks and savings banks may 
include the following:  
1. Acceptance of deposits and other repayable funds from the public. 
2. Lending activities, including: 
a. consumer credit; b. long-term mortgages; 
c. factoring and the purchase of debt instruments; and 
d. commercial credit. 
3. Financial leasing. 
4. Payment Services in accordance with the Act on Payment Services. 
5. Issuing and administering of payment document s e.g. travellers' cheques and bankers' drafts. 
6. Providing guarantees and commitments. 
7. Trading for own account or for account of customers in: 
a. money-market instruments (cheques, b ills, other comparable instruments, etc.); 
b. foreign exchange; c. futures and swaps (options); 
d. exchange and interest-rate instruments; and 
e. transferable securities. 
8. Participation in placing securities, services related to such placing and admission of securities to 
trading in a regulated market. 
9. Providing advice to undertakings on capital stru cture, strategy and related issues, and advice as 
well as services related to mergers and acquisitions. 
10. Money broking. 
11. Portfolio management and advice. 12. Safekeeping and administration of securities. 13. Credit reference (credit rating) services. 
14. Safe custody services. WT/TPR/M/273/Add.1 
 
- 25 - 
 
  According to Article 21 of the Act, commercial banks, savings banks and credit undertakings may 
pursue other activities naturally linked to their authorized activities listed in Article 20. 
 
In addition to services as provided for in Article 20, commercial banks, savings banks and credit 
undertakings may pursue ancillary activities, provided this is a normal extension of the 
undertaking's financial services. The provisions of the first sentence of this paragraph shall also apply when a financial undertaking has a holding in or participates in other business activity. 
Notification must be sent to the Financial Supervisory Authority of any intention to pursue the 
activities provided for in this article. Such noti fication must be accompanied by information on the 
proposed activity deemed to be satisfactory by th e Financial Supervisory Authority. If the Financial 
Supervisory Authority raises no objection to the proposed activity within one month of receiving 
satisfactory notification, this shall be interpreted as authorisation for commencing the activity. The 
Financial Supervisory Authority may require that a separate company pursue this activity, in which 
case it must notify the party concerned of its deci sion within the time limit specified above. Failure 
to send a notification in accordance with this paragraph may result in prohibition of the activity by 
the Financial Supervisory Authority or its demand that the activity be pursued by a separate company. 
 
Commercial banks, savings banks and credit undertakings may, pursuant to special agreement upon receiving the authorisation of the Financia l Supervisory Authority, undertake to provide 
postal service on behalf of a party authorized to provide such service. They are furthermore 
permitted to provide services on behalf of other entities, such as insurance companies, pension 
funds and other financial undertakings, provided that such activities are not deemed by the 
Financial Supervisory Authority to prejudice their ability to provide services in accordance with 
their operating licenses or prejudice its own ability to regulate the activities. The Financial 
Supervisory Authority shall be notified in advance of the intentions of the entity in question so that 
its assessment is available before provision of the service commences.  
 
According to Article 22 of the Act, commercial banks, savings banks and credit undertakings may 
only pursue activities other than those listed ab ove on a temporary basis and for the purpose of 
concluding transactions or reorganizing the activities of customers. A reasoned notification to this 
effect shall be sent to the Financial Supervisory Authority. If a commercial bank, savings bank or 
credit undertaking, or their subsidiary, has needed to take action pursuant to the first sentence and taken over at least a 40% holding in its client , the provisions of Chapter VII and VIII of Act 
No. 108/2007 on securities transactions shall apply to the client, as applicable. The Financial 
Supervisory Authority is permitted to grant an exemption from the provisions of the third sentence, provided that financial reorganisation is  completed within six months from the time that 
the commercial bank, savings bank or credit und ertaking, or their subsidiary, commenced the 
operation. The Financial Supervisory Authority shall assess whether the financial conditions in the first sentence are met, and reorganisation shall be completed before twelve months have passed from the time that operations pursuant to the first sentence began. The Financial Supervisory 
Authority may extend the deadline pursuant to the fifth sentence, and an application shall contain 
reasoning regarding the circumstances that prevent the sale. 
 
Commercial banks, savings banks and credit undertakings may take over assets to secure 
payment of claims. Such assets must be  sold as soon as this is feasible. 
 
(5) TOURISM  
 Page 82, paragraphs 106-107  
The Report mentions that Iceland has identified tourism as a focus sector and that the Parliament 
in 2011 has approved a new public strategy for tourism. Furthermore, according to the report, the authorities are trying to promote Iceland as a year round destination by marketing unique natural 
phenomena such as northern lights and winter festivals.  
Against this background, the EU would like to understand how this relates to Iceland's limitations in its GATS schedule for tourist guides.  
 
Question 8 Taking into account Iceland's limitation in Mode 3 and 4 (licensing, deposits or liability insurance, residency for authorized tourist guides) could Iceland inform whether the GATS limitations reflects WT/TPR/M/273/Add.1 
 
- 26 - 
 
  the current autonomous level of liberalizations and whether it considers those limitations as 
barriers for the services providers?  Answer 
The national legislation provides for more generous market access for tourist guide services then the limitations under Iceland's Schedule of Commitment indicate. The national legislation does not entail residency requirements or other limitations referred to in the question. 
Government Report, WT/TPR/G/273 
II. ECONOMIC ENVIRONMENT  
(2) FOREIGN TRADE (ii) Various 
 
Page 9, Para 28  
According to the Government's Report, around 90% of imported fuel is used by the fishing fleet 
and for general transportation (around 600 million tons in 2011). […]"  
Question 9 
Could Iceland specify whether fuel used by fishing vessels is subject to taxes, and if yes, which 
ones? 
Answer 
The fuel used by the fishing vessels is not subject to the general excise taxes on fossil fuel for 
motor vehicles. However all fossil fuels imported to Iceland are subject to a Carbon tax on fossil 
fuels, including fuels for fishing vessels. The amount  of the tax is based on the price of emission 
allowances in the EU ETS. The fishing vessels mo stly use crude oil for their operation. Currently 
the tax is 7.10 ISK (0,04 Euro) per litre of crude oil. If calculated to the price of the emission 
allowances in the EU ETS the tax on crude oil amounts to 14 Euros per tonne emitted of carbon dioxide. In addition to this all fuels, includin g fuel for the fishing vessels, are subject to 25.5% 
VAT. 
 JAPAN 
 
Report by Secretariat(WT/TPR/G/273) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) MEASURES AFFECTING PRODUCTION AND TRADE  
(vii) Competition policy  
Page 54, Paragraph 130 
 Report by Iceland(WT/TPR/S/273) 
 
II. ECONOMIC ENVIRONMENT 
(3 STRUCTUAL REFORMS  (iv) Competition Policy 
 
Page 11, Paragraph 41  
Question 1 
According to the reports, the 2011 amendment to the Competition Law gives the Competition 
Authority the power to respond to any market situation or action by any enterprise that would restrict competition even if there is no breach of any specific part of the law. Japan would like to know how the authority ensures transparency. Ar e there any guidelines or criteria to judge 
whether competition is restricted? 
 Answer 
According to the abovementioned amendment to th e Competition Act, the ICA has the authority to 
respond to circumstances or conduct which prevents, limits or affects competition to the detriment WT/TPR/M/273/Add.1 
 
- 27 - 
 
  of the public interest. Circumstances means among other things, factors connected to the 
attributes of the market concerned, including th e organisation or development of companies that 
operate in it. Conduct means all forms of behaviour, including failure to act, that are in some way detrimental to market competition without being in violation of the Act's ban provisions. 
 
When applying this provision, which has not ye t been done, the ICA will have to define the 
relevant market and clearly establish the circumstances or conduct which prevents, limits or 
affects competition. It is clear that this provisio n will only be used exceptionally and the remedies 
shall be proportionate to the circumstances or conduct concerned. The ICA will implement 
thorough provisions to the ICA's Rules of Procedur e in order to ensure transparency regarding the 
procedure of this market test, although it is not possible to give complete guidelines on the 
assessment on whether competition is restricted. 
 KOREA 
 PART I: Questions Regarding the Secretariat Report 
 
I. ECONOMIC ENVIRONMENT 
 Page 5 (Para 12)  
Fiscal consolidation is continuing, albeit at a slower pace than envisaged. There have been 
expenditure overruns at the central government le vel. However, on the revenue front, legislation 
that will increase the fishing levy has recently been passed and is expected to raise US$110-120 
million.  
 Question 1 
Despite Iceland's notable efforts, given the continued euro zone fiscal crisis, it seems that it has 
not been easy to implement the fiscal consolidation measures as planned. Could Iceland provide the detailed fiscal consolidation roadmap?   
Answer 
The current fiscal consolidation plan presented with the 2012 budget proposal, aims for a surplus 
of ISK 17 bn in the total balance in 2014. The bu dget for 2013 assumes a slight deficit on the total 
balance which amounts to ISK 2.8 bn, or 0.1% of  GDP. In 2014 the total balance is expected to 
become positive by ISK 17.8 bn, or 0.9% of GDP, according to the revised fiscal plan.  
The prospects for reaching a surplus on the total balance in 2014 are good, resting on three main 
factors; continued economic growth, increased revenue from natural resources and fiscal restraint measures. Good prospects also remain for a positive primary balance on the Treasury in 2012, as the budget proposal assumes a positive primary balance of just over ISK 60 bn in 2013. 
 
Restraint measures are taken with the aim of safeguarding welfare services, the education system, and law enforcement and focus more on expenditure cutting in general administrative operations. 
This has been in line with the government's obje ctive to shield the welfare system. In the 2013 
proposal, expenditure measures of 1.75% in the turn over of general public services will come into 
force, as well as 1.2% in benefit systems and health insurance, 1% in education and 0.5% in 
public order and safety. No restraint measures will take place in operational costs of hospitals, 
health care clinics, medical institutions and nur sing homes. New revenue measures include carbon 
and energy taxes, as well as an increase in the levy for fisheries‘ utilisation of natural resources. 
Further revenue is to be ex pected from asset sales. 
 
As of 2011, the debt-to-GDP ratio for the central government was about 84% and 11% for the local governments. As of this year, however, general government debt is on a downward trend. 
The Treasury should be able to reduce debt in the coming year s by running a disciplined fiscal 
policy along with increasing economic growth.  WT/TPR/M/273/Add.1 
 
- 28 - 
 
  II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
 Page14 (Para 14)  
Although a number of notifications have been submitted to the WTO, particularly on agriculture 
and regional trade agreements (Table II.1), as of  end-July 2012 a considerable number of regular 
notifications remained outstanding (Table II.2). 
 
Question 2 Could Iceland state when these outstanding notifications will be made?   
Answer 
Iceland is working actively on notifications th at are outstanding towards the WTO. Iceland has 
already submitted several outstanding notifications prior to the TPR meeting, and intends to 
submit outstanding notifications in the coming months. 
 
IV. TRADE POLICIES BY SECTOR 
 
Page 70 (Para 51)  The legislation covering the energy sector in Icel and is set out in Act No. 57/1998 on Survey and 
Utilization of Ground Resources, and Act No. 65/2003 on Electricity. Both Acts are administered by 
the National Energy Authority. Under these laws, investment and/or ownership of energy exploitation rights and the production and distri bution of energy are limited to EEA and EFTA 
residents. 
 Question 3 
Does Iceland have a plan to open the energy sector to non-EEA countries for attracting further 
investment?  Answer 
Currently, there are no plans to open the energy sector to investors from non-EEA countries. However, the Government has initiated a committee with the aim to review Act No. 34/1991 on Investment by Non-residents in Business Enterprises, including the energy sector. 
 
PART II: Questions Regarding the Government Report 
 
II. ECONOMIC ENVIRONMENT 
 Page 10 (Para 35)  
Following the financial crisis in the autumn of 2008 and the restructuring of the banking system, 
the Icelandic government set out a State ownership policy in financial companies. The centrepiece of the policy was the creation of a new agency, the Icelandic State Financial Investments, to 
manage the State's holdings in financial undertakings.  
 Question 4 
Could Iceland elaborate on the State ownership policy in financial companies? Is there any 
possibility to change this policy through, for example, divestment of the State's holdings, if 
circumstances dictate such a need?  
Answer 
It is important to distinguish between the state ownership policy of financial undertakings and the 
current government policy regarding any divestme nt of state holdings. The state's ownership 
policy is intended to define the objectives of the state as the owner of financial undertakings. The 
policy covers four main areas:   
1. The state's objectives in its ow nership of financial undertakings  
2. The organization of the ownership function with in the state, i.e. the responsibilities of each 
entity and how they relate to each other.  3. The principles laid down by the state as owner.  WT/TPR/M/273/Add.1 
 
- 29 - 
 
  4. Requirements and criteria in the management of financial undertakings which the state owns a 
stake in.  The current government policy, not stated in the ow nership policy, is to sell shares in two of the 
largest banks in Iceland and in the Icelandic Saving banks. This is stated in a bill that is currently 
being discussed in the Parliament. The divestment of these shares would mean that the state would only have about 70% in one of the largest banks in Iceland (Landsbanki). This would most 
likely result in changes being made to certain objectives in the state ownership policy. However, 
the principles laid down, requirements and criteria for management would most likely stay the same in the policy.  
 
MEXICO 
 
Summary 
 
Page viii, paragraph 11  
Question 1 
Paragraph 11 on page viii refers to legislation on investment incentives which provides for aid as high as 35 per cent for small enterprises, 25 pe r cent for medium-sized enterprises and 15 per 
cent for large enterprises. What do these incentives consist of? How do the investment agreements 
mentioned in this same paragraph work? How are foreign investors treated under this legislation? 
 Answer 
Act No. 99/2010 is a framework legislation regarding incentives for initial investments in Iceland. The legislation is applicable to all foreign investment in Iceland, regardless of origin, taking into account specific restrictions in other legislation. Incentives are offered to companies that are 
investing in commercial operations in Iceland. The investment projects need to meet 
requirements, such as being beneficial for the Icelandic economy and society, in terms of job 
creation, rural development, export and tax revenues and knowledge. Approved investment projects will receive benefits  in return, including derogations from taxes and 
charges. In addition, authorization to fix the rate of income tax, in line with the current rate of 
income tax, for 10 years can be granted, as well as exemption from customs and excise duties on importation or domestic purchase of construction materials, machinery and equipment for the 
building and operation of the investment project.  
 The authorization of the Government to grant incent ives in the form of regional aid are restricted 
by the obligations of the Government of Icelan d under the EEA Agreement. An incentive in the 
form of regional aid pursuant to the Act No. 99/2010 will normally not exceed 15% of the defined investment cost of the investment project for which an application is made. For a medium-sized enterprise, the maximum incentive is 25% of the investment cost, and for a small enterprise the 
maximum incentive is 35% of the investment cost. In cases where the investment cost of an 
investment project exceeds EUR 50 million, the proportion of maximum permitted aid will be 
reduced to the levels provided in line with the total investment cost. 
 
According to the Article 8 of the Act, regional aid may take the form of a direct public cash grant 
for the investment project in question to the company that has been formed for the new 
investment and which will construct and operate the investment project. This shall constitute an 
initial cash grant, which accrues at the start of the project and regards the maximum incentive pursuant to the Article 7.  
Under Article 9, regional aid can take the form of derogations from taxes or public levies relating 
to the investment project in question.   
Regional aid under Article 10 may take the form of a sale or lease by the State or a municipality of 
land or a site owned by the State or a municipality for the investment project in question to the company which is formed for the purpose of the new investment and constructs and operates the 
investment project at a price under the normal market price.  
 The government authorities are permitted to grant for new investments in Iceland, irrespective of the location of the investment project accordin g to the Article 10. The authorization of the WT/TPR/M/273/Add.1 
 
- 30 - 
 
  Government to grant non-regional incentives are however, restricted by the obligations of the 
government of Iceland under Articles 16–64 of the Agreement on the European Economic Area.  A general incentive in respect of a new investment  under Article 11 may take the form of training 
aid to meet the incurred cost of training personnel in connection with a new investment. The 
maximum training cost aid is EUR 2 million for each investment project. It may also take the form of an incentive in respect of new investments in research and development (Article 14). 
 
The investment project may also take the form of an incentive to enterprises in respect of environment-related new investments which contain improvement or innovation in environmental protection, i.e. reduced use of energy or redu ced emissions of greenhouse gasses (Article 15). 
 
II. ECONOMIC ENVIRONMENT 
(3) D
EVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
 
(i) Composition of trade  
Paragraph 19, page 8 
 Question 2 Paragraph 19 on page 8 mentions that imports of automotive products declined sharply. What 
were the reasons for this? 
 Answer 
The financial crisis and the collapse of the banking system resulted inter alia in more than 70% depreciation of the Icelandic krona. Consequently , the prices of imports of automotive products 
increased significantly, which resulted in sharp decrease in imports.  
 
III. TRADE POLICY REGIME 
(1) G
ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  
 
Question 3 
Paragraph 2 on page 11 states that on 20 October 2012 a national referendum was to be held on amendments to the Constitution. Did this refe rendum take place? What do the amendments 
entail? If the referendum has taken place, what was the outcome? 
 
Answer 
The advisory referendum was held on 20 October 2012 on the proposals by the Constitutional Council for a draft Constitutional Act and particular points relating to the proposals. Election turnout was 49%. The following questions were put to the electorate in the referendum: 
1. Do you wish the Constitution Council's proposals to form the basis of a new draft 
Constitution? Yes, said 66.9% of those who voted. 2. In the new Constitution, do you want natural resources that are not privately owned to 
be declared national property? Yes,  said 82.9% of those who voted. 
3. Would you like to see provisions in the new Constitution on an established (national) church in Iceland? Yes, said 57.1% of those who voted. 
4. Would you like to see a provision in the new Constitution authorizing the election of 
particular individuals to the Althingi more than is the case at present? Yes, said 78.4% of those who voted. 5. Would you like to see a provision in the new Constitution giving equal weight to votes 
cast in all parts of the country? Yes, said 66.5% of those who voted. 
6. Would you like to see a provision in the new Constitution stating that a certain proportion of the electorate is able to dema nd that issues are put to a referendum? Yes, 
said 73.3% of those who voted. 
 
The matter will now be further processed by th e Parliament, based on the proposals by the 
Constitutional Council and the outcome of the advisory referendum. 
 WT/TPR/M/273/Add.1 
 
- 31 - 
 
  (2) T RADE POLICY DEVELOPMENT AND OBJECTIVES  
(i) Agencies involved in trade policy implementation  Question 4 
According to paragraph 9 on page 12, the private sector's views are taken into account in 
formulating trade policy through regular consultations. Is the private sector's view taken into account in all areas of trade policy? How often are the consultations held? 
 
Answer 
It's always the goal of the government to include and respond to observations and to adhere to the needs of the private sector and businesses. That is the case whether the government is 
conducting a new comprehensive approach, formulatin g a policy, writing a bill of law or negotiating 
an international or bilateral instrument. The consultations are held on an "ad hoc" basis whenever the views of the industries are considered to have relevance. 
 
(3) T
RADE AGREEMENTS AND ARRANGEMENTS  
(i) World Trade Organization, paragraph 12, page 13 
 
Question 5 Do the free trade agreements recently concluded by Iceland include provisions on regulatory 
cooperation in their chapters on technical barriers to trade? If so, please describe these provisions. 
 
Answer 
Iceland, as a committed member of the WTO, includes a reference in all new FTAs to the WTO 
Agreement on Technical Barriers on Trade. 
 
Furthermore, Iceland has a more comprehensive description of TBT rules in the EFTA (Vaduz) 
Convention as a member of EFTA, in the EEA Agre ement, as a member of the European Economic 
Area, and also in the Hoyvik FTA between Iceland and the Faroe Islands, Iceland's most comprehensive FTA.  
(4) F
OREIGN INVESTMENT REGIME  
 Question 6 
Paragraph 28 states that restrictions on foreign ownership have not been changed since the last 
R e v i e w  o f  I c e l a n d .  W i t h  e x c e p t i o n s ,  f o r e i g n e r s  m u s t  o b t a i n  a  p e r m i t  f r o m  t h e  M i n i s t r y  o f  t h e  Interior to own real estate in Iceland. These exceptions include foreigners resident in Iceland, 
citizens of other EFTA or EU countries, and enterprises resident in or with their headquarters or 
main operations in other EFTA or EU countries. Please provide further details concerning the exceptions mentioned for obtaining a permit from the Ministry of the Interior to own real estate. We would also like Iceland to provide more information on existing restrictions on foreign 
investment in the case of activities reserved for the State. 
 Answer 
According to the Act on the Right of Ownership and Use of Real Property No. 19/1966, 
general  restrictions on acquiring the right to own or use real property in Iceland are as follows: 
 
In case of an individual:  
- he/she shall be an Icelandic citizen or have domicile in Iceland.  
In case of companies: 
-if several individuals are involved in a company and each bears unlimited liability for the 
depts of the company, they shall all be Icelandic citizens or shall have been domiciled in Iceland for at least five continious years. 
-in the case of a company in which some members bear unlimited liability, and others only 
limited liability, for the company's debts, all those who bear unlimited liability shall be Icelandic citizens or shall have been domiciled in Iceland for at least five continious years. 
-in the case of a company in wich none of the members bears unlimited liability for the 
company's debts, or an institution, the company or institution shall have its domicile and venue in Iceland and all its directors shall be Icelandic citizens or shall have been domiciled in Iceland for at least five continuous years.  WT/TPR/M/273/Add.1 
 
- 32 - 
 
  -in case of joint-stock companies, 4/5 of the share capital shall be owned by Icelandic 
citizens and Icealandic citizens shall exercise the majority of the votes at shareholder's meetings.  
If a foreign individual or a company does not fulfill these general restrictions they can apply for the 
Minister's exemption, followed by necessary documents.  
 
The permisson of the Minister is not required wh en the party involved enjoys rights in Iceland 
under the rules of the Agreement on the European Economic Area, of the Convention establishing 
the European Free Trade Association, and the Hoyvík Agreement concerning the Faroe Islands.  
 
The abovementioned incidents fall under Regulati on No. 702/2002 on these rights of foreigners 
who fall under the EEA Agreement or the EFTA Convention, which stipulates the conditions of such rights.  
 
Regarding existing restrictions on foreign investment in the case of activities reserved for the State, Article 4 of the Act No. 34/1991 on Investment by Non-residents in Business Enterprises 
stipulates that only Icelandic citizens and other Icelandic persons are permitted to own energy 
exploitation rights as regards waterfalls and geot hermal energy for other than domestic use. The 
same applies to enterprises which produce or distribute energy. Individuals domiciled in another member state of the European Economic Area and legal persons which are domiciled in another 
EEA member state shall have the same right. Electricity distribution companies must be under the 
majority ownership of public parties according to the Electricity Act. All six distribution companies 
operating in Iceland are entirely owned by either local municipalities or the State. 
 
IV. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
 Paragraph 4, page 20  
Question 7 
Paragraph 4 on page 20 describes the requirements that must be met to ensure the clearance and free circulation of goods in Iceland. On average, how long do these procedures take from when the 
applicant submits its entry form with all the relevant documents? 
 Answer 
If all the documents are in order and correctly submitted, customs clearance takes less than 15 
minutes.  
 Question 8 
Paragraph 6 on page 20 states that all documents submitted to Customs can be inspected 
electronically but that the Customs Directorate has the right to inspect the originals and to ask for additional information and documentation. It is also stated that a breach of the Customs Law may 
result in the confiscation of goods, fines or imprisonment of up to six years. In what circumstances 
may the Customs Directorate ask for additional information and documentation? What legislation provides for these cases? What are the penalties fo r failing to provide this additional information 
and documentation? 
 Answer 
In article 30 of the Customs Act it is stated that an importer must submit or provide access to his 
accounts and accounting records, letters, contracts and other data concerning the importation of 
goods or a consignment, when considered necessary to verify if the price or other items in an import declaration, invoices or corroborative documentation is or has been correctly stated. 
Furthermore it is stated that the Director of Customs shall have access to the aforementioned data 
and access to the premises of parties liable for du ty and stores for supplies and is authorized to 
take statements from any person expected to  be able to provide relevant information. 
 
In general terms there could be quite a few reasons for the Customs to require additional information or documentation. For example there might be discrepancies between the value of the goods compared to the volume and tariff classification, also there might be a suspicion that the 
imported product is wrongly classified.  WT/TPR/M/273/Add.1 
 
- 33 - 
 
  If there is a suspicion that a product is wrongly classified the importer might be asked for 
additional information about the product. That information might include brochures or any information from the manufacturer of the product in question. When there is a suspicion that the value of the product is wrongly stated the Customs may ask for the original invoice or a 
confirmation that a payment has taken place.  
 The Director of Customs is authorized to suspend customs clearance of all goods relating to an 
importer who does not submit information to the Director of Customs that has been requested 
under Article 30 of the Customs Act.  
 (iv) Other charges affecting tr ade (VAT and excise duties) 
 
(a) Value added tax  
Paragraph 29, page 27 
 Question 9 
Paragraph 29 on page 27 states that the standard rate for VAT in Iceland was increased 
from 24.5 per cent to 25.5 per cent on 1 January 2010 with a reduced rate of 7 per cent. What does the report mean by "a reduced rate of 7 pe r cent"? What are the technical requirements for 
vehicles using hydrogen as fuel? When will this exemption be replaced by an exemption for 
electric, hybrid, and hy drogen-fuelled vehicles? 
 Answer 
The following categories of products and services are subject to the lower VAT tax rate.   1. The rental of hotel and guestrooms and other guest services.  2. Radio license charges.  
3. Sales of magazines, newspapers and countryside- and district newspapers.  
4. Sales of books, whether translations or not, including musical notes as well as audio 
recordings of such books.  
5. Sales of hot water, electricity and oil for space heating and swimming pool water.  
6. Sales of foodstuffs and other goods for human  consumption as defined in an Addendum to 
the Act, excluding the sales of alcohol.  
7. Admission tolls to land transportation projects.  
8. CD disks, records, magnetic tapes and othe r similar means of music recordings, other than 
visual records.  
 
From June 2005 until June 2012, VAT vas reduced to 0% on vehicles that use hydrogen instead of 
fossil fuels. It was required that the vehicle in question was registered as a vehicle that uses hydrogen. The registration is based on the EU Cert ificate of Conformity, which needs to state that 
the vehicle uses hydrogen so the vehicle can be registered has a hydrogen vehicle.  
 
From June 2012 until December 2013 there is a permission, for the purposes of calculating value added tax, to lower customs value of electric- or hybrid vehicle up to 6,000,000 ISK (37,000 
euros) and of plug-in hybrid vehicle up to 4, 000,000 ISK (24,500 euros). Therefore electric- or 
hybrid vehicles that cost less than 37,000 euros and plug-in hybrid vehicles that cost less than 24,500 euros are not subject to VAT. Full 25.5% VAT is paid of customs value higher than those 
amounts. The conditions of the exemption are that  the vehicle has a certificate of conformity and 
falls under one of the following vehicle categories: L6e, L7e, M1, N1 and M1g. Also, the registered 
carbon dioxide emission of a plug- in hybrid has to be 50 grams or less per kilometre driven.  
 
(b) Excise duties 
 Paragraph 32 
 
Question 10 Paragraph 32 on page 28 states that the basis for assessment of excise duties on vehicles was 
changed at the start of 2011 from engine size to carbon dioxide emissions. Mexico would like 
further information on the parameters an d formulas used to assess these duties. 
 WT/TPR/M/273/Add.1 
 
- 34 - 
 
  Answer 
The excise duty on passenger cars has from 1 January 2011 been based on carbon dioxide 
emissions declared by the car manufacturer for combination of city and road driving. Where 
emissions data are not available, the tax rate will be based on the weight of the vehicle. From the 
weight of the vehicle estimated emissions are calculated and then the tax is calculated from the 
estimated emissions. From 1 January 2013, when the amendments will fully take effect, the 
registration tax will be at minimum 10% ad valorem (max. 65 per cent) of the taxable value.  
 
There are special provisions for vehicles that dr ive on methane gas. They will get a discount of 
1,250,000 ISK from the levied excise duty. Vehicles that are registered to car rentals get an exemption from the main category and fall under an exemption category.  
 
Article 3 of the Act on Excise Duties No. 97/1987 reads as follows:   
"On passenger vehicles and other motor vehicles, wh ich are not specifically mentioned in Articles 4 
and 5, excise duty shall be levied under the Main Category in the following table based on the vehicles registered emissions of carbon dioxide (CO2), measured in grams per kilometre driven: 
Price Band Registered emissions Main category Exception category 
A CO2  According to Article 5 
B 0–80 0 0 
C 81–100 10 0 
D 101–120 15 0 
E 121–140 20 0 
F 141–160 25 5 
G 161–180 35 10 
H 181–200 45 15 
I 201–225 55 20 
J 226–250 60 25 
 
For vehicles manufactured and registered with me thane as its primary energy source, the vehicle 
excise tax shall be 1,250,000 ISK lower than the calculations in paragraph 1 indicates. Reduction in the excise duty according to the exempt ion category cannot exceed 1,250,000 ISK"  
For further clarification an example can be taken of a large passenger vehicle that emits 180 
grams of carbon dioxide per kilometre driven (accord ing to information in the vehicles certificate of 
conformity). The vehicles' customs value is 37,000 euros. According to the table above the vehicle 
is subject to 35% excise duty on passenger vehicl es. Therefore the duty on this vehicle is 12,950 
euros. The whole amount, 49,950 euros (37,000 +12,950) is then subject to value added tax.  
 (v) Import prohibitions, restrictions, and licensing 
 
Paragraph 35, pages 29 and 30  
Question 11 
Paragraph 35 on pages 29 and 30 states that SPS and TBT-related measures include the need for a licence from the Ministry of Welfare to import narcotics and psychotropic substances. What sort 
of narcotics and psychotropic substances can be imported? What are the requirements for 
obtaining a licence in this regard? We also note that according to Table III.6 on page 34, the export of narcotics is prohibited under the Narcotics Act No. 65/1974.  
Answer 
The drugs and psychotropic substances in question are substances that are defined as narcotics or 
psychotropic substances in either the Single Convention on Narcotic Drugs or the Convention on 
Psychotropic Substances. On the basis of a license  granted by the Icelandic Medicines Agency the 
substances may be imported. The requirements range from single kinds of substances being ingredients in a medicinal product that has been marketed in Iceland on the basis of a marketing 
authorization to special import licenses being awarded for medical or pharmaceutical research. 
 WT/TPR/M/273/Add.1 
 
- 35 - 
 
  (2) M EASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures  Paragraph 48, page 34 
 
Question 12 Paragraph 48 on page 34 states that exporting from Iceland takes longer and is more expensive 
than in other high-income OECD countries. What measures has the Icelandic Government taken or 
does it plan to take to reduce both the time and the cost of the export process?  Answer 
Iceland is constantly seeking ways and methods that facilitate trade and export as much as possible. Iceland is a strong supporter of the multilateral trading system and has furthermore established, through its regional co-operation, an extensive network of free trade agreements. 
However, it is a fact that Iceland is one of the most sparsely populated countries in the world and 
is far away from main trading partners with relevant transportation costs. This is difficult to overcome.  
 
(3) Measures affecting production and trade 
(iii) Incentives and other government assistance  
Paragraphs 67 to 72 
 Question 13 
Please specify which legal regime is applicable to foreigners who wish to obtain incentives and 
government assistance for their investments, in  accordance with Act No. 99/2010, Regulation 
No. 800/2008 and other provisions, and depending on whether they are nationals of any State 
party to EFTA, the European Economic Area (EEA) or other treaties. 
 Answer 
Act No. 99/2010 is a framework legislation regarding incentives for initial investments in Iceland. 
The legislation is applicable to all foreign investment in Iceland, regardless of origin, taking into 
account specific restrictions in other legislation. Incentives are offered to companies that are 
investing in commercial operations in Iceland. The investment projects need to meet 
requirements, such as being beneficial for the Icelandic economy and society, in terms of job 
creation,  rural development, export and tax revenues and knowledge. 
Approved investment projects will receive benefits  in return, including derogations from taxes and 
charges. In addition, authorization to fix the rate of income tax, in line with the current rate of 
income tax, for 10 years can be granted, as well as exemption from customs and excise duties on importation or domestic purchase of construction materials, machinery and equipment for the 
building and operation of the investment project.  
 The authorization of the Government to grant incent ives in the form of regional aid are restricted 
by the obligations of the Government of Icelan d under the EEA Agreement. An incentive in the 
form of regional aid will normally not exceed 15% of the defined investment cost of the investment project for which an application is made. For a medium-sized enterprise, the maximum incentive is 
25% of the investment cost, and for a small enterprise the maximum incentive is 35% of the 
investment cost. In cases where the investment cost of an investment project exceeds EUR 50 million, the proportion of maximum permitted aid will be reduced to the levels provided in line with 
the total investment cost. 
 
According to the Article 8 of the Act, regional aid may take the form of a direct public cash grant 
for the investment project in question to the company that has been formed for the new 
investment and which will construct and operate the investment project. This shall constitute an 
initial cash grant, which accrues at the start of the project and regards the maximum incentive pursuant to the Article 7. 
 
Under Article 9, regional aid can take the form of derogations from taxes or public levies relating to the investment project in question.   
Regional aid under Article 10 may take the form of a sale or lease by the State or a municipality of 
land or a site owned by the State or a municipality for the investment project in question to the WT/TPR/M/273/Add.1 
 
- 36 - 
 
  company which is formed for the purpose of the new investment and constructs and operates the 
investment project at a price under the normal market price.   The government authorities are permitted to grant for new investments in Iceland, irrespective of 
the location of the investment project accordin g to the Article 10. The authorization of the 
Government to grant non-regional incentives are however, restricted by the obligations of the 
government of Iceland under Articles 16–64 of the Agreement on the European Economic Area. 
 
A general incentive in respect of a new investment  under Article 11 may take the form of training 
aid to meet the incurred cost of training personnel in connection with a new investment. The maximum training cost aid is EUR 2 million for each investment project. It may also take the form 
of an incentive in respect of new investments in research and development (Article 14). 
 The investment project may also take the form of an incentive to enterprises in respect of 
environment-related new investments which contain improvement or innovation in environmental 
protection, i.e. reduced use of energy or redu ced emissions of greenhouse gasses (Article 15). 
 
(iv) Standards and other technical requirements 
 (a) Technical barriers to trade  
Paragraphs 73 to 80, pages 41 to 43 
 Question 14 
With regard to paragraph 73 (page 41), which lega l instrument establishes the responsibilities of 
the various agencies and Ministries in respect of standards and technical regulations?  
Answer 
Iceland is a member of the EEA Agreement and therefore all relevant EU legislation has been 
transposed into Icelandic legislation. A general overview of these rules and which authorities and 
ministries are responsible can be seen in NMSP 2012 (National Market Sureveillance Plan of 
Iceland), which can be found at this webpage of the Consumer Agency: 
http://www.neytendastofa.is/lisa lib/getfile.aspx?itemid=2816 
 
Therefore there is not in fact any one legal instru ment that applies regarding the responsibilities of 
various ministries and agencies. In Article 13 of Act No. 24/2006 on Accreditation it is stated that „ministers in the applicable area of the legislatio n" are responsible for the notification of „notified 
bodies" to the Commission of the EU and EFTA Surveillance Authority (ESA). 
Regulation No. 957/2006 implements EU Decision 93/465/EU on the applicable modules for conformity assessments according to technical regulations.  
Question 15 
What differences are there between the responsibi lities of the Consumer Agency and those of the 
Medicines Authority and the Environment Agency? (page 42). 
 
Answer 
The Consumer Agency is the competent authority of  market surveillance of general product safety 
and also several sector specific EU Directives, e.g. toys, PPE for consumers, measurement 
instruments and pyrotechnical articles (as of 2013) . The Consumer Agency is therefore responsible 
for all products that are not specifically subject to the market surveillance of any other authority 
according to the legislation.  
The Medicines Control Agency is the responsible authority for market surveillance of medicines and 
medical devices according to a special legislation.  Therefore, the Consumer Agency does not cover 
these products since a special authority is entrusted this according to Icelandic law.  
 
Question 16 With regard to paragraph 74 (page 42), apart fr om notifying the TBT Committee, what other role 
does the Consumer Agency play in the preparation of technical regulations? 
 Answer 
The Consumer Agency is the "clearing house" and „national contact point" for the notification of 
regulations that may involve TBT. This task is derived from the Act No. 57/2000 on the WT/TPR/M/273/Add.1 
 
- 37 - 
 
  Information Exchange of TBT rules and Regulation  No. 733/2000. According to the aforementioned 
rules the Ministry for Foreign Affairs, according to a service agreement with the Consumer Agency, 
has given this role as "national contact point" to the Consumer Agency. The Consumer Agency is the office to which representatives in ministries take contact and seek advice and assistance in 
case they are planning for submission of notification that is mandatory to make according to Act 
No. 57/2000 that implements these duties that are derived from the EEA Agreement and WTO obligations of Iceland. If the relevant ministry then takes a decision to notify a draft Act or 
Regulation, the Consumer Agency subsequently receives this information and fowards it to the 
international notifications system.  Question 17 
As regards paragraph 76 (page 42), to which sectors do most of the notifications made by Iceland 
to the EFTA Surveillance Authority refer?  
Answer 
In the Annual Report of the Consumer Agency for 2011 an overview of notifications sent by Iceland 
can be found on page 21 of the Report. According to the information given in year 2011 there 
were 7 notifications sent and these were related to  the GMOs in food and other food regulations. 
 Question 18 In relation to paragraph 77 (page 43), does the public enquiry process for draft 
European standards consist only of the submission of comments by interested parties? 
 Answer 
As a general rule, all intrested parties can give their views.  Question 19 
As regards paragraph 80 (page 43), is the Icelandic Board for Technical Accreditation the only 
accreditation body in Iceland?  Answer 
Yes.  (b) Sanitary and phytosanitary measures 
 
Paragraphs 81 to 91, pages 44 to 46  
Paragraph 82, page 44 
 Question 20 The Government of Iceland mentions a notification made to the SPS Committee in October 2005 
on a measure to ban imports of live poultry and poultry products from some countries. Is this 
sanitary measure still in effect?  
Answer 
Yes, MAST approval is not given for imports from countries that have reported outbreaks within 
the last 6 months of diseases previously classifi ed by the OIE under "List A" until the country in 
question has notified the OIE to be free from the the disease in question. 
 Paragraph 83, page 44  
Question 21 
With regard to food safety, the government of Iceland states that it continues to apply restrictive import policies to fresh meat, raw eggs and animal products not for human consumption. Why are 
restrictive policies applied to these products? 
 Answer 
A scientifically valid risk analysis has been carried out regarding the risk involved in the importation of raw meat. There it is concluded that it cannot be excluded that the importation of raw pork, broiler meat and beef could have a negative impact on the public health in Iceland. The assessment is that such importation would lead to a higher proportion of meat on the market in 
Iceland, in which zoonotic agents would be present. In addition it is likely that the meat would WT/TPR/M/273/Add.1 
 
- 38 - 
 
  contain more virulent strains of bacteria than has previously been detected in Iceland. It is also 
concluded that all actions that could alter the curr ent animal disease status in Iceland should be 
taken with caution and must be given thorough consideration so that accidental introductions of new transmissible agents with unforeseen catastrophic consequences do not take place. This is 
due to the centuries of isolation of Icelandic liv estock breeds, i.e. cattle (dairy cows), horses, 
sheep and goats and therefore the animals are su sceptible, i.e. are immunologically naïve to 
various transmissible agents common overseas, some of which are even considered as harmless. 
 
Paragraph 83, page 44  Question 22 
The government of Iceland applies restrictive import policies to products such as fresh meat, raw 
eggs and animal products not for human consumption. Are animal products for human consumption exempt from these restrictive import policies? 
 
Answer 
Art. 10 of Act No. 25/1993 on Animal Diseases and Disease Prevention stipulates a ban against 
import of raw meat and raw eggs. The same applies to non-disinfected raw skins and hides, 
farmyard manure and compost mixed with manure, import of which is not authorised.  According to Article 4 of Regulation No. 448/2012 on measures to prevent the introduction of 
animal diseases and contaminated products into Ic eland, the Minister of Industries and Innovation 
has the authority, following a positive recommendation from MAST, to permit the importation of products otherwise prohibited by the aforementi oned Article 10 the recommendation has to be 
based on international risk assessment following standards laid down by OIE, CODEX and the SPS 
agreement, of which Iceland is a member, cf. Arti cle 9 of Regulation No. 448/2012. The required 
permit from the Ministry and the certificates in  order to permit importation are listed in the 
aforementioned Regulation. These documents have to be shown before customs clearance can 
take place.  Paragraph 84, page 45 
 
Question 23 With regard to Table III.10 "Provisionally prohibited imports", has the WTO SPS Committee been 
notified of these prohibitions? If so, in which notifications? 
 Answer 
Iceland has recently made the relevant notifications which should be circulated to all members in the course of the week.   Question 24 
Table III.10 on page 45 is entitled "Provisiona lly prohibited imports, 2012". When did these 
prohibitions take effect? Wh en are they to be lifted? 
 
Answer 
The ban on imports of live animals is long-standing and the current legislation is Act No. 54/1990 
on Import of Animals. There is no plan for lifting  the prohibition. The current policy is to keep up 
the strict legislation to preserve the very good animal health status of the country. 
 Paragraph 85, page 45  
Question 25 
The government of Iceland states that a recommendation from the Chief Veterinary Office may authorize the importation of pets. What is the procedure for obtaining an import permit? 
 
Answer 
According to Article 2 of Act No. 54/1990 on import of animals all import of live animals is 
forbidden. The Chief Veterinary Officer (CVO) is pe rmitted to deviate from this ban regarding pets, 
cf. Article 4a of the Act. Such a permit is base d on the condition that the importer commits to 
comply in every respect with all conditions of Re gulation No. 935/2004 on the importation of pets 
(companion animals) and dog semen into Iceland. The CVO is working within the Icelandic Food 
and Veterinary Authority (MAST) which is the inst itution performing the task of monitoring the WT/TPR/M/273/Add.1 
 
- 39 - 
 
  import of pets to Iceland. All information and necessary forms can be obtained on the 
www.mast.is.  Question 26 
Paragraph 85 on page 45 of the Secretariat's report  states that notwithstanding the prohibition on 
imports of live animals, the Minister for Fisheries and Agriculture may, based on a recommendation from the Chief Veterinary Office, allow imports to take place. What are the 
criteria for issuing a favourable opinion? 
 Answer 
According to Art. 2 of Act No. 54/1990 all import of live animals is forbidden. The Minister of 
Industries and Innovation has the right to give derogation to this rule upon recommendation from 
the Chief Veterinary Officer (CVO). Import is only  recommended if no disease on the former A-list 
of the World Organisation of Animal Health (OIE) has occurred within the last 6 months, according 
to the latest list of the disease situation in the respective country. In order to verify this, the 
website of the OIE is checked together with the annual report regarding the animal diseases for the country of origin. All the most recent Rapid-Alert notifications from the OIE are furthermore 
consulted. The fundamental rule is that each anim al species is evaluated separately; no A-disease 
may have occurred in that animal species or others in the country under valuation which might have been transmitted to the animal species undergoing evaluation. Risk assessment in connection with other diseases can be complicated. This is perf ormed by MAST on a case by case basis. If the 
result of the risk assessment is negative, pe rmission for importation is not recommended. 
 Paragraph 87, page 46 
 
Question 27 Which importers are registered to import animal feed? 
 
Paragraph 90 states that imports of certain types of trees and vegetables, soil, cut tree bark, and manure are prohibited. What is the scientific basis for this prohibition?  
Answer 
Icelandic rules are fully harmonized with EU legi slation regarding feeding stuff and conditions for 
importation.  
 
Regarding the scientific basis for prohibition, the main reason is that Iceland is free of many 
organisms that are considered potentially harmful on those plant species but are common in 
countries with whom Iceland has commercial relations but are not always subject to phytosanitary 
surveillance and control in those countries. Soil, cut tree bark and manure are considered as high 
risk pathway for harmful organisms.  
The main reason for the absence of certain organi sms is the geographical isolation of the country 
and relatively young cultivation of nonindigenous forest tree species. Due to the lack of natural enemies, it is of concern that organisms that are not defined as considerable harmful on their host 
plants in other countries may be more harmful in Iceland. 
 Question 28 
Paragraph 91 mentions that in the event of an outbreak of disease, certain animal species must be 
culled immediately, while the culling of others is  optional. For which species is culling optional? 
 Answer 
Under Act No. 25/1993, immediate culling is required in the event of an outbreak of many diseases 
and is an option for others. Immediate culling is compulsory if the disease is serious but optional if it is less serious. The difference lies in severity of diseases, but not in different animal species. . 
 
(v) Intellectual property rights  
(a) Copyright, paragraph 95, page 47 
 Question 29 In Iceland, is the transfer of copyright free and/ or permanent? Does the regime vary depending on 
whether the author is alive or dead? WT/TPR/M/273/Add.1 
 
- 40 - 
 
  Question 30 
After the author's death, are both moral rights (e.g. the right to modify the work) and economic 
rights (e.g. the right to transfer the authority to use the work, and the collection of royalties) protected for 70 years? Or are both of these categories of rights treated differently? 
 
Joint answers 
Article 27 of the Icelandic Copyright Act provides th at transfer of copyright can be partial or to a 
full extent, within the restrictions imposed by Articl e 4 of the Act. Special rules apply for transfer of 
copyright if the author is married. Copyright is ex empt from legal debt collecting by the author's 
creditors. Following the death of an author the tr ansfer of the author's right is governed by the 
Inheritance Act. 
 
Article 28(1) of the Copyright Act stipulates that tr ansfer of copyright does not give the transferee 
a right to modify the work, unless expressly so agreed by the author. The moral rights of an 
author are inherited in the same manner as the economic rights and have the same duration of 
protection. However, moral rights are awarded cultural protection, enforceable by the Minister of Culture, cf. Article 53, regardless of the duration of the economic rights. So, in theory it is possible 
to enjoy protection of moral rights for art and lit erature after the 70 years period of post mortem 
authorization.  (b) Patents 
 
Paragraph 101, page 49  
Question 31 
Paragraph 101 on page 49 states that in 2011, the Patent Office acknowledged 778 European patents and approved 65 patents out of 71 applications directed to the Icelandic 
Patent Office, and that at the end of 2011, 2,632 patents were in force. Could Iceland please 
clarify how many non-European patents were acknowledged in 2011? How many of the 65 patent applications submitted to the Patent Office were not European? How many of the 2,632 patents in force are not European? 
 
Question 32 Paragraph 103 on page 49 refers to compulsory licences for the export of pharmaceutical products 
to developing countries facing severe health problems. Please explain how these compulsory 
patents work.  
Question 33 
Paragraph 107 on page 49 mentions a patents case concerning a licence agreement between the parties that was considered irrevocable by the Ic elandic Supreme Court. In what circumstances is 
a licence agreement considered irrevocable? 
 
Joint Answers 
The IPO would like to rectify the misunderstanding that 65 out of 71 applications filed in 2011 
were granted. The handling of patent applications takes time and the patents granted in 2011 
were applications that were filed before the ye ar 2011. The applications filed in 2011 are still 
under examination. 
 
A total of 778 European patents were validated in Iceland in 2011, so that is the correct number for total European Patents granted that year.  
The 71 patent applications filed in 2011 were na tional filings, either from Icelandic or foreign 
applicants. These applications were either filed ba sed on priority or via the PCT route as national 
phase applications. None of the applications was a European application. 
Out of the total number of patents in force in 2011, 1929 were European patents validated in 
Iceland.  
The authority to grant compulsory licences was insert ed in the Patent Act in 2005, cf. Art. 49(5) of 
the Act. The conditions for grant of such licen ce are outlined in Regulation No. 1011/2006. 
Compulsory licences are, subject to the fulfilment of all conditions (Art. 4), granted only by a 
District Court (Articles 5 and 6). The compulsory lic ence holder is only authorized to manufacture 
the pharmaceutical product specified in the licence and may only export the product to countries WT/TPR/M/273/Add.1 
 
- 41 - 
 
  specified in the licence (Art. 7). Eligible countries for import of products are those who fulfil the 
conditions of Art. 3 of the Regulation. The co mpulsory licence holder is obliged to publish 
information on the licence on his website or a site hosted by the WTO (Art. 9). Information in this regard should also be sent to the IPO (Art. 9(3)), which notifies the TRIPS Council of the 
compulsory licence (Art. 10). More exact informat ion on compulsory licences cannot be provided at 
this stage, as this has to the best knowledge of the IPO never been used.  
Concerning the Supreme Court Judgement, it depends on each case at hand and the relevant 
agreement between the parties whether Courts will consider a licence agreement to be irrevocable or not. According to the merits of the case mentioned it was considered that the agreement 
between the parties was a licence agreement which neither included time limits nor articles 
concerning revocation.  
 (c) Trademarks 
 
Paragraph 110, page 50  
Question 34 
Paragraph 110 mentions that various changes have been made to trademark legislation. One of these changes is that the Patent Office is now authorized to invalidate a registration, a task which previously fell to the courts. What requirements must be met in order for the Patent Office to 
invalidate a registration? Are these requirements exactly the same as those considered by a court 
when invalidating a registration?  
Answer 
The Icelandic Trademark Act No. 45/1997 (Trademark Act) was amended in June 2012 by 
Act No. 44/2012 in order to provide the Icelandic Patent Office (IPO) with the power to invalidate 
trademark registrations.  
IPO now has the power to revoke a trademark registration if a trademark was registered contrary to the provisions of the Trademark Act. If inva lidation is required because of the likelihood of 
confusion with an older mark, the request can only be accepted if the one setting forth the request 
proves that the use of the older mark has been in accordance with Article 25 of the Act (inter alia 
usage within five years from registration).   
According to the new Article 30.a, which regards governmental invalidation, anyone with a 
legitimate interest has the right to request that the IPO eradicates the registration of a mark although the time limit for opposition has passed. Th e conditions of Art. 28 of the Act have to be 
fulfilled (regarding cancellation of registration by a verdict of a Court), the request has to be made 
in writing and be accompanied with the prescribed fee. The proprietor of the registered mark shall 
be informed and have the right to comment within a prescribed time limit before the IPO makes its 
decision. If the IPO reaches the decision that a mark shall be invalidated, the decision shall be 
published in the IPO Gazette. Such a request cannot be made if a case regarding the same 
registration has been brought to Courts. If this is the case, the IPO shall postpone its handling of the invalidation request until a Court has reached its decision. The invalidation requirements in 
Article 30.a are the same as the requirements before a Court.  
 Question 35 
Paragraphs 114 and 115 on page 51 refer to the Design Protection Act of 2001. According to this 
Act, what "fair trade practices" may designs be destined for?  Answer 
According to Article 10, paragraph 3, of the Design Protection Act No. 46/2001 design rights shall not include: 1) acts done for private purposes, 2) acts done for experimental purposes and 3) reproduction for use in citations or education provid ed that such acts are compatible with fair trade 
practices, do not unduly prejudice the normal exploi tation of the design, and that mention is made 
of the source.  
 
The Article makes the use of designs in quotatio n or education/teaching possible, if done in 
accordance with fair trade practices. For example,  publications of designs in educational magazines 
are allowed, given that the designer is also mentioned.  
 WT/TPR/M/273/Add.1 
 
- 42 - 
 
  (vi) State trading enterprises, State- owned enterprises, and privatization 
 (b) State-owned enterprises and privatization  
Paragraph 123, page 52 
 Question 36 
Paragraph 123 mentions that Icelandic local governments have holdings in companies engaged in 
the geothermal production of heating and electr icity, and own operating companies for harbours 
and local electricity distributors. How many local governments in Iceland own the aforementioned companies? How many companies does each of these local governments have? How many private 
companies are there in these sectors in Icelan d? Do local government State-owned companies 
provide services in areas of Iceland that are beyo nd their jurisdiction, in such a way that they 
compete with the State-owned and private co mpanies of other Icelandic municipalities? 
 
Answer 
There are three companies involved in the production of electricity from geothermal sources. One 
of them, Landsvirkjun, is owned directly by the State, one is privately owned, HS Orka, while 
Reykjavík Energy is owned by three municipalities: Reykjavíkurborg (93.5%), Akraneskaupstadur (5.5%) and Borgarbyggd (0.9%).  As regards the production of heat there are 22 geothermal public district heating utilities. They are 
the sole distributors of geothermal heat to local residents in a geographically isolated area and 20 
of them are owned by municipalities within the area. The other public district heating utilities are owned by the State.  
 
Electricity transmission and distribution companies must be under the majority ownership of public 
parties or companies wholly owned by public parties according to the Electricity Act. All six such 
companies operating in Iceland are entirely owned by  either local municipalities or the State. They 
all have licenced geographically defined distribution areas where they are the sole distributor of electricity and no company operates in the jurisdiction of another unless with the express permission of the corresponding distribution company and the National Energy Authority 
(Orkustofnun). There are no reservations regarding generation and sale of electricity. 
 The generation and sale of electricity is subject to competition under the Electricity Act and 
therefore all companies, whether state or privately owned, compete on the national electricity 
market amongst each other to generate and sell electricity. There are three companies engaged in the production of electricity from geothermal resources and one of them, HS Orka,is owned by 
private investors. There are several small privatel y-held hydropower producers on the market as 
well, although most electricity is still produced by publicly held entities. The largest producer of electricity is the State-owned Landsvirkjun, which produces 73% of Iceland's electricity, mostly from hydropower sources. Other most importan t players are in municipality (15%) and private 
(8%) ownership. 
 All harbours in Iceland are operated by the local municipality in which they are located, with the 
exception of one harbour in the South of Iceland th at is used exclusively for ferry service from the 
mainland to the Westman Islands. There are approximately 50 harbours in Iceland, and the vast majority are small and used by the fishing fleet. The State provides support for harbour projects 
by undertaking and funding basic research in full, and also provides financial support for new port 
projects.   (vii) Competition policy 
 
Question 37 Paragraph 128 states that Icelandic economic competition legislation prohibits anti-competitive 
practices. According to the Competition Law and its Rules of Procedure No. 880/2005, what do 
these anti-competitive practices entail?  
Answer 
According to the Competition Act No. 44/2005 anti-competitive agreements and practices by 
business are prohibited, as are abuse of a dominant position and agreements between businesses that restrict competition. The provisions of Arti cle 10 of the Competition Act prohibit any form of 
anti-competitive collusion among undertakings and reads as follows: WT/TPR/M/273/Add.1 
 
- 43 - 
 
  "Any agreement or resolution between undertaking s, whether binding or guiding, and concerted 
practices which have as their object or effect  the prevention, restriction or distortion of 
competition are prohibited.  
 This prohibition includes any agreements, resolutions and concerted practices which:  
a. directly or indirectly affect prices, disco unts, margins or any other trading conditions;  
 b. limit or control production, markets, technical development, or investment;   c. share markets or sources of supply;  
d. apply dissimilar conditions to equivalent transactions with other trading parties, thereby 
placing them at a competitive disadvantage;  e. make the conclusion of contracts subjec t to acceptance by the other parties of 
supplementary obligations which, by their nature  or according to commercial usage, have no 
connection with the subject of such contracts."  
 
Article 11 of the Competition Act prohibits any abuse by one or more undertakings of a dominant 
position and reads as follows: 
 "Any abuse by one or more undertakings of a dominant position is prohibited.  
Abuse according to Paragraph 1 may, inter alia, consist in:  
a. directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;  b. limiting production, markets or technical development to the prejudice of consumers;  
c. applying dissimilar conditions to equivalent transactions with other trading parties, thereby 
placing them at a competitive disadvantage;  d. making the conclusion of contracts subj ect to acceptance by the other parties of 
supplementary obligations which, by their nature  or according to commercial usage, have no 
connection with the subject of such contracts." 
 
Furthermore, the Competition Authority is responsible for monitoring mergers of companies falling 
within the scope of Article 17 of the Competit ion Act, cf. Rules No. 684/2008 relating to the 
notification of mergers. The ICA may annul a merg er or set conditions for a merger, if the ICA 
believes that the merger will prevent effective co mpetition by bringing about or strengthening a 
dominant position, or will result in a significant distortion of competition in the market in other 
respects. Article 17(c) reads as follows: 
 
"If the Competition Authority is of the opinion that a merger will obstruct effective competition 
by giving one or more undertakings a dominant position or by strengthening such a position, or will result in a significant distortion of competition in the market in other respects, the 
Authority may annul the merger. In addition, technological and economic progress shall be 
taken into account when assessing the lawfulness of a merger, provided that such progress is to customers' advantage and does not form an obstacle to competition. The Competition Council may also establish conditions for such a merger that must be met within a given time. 
When assessing the lawfulness of a merger the Competition Council shall take into account 
the extent to which the competitive position of the merged undertaking is affected by international competition. Moreover, when assessing the lawfulness of a merger account shall 
be taken of whether the market is open or whether market access is obstructed." 
 Lastly it should be noted that an undertaking, as it is defined in the Act, means any individual, 
company, public party or other party engaged in economic operation.  
 Page 53, paragraph 125  
Question 38 
What is the procedure for investigating and imposing conditions or penalizing international mergers that have anti-competitive effects in Iceland? What happens when the firms affecting 
Icelandic markets are located outside the EEA? 
 Answer 
The ICA is responsible for monitoring mergers of companies falling within the scope of the 
Competition Act. The ICA will investigate mergers that have anti-competitive effects in Iceland and if the undertakings in question have combined turn over amounting to ISK 2 billion or more and at 
least two of the undertakings involved in the me rger have a minimum annual turnover of ISK 200 
million respectively in Iceland.  WT/TPR/M/273/Add.1 
 
- 44 - 
 
  Should the ICA be of the opinion that there is a significant probability that a merger, which has 
already taken place, may substantially reduce effective competition while failing to meet aforementioned turnover conditions, the Authority may require the merging parties to submit a notification of the merger, provided that th e combined annual turnover of the undertakings 
concerned exceeds ISK 1 billion.  
 The ICA can investigate and impose conditions or annul agreements that have anticompetitive 
effects in Iceland, but only the part of the agreement that has to do with Iceland. Therefore it does 
not matter where the companies in question are registered, whether inside or outside the EEA.   Question 39 
What limits does competition legislation have as regards penalizing international cartels that affect 
markets in Iceland?  
Answer 
According to Article 3 of the Competition Act, the Act applies to agreements, terms and actions 
with effect, or intend ed effect, in Iceland . In the second paragraph it specifically states that the Act 
does not apply to agreements, terms or actions whic h are solely intended to have an effect outside 
Iceland. The Competition Authority shall on the other hand provide assistance in implementing the competition provisions of other states and international organizations in accordance with mutual obligations provided for in international conventions to which Iceland is a party.  
 
As stated in Art. 37 of the Competition Act, th e Competition Authority will impose administrative 
fines on undertakings or groups of undertakings that  violate e.g. Art. 10, 11 and 12 of the Act and 
also for violating a prohibition pursuant to Articles 53 or 54 of the EEA Agreement which are the 
two basic prohibition provision of the competition part of the EEA Agreement.   
 
According to Art. 41.a of the Competition Act any employee or director of an undertaking or 
association of undertakings who carries out, incites to or gives instructions on collusion which violates Articles 10 and/or 12  of the Icelandic Competition Act and relates to the issues specified in 
paragraphs 2 and 3 of the Article shall be subject to fines or imprisonment up to six years. 
According to Art. 42, violations of the Act are on ly subject to criminal investigation following a 
complaint submitted by the Competition Authority to the police.  
Page 53, paragraph 126 
 Question 40 
How does the formal information request procedure between the Nordic competition authorities 
work? What are the obligations of the Icelandic Competition Authority (ICA) in this process?  Answer 
Iceland is a party to an agreement between Denm ark, Norway and Sweden on co-operation on 
competition matters. According to Article II of the agreement, the ICA is obligated to provide the 
other competition authorities with information concerning the situations in which it becomes aware 
that its enforcement measures may affect important competition Act interests that are subject to 
another authority's competence.   
The enforcement measures concerning which it will normally be appropriate to provide 
information shall include measures that: (a) Are relevant to the enforcement measures of one or more competition authorities, (b) Relate to activities in restraint of competition that largely originate or take place in the 
territory of one or more authorities, 
(c) Relate to a merger, an acquisition or merger in which one or more of the participants in the transaction is an enterprise that is registered in, established under the legislation of, or 
resident in Denmark, Iceland, Norway or Sweden or in several of the countries, 
(d) Relate to behaviour in restraint of competition in which it is assumed that one of the countries concluding the Agreement has called for, promoted or approved, 
(e) Relate to decisions of a vital nature that will require or promote a specific behaviour in 
restraint of competition in the territory of another of the countries concluding the Agreement. 
 WT/TPR/M/273/Add.1 
 
- 45 - 
 
  According to Article V of the Agreement, information from one competition authority to another 
competition authority in accordance with article II of the Agreement shall be provided in writing (including fax and electronic mail). Other communi cations may be made orally or in writing. 
 
Question 41 
What formal and informal mechanisms are available to the ICA to promote technical support cooperation with the above-mentioned authorities? 
 
Answer 
The ICA is an active member of the ECN-FI T working group (European Competition Network-
Forensic IT). The purpose of this working group is  to exchange information based on experience in 
the field of forensic IT. The ECN-FIT is divided into two groups, a legal group and a technical one. 
The ECN-FIT holds 1-2 working group meetings a year where issue relevant topics are discussed and solutions to various problems facing the NCA's are presented.  
 
Aside from these meetings the ECN-FIT also has an on-going program called EATEP-FIT (European Antitrust Training and Exchange Program in Forensic  IT). The aim of this program is twofold, to 
provide technical training for case handlers and IT personal in the field of forensic IT, as well as to 
promote cooperation and information exchange by  means of a personnel exchange program. The 
ICN has taken an active role in this cooperation platform and was for a few years part of the steering group comity for the ECN-FIT. The ICN ha s benefited substantially from this cooperation 
and views the ECN-FIT as having been a vital part in building the authority's competence in the 
field of forensic IT. Aside from this venue the ICA is not part of any formal or informal cooperation on technical issues.  
 
Question 42 Are there any agreements regarding information-shar ing with the authorities of other countries? If 
so, please specify. 
 Answer 
The ICA is not a party to any other agreements, obligating it to share information with competition 
authorities in other countries. Nevertheless, it participates in both European and International co-
operations on competition matters.  
To begin with, the ICA participates in a co-operation organized by the European Competition 
Network (ECN), which consists in co-operation between Competition Authorities of EU and EFTA 
Member States, EFTA Surveillance Authority and the European Commission. The purpose of this 
co-operation is to review specific competition issues which are under discussion at any time within 
the competition authorities of the EU, in addition to general competition policy work. For this purpose, various groups have been established to address specific aspects of competition.  
Secondly, the ICA participates in a co-operation between the European competition authorities, 
which involves informal co-operation, reviewing the implementation of competition rules and policy- making. Separate working groups have been formed for the purpose of discussing 
individual competition markets or competition matter s, including working groups on issues such as 
mergers, the energy sector, the media, amnesty etc.  
Thirdly, the ICA participates in the International Competition Network (ICN), which is an 
international association of competition authorities.   Finally, the ICA participates in OECD working groups on competition matters.  
Question 43 
How could international cooperation between the ICA and other competition agencies be improved? 
 
Answer 
Co-operation between ICA and other competition agencies can be improved by increased 
communications and more regular meetings. 
 Question 44 What are the main actions taken by the ICA to advocate competition? 
 WT/TPR/M/273/Add.1 
 
- 46 - 
 
  Answer 
The ICA runs a comprehensive and an accessible website where all decisions of the ICA and the 
Competition Appeals Committee are published. In addition, all judgments by Icelandic courts on competition matters are published on the website. Furthermore, the ICA publishes articles, news 
reports, annual reports and other specific reports on competition matters. It also publishes reports 
from the Nordic competition authorities.  
 
Page 53, paragraph 127 
 Question 45 How is the ICA's Board of Directors formed? What  elements are considered when prioritizing 
investigations? 
 Answer 
According to Article 5 of the Competition Act the Board of Directors is composed of three members 
appointed by the Minister of Economic Affairs, as from 1 September 2012 the Minister of Industries and Innovation,  for a term of four years at a time. Three alternates shall be appointed in the same 
manner. The Minister appoints the Chairman of the Board and decides the remuneration of the 
members of the Board.   The role of the Board of Directors is to establish priorities in the work of the Competition Authority 
and monitor its activities and operations. Major material decisions must be submitted to the Board 
for approval or rejection. The Board of Directors has established its own rules of procedure, No. 759/2005, which include provisions on what constitutes major decisions. 
 
Regarding prioritization of investigations, it is clear that urgent cases under process will often delay the progress of other cases. To give an exam ple, a decision on intervention or annulment of 
a merger must, by law, be taken within statutory time limits. Merger cases are therefore 
processed ahead of cases that are not subject to statutory limits.   The ICA decides which cases are investigated based,  among other things, on the priorities of the 
Authority at any time. In any year, the ICA will have predetermined financial resources at its 
disposal. The ICA's Rules of Procedure lay down re quirements relating to submitted complaints and 
in addition the ICA will assess whether a complaint gives sufficient causes for investigation. Should 
the complaint not meet the conditions that are laid down in aforementioned rules, concerning form 
and content, it is nevertheless filed as a notificati on/tip which may later lead to an investigation. 
 
In assessing whether a complaint warrants an investigation, the ICA will take into account the 
objective viewpoints regarded as relevant in each case. The following points can be significant for the assessment of whether an investigation is warranted: 
 The seriousness of the alleged violation or distor tion of competition. The incident in question 
may be serious from the point of view of the complainant, but the Competition Authority 
will assess the matter as a whole from the point of view of the public interest. 
 The question whether the barrier to competition is relevant only to the business interests of 
the complainant or whether it may have a wider harmful impact on competition. This 
includes the question of whether public interests are at stake. 
 Whether the undertaking which is the subject of the complaint has desisted from the 
conduct giving rise to the complaint. The possible meaning of a potential investigation is 
assessed. 
 The question whether interests of the complainant can be protected before the courts of 
justice. Not all infringements of the Competition Act need to be brought before the 
Competition Authority. The complainant may have possession of sufficient evidence and 
information to initiate proceedings before the courts. 
 
In assessing whether a complaint warrants an investigation, the Competition Authority may seek 
outside comments. This means that the Competition Authority may seek information and opinions from third parties for the purpose of assessing whether a case needs to be opened. 
 WT/TPR/M/273/Add.1 
 
- 47 - 
 
  Page 53, paragraph 128 
 Question 46 Has Iceland clarified what type of evidence is needed to prove that an agreement is 
anti-competitive, and what type of proof a potential offender may put forward in its favour to show 
that it has not engaged in such a practice?  
Answer 
No, it has not been clarified in the Competition Act or other rules set by the Competition Authority 
or the legislator. The Competition Authority mainly uses the same views on evidence that are upheld by the European Commission and the European Court of Justice.  
 
Question 47 Has consideration been given to whether reactive methods for detecting cartels (for example, 
formal system of denunciation, clemency programme, assistance from informers) have been 
more/less effective in practice than proactive meth ods (for example, interinstitutional cooperation 
with other competition bodies, assistance from government entities, monitoring of the press 
and/or trade associations, competition policy dissemination programmes)? 
 Answer 
No, not in a formal way. The ICA shares the same views as the European Commission and other 
European Competition Authorities that a good leniency program is important and makes it easier 
for the Competition Authority to uncover collusion between undertakings. It is also the Authority's view that a vigorous enforcement of competition policy is a key element in preventing 
undertakings in violating the Competition Act.  
 Question 48 
When determining whether a firm is in a dominant position, what elements are taken into account 
to assess market contestability?  Answer 
The elements that the ICA takes into account when assessing market contestability can be divided into three categories.  
In the first place, there are any public barriers to entry. Examples of such barriers are legal 
barriers, public surveillance, patents, customs and import duty.  
Secondly, there are economic barriers relating to  the market. Examples of such barriers are for 
example sunk cost, cost of capital, network effects, switching cost, economies of scope or size and barriers to exit.  
Lastly, there are any barriers on account to conducts of undertakings in the market. Such conduct 
is for example tying, bundling and vertical integration. Other barriers relating to undertakings in the market are reputational effects, brand loyalty and access to essential facilities. 
 
Question 49 Once a dominant position has been proved, what procedure does the ICA follow to determine that 
the firm investigated has abused such a position? What type of evidence is taken into account? 
 Answer 
Once a dominant position has been proved, the ICA investigates whether the firm has abused such 
a position by gathering information or by carrying out inspections on the premises of the firm in 
question.   
According to Article 20 of the Competition Act, the ICA may, in the course of the investigation of a 
case, carry out the necessary inspections on the premises of an undertaking and associations of undertakings and seize documents and other evidence when there are compelling reasons to 
believe that this Act or the decisions of the competition authorities have been violated. 
 
According to Article 19 of the Competition Act, the ICA may request from individual undertakings 
or groups or associations of undertakings any information regarded as necessary for the WT/TPR/M/273/Add.1 
 
- 48 - 
 
  investigation of individual cases. Information may be requested in oral or written form. The ICA 
may, under the same condititions require the surrender of documents for inspection. 
 
When investigating potential abuse of dominant position, the ICA generally requests meetings with 
third parties, such as other undertakings in the market and customers. It reviews the information 
that has been gathered and takes into account any tenable and verifiable evidence.  
Page 54, paragraph 129 
 Question 50  What type of evidence is taken into account in practice to prove that the benefits obtained from 
any economic efficiency resulting from specific economic integration actually exceed the 
operation's potential negative impact?  
Answer 
The ICA has never accepted efficiency defences in previous cases regarding mergers and 
acquisitions. The same applies to cases regarding abuse of a dominant position and cases 
regarding agreements or concerted practises that restrict competition.  
 If such a case would be examined by the ICA it would use the same or similar methodology as the 
European Commission and the EFTA Surveillance Authority use in cases regarding concentrations. 
The burden of proof regarding efficiencies put fo rward lies on the merging entities, cf. provision 
17c of the Competition Act and paragraph 29 of the foreword to the EU merger regulation (Council Regulation (EC) No. 139/2004).  
 
The ICA will take any tenable and verifiable evid ence put forward by the notifying parties into 
account. In Iceland both the administration and courts have liberty to take any evidence put 
forward into account when assessing cases, cf. Article 44 of the Act regarding Civil Proceedings No. 
91/1991. The notifying parties would have to proof that such efficiencies would be likely to outweigh the negative competitive effects of the concentration.  
 
Question 51 
Is the merger of potentially anti-competitive operations allowed on an exceptional basis if the firm is in a crisis situation (failing firm defence)? Has this exception been applied? 
 
Answer 
In general, the ICA will set conditions or annul a merger that has anticompetitive effects. Such a 
merger has been allowed on the grounds of failing firm defence on three occasions since or during 
the economic collapse in the fall of 2008. Two of those mergers regarded commercial banks that acquired another commercial banks. The third deci sion was overturned by the Appeals Committee. 
Subsequently ICA annulled the merger on the grounds that the conditions of the failing firm 
defence had not been sufficed. 
 Question 52 
Can the ICA apply prudential measures in the context of its investigations? 
 Answer 
No.  Question 53 Can the ICA determine security to be deposited against the potential imposition of prudential 
measures in the context of its investigations? 
 Answer 
No.  Question 54 
What are considered to be attenuating/aggravating factors when imposing administrative fines? 
 WT/TPR/M/273/Add.1 
 
- 49 - 
 
  Answer 
According to Art. 37 of the Competition Act, deci sions on fines shall take regard of the nature, 
extent and duration of the restrictive practices. According to Icelandic case law many factors can 
be taken into account, both attenuating and aggravating factors. 
Factors that have been considered to be attenuating are e.g. the following : 
 If the undertaking assists the Competition Authority in solving the case (see settlement 
procedure in Art. 17 f of the Competition Act and Leniency rules No. 890/2005)  
 If the undertaking can prove that its participation in e.g. a cartel was very minimal  
 If the undertaking can prove that its intent was not to harm competition  
 Factors that have been considered to be aggravating are e.g. the following : 
 The duration, extent and nature of the violation 
 Repeated violations 
 If the undertaking is the main leader in e.g. a cartel 
 The market share of the participants in e.g. a cartel 
 The importance of the relevant products or services involved in the case 
 The purpose of the violation 
 If the intent of the employees involved has been proved 
 If the harmful effects on competition on the market has been proved 
 Page 54, paragraph 130 
 
Question 55 Paragraph 130 states that "the 2011 amendment to the Competition Law gives the Competition 
Authority the power to respond to any market situation or actions by any enterprise that would 
restrict competition even if there was no breach of any specific part of the law". In exercising 
these powers, what treatment is given to State-owned enterprises? 
 
Answer 
According to the Competition Act, an undertaking means any individual, company, public party or other party engaged in economic operation. Therefor e the provision applies to public enterprises as 
well as private ones. The power given to ICA under this amendment has so far not been made use 
of.   
Question 56 
How does the ICA intervene in markets when the law has not been breached?  
Answer 
As mentioned above, the provision in question has not been applied in practice yet. However, 
when applying this provision, the ICA will have to define the relevant market and clearly establish the circumstances or conduct which prevents, limits or affects competition. Circumstances means 
among other things, factors connected to the attributes of the market concerned, including the 
organisation or development of companies that operate in it. Conduct means all forms of behaviour, including failure to act, that are in some way detrimental to market competition without 
being in violation of the Act‘s ban provisions. This  provision will only be used exceptionally and the 
remedies shall be proportionate to the circumstances or conduct concerned.  
Question 57 
How does the judicial review procedure work in practice?  Answer 
The decisions of the ICA may be appealed to an  independent committee, the Competition Appeals 
Committee. A written and reasoned appeal must be received by the Committee within four weeks from the time that the party in question was inform ed of the decision of the Competition Authority. 
According to the Competition Act, the decision of the Appeals Committee shall be made available 
within six weeks from the date of appeal. However, an appeal will not postpone the effect of decisions of the Competition Authority. 
 
According to the Competition Act a party, includin g the ICA, not willing to accept the decision of 
the Appeals Committee may instigate legal action for annulment before the courts of law. Such action shall be brought within six months afte r the party obtained knowledge of the Committee's WT/TPR/M/273/Add.1 
 
- 50 - 
 
  decision. Such action does not suspend the entry into force of the Committee‘s decision, nor shall 
it preclude formal enforcement proceedings.   Question 58 
Paragraph 130 states that "the amendment also allows the Authority to bring rulings of the 
Appeals Committee to the courts". This statement appears to indicate the existence of an Appeals Committee that is separate from the Competition Authority, but does not specify its 
organizational attachment or legal nature. What exactly is the Appeals Committee? To which State 
body is it attached?  Answer 
The Competition Appeals Committee is a committee composed of three members, with three alternates, appointed by the Minister of Industri es and Innovation following nomination by the 
Supreme Court. The chairman and his or her alte rnate, who shall also serve as vice-chairman, 
shall meet the conditions for qualification as Supreme Court judges, but the other members shall 
possess professional expertise in the field of  competition and business. The term of the 
appointment of the Competition Appeals Committee shall be the same as that of the Board of 
Directors of the Competition Authority. The decisions of the ICA may be appealed to the Appeals 
Committee.  V. TRADE POLICIES BY SECTOR 
(1) A
GRICULTURE  
 (i) Features 
 
Paragraph 3, page 55  
Question 59 
Paragraph 3 on page 55 of the report states that increased productivity in Iceland is hindered by the fact that there is only one dairy breed, one sheep breed, and one horse breed, which have 
developed in isolation from the rest of the world and are vulnerable to transmittable diseases. Has 
Iceland made any attempts to introduce new species since the last review? 
 Answer 
Since 2006, there have been no applications for imports of live cattle, sheep or horses.  (c) Support levels 
 
Paragraph 26, page 62  Question 60 
Paragraph 26 on page 62 of the report states that "despite the high level of support provided, 
agriculture continues to decline relative to the rest of the economy, the number of farmers continues to fall, productivity is low by international standards, and imports are rising compared 
with domestic production". In Iceland's view, what are the reasons for this situation? 
 Answer 
After the economic crisis in 2008 the economy has b een improving, especially the export sectors. 
It has not been decline in the agricultural output, however, numbers of farmers has continued to decrease, remaining farms have increased in size and efficiency. Iceland is not aware of any study which state that productivity is lower in Iceland compared with other countries. 
 
(2) F
ISHERIES  
(ii) Policies, paragraph 41 
 
Question 61 Paragraph 41 on page 68 states that a vessel will lose its individual transferable quota (ITQ) if it 
catches less than 50 per cent of its total quota for two consecutive years and that a separate quota 
system is applied to boats of less than 15 gross tonnes. How does this condition to maintain the 
ITQ not constitute a performance requirement? Ho w does the quota system work for boats of less 
than 15 gross tonnes? 
 WT/TPR/M/273/Add.1 
 
- 51 - 
 
  Paragraph 44 on page 69 provides a general description of foreign ownership in respect of fishing 
activities. Please provide further details of the regime applicable to foreign natural persons.  Answer 
Before 2010, there was a condition that a vessel would lose its quota if it catched less than 50% of its total quota for two consecutive years. In 2010, the condition was made stricter so that vessel now has to catch at least 50% of its quota each year. These rules were introduced in order to 
prevent quota-owners from not making use of their quota.  
 Under the Icelandic quota system, differentiation is made between vessels fishing within the general management regime, and boats under 15 GT that choose to operate under a special 
management regime for handline and longline boats (referred to as the small vessel ITQ system). 
Those who choose to operate within the latter ment ioned system commit to only fishing with gear 
using handline and longline and special restrictions apply to transfers of quotas between the two 
systems. 
 The same rules apply for both vessels under and above 15 gross tonnes as regards conditions for 
transfering quota beween vessels, including the requ irement to catch at least 50% of the allocated 
annual quota (not for two consequtive years as stat ed in the question). However, quotas cannot be 
transferred from the general system to the small vessel system.   
As for foreign investment, the general rule applies th at foreigners are not allowed to invest directly 
in the fisheries or fishprocessing sector. Howe ver a foreign individual or a company may own a 
share in an Icelandic company which holds a share in an fisheries company. The rules are 
complicated but in essence they mean that indi rect foreign ownership can never exceed 49%. 
 (3) E
NERGY  
 
Paragraph 53  Question 62 
Paragraph 53 states that electricity transmission and distribution need to be separated from 
production and sales. Which of these four ac tivities are reserved for the public sector? 
 
Answer 
Electricity transmission and distribution companies must be under the majority ownership of public 
parties or companies wholly owned by public parties according to the Electricity Act. All six such 
companies operating in Iceland are entirely owned by  either local municipalities or the State. They 
all have licenced geographically defined distribution areas where they are the sole distributor of electricity and no company operates in the jurisdiction of another unless with the express permission of the corresponding distribution company and the National Energy Authority 
(Orkustofnun). There are no reservations for the public sector regarding generation and sale of 
electricity.   
IV. TRADE POLICIES BY SECTOR 
(4) SERVICES (i) Financial sector 
 
(a) Banking  Question 63 
Paragraph 55 states that Iceland was one of the countries worst affected by the 2008 financial 
crisis; nearly the entire banking system collapsed . The Government had to intervene through 
emergency measures, which included, inter alia, capital controls and the establishment of three 
new commercial banks by the State, which took over the domestic operations of the three largest 
commercial banks, to prevent a complete meltdown  of the system. What treatment does Iceland 
afford to foreign banks? Also, please provide details regarding possible incentives for establishing 
banks in Iceland following the crisis. 
 Answer 
No foreign commercial banks were operating in Iceland before the crises. No special incentives 
have been put into place regarding establishment of foreign banks in Iceland after the crises. WT/TPR/M/273/Add.1 
 
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  IV. TRADE POLICIES BY SECTOR 
(4) SERVICES (ii) Telecommunications  
(a) Structure 
 Question 64 
Paragraph 83 on page 78 of the report mentions that the Postal and Telecom Administration (PTA) 
operates an equalization fund which provides f unding for universal service operations that are 
either unprofitable or run at a loss. In Iceland, what are these operations?  
Answer 
Possible compensation from the fund must corresp ond to a duty that the PTA has imposed on an 
undertaking to provide specific universal service.  Currently the National Emergency Call Centre is 
the only undertaking that is receiving compensati on from the fund, i.e. for providing answering 
service in the emergency number 112.  
Question 65 
Paragraph 84 on page 78 of the report indicates that the PTA may impose fines and punish serious or repeated violations with imprisonment. What telecommunications violations may lead to a prison sentence? 
 
Answer 
The PTA has only competence to impose a periodic penalty payment on operators up to 500,000 
ISK per day of infringement. Penalties in the form of a lump sum fee or imprisonment require 
prosecution by the police and a District Court procedure ending with a formal judgment. These penalties are applicable to infringements of the Telecom Act in general. The initiation of 
prosecution and the utilization of such penalties would depend on variables such as the subject 
matter of the legal provision in question, i.e. wh ether it constitutes a clear enough duty for a 
person either to act in certain way or forbidding certain acts, and additionally whether the infringement was perpetrated with intension, e. g. for profit, or by way of thoughtlessness. 
 
Question 66 Paragraph 85 states that recent amendments to the Electronic Communications Act have increased 
communications security and consumer protection, implemented EU regulations on roaming on 
public mobile telephone networks, and ensured smoother and quicker number portability. What 
restrictions are there on foreign enterprise participation in the telecommunications sector? What 
are the Icelandic Government's projections re garding the impact of the above-mentioned 
amendments on variables such as consumer prices and telephone penetration?  Answer 
According to Article 4 of the Act on Telecommunications No. 81/2003, the right to operate a telecommunication company/service rests with individuals or legal persons established within the European Economic Area. 
 
Generally, there is free competition on the telecommunications market in Iceland and consumer prices are therefore not decided by the State. Th e objective of the EU roaming Regulation, which 
has been implemented in Iceland, is to ensure that prices to consumers do not exceed certain 
limits when they move between the EEA countries. As another general remark, the penetration in Iceland in the field of telecommunication is ve ry high, both regarding mobile telephones and 
internet services.  
 
(iii) Transport  
(a) Air transport 
 Paragraphs 86 to 95 
 
Question 67 What limits are there on foreign participation in the air transport sector in Iceland?  WT/TPR/M/273/Add.1 
 
- 53 - 
 
  Answer 
A distinction is made between companies establis hed within the European Economic Area (EEA) 
and companies established outside the EEA. In the latter case the requirements depend on whether an Air Services Agreement has been concluded between Iceland and the relevant country 
or not. In short the requirements are these:  
 
Air carriers established within the EEA have to notify to the Icelandic Civil Aviation Administration 
(ICAA) before they start providing flight services  to and from Iceland and if they are providing 
more than three flights they need to se nd ICAA copy of the following documents: 
 Air operation certificate (AOC)  
 Operation specification 
 Insurance certificate  
 Air carrier security programme according to Article 17 of the Regulation on Aviation 
Security No. 985/2011  
Air carriers established outside the EEA but within a state that has concluded an Air Service 
Agreement with Iceland also have to notify to the ICAA before they start providing flight service to 
and from Iceland and send ICAA copy of the following documents: 
 Air operation certificate (AOC)  
 Operation specification 
 Insurance certificate  
 Air carrier security programme according to Article 17 of the Regulation on Aviation 
Security No. 985/2011 
Provided that the air carrier has been designated by its state to provide the air service and the Air 
Service Agreement authorizes the flights th ere will be no objection by the ICAA.  
Air carriers established outside the EEA and within a state that has not concluded an Air Service 
Agreement with Iceland have to ask for permission from the ICAA to provide flight service to and 
from Iceland. To get permission the following has to be provided: 
 Air operation certificate (AOC)  
 Operation specification 
 Airworthiness certificate 
 Insurance certificate  
 Air carrier security programme as required by  Art. 17 of the Regulation on Aviation 
Security No. 985/2011 
 Confirmation that the flight safety rules in the state of the air carrier are equal to 
the EASA rules 
 Confirmation of reciprocity providing Icelandic air carriers with equal flight (traffic) 
rights as ICAA are permitting, in accordance with paragraph 2 of Art. 146 b of the 
Aviation Act No. 60/1998  
 
All parties that provide services and have aviation  security role in accordance with Art. 11 of 
Regulation on Aviation Security No. 985/2011 shall obtain an approval from ICAA for the aviation 
security. Parties that intend to provide ground -handling services or a self-handling users at 
Keflavík airport have to obtain an approval from the ICAA for the aviation security in accordance 
with Art. 3 and Art. 14 of Regulation No. 1186/2008.  
 
IV. TRADE POLICIES BY SECTOR (4) SERVICES 
(iii) Transport  
 (a) Air transport  
Question 68 
Paragraph 93 states that under the provisions of Act No. 34/1991 on Foreign Investment in Companies, foreign ownership in Icelandic companies involved in airline operations may not 
exceed 49 per cent. This limitation does not apply to nationals of the EEA, who are treated as 
Icelandic nationals. Additionally, no entity ma y be granted an operating licence unless it is 
effectively controlled by EEA nationals. There are no limitations on foreign participation in auxiliary 
services. What steps must be followed for a foreign company to provide auxiliary services? Do any 
companies with foreign holdings provide these services?  WT/TPR/M/273/Add.1 
 
- 54 - 
 
  Answer 
Air carriers that have a permission to provide air-services to and from Icelancd, cf. answer to the 
question immediately above, have the right to provide themselves ground -handling services as 
well. Parties that intend to provide ground-handlin g services or a self-handling users at Keflavík 
airport have to obtain an approval from the ICAA fo r the aviation security in accordance with Art. 3 
and Art. 14 of Regulation No. 1186/2008. Currently , there are no foreign companies that provide 
these services.  
 
(b) Maritime transport  Paragraphs 96 to 103 
 
Question 69 What limits are there on foreign participation in the maritime transport sector in Iceland? 
 
Answer 
The maritime transport sector in Iceland is not subject to specific restrictions on foreign 
participation. However, the general Act No. 34/1991 on Investment by Non-residents in Business 
Enterprises applies as in any other sectors. The Act is available in English here:. http://eng.idnadarraduneyti.is/laws-and-regulations/nr/1129. 
 
The registration of ships in Iceland is, however, on ly open to Icelandic nationals and Icelandic legal 
entities, as well as nationals and legal entities of the EEA, according to Act 115/1985 on the Registration of Ships.  
 
IV. TRADE POLICIES BY SECTOR (4) SERVICES 
(iii) Transport 
 (b) Maritime transport  
Question 70 
With regard to harbour administration, Paragraph 101 states that the Iceland Maritime Administration (IMA) is responsible for coastal protection and harbour projects, research, and 
planning for the development of coastal protections and harbours. The State is responsible for 
conducting basic research pertaining to harbour projects as well as the provision of financial support for new harbour projects.  
Paragraph 101 mentions that most harbour projects are tendered out. What harbour projects can 
be awarded through procedures other than tendering? What do these award procedures entail?  Answer 
Tendering procedures for port projects is gove rned by Regulation 755/2007 on the procurement 
procedures of entities operating in the water, energy, transport and postal services sectors, which implements Directive 2004/17/EC on this subject. 
 
The port projects concerned include enlargements of ports, repairs of port infrastructure, harbour deepening, construction and maintenance of harbour sea walls and construction of quay 
installations. 
 The relevant rules lay down detailed rules on the pr ocess required in such matters. The main rules 
is that projects are subject to tender, but sm all projects (under approx. 10 million ISK) are 
excempt from this requirement.  
 IV. TRADE POLICIES BY SECTOR 
(5) TOURISM 
 Question 71 
Paragraph 106 states that under the Government's new growth plan, the authorities have 
identified tourism as a focus sector. In this regard, a new public strategy for tourism was approved by Parliament in 2011. What restrictions are there on foreign enterprise investment in the hotel trade? 
 WT/TPR/M/273/Add.1 
 
- 55 - 
 
  Answer 
There are no restrictions to foreign enterprises in vestment in the hotel trade. However, the general 
Act No. 34/1991 on Investment by Non-residents in Business Enterprises applies in hotel trade as in any other sectors. The Act is available in English here:. 
http://eng.idnadarraduneyti.is/laws-and-regulations/nr/1129. 
 UNITED STATES 
 Part I: Questions on the Secretariat Report (WT/TPR/S/273) 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS 
(v) Import prohibitions, restrictions and licensing  
Pages 29-30, paragraph 35 
 Question 1 
The Secretariat Report refers to changes to Icel and's import license and/or permit requirements 
since its 2006 TPR. It appears that Iceland has not notified any import licensing measures since 2004. In light of the WTO Agreement on Import Licensing Procedures, what are Iceland's intentions with regard to the Agreement's notifica tion requirements? When will Iceland reply to the 
annual Questionnaire on Import Licensing Procedures in accordance with Article 7.3 of the 
Agreement?   
Answer 
Iceland recognizes that it in the past years ha s not submitted the annual Questionnaire on Import 
Licensing Procedures in accordance with Article 7. 3 of the Agreement. Iceland will submit the next 
reply to the annual questionnaire in March 2013.  
 II. TRADE POLICY REGIME, FRAMEWORK AND OBJECTIVES (1) GENERAL CONSTITUTION AL AND LEGAL FRAMEWORK 
 
Page 12, paragraph 4  
Question 2 
The report mentions that there are two special courts; the Court of Impeachment, which deals with cases where members of the executive are accused of criminal behavior, and the Labour 
Courts. Please explain the types of cases that are considered under the Labour Court. 
 Answer 
The Labour Court is a specialized court stipulated in the Act No. 80/1938 on Trade Unions and 
Industrial Disputes. 
 The Court consists of five persons appointed for terms of three years, one by the Confederation of 
Icelandic Employers, one by the Icelandic Federation  of Labour, one by the Minister of Welfare and 
two by the Supreme Court.  
The Labour Court‘s role is to settle legal disputes arising between social partners, e.g. unions and 
federations of employers, namely in the following instances:  
 Arising out of complaints of violations of the law on trade unions and labour disputes and 
damages suffered due to unlawful stoppage of work. 
 Out of charges of violation of a work agreemen t or disagreement on the interpretation of a 
work agreement or its validity. 
 Other issues between workers and employers, who have agreed to submit it to the Court. 
 Items relating to the proceedings of cases which are not stipulated in the Act (No 80/1938) shall 
be subject to the code of procedure of civil cases before the District Courts as far as may be 
possible.  The Court may order parties to pay damages, fines and costs in accordance with customary rules. 
The judgements and decrees of the Labour Court are subject to execution. WT/TPR/M/273/Add.1 
 
- 56 - 
 
  A case which may be proceeded with before the Labour Court shall not be pleaded before common 
Courts of Law, unless the Labour Court has refused to take it for consideration, the Labour Court's decrees and judgements are final and will not be appealed. However, a judgement or ruling of dismissal or invalidation on the grounds that the case does not fall within the jurisdiction of the 
Labour Court, an order on the duty to witness, the swearing of oaths and fines for breaches of 
court procedure and decisions on the imposition of fines on parties can be appealed to the Supreme Court. 
 
(1) TRADE POLICY DEVELOPMENT AND OBJECTIVES (ii) Trade Policy Objectives  
 
Page 13, paragraph 11, footnote 4 
Question 3 
The Secretariat report indicates that in July 2009,  Iceland applied for membership of the EU and 
that 10 chapters are fully covered by the European Economic Area (EEA). As footnote four notes, 
one of the chapters covered is the freedom of mo vement for workers. Please provide additional 
information regarding what is covered by the ch apter on the freedom of movement for workers. 
Answer 
The EU legislation falling under the chapter on the freedom of movement for workers provides that 
citizens of one Member State have the right to work in another Member State. EU migrant workers 
must be treated in the same way as national workers in relation to working conditions, social and 
tax advantages. The acquis also includes a mechanism to coordinate national social security 
provisions for insured persons and their family members moving to another Member State. 
 
As a party to the EEA Agreement, Iceland has participated in the European Single Market since 
1994. Icelandic legislation is therefore already in line with the EU rules on freedom of movement for workers.  
 
(3) TRADE AGREEMENTS AND ARRANGEMENTS  Page 14, paragraph 14 
 
Question 4 The Secretariat report indicates that a number of no tifications remain outstanding. In addition to 
the annual notifications listed, we note that Iceland did not provide notification of changes to its 
import requirements for dairy and livestock products – adopted in 2011 – to the WTO SPS Committee, which has negatively impacted U.S. exports. When will Iceland notify this requirement 
to the WTO?   
 Answer 
Iceland has recently notified the measures in question, and the relevant notification should be 
circulated to all members in the course of the week.  
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES AFFECTING PRODUCTION AND TRADE 
(iv) Standards and other technical requirements  
Page 42, paragraphs 75-76 
 The Secretariat report notes that Iceland has not made any notifications to the TBT Committee (or the SPS Committee) since its last review, which was in June 2006. 
 
Question 5 
- During that review, the Secretariat report stated that "[… Icelandic] authorities also 
indicated that Iceland does not have a system in place for notifying EEA technical 
regulations to WTO Members but that they are considering how to address this." What is the status of Iceland's efforts to notify technical regulations that Iceland mandates, 
irrespective of how the regulations were developed or whether they are notified to EEA 
members? 
 WT/TPR/M/273/Add.1 
 
- 57 - 
 
  Answer 
Iceland is a part of the European Economic Area and as such participates in the European Single 
Market. Iceland as other EEA countries applies the harmonised rules of the Single Market, which often entails incorporating EU legislation into Icel andic legal order. Iceland is fully aware of its 
obligations under the WTO agreements to notify certain technical regulations to the WTO. Iceland 
has recently reviewed its procedure in order to provide for necessary and timely notifications of 
relevant TBT and SPS measures to the WTO.  
 
Question 6 
- Additionally, our understanding is that since the last review, Iceland established specific 
labelling requirements for imports of certain agricultural products made with genetically 
engineered crops as ingredients, such as grai ns and cereal products. Iceland also recently 
updated their regulations in November 2011 regarding measures to prevent the introduction of animal diseases and contaminated products. When will Iceland notify these 
requirements to the WTO? 
 
Answer 
Iceland has recently notified the measures in question, and the relevant notification should be circulated to all members in the course of the week.   Page 44, paragraph 83 
 
The Secretariat report provides information regarding the EEA and the application of EU SPS measures in Iceland. Please clarify how Iceland en sures that its SPS measures are based on either 
international standards (OIE, IPPC, or Codex) or science when Iceland selects a higher level of 
protection. For example, in 2011 Iceland adopted a regulation that requires meat shipped to 
Iceland to be accompanied by a certificate confirming that the products have been stored at a 
temperature of at least -18°C for one month prior to customs clearance. 
 Question 7 
- What is the scientific justification for this requirement? 
 
Answer 
The requirement that meat shipped to Iceland is to be accompanied by a certificate confirming that 
the products have been stored at a temperature of at least -18°C for one month prior to customs 
clearance, has been a requirement under Icelandic law for decades. This requirement is now found in Regulation No. 448/2012 on measures to prevent the introduction of animal diseases and 
contaminated products.  
 The scientific justification for this requirement is based on the need for Iceland to have a high level of protection against the introduction of foreign animal diseases, due to the almost unique status 
of animal health in Iceland, as can be seen from the OIE website. The provision to require that 
meat products shall be stored at a temperature of at least -18°C for one month prior to customs clearance, allows Icelandic Food and Veterinary  Authority a time to scan information from the 
country of origin of the meat to find out if a co ntagious disease that could be transmitted with the 
meat was present at the time of slaughter. A go od example for the need of Iceland to exercise 
such a precautionary principle is the case of f oot and mouth disease in UK in 2001. It was later 
determined that the disease had been present in the country almost three weeks before it was 
suspected and confirmed.  Question 8 
- This regulation does not appear to have been notified to the WTO. What steps has Iceland 
take to ensure that it notifies the WTO when it adopts a SPS measure which results in a higher level of protection than achieved by an international standard?   
 
Answer 
Iceland has recently notified the measures in question, and the relevant notification should be 
circulated to all members in the course of the week.  
 WT/TPR/M/273/Add.1 
 
- 58 - 
 
  (v) Intellectual property rights 
 Page 48, paragraph 97  
Question 9 
As the Secretariat report notes, copyright reform and a new draft bill have been put off until 2014. Is this a date-certain or is it contingent on funding that has yet to be acquired? Please also 
describe more fully some of the goals of the refo rm initiative? For example, what is meant by 
"maintaining Nordic legal unity?" Does this refer to working with and/or working on copyright harmonization with other EFTA countries?  
Page 48, paragraph 99 
 Question 10 
Please describe the environment in Iceland for collective management organizations (CMOs)? It is 
our understanding that Iceland participates in extended collective licensing and that future legislation foresees relevant provisions on accreditation of CMOs. What will accreditation involve? 
 
Joint answer 
The reform of the Icelandic copyright act was launched in October 2009 and has so far resulted in one amendment act (act no. 93/2010). A second draft amendment act will go to public 
consultation shortly. Following that a bill of law will be presented in the next spring session of 
parliament. This bill of law will contain a revised ch apter I (exclusive rights of authors) and revised 
provisions on extended collective licensing. The orig inal schedule of the reform initiative included 
plans for annual incremental amendments to the copyright act, followed by a final revision bill of 
law to be presented  in 2012. Due to the economic situation it is now envisaged that the final 
revision bill of law will be presented in 2014 instead of 2012. 
 
The Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) have a long history of co-
operation in the field of copyright legislation under  the auspices of the Nordic Council of Ministers. 
The first co-ordinated Nordic copyright legislation was enacted in all the Nordic countries, bar 
Iceland, in 1960. By maintaining the Nordic lega l unity through an on-going co-operation for the 
development of the copyright legislation each country can benefit from the relevant case law and jurisprudence from other Nordic countries. Thus there is a long tradition for attending higher 
education and training of the legal profession in other Nordic countries. Members of the legal 
profession of the Nordic countries also attend symposiums and workshops on regular basis for the 
development of common Nordic interpretation and understanding of legal principles and policy. 
 
A working group of Nordic Ministries collaborates on maintaining the Nordic legal unity in the copyright legislation of the respective Nordic  countries. The working group is comprised of 
copyright experts from the Danish Ministry of Cu lture, the Norwegian Ministry of Culture, the 
Finnish Ministry of Education and Culture, the Swedish Ministry of Justice and the Icelandic 
Ministry of Education, Science and Culture. This working group was originally formed under the auspices of the Nordic Council of Ministers but is now independent from that body. The working 
group is a forum for exchange of information on th e national and international level, including the 
EU and EEA levels and co-ordinates a common Nordic copyright policy.  
As all of the Nordic countries participate in the European Economic Area (EEA) they have in most 
cases equivalent duties to transpose the same EU directives, regulations and recommendations in the field of intellectual property. It is common for the Nordic countries to harmonize the national implementation of EU legislation, within the scope prescribed in each case. 
 
The following collective management organisations have received an accreditation from the Ministry of Education, Science and Culture, fo r representing the respective right holders for 
extended collective licensing purposes, cf. the Copyright Act No. 73/1972: 
Innheimtumiðstod gjalda (IHM), a collecting soci ety according to Art. 11 of the Copyright Act 
(private copying exemption), is a joint copyright organisation for authors, performers and 
producers. IHM collects remunerations for the sale of blank audio and video media and hardware, 
used for reproduction of material protected by copyright, and distributes to right holders. IHM represents the large majority of Icelandic right holders and through reciprocity agreements, most of the foreign right holders. IHM also represents right holders for terrestrial cable retransmission of 
satellite broadcasting, cf. arts. 23a and 45a of the Copyright Act. WT/TPR/M/273/Add.1 
 
- 59 - 
 
  FJÖLÍS is an umbrella collection society representing authors and publishers for use of published 
works via reprography accredited by the Ministry of Education, Science and Culture pursuant to Art. 15a of the Copyright Act. FJÖLÍS has reciprocal agreements with equivalent collection societies in the EU 
 
STEF is the Performing Rights Society of Iceland, representing the interest of composers and songwriters for public performances and broadcasting, accredited by the Ministry of Education, 
Science and Culture pursuant art. 23 of the Copyri ght Act. STEF is a member of Nordisk Copyright 
Bureau (NCB), which deals with recording rights, both mechanical rights and more recently on-line rights. Both organisations have reciprocal agreements with other collection societies in the EU.  
The Icelandic Visual Arts Copyright Associat ion (Myndhöfundasjóður Íslands, Myndstef) is 
accredited by the Ministry of Education, Science and Culture pursuant to Arts. 23, 25 and 25b of the Copyright Act. Myndstef represents and collects licence fees on the behalf of authors of visual 
art for use of their work and resale right remuneration for the resale of original works of art. 
Myndstef has reciprocal agreements with other collection societies in the EU. The Writer's Union of Iceland (Rithöfundasamband  Íslands), is accredited by the Ministry of 
Education, Science and Culture pursuant  to Art. 23 of the Copyright Act. 
 SFH, the Collecting Society for Performing Artists and Phonogram Producers, is accredited by the Ministry of Education, Science and Culture pursuant to Art. 47 of the Copyright Act. 
The legal status of accreditation for a copyright collecting society means that collective agreements 
with users done on behalf of the members of the collecting society also become binding for artists and performers who are not members of the society in question. However, in system of extended 
collective licensing there is always an opt-out possibility for members and non-members for 
excluding their works or performances from the rights granted by such licenses.  
Directive 2006/123/EC of the European Parliame nt and of the Council of 2 December 2006 on 
services in the internal market is likely to influence the current regime of accrediting copyright collection societies. The European Commission ha s in a handbook on implementation of the 
directive construed Art. 17(11), which excludes th e administration of copyright from the directive 
in such a way that it does not bar the application of  Art. 9 of the directive which explicitly prohibits 
official accreditation as a regulatory prerequisi te for offering services in another EEA member 
state. This, along with plans for a new directive for regulating collecting societies, is now 
commonly regarded as a going against the current accreditation scheme of copyright collecting 
societies. It is therefore envisaged that accredit ation will in near future be abolished from the 
Icelandic copyright act. 
 
THAILAND 
 III. TRADE POLICIES AND PRACTICES BY MEASURES 
 
Page 42, paragraph 75  
"As of 30 June 2012, Iceland had not made any notifications to the TBT Committee since its last 
Review." 
 
Question 1 
Thailand would appreciate if Iceland could explain the reason why it has not made any notifications to the TBT Committee since its last trade policy review.  
Answer 
Iceland recognizes that it may have some TBT notifications outstanding. Iceland is taking active 
steps to remedy the situation. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
 
Page 30, paragraph 38 
 "Under the Regulations, a claim concerning dumping or subsidies must be made to the Minister, who refers it to the Committee on Anti-Dumping and Countervailing Duties. The Committee may 
make preliminary findings to reject or uphold the claim. If the claim is upheld, the Committee may WT/TPR/M/273/Add.1 
 
- 60 - 
 
  impose preliminary anti-dumping or countervailing duties for up to twelve months and must notify, 
in the Official Gazette , that it intends to start a full investigation. In addition, the complaining 
party and other interested persons (including ex porters, importers, and the Government of the 
exporting country) must be directly informed of the investigation. During the investigation, which 
should not take longer than one year, the Committee may hold hearings and invite interested 
parties to make submissions. The final decisions of the Committee are published in the Official  
Gazette . If the Committee decides to impose anti-dumping or countervailing duties on imports of a 
product (cannot be applied simultaneously) the maximum period is five years, renewable if a 
complaining party can show that removal of the measure would lead to injury."  Question 2 
Could Iceland please explain how preliminary anti-dumping and countervailing duties are 
calculated? What are the bases of such calculation? 
 
Answer 
As stated in paragraph 83 of the TPR report, Iceland has not resorted to anti-dumping or 
countervailing measures. The process of applying anti-dumping or countervailing measures is 
described in the Customs Act and other relevant regulations that are based on Iceland's obligations 
under WTO agreements.   In Article 135 of the Customs Act it is stated that anti-dumping duties must not exceed the 
dumping margin, i. e. the difference between th e dumping price and the price being compared. 
The Article further states that countervailing duti es must not exceed the payments or subsidies 
that are directly or indirectly granted in connection with the manufacture, processing, exportation 
or transportation of the goods. This would also apply to preliminary anti-dumping and 
countervailing duties if imposed.  In Article 34 of Regulation No. 351/1994, on th e execution of Anti-Dumping and Countervailing 
Duties, it is stated that anti-dumping and countervailing duties may be imposed temporarily until 
further information is available, if a delay is considered likely to cause damage. In such cases the customs clearance of the product should be author ized granted that a cash deposit has been made 
as a guarantee.   
 
If Iceland were to impose preliminary anti-Dumping or countervailing duties such application would be in the form of a security by a cash deposit prior to customs clearance and the deposit would not 
exceed the dumping margin.  
 
__________