WT/TPR/S/273 Trade Policy Review 
Page 20 
  
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures 
1. The Minister of Finance is responsible fo r policy and legislation relating to customs 
procedures in Iceland while the Directorate of  Customs is responsible for implementation. 
2. Act No. 88/2005 on Customs Law has been amende d several times over the past few years, 
although customs procedures remain largely the sa me as reported in Iceland's last Trade Policy 
Review.1  Amendments include:  the creation, under the Directorate of Customs, of a single customs 
district for the whole country, which replaced the sy stem of 26 districts;  changes to the conditions 
under which consignments may be released when  some essential documentation has not been 
submitted;  and changes to the duty-free limits that individuals are allowed to bring into the country.  
Regulation No. 1100/2006, as amended, provid es details on custody and customs clearance.2 
3. Before a consignment of goods reaches Iceland, a cargo manifest must be sent to the customs 
authorities in the port or airport of entry.  The manifest must match the bill of lading/airway bill that accompanies the consignment.  The cargo manifest system is computerized and importers provide the 
information by electronic data interc hange for 97% of consignments.  
4. To be able to clear goods for free circulation, an  entry form has to be filled out, signed, and 
handed to customs along with:   
 the bill of lading/airway bill;   
 a commercial invoice, or equivalent;   
 bills/invoices covering the costs of delivery other than those stated on the commercial invoice 
(e.g. freight, packing, insurance and forwarding charges and fees) in order to determine the 
customs value (c.i.f. for imports, f.o.b. for exports);   
 other documentation if necessary, to determine the classification of the goods;   
 and permits and certificates, if necessary, according to the legislation covering the respective 
commodities, such as those necessary to comply with sanitary and phytosanitary measures.  
5. Since 1988, customs clearance has been fully computerized, including the submission of 
electronic documents.  The option of clearing goods through customs manually is available but usually requires a few hours, compared with a few minutes for clearance by electronic data interchange (EDI).  The EDI system is used for about 98% of consignments  cleared through customs 
(imports and exports).  In order to use the EDI system, an importer must obtain a licence from the 
Directorate of Customs or use a licensed import br oker, otherwise customs clearance must be done 
manually.  There is no charge for manual clearance during normal working hours, outside of normal working hours, the charge is based on th e time required for the customs officer. 
6. All documents submitted to Customs can be inspected electronically but the Customs 
Directorate has the right to inspect the origin als and to ask for additional information and 
documentation on the consignment.  Physical inspec tions of consignments are based on an assessment 
                                                      
1 WTO document WT/TPR/S/164/Rev.1, 17 August 2006. 
2 For the consolidated text of Act No. 88/2005 on Customs, as amended, and Regulation 1100/2006, as 
amended (in English), see:  http://www.tollur.is/displayer.asp?cat_id=918 [July 2012]. Iceland WT/TPR/S/273 
 Page 21 
 
 
  by the Analysis Unit in the Directorate of Custom s (Table III.1).  A breach of the Customs Law may 
result in confiscation of goods, fines or imprisonment of up to six years. 
7. In the case of disputes, written complaints may be submitted to the Director of Customs with 
supporting arguments and documents within 60 days of customs clearance.  The Directorate ruled on 
an average of 21 complaints each year for 2009-11.  The rulings on complaints may be appealed to the 
State Customs Board for a final decision;  an  annual average of five appeals were made 
during 2009-11.  
Table III.1 
Cases investigated by the Customs Inspectorate, 2009-2011 
 2009 2010 2011 
Number of cases 274 433 324 
Finished cases 176 278 317 
Penalties issues 1, 666 1,480  1,459 
Total penalties (ISK million) 12.1 13.5 15.6 
Source:  Icelandic authorities. 
8. The storage area used for goods that have not  cleared customs depends on the intended 
destination of the goods: 
 clearance warehouses:  goods may be stored for up to six months; 
 bonded warehouses:  individual consignment part s may be withdrawn, and minor processing 
of goods is permitted, such as repackaging, labelling, assembling, testing, and cleaning, 
provided there is no change in the tariff classification of the goods; 
 warehouses for duty-free supplies:  for storage of provisions, equipment, and other supplies 
for vessels in international journeys, and goods  intended for sale aboard such vessels; 
 duty-free shops:  for sales to passengers and crews of vessels on international journeys, on 
arrival and departure; 
 free zones;  uncleared goods may be used in processing or industry of any kind (although 
legal provision has been made for free zones,  none are functioning (section (3)(ii));  and 
 transit warehouses:  for goods transferred from a vessel or clearance warehouse, before they 
are transported out of the country.  
9. Iceland has notified the WTO that it does not have any laws or regulations relating to 
preshipment inspection.3 
10. It has been reported that, compared with ot her OECD countries and other countries in the 
region, importing into Iceland takes longer (14 days  compared with 11 in other high income OECD 
countries), and is more expensive (US$1,674 comp ared 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.4   
                                                      
3 WTO document G/PSI/N/1/Add.4, 9 October 1996. 
4 World Bank (2012). WT/TPR/S/273 Trade Policy Review 
Page 22 
  
  (ii) Customs valuation and rules of origin 
(a) Customs valuation 
11. The law on customs valuation was changed slightly during the review period.  
Under Act No.170/2007, the exchange rate used for customs clearance became the official adjustment 
rate registered by the Central Bank for the week-d ay preceding customs clearance.  Exchange rates for 
Iceland's main trading partners are posted on the website of the Directorate of Customs.5 
12. Under Chapter V of Act No. 88/2005 on Customs Law, which is modelled on Articles 1 and 8 
of the Agreement on the Implementation of Artic le VII of GATT 1994, the primary basis for the 
customs valuation of goods is the transaction value ad justed to include container, insurance, freight, 
and other charges.  The actual transaction value may be reduced:  
 for the cost of transport from the first custom s port where they could have been unloaded to 
the actual port where they were unloaded; 
 for the additional cost arising from poor conditions for unloading;  or 
 for the additional cost arising from unloading at more than one port. 
13. Under the Act, the Minister of Finance is re quired to take into account the Agreement on the 
Implementation of Article VII of GATT 1994, when issuing further rules on customs valuation.  
Regulation 1100/2006 lists the alternative methods of  valuation to be used when the director of 
customs doubts the veracity of the information c oncerning the transaction value.  The alternative 
methods of valuation and their order of pr iority were modelled on the Agreement on the 
Implementation of Article VII of GATT 1994.   
14. Special provisions apply to the valuation of mo tor vehicles allowing the valuation for customs 
purposes to be a reference value, based on the valu e of a similar vehicle (same type, subtype, and 
model year) in the country where the vehicle was purchased.   
15. Assistance may be sought from customs authoriti es in the country of export.  Where the 
determination of customs value of imported goods is delayed, Customs may release the goods, against 
security for border charges.  Upon written re quest, an importer has the right to a written 
communication from the Director of Customs explaining how the customs value of the imported goods was determined. 
16. Iceland has notified the WTO that the In terpretative Notes of the Agreement on 
Implementation of Article VII of the GATT 1994 have  not been included in its respective laws and 
regulations
6;  the provisions of the Decision on the Treat ment of Interest Charges in the Customs 
Value of Imported Goods have not been implemente d;  and the provisions of paragraph 2 of the 
Decision on the Valuation of Carrier Media Bearin g Software for Data Processing Equipment have 
not been implemented.7 
                                                      
5 Exchange rates.  Viewed at:  http://www.tol lur.is/Tollgengi.asp?cat_id=2844 [July 2012]. 
6 WTO document WT/TPR/S/164/Rev.1, 17 August 2006. 
7 WTO document G/VAL/N/2/ISL/1, 16 April 1999. Iceland WT/TPR/S/273 
 Page 23 
 
 
  (b) Rules of origin 
17. In 1995, Iceland notified the WTO Committee on Rul es of Origin that the Minister of Finance 
would probably issue a regulation on non-preferential rules of origin once the Technical Committee on Rules of Origin had concluded its work on the harmonization of non-preferential rules of origin.
8  
Although this has not happened, as a member of EFTA and a signatory to the EEA Agreement, 
Iceland is subject to their non-preferential rules of origin.9 
18. Furthermore, under Article 7 of the Customs Law, preferential rules of origin, including 
Iceland's GSP scheme, are based on the trade agr eements Iceland has concluded.  In March 2012, 
Iceland ratified the Regional Convention on Pan- Euro-Mediterranean Prefer ential Rules of Origin,  
which  will cover trade among the EU, EFTA10, the Faroe Islands, the par ticipants in the Barcelona 
Process11, and participants in the European Un ion's Stabilisation and Association Process.12  The Pan-
Euro-Mediterranean system is an extension of the existing Pan-European cumulation that applies to 
the EU, EFTA, and Turkey.  Under this system produc ts that originated in one of these countries may 
be added to products originating in anothe r without losing their originating status.13 
19. For GSP beneficiaries, the rules of origin ar e set out in Annex 4 of  Regulation No. 119/200214 
as products wholly obtained in a GSP country or pr oducts that have been sufficiently worked or 
processed to satisfy Annex II to Protocol 4 of the Agreement on the European Economic Area as 
replaced by the Decision of the EEA Joint Committee No. 136/2005.15 
20. Exporters, importers or other persons may request  an advance assessment of origin from the 
Icelandic authorities.  An assessment by a director of customs may be appealed to the State Customs 
Board by the person who made the request for an advance assessment.16 
(iii) Tariffs  
(a) Applied MFN tariff 
21. Iceland grants at least 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% are duty free or have ad valorem  
duties (Table III.2 and Chart III.1).  Over 70% of all tariff lines are duty free.   
                                                      
8 WTO document G/RO/N/5 ,1 November 1995. 
9 Ministry of Foreign Affairs (2011). 
10 Iceland, Liechtenstein, Norway, and Switzerland. 
11 Algeria, Egypt, Israel, Jordan, Lebanon, Morocco , the Palestinian Authority, Syria, Tunisia, and 
Turkey. 
12 Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Re public of Macedonia, 
Montenegro, and Serbia, as well as Kosovo. 
13 European Commission online info rmation.  Viewed at:  http://ec.europa.eu/taxation_customs/ 
customs/customs_duties/rules_origin/preferential/article_783_en.htm [July 2012]. 
14 Regulation No. 119/2002 (in English).  Viewed at:  http://eng.fjarmalaraduneyti.is/media/laws_ 
regulations/Regulation_119-2002.pdf [July 2012]. 
15 Decision of the EEA Joint Committee No. 136/2005, Official Journal of the European Union OJ No 
L 321 , 8 December 2005.  Viewed at:  http://eur-lex.europa.eu/en/index.htm [July 2012]. 
16 WTO document G/RO/W/26, 25 March 1998. WT/TPR/S/273 Trade Policy Review 
Page 24 
  
  Table III.2 
Tariff structure of Iceland, 2005 and 2012     
MFN applied   EEA 
  2005 2012   2012 
Bound tariff lines (% of all tariff lines)a 94.9 94.9 
Simple average rate 4.3 (5.9) .. 1.8 
   Agricultural products (HS 01-24) 9.5 (15.8) 9.0 6.2 
   Industrial products (HS 25-97) 2.5 2.5 0.0 
   WTO agricultural products 10.9 (18.2) .. 8.3 
   WTO non-agricultural products 2.5 2.5 0.0 
Duty-free tariff lines (% of all tariff lines) 70.1 70.1 94.0 
Simple average rate of dutiable lines only 14.5 (19.8) .. 33.3 
Tariff quotas (% of all tariff lines) 1.1 .. .. 
Non- ad valorem  tariffs (% of all tariff lines) 4.7 5.2 4.6 
Domestic tariff "peaks" (% of all tariff lines)a 11.6 (7.8) .. 5.4 
International tariff "peaks" (% of all tariff lines)b 7.6 (7.9) .. 5.3 
Overall standard deviation (SD) of tariff rates 8.7 (21.0) .. 7.9 
Coefficient of variation (CV) of tariff rates 2.0 (3.6) .. 4.4 
Nuisance applied rates (% of all tariff lines)c 0.0 .. 0.0 
Number of lines 8,167  8,513  8,513  
  Ad valorem  2,057  2,110  514  
  Duty-free lines 5,728  5,965  7,999  
  Non- ad valorem   382  438  388  
      Specific 50  53  53  
      Compound 332  385  335  
      Alternate 0  0  0  
.. Not available/not calculable. 
a Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
b International tariff peaks are defined as those exceeding 15%. c Nuisance rates are those greater than zero, but less than or equal to 2%. 
Note: The 2005 tariff is based on HS02 nomencla ture and the 2012 tariff is based on HS12. 
 Calculations are based on national tariff line level (eight-digit);  calculations for tariff averages, domestic and internatio nal 
 peaks, and SD and CV exclude specific rates and include the ad valorem  part of compound rates. 
 Figures in brackets include AVEs provide d by the authorities for the 2005 tariff sc hedule.  For 2005, where no brackets are 
 shown, the figure is the same, including or excluding AVEs.  No AVEs were provide d by the authorities for 2012 non- ad 
 valorem  rates. 
Source : WTO Secretariat calculations, based on Icelandic Directorate of Customs online information.  Viewed at:  
 http://www.customs.is/upl oad/files/Customs%20Tariff%202012.pdf [February 2012]. 
22. It is not possible to provide an average MFN applied tariff because non- ad valorem  duties 
(specific and compound rates) apply to 438 items, representing 5.0% of total tariff lines, and the 
authorities were unable to provide ad valorem  equivalents for these lines.  However, these non- ad 
valorem tariffs are applied exclusively to agriculture  products (WTO definition), which are much 
more heavily protected than other sectors.  The average MFN duty would therefore be higher, and the 
complex nature of the tariffs also adds to the co st of importing.  For non-agricultural products, the 
average MFN applied tariff was 2.5% in 2012.  For non-agricultural products, clothing has the highest average tariff, while the highest duty rate of 20% is applied to chemicals and photographic supplies 
(Chart III.2).  Iceland WT/TPR/S/273 
 Page 25 
 
 
  23. Among the ad valorem -only tariffs, more than 90% of tariff lines have MFN duty rates below 
15%;  excluding duty-free rates, most rates are in th e 5% to 10% range (Chart III.2).  Duty-free rates 
account for close to 60% of lines in the manufacturi ng sector but only 12% in the agriculture sector. 
Chart III.1
Tariff distribution by type of duty, 2012
(Share of total tariff lines)
Source: WTO Secretariat estimates, based on Icelandic Directorate of Customs online information.
Viewed at:  http://www.customs.is/upload/files/Customs%20Tariff%202012.pdf [February 2012].Ad valorem duty
24.8%
Duty free
70.1%Non- ad valorem duty
5.1%
Compound duty
4.5%Specific duty
0.6%
 
(b) Bound tariff 
24. All agricultural tariff lines and some 95% of manufactured lines are bound (using Iceland's 
schedule based in the HS96 classification).  Again, it has not been possible to calculate average tariffs 
because of the high number of non- ad valorem  equivalents and the absence of ad valorem 
equivalents.  However, the same conclusions can be made as for app lied MFN tariffs, i.e. that the non-
ad valorem  bound tariffs pertain to agricultural products. 
(c) Tariff preferences 
25. Iceland grants tariff preferences to participan ts in the EEA.  The overall simple average 
preferential tariff is 1.8% (2012).  The average rate  for agricultural products is 6.2% compared with 
close to 0% for other products;  99.5% of  manuf actured products can be imported duty free.  In 
addition to the EEA Agreement, Iceland has sever al FTAs under which it offers preferential tariffs 
(Table II.4). 
 WT/TPR/S/273 Trade Policy Review 
Page 26 
  
  0123456789 1 0 1 1 1 2 1 3 1 4 1 5
WTO agriculture
Animals & prod. thereof
Dairy products
Fruit, vegetables & plants
Coffee & tea
Cereals & preparations
Oil seeds, fats, oils & their prod.
Sugars & confectionary
Beverages, spirits & tobacco
Cotton
Other agricltural products
WTO non-agriculture
Fish & fishery products
Minerals & metals
Chemicals & photographic supplies
Wood, pulp, paper & furniture
Textiles
Clothing
Leather, footwear, travel goods
Non-electric machinery
Electric machinery
Transport equipment
Non-agriculture articles n.e.s.
PetroleumChart III.2
MFN applied tariff averages and dispersion by product groups, 2012
Product groups
(2.2)(12.4)
(3.4)(4.5)
(5.9)
(1.2)(4.0)(3.0)
(3.7)(4.0)
(2.4)(3.7)
(4.9)(2.7)(0.0)
Figures  in brackets correspond 
to the standard deviationAverage (%)
No average or standard deviation can be shown 
for agricultural products due to the high proportion of non- ad valorem tariffs and the 
absence of ad valorem equivalents;  except for 
sugar & confectionary and cotton.
Source: WTO Secretariat estimates, based on Icelandi c Directorate of Customs online information. Viewed at:  
http://www.customs.is/upload/files/Customs%20Tariff%202012.pdf [February 2012].
 Iceland WT/TPR/S/273 
 Page 27 
 
 
  (iv) Other charges affecting trade (VAT and excise duties) 
(a) Value Added Tax 
26. The main legislation covering VAT is  Act No. 50/1988 on Value Added Tax.17  Businesses 
with annual sales of taxable goods and/or services of less than ISK 1 million are exempt from VAT, 
as are medical and social services, educational institutions, cultural services, sports activities, 
passenger transport, postal services, rent of real estate properties, insurance activities, banking services, lotteries and betting pools, works of author s and musical composers, travel agencies, and 
funeral and church-related services.  
 
27. Exports of goods and services are zero-rated as are several other transactions, including: 
transportation of goods between countries;  design and planning of constructions based abroad; 
provisioning of inter-country vessels;  sale and leasi ng of aircraft and ships;  shipbuilding and 
maintenance of ships and aircraft; services to forei gn fishing vessels related to landing and sale of fish 
in Iceland;  direct payments to farmers;  and telecommunications services. 
28. VAT is levied at all stages of production and trade on domestically produced goods and 
services.  For imports, VAT is assessed and collected by the Directorate of Customs and is based on 
the c.i.f. price, plus the tariff and other duties and charges levied on the import.  For both imports and domestically produced goods and ser vices, outstanding VAT must be settled on a bimonthly basis, 
except for tax payers with turnover of less than ISK 3 million per year, who have a one-year settlement period, and farmers, who have a six-month settlement period. 
29. The standard rate for VAT in Iceland was incr eased from 24.5% to 25.5% on 1 January 2010 
with a reduced rate of 7% (down from 14% sin ce March 2007) for some goods and services (mainly 
food, printed materials, electricity, and hot water).  Public transport and tourist coach services using 
vehicles meeting Euro 5 emission standards qualify for a refund of two-thirds of VAT paid, and 
labour for residential housing qualifies for a temporary refund until 1 January 2013.  According to the 
authorities, the current exemption for cars using hy drogen as fuel is to be replaced by an exemption 
for electric, hybrid, and hydrogen fuelled vehicles. 
(b) Excise duties 
30. The main legislative acts for excise duties are:  Act No. 97/1987 on Commodity Tax;  
Act No. 29/1993 on Commodity Tax on Vehicles, Fu el, et al;  Act No. 96/1995 on Alcohol and 
Tobacco Tax;  and Act No. 87/200 4 on Oil Tax and Mileage Fee.  Each of these laws has been 
amended a number of times since being introduced.
18 
31. Excise duties on imports (except commercial im ports of alcohol and tobacco) are assessed 
and collected by the Customs Directorate and paid at  the point of import.  Excise duties on domestic 
production and sales are assessed by the Internal Revenue Directorate at the point of leaving the factory, and settled at the end of a two-month settl ement period.  Excise dutie s on alcoholic beverages 
                                                      
17 Act No. 50/1988 on Value Added Tax (in English).  Viewed at:  http://eng.fjarmalaraduneyti.is/ 
legislation/ [July 2012]. 
18 Act No. 97/1987 on Commodity Tax;  Act No. 29/1993 (as amended) on Commodity Tax on 
Vehicles, Fuel, et al;  Act No. 96/1995 (as amended) on Alcohol and Tobacco Tax;  and Act No. 87/2004 (as 
amended) on Oil Tax and Mileage Fee (in English).  Vi ewed at:  http://eng.fjarmala raduneyti.is/legislation/ 
[July 2012]. WT/TPR/S/273 Trade Policy Review 
Page 28 
  
  and tobacco products are assessed when they leave th e production centre and collected at the end of a 
14-day settlement period.   
32. The basis for assessment of excise duties on ve hicles was changed at the start of 2011 from 
engine size to carbon dioxide emissions.  For vehicles emitting greater amounts of CO 2, the new 
charges are being phased in, starting in 2011.19  Duties on taxis and rental cars are subject to lower 
rates of tax, and commercial and other vehicles not for private use are either exempt or have a simple ad valorem excise duty.  Vehicles are also subject to a tax based on their weight and CO
2 emissions, a 
disposal charge, and, for vehicles over 10 tonn es, a tax based on weight and distance driven 
(Table III.3). 
Table III.3 
Excise duties and related taxes in Iceland, 2012 
Product Excise duty rate 
Alcohol products  
Beer and ale containing more than 2.25%  alcohol ISK 86.90/cl of pure alcohol 
Wine and fermented beverages up to 15% alcohol ISK 78.16/cl of pure alcohol 
Other alcohol ISK 101.74/cl of pure alcohol 
Tobacco  
For resale  
Cigarettes ISK 347.90/pack of 20 cigarettes 
Snuff ISK 4.12/g 
Cigars and other tobacco ISK 12.45/g 
Not for resale   
Cigarettes ISK 437.00/pack of 20 cigarettes 
Cigars and other tobacco ISK 21.85/g 
Excise duties on vehicle fuel  
Petrol  ISK 42.23/litre ( 44.20 for leaded petrol) 
Diesel  ISK 45/litre 
Biofuels Reduction based on  the proportion of biofuel 
Excise duties on private motor vehicles  
Emissions in grams of CO 2/km Standard % Taxis and rental cars % 
  A. 0-80 0 0 
  B.  81-100 10 0 
  C.  101-120 15 0 
  D. 121-140 20 0 
  E.  141-160 25 5 
  F.  161-180 35 10 
  Categories G, H, I, J phased in as follows: 2011 2012 2013 2011 2012 2013 
  G. 181-200 36 41 45 12 14 15 
  H. 201-225 44 50 55 16 18 20 
  I.  226-250 48 54 60 20 23 25 
  J.  251 + 52 59 65 24 27 30 
Note:   Reduction for methane fuelled cars of up to ISK 1,250,000 
Table III.3 (cont'd)  
                                                      
19 Act No. 156/2010 amending Act No. 29/1993 on Commodity Tax on Vehicles, Fuel, et al;  and 
Act No. 87/2004 (as amended) on Oil Tax and Mileage Fee. Iceland WT/TPR/S/273 
 Page 29 
 
 
  Product Excise duty rate 
Excise duties on motor vehicles other than private automobiles 
Large goods vehicles, large special-purpose vehicles, 
tractors, agriculture trailers, large snow-mobiles, amphibious vehicles, competition cars and motorbikes, 
vehicles for transport of disabled persons, rescue 
vehicles, large coaches Exempt 
Small goods vehicles, small special-purpose vehicles, 
vehicles over 40 years old, motor vehicle bodies 13% 
small coaches, motorbikes, other vehicles 30% 
Semi-annual road tax  
 0 - 3,500 kg  
  Emissions 0-120 g of CO 2 /km ISK 5,000 
  Emissions greater than 120 g of CO 2 /km ISK 5,000 + 120/g of CO s/ km 
 More than 3,500 kg  ISK 46,880 + 2/kg over 3,500 kg up to a maximum of ISK 73,800 
Disposal charge  
 ISK 350 every six months for 15 years, ISK 15,000 refund when 
scrapped  
Weight distance tax (payable every six months)  
 Vehicle weight ISK/km Vehicle weight ISK/km Vehicle weight ISK/km Vehicle weight ISK/km 
 0-10 tonnes 0 15-16 tonnes 3.29 21-22 tonnes 6.89 27-28 tonnes 10.49 
 10-11 tonnes 0.29 16-17 tonnes 3.89 22-23 tonnes 7.49 28-29 tonnes 11.09 
 11-12 tonnes 0.89 17-18 tonnes 4.49 23-24 tonnes 8.09 29-30 tonnes 11.69 
 12-13 tonnes 1.49 18-19 tonnes 5.09 24-25 tonnes 8.69 30-31 tonnes  12.29 
 13-14 tonnes 2.09 19-20 tonnes 5.69 25-26 tonnes 9.29 Over 31 tonnes   12.89 
 14-15 tonnes 2.69 20-21 tonnes 6.29 26-27 tonnes 9.89  
Source:  Customs Directorate of Icel and online information.  View ed at:  http://www. customs.is/default .asp?cat_id=61  
 [July 2012] and European Commission (2011), Screening Reports, Chapter 16, Taxation . 
(v) Import prohibitions, restrictions, and licensing 
33. Under Act No. 88/1992 on Imports, there are no re strictions or prohibitions on imports into 
Iceland except for those provided for under interna tional agreements to which Iceland is a party and 
specific products identified under domestic statut es for health, safety, and security reasons.   
34. Under international agreements, Iceland follo ws the resolutions of the United Nations 
Security Council, and prohibits imports of ozone -depleting chemicals in line with the Montreal 
Protocol to the Vienna Convention for the Protec tion of the Ozone Layer.  Iceland is also a 
contracting party to the Convention on Internati onal Trade in Endangered Species and Wild Fauna 
and Flora (CITES). 
35. The only major changes to import licen ce 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)):20 
 imports of live animals are prohibited, with the exception of import consignments licenced 
by the Minister for Industries and Innovati on on the basis of recommendations from the 
Chief Veterinary Officer.  Imports of animal products also require the permission of the 
Minister; 
                                                      
20 WTO document WT/TPR/S/164/Rev.1, 17 August 2006. WT/TPR/S/273 Trade Policy Review 
Page 30 
  
   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 requi re an import licence from the Ministry of 
Welfare; 
 imports of radioactive goods require the perm ission of the Icelandic Radiation Protection 
Institute; 
 firearms and ammunition imports require a pe rmit 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 inspect ed 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 allowe d subject to certain conditions and approval 
from the Ministry for the Environment and the Environmental and Food Agency. 
(vi) Contingency measures 
36. The law on anti-dumping and countervailing duties is  set out in Act No. 88/2005 on Customs, 
and Regulation No. 351/1994.  The competent au thority is the Committee on Anti-Dumping and 
Countervailing Duties in the Ministry of Finance.
21  There have been no amendments to these laws or 
to policy since 200622, and Iceland has not resorted to anti-dumping, or countervailing measures. 
37. Under the customs law the Minister of Finance may impose anti-dumping duties of up to the 
dumping margin or countervailing duties up to the value of the subsidy for a maximum of five years.   
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 impose preliminary anti-dumping or c ountervailing duties for up to twelve months 
and must notify, in the Official Gazette , that it intends to start a full i nvestigation.  In addition, the 
complaining party and other interested persons (i ncluding exporters, importe rs, 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 deci sions of the Committee are published in the Official  
Gazette .  If the Committee decides to impose anti-du mping or countervailing duties on imports of a 
product (cannot be applied simultaneously) the ma ximum period is five years, renewable if a 
complaining party can show that removal of the measure would lead to injury.  
39. Iceland does not have any law on safeguards, within the meaning of Article XIX of GATT 
and the Agreement on Safeguards, but it reserved the right to use the Special Safeguard Provisions in 
                                                      
21 WTO documents G/ADP/N/14/Add.29 and G/SCM/N/18/Add.29, 22 April 2010. 
22 WTO document WT/TPR/S/164/Rev.1, 17 August 2006. Iceland WT/TPR/S/273 
 Page 31 
 
 
  the Agreement on Agriculture for 645 tariff lines, whic h is reflected in the Customs Law.  However, it 
has never used the SSG.23 
(vii) Government procurement 
40. Iceland acceded to the Government Procurement Agreement in 2001 although it has yet to 
provide the Committee on Government Procurement with the data required under Article XIX:5 of 
that Agreement.  According to the authorities,  the process to ratify the revised Government 
Procurement Agreement is under way.  The Minister  of Finance is responsible for legislation and 
policy on public procurement, and the State Trading Centre ( Ríkiskaup ) is responsible for 
procurement of supplies and services for state agen cies and enterprises.  Other entities responsible for 
government procurement are:  Gove rnment Construction Contracts ( Framkvaemdasýslan );  Public 
Road Administration ( Vegagerd ríkisins );  and the Icelandic Maritime Administration 
(Siglingastofnun ).  The Public Procurement Complaint Co mmittee is responsible for investigating 
complaints.   
41. During the review period, Act No. 84/2007 on Pu blic Procurement and several regulations 
were passed, as Iceland's legislation is being brought into line with EEA rules in this area.  According 
to the authorities, all relevant EU legislation has be en transposed into Icelandic law with the exception 
of Council Directives on remedies24, defence25, and the accession of Bulgaria and Romania to 
the EU26 (although a regulation should be published in the Official Gazette  before autumn 2012) 
(Table III.4).27  In addition, the Government has publis hed policy statements on procurement policy 
generally and on ecological procurement.28  
Table III.4 
National legislation on gov ernment procurement, 2012 
Icelandic legislation:  reference and title Co rresponding EU legislation:  reference and title 
Act No. 84/2007  on Public Procurement Council Directive 89/665/EEC  on the coordination of the laws, 
regulations and administrative provisi ons relating to the application of 
review procedures to the award of public supply and public works 
contracts 
  Council Directive 92/13/EEC coordinating the laws, regulations and 
administrative provisions relating to the application of Community rules 
on the procurement procedures of ent ities operating in the water, energy, 
transport and telecommunications sectors 
  Directive 2004/18/EC of the European Parliament and of the Council  
on the coordination of procedures for the award of public works 
contracts, public supply contract s and public service contracts 
Table III.4 (cont'd) 
                                                      
23 WTO documents G/AG/N/ISL/27, 27 July 2009, G/AG/N/ISL/23, 29 July 2003, G/AG/N/ISL/21, 
30 October 2002, G/AG/N/ISL/18, 23 February 2001, G/AG/N/ISL/13, 26 January 1999, G/AG/N/ISL/7, 
15 July 1997, and G/AG/N/ISL/3, 17 October 1996. 
24 Directive 2007/66/EC of the European Parliament and the Council amending Council Directives 
89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the 
award of public contracts. 
25 Directive 2009/81/EC of the European Parliament and the Council on the coordination of procedures 
for the award of certain works contracts, supply contr acts and service contracts by contracting authorities or 
entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC. 
26 Council Directive 2006/97/EC adapting certain Direc tives in the field of free movement of goods, by 
reason of the accession of  Bulgaria and Romania. 
27 The Icelandic Authorities;  and Ministry of Foreign Affairs (2011). 
28 Government of Iceland (2009). WT/TPR/S/273 Trade Policy Review 
Page 32 
  
  Icelandic legislation:  reference and title Co rresponding EU legislation:  reference and title 
  Directive 2005/75/EC of the European Parliament and of the Council  
correcting Directive 2004/18/EC on the coordination of procedures for 
the award of public works contracts,  public supply contracts and public 
service contracts 
Regulation No. 411/2008 on the Common Procurement 
Vocabulary (CPV) Regulation (EC) No. 2195/2002 of the European Parliament and of 
the Council  on the Common Procurement Vocabulary (CPV) 
  Commission Regulation (EC) No 213/2008  amending Regulation (EC) 
No 2195/2002 of the European Parliament and of the Council on the 
Common Procurement Vocabulary (CPV) and Directives 2004/17/EC 
and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV 
Act No. 84/2007  on Public Procurement Directive 2004/17/EC  of the European Parliament and of the Council 
coordinating the procur ement procedures of entities operating in the 
water, energy, transport and postal services sectors 
Regulation No 755/2007  as amended by Regulation No. 
916/2008 on the procuremen t procedures of entities 
operating in the water, energy, transport and postal services 
sectors Commission Regulation (EC) No 2083/2005  amending Directives 
2004/17/EC and 2004/18/EC of the European Parliament and of the 
Council in respect of their application thresholds for the procedures for 
the award of contracts 
Act No. 84/2007  on Public Procurement Commission Directive 2005/51/EC  amending Annex XX to Directive 
2004/17/EC and Annex VIII to Direc tive 2004/18/EC of the European 
Parliament and the Council on public procurement 
Regulation No 1300/2007  establishing standard forms for 
the publication of notices in the framework of public 
procurement procedures Commission Regulation (EC) No 1564/2005  establishing standard 
forms for the publication of notices in the framework of public 
procurement procedures pursuant to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council 
Regulation No. 807/2007 on the application of thresholds 
for the procedures for the award of contracts   
Regulation No. 615/2012  on the application of threshold for 
the procedures for the award of contracts Commission Regulation (EC) No 1251/2011  amending Directives 
2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament 
and of the Council in respect of their application thresholds for the 
procedures for the awards of contract 
Regulation No. 614/2012  on the application of threshold for 
the procedures for the awar d of contracts of entities 
operating in the water, energy, transport and postal services 
sector  Commission Regulation (EC) No 1251/2011  amending Directives 
2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament 
and of the Council in respect of their application thresholds for the 
procedures for the awards of contract  
Regulation No. 540/2012  establishing standard forms for 
the publication of notices in the framework of public 
procurement procedures  Commission Regulation (EC) No 1150/2009  amending Regulation (EC) 
No 1564/2005 as regards the standard forms for the publication of notices 
in the framework of public proc urement in accordance with Council 
Directives 89/665/EEC and 92/13/EEC 
Source : The Icelandic authorities;  and Ministry of Foreign A ffairs (2011), Intergovernmental Conference on the Accession 
 of Iceland to the European Union, Negotiating Position of  Iceland, Chapter 5, Public Procurement Annex 5:1.  
 Viewed at:  http://www.mfa.is/med ia/ees_i/Chapter-5-Draft -Position-Paper-Iceland---FINAL.pdf [July 2012].  
42. The Act on Public Procurement states that:  "[e]quality and transparency must be maintained 
during public procurement" and:  "[d]iscrimination on grounds of na tionality or other similar reasons 
is prohibited" (Article 14).  It also states that  the principle of non-discrimination applies to non-
government entities that have special or exclusive rights to provide public services (Article 16).  The Act requires that all tenders over thresholds set out  in the Act (Table III.5)  should go to public tender 
or be made in accordance with the procedures set ou t in the Act.  Tenders over the EEA thresholds 
(Table III.5) must follow the procedures in Dir ective 2004/18/EC on public works, supply, and 
service contracts, and Directive 2004/17/EC on proc urement by entities operating in the water, 
energy, transport, and postal services (utilities) sector s.  The WTO GPA applies to contracts over the 
thresholds set out in Iceland's Annexes to the Agreement. Iceland WT/TPR/S/273 
 Page 33 
 
 
  Table III.5 
Public procurement thresholds as of June 2012 
Domestic thresholds (Act No. 84/2007 ) Supplies Services and Works 
 ISK 6,8 million ISK 13.6 million 
EEA thresholds (Directive 2004/18/EC) Supplies Services & design Works 
 Central government:  ISK 21.5 million ISK 33.1 million ISK 828.5 million 
 Local government: ISK 33.1 million ISK 33.1 million ISK 828.5 million 
Thresholds in Annexes 1-3 of Appendix 1 of the 
GPA Supplies Services Works 
 Central government SDR 130,000 SDR 130,000 SDR 5,000,000 
 Local authorities SDR 200,000  SDR 200,000 SDR 5,000,000 
 Other entities SDR 400,000 SDR 400,000 SDR 5,000,000 
Source:  Icelandic authorities and Annexes 1-3 of Appendix 1 of the GPA. 
43. To help public authorities apply the laws on public  procurement consistently, the Ministry of 
Finance issued a Guide to Public Procurement ( Handbók um Opinber Innkaup) in February 2008.29  
The Guide sets out the procedures that must be followed, the documentation required, and provisions on eligibility of bidders, submission of tenders, select ion procedures, complaints procedures, and the 
annulment of  contracts and damages.  It also sets out procedures for procurements below the thresholds (ISK 5 million for supplies and ISK 10 million for services), now at ISK 6.8 million and 
ISK 13.6 million (Table III.5).  Further guidelines have also been prepared on electronic procurement 
methods and procurement that takes account  of its impact on the environment. 
44. In general, all tenders must be advertised in the Official Gazette as well as on the State 
Trading Centre's website.  Tenders  over the EEA thresholds are also published in English in the 
Official Gazette  and in the main newspapers.  Tendering ma y be through open, restricted or negotiated 
procedures, or (in particularly complicated tenders) they may be subject to competitive dialogue.  Pre-
selection for restricted and negotiated procedur es and competitive dialogues requires an initial 
advertisement, to which all interested parties may respond.  This initial advertisement should set out  
the conditions for pre-selection and the mi nimum number of candidates being sought. 
45. In all cases, selection of the winning tender should be based on the lowest price that best 
meets the needs of the contracting authority b ased on the criteria in the tender documents.   
46. Complaints about a public procurement contract must be lodged with the Public Procurement 
Complaints Commission within four weeks from th e date the complainant knew, or should have 
known, of the violation of her/his rights.  The complainant is required to pay ISK 50,000 for each 
complaint.  The Commissi on has the power to suspend or annul contracts and to decide on costs, but, 
although it can give advisory opinions on liability fo r damages, the courts to give legally binding 
decisions and decide on the amount of damages.  In the 2006-11 period there were an average of 31 
complaints per year. 
                                                      
29 The Guide to Public Procurement (in Icelandic).  Viewed at:  http://www.rikiskaup.is/media/eplica-
uppsetning/HandbokOI_Final.pdf [February 2012]. WT/TPR/S/273 Trade Policy Review 
Page 34 
  
  (2) MEASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures  
47. There has been no change to export procedur es since the last Trade Policy Review of 
Iceland.30  Under the Customs Law, an exporter must give the customs authorities a cargo manifest 
before the consignment can be cleared for export.  The manifest must match the bill of lading/airway 
bill.  In general, five documents are required for exports:  a packing list;  bill of lading;  customs 
export declaration;  commercial invoice;  and the EUR.1 Certificate.  In order to enforce fishing 
quotas, fishing vessels taking fish directly to ports abroad are required to provide a report on their 
catch to the relevant customs office in Iceland (Chapter IV(2)(ii)).   
48. According 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 th e relatively high cost of exporting goods are the 
cost of ports and terminal ha ndling and internal transport.31   
49. There are no taxes on exports apart from a levy of 5% on exports of whole fish and ISK 500 
per horse exported.   
(ii) Export prohibitions, restrictions, and licensing 
50. Iceland applies restrictions and/or licensing requirements on some exports, in line with its 
international obligations or for health and secur ity reasons.  The principal change to Iceland's 
regulations over the past six years has been th e implementation of EU Council Regulation (EC) 
No. 428/2009 on dual-use items, Directive 2009/43/EU on defence products, and the European Code 
of Conduct on Arms Exports (2008/944/CFSP).  Th e EU laws have been implemented through Act 
No. 58/2010 and Regulation No. 800/ 2011 on Control of Services and Items that may have Strategic 
Significance (Table III.6).32  The control lists for defence-related and dual-use items are the same as 
those of the EU. 
Table III.6 
Export prohibitions and export licensing requirements, June 2012 
Product Legislation Nature of restriction 
Narcotics Narcotics Act No . 65/1974 Export prohibition 
Ozone-depleting substances Re gulation No. 586/2002 on Ozone 
Depleting Substances Export prohibition (with some ex ceptions, e.g., export for the 
purposes of waste disposal or recycling.  Export to non-signatories of the Montreal Protocol (1987) is prohibited in all 
cases) 
Consumer goods that are a 
danger to health Act on Product Safety 
No. 134/1995 Export prohibition 
Wild animals and parts of 
wild animals, as well as eggs Act on Protection and Hunting of 
Wild Birds and Animals, No. 64/1994 Minister for the Environment shall in a regulation stipulate on 
the import and export of wild animals and their parts, as well as eggs 
Live horses Law on the Export of Horses 
No. 55/2002 Exports require a special certificate from an official veterinarian 
and from the Farmer's Association 
Table III.6 (cont'd) 
                                                      
30 WTO document WT/TPR/S/164/Rev.1, 17 August 2006. 
31 World Bank (2012), p.80. 
32 WTO document WT/TPR/S/164/Rev.1, 17 August 2006, p.40-41. Iceland WT/TPR/S/273 
 Page 35 
 
 
  Product Legislation Nature of restriction 
Antiques and objects of 
historical value Law on Export of Cultural Goods, 
No. 105/2001 Exports require a special licence from the Museum's Committee 
Natural artefacts, micro-
organisms and their DNA Law on the National Institute for 
National History, No. 60/1992 Exports require a special licence from the Icelandic Institute for 
Natural History 
   
Dual-use items and defence-related products Act No. 58/2010 and Regulation 
800/2011 on Control of Services 
and items that may have Strategic 
Significance Applies Council Regulation (E C) No. 428/2009 for dual-use 
items and Directive 2009/43/EC on defence-related products.  
Exports of dual-use items and de fence-related products require 
licences from the Minister of Foreign Affairs 
Plants and plant products Regulation No. 189/1990 Exports re quire a special health certif icate from the Agricultural 
Research Institute 
Source:  Icelandic legislation.  
51. Iceland is a participant in the Australia Group on minimizing the risk of assisting chemical 
and biological weapon proliferation, the Nuclear Suppliers Group on the non-proliferation of nuclear 
weapons, and the Missile Technology Control Re gime on the coordination of national export 
licensing efforts on the non-proliferation of unm anned delivery systems capable of delivering 
weapons of mass destruction as well as several othe r related organizations.  Since 2009, it has been 
applying the Wassenaar Arrangement on Export Co ntrol for Conventional Arms and Dual-Use Goods 
and Technologies.33  
(iii) Duty and tax concessions 
52. Exports of goods and services are zero-rated for VAT, and excise duties are not applied to 
exported products.  However, there are no  tax deductions contingent on exports. 
53. Under Article 7(3) of the Customs Law, the Minister of Agriculture may authorize the duty 
on imported agricultural goods to be waived or refunded if such goods are being imported for 
processing and export.  Under Regul ation No. 535/2003, the Ministry of Fisheries and Agriculture 
may authorize an exporter using domestically sourced raw materials to be paid the difference in price 
between the international and domestic  market (Chapter IV(1)(ii)(a)).  
54. Under Article 105-108 of the Customs Law, the Di rector of Customs may grant a licence to 
operate a free zone where domes tic products and goods that have not cleared customs may be 
processed.  The licence is granted to an enterprise providing the services necessary to operate in the 
free zone;  the licence holder must not engage  in industrial production, commerce, sale of 
commissions, wholesale or retail sale in the free zone.  As of end-July 2012, no free zones were in 
operation. 
(iv) Export finance, insurance and guarant ees, promotion, and marketing assistance 
55. In its Uruguay Round Schedule LXII Iceland rese rved the right to use export subsidies for 
sheep meat, and milk.  However, according to its most recent notification to the Committee on 
Agriculture on export subsidies, it did not provid e any export subsidies for these products for the 
2003-08 period (Chapter IV(1)(ii)(a)).34 
                                                      
33 Ministry of Foreign Affairs online information, "Export Control".  Viewed at:  http://www.mfa.is/ 
foreign-policy/export-control/ [July 2012]. 
34 WTO document G/AG/N/ISL/28, 27 July 2009. WT/TPR/S/273 Trade Policy Review 
Page 36 
  
  56. The Export Credit Guarantee Department of the New Business Venture Fund (NSA) was 
created to provide export credit insurance and guarantees.  Howeve r, 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 auth orities, the Export Credit Guarantee Department's 
guidelines are based on the OECD Arrangement on E xport Credits and on the regulations established 
by members of the Bern Union.
35  According to the authorities, the Export Credit Guarantee scheme 
has been essentially dormant fo r the past six years, during which the State has provided only 
insignificant amounts in export credits. 
57. Promotion and marketing assistance may be provided through Promote Iceland ( Islandsstofa ), 
which was established under Act No. 38/2010 on th e Promote Iceland Agency, to provide services 
and consultancy to facilitate expor ts, attract tourists, and promot e investment.  Under the Act, 
Promote Iceland replaced the Trade Council, and Ac t No. 160/2002 on Assistance with Exports was 
annulled.36  
58. The Promote Iceland Agency is funded by a fee on business companies (which provides about 
ISK400 million), government suppor t (ISK 300 million), and its own revenue (ISK 200 million).  The 
services provided by the Agency include the orga nization of trade fairs and business delegations, 
consulting services, various training programmes, a nd the provision of market information.  The 
Promote Iceland Agency is a member of Enterprise Europe Network and focuses on helping companies make the most of business oppor tunities in the European Economic Area. 
59. The Innovation Center Iceland provides counselling, training, and information services to 
SMEs, including export planning, while Iceland Na turally is a programme in the United States and 
Canada to promote investment and tourism in Iceland and Icelandic exports to these countries.
37 
(3) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Legal framework for businesses38  
60. The legal framework for business has not change d since the last Review (Table III.7).  
However, some tax rates have been changed, most  notably income tax on private and public limited 
companies, which was increased from 18% to 20%, and the industrial charge (a statutory obligation to 
contribute to the Federation of Icelandic Industri es) of 0.08% on operating income was abolished on 
1 January 2011. 
61. The main legislation governing business entities is Act No. 138/1994 on Private Limited 
Companies and Act No. 2/1995 on Public Limited Comp anies.  In addition, some aspects of company 
law are found in other legislation, including Ac t No. 3/2006 on Annual Accounts, Act No. 108/2007 
on Securities Transactions, Act No. 87/1998 on Offici al Supervision of Financial Operations, and 
Act No. 161/2002 on Financial Undertak ings.  Icelandic law also allows for European companies and 
European economic interest groupings through Act No. 26/2004 on European Companies, and 
                                                      
35 Ministry of Foreign Affairs online information, "Iceland's application for membership of the EU:  
Export Credits, Screening Iceland Chapter 30, External Re lations - Bilateral."  Viewed at:  http://esb.utn.is/ 
media/ESB/samningskaflar/30/4.-30-Export-Credits.ppt [February 2012]. 
36 Promote Iceland online information:  Viewed  at:  http://www.promoteiceland.is/EN/Promote-
Iceland/ [February 2012]. 
37 WTO document WT/TPR/S/164/Rev.1, 17 August 2006, p. 42. 
38 For special rules affecting financ ial services, see Chapter IV(4)(i). Iceland WT/TPR/S/273 
 Page 37 
 
 
  Act No. 159/1994 on the European Economic Interest Grouping, but (as of July 2011) no such 
companies had been established.39 
Table III.7 
Principal business structures, responsible agencies, and selected requirements, 2011 
Type of 
business Agency of 
registration Registration fee Selected rules and 
requirements Income tax 
Private limited 
company Register of Limited Companies  
(hlutafélagaskrá)  ISK 130,500 registration fee, 
including identity number from 
Director of Internal Revenue 
ISK 4,980 (inc. VAT) for 
publication of notification of 
registration in Legal Gazette  Act No. 138/1994 on Private 
Limited Companies 
A single party may establish a 
private limited company and be a shareholder 
Minimum share capital 
requirement of ISK 500,000;  liability is limited to share 
capital 
Limitations apply to payment of 
dividends;  granting of loans to 
shareholders is prohibited 20% 
Public limited 
company Register of Limited Companies 
(hlutafélagaskrá)  ISK 265,000 registration fee, 
including identity number from 
Director of Internal Revenue 
ISK 4,980 (inc. VAT) for 
publication of notification of registration in the Legal Gazette  Act No. 2/1995 on Public 
Limited Companies 
Minimum of two founders, two 
shareholders, one manager and three people on the board of directors 
Minimum share capital 
requirement of ISK 4 million;  liability is limited to share 
capital 20% 
Branches of 
foreign 
companies Register of Limited 
Companies ISK 256,000 registration fee  20% 
Co-operative 
society Register of Co-
operative Societiesb 
(samvinnufélagaskr)  ISK 165,000 registration fee 
ISK 5,000 (for identity number 
from Director of Internal 
Revenue) Minimum 15 founders 
Liability of members limited to 
the payment of a membership 
fee and share of ownership of society's funds 20% 
Partnership District 
Commissioner 
(sýslumanour) ISK 55,000 fee 
ISK 5,000 (for identity number 
from Director of Internal 
Revenue) 
ISK 1,868 (inc. VAT) for 
publication of notification of 
registration in Legal Gazette  Act No. 50/2007 on 
Partnerships 
Liability of members of 
partnerships is generally 
unlimited 36% on the 
partnership 
Individual firm District 
Commissioner 
(sýslumanour)  ISK 44,000 registration fee 
ISK 5,000 (for identity number 
from Director of Internal 
Revenue) 
ISK 1,868 (inc. VAT) for 
publication of notification of 
registration in Legal Gazette  Individual's liability is 
unlimited Income tax plus 
municipal rates vary 
with income from 
37.31% to 46.21% 
Source: Invest in Iceland (2011 ), Doing Business in Iceland .  Viewed at:  http://www.i nvest.is/resources/Files/Doing 
 BusinessInIceland_April_2011.pdf;  and WTO doc ument  WT/TPR/S/164/ Rev.1, 17 August 2006. 
62. The most common type of business structure in Iceland is the public or private limited 
company.  A public limited company normally raises  capital from a number of shareholders:  it must 
have at least two shareholders and three members on its board of directors.  If it is a publicly listed 
company, then it is subject to additional rules, including the requirement to have its accounts audited 
                                                      
39 European Commission (2011), Chapter 6 - Company Law , p.4. WT/TPR/S/273 Trade Policy Review 
Page 38 
  
  by an authorized public accountant or audit firm.  The audited financial st atement and annual report 
must be filed with the Financial Supervisory Au thority within three months of the end of the 
accounting period.  Private limited companies may ha ve only one shareholder, in which case they do 
not have to hold meetings of the board of directors.40  
63. Setting up a business in Iceland is quite straightforward.  The initial share capital must be 
deposited in a bank and the company must then be re gistered with the Register of Limited Companies 
which requires:  a notification of incorporation;  an agreement of incorporation;  a record of the meeting of incorporation;  the articles of associati on;  and an affidavit on payment of share capital 
from a certified public accountant.  Registration also requires payment of the registration fee, the 
charge for advertising the incorporation in the Legal Gazette , and the fee for the company 
identification number (see Table III.7).  If necessary,  a VAT number must also be obtained and the 
tax authorities notified of employment of employees.   The whole procedure takes about five days on 
average with one day for registration.
41 
64. Operating licences are required for a number of industries and services and are issued on the 
basis of various laws and regulations, many of wh ich have been adopted to implement EU rules.  
Operating licences for polluting activities are requi red under Act No. 7/1998 on Public Health and 
Control, and under Regulation No. 785/1999.  Operat ing licences for sanitary and health practices are 
required under Act No. 7/1998 and Regulation 941/2002.  Some services operations also require 
licences, including public baths, sports halls, sc hools, kindergartens, guesthouses, bars and night 
clubs, salons, social and health institutions.  U nder Act No. 93/1995 on Fo odstuffs, operating licences 
are required for the production and distribution of foodstuffs.42 
(ii) Business tax 
65. As stated above, in 2011 corporate income tax rate was increased from 18% to 20% for 
limited liability companies and for branches of fo reign resident companies.  There are no local 
corporate taxes, although property ta xes and services are paid to local authorities and a market charge 
of 0.05% of payroll charges is also applied.  Income from dividends received by limited liability 
companies is not taxed.  However, dividend paym ents to individuals and resident companies are 
subject to a 20% withholding tax, and dividend paymen ts to non-resident companies to a withholding 
tax of 18%.  The rate of withholding tax applied to dividends, royalties, and interest paid to residents 
of countries with which Iceland has a tax treaty depend on the terms of the treaty.43 
66. Capital allowances, based on the acquisition cost , vary depending on the type of asset, and 
cover some types of buildings as well as goodwill.  The rate of capital allowance is set out in the tax 
                                                      
40 Invest in Iceland (2011). 
41 World Bank (2012), p.21. 
42 WTO document WT/TPR/S/164/Rev.1, 17 August 2006, p.44. 
43 As of June 2012, Iceland had tax treaties with:  Barbados (ratified but not yet in force), Belgium, 
Canada, China, Croatia, Czech Republic, Estonia, Fr ance, Greece, Greenland, Germany, Hungary, India, 
Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Malta, Mexico, Poland, Portugal, Romania, Russian 
Federation, Slovakia, Slovenia, Spain, Korea, Rep. of, the Nordic countries, United Kingdom, Ukraine, United States, and Viet Nam.  In addition, Iceland has initialled draft treaties with Albania, Austria, Bulgaria, 
Germany (revised treaty), and Qatar and is in negotiations with Cyprus, Chile, Georgia, and the 
United Kingdom (revised treaty).  It also has tax and information-exchange agreements with Aruba, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Is le of Man, Jersey, Netherlands Antilles, Anguilla, Cook 
Islands, Gibraltar, Samoa, Turks and Caicos, San Marino, Andorra, Bahamas, St Kitts and Nevis, St Vincent and 
the Grenadines, Antigua and Barbuda, Dominica, Grenada, and St Lucia. Iceland WT/TPR/S/273 
 Page 39 
 
 
  regulations, for example the allowance for electri c transmission lines is 7.5-10% (Table III.8).  
Income from capital gains and interest is treated as operating income. 
Table III.8 
Capital allowances, 2011  
(%) 
Asset Minimum capital 
allowance Maximum capital 
allowance 
Ships and aircraft 10 20 
Industrial machinery and equipment 10 30 
Office equipment 20 35 
Machinery and equipment for building a nd construction, automobiles and other 
transport conveyances, and other mo vable property not included above 20 35 
Buildings as defined by the Income Tax Act 1 6 
Purchased intangibles (e.g. proprietary ri ghts for ideas and trademarks, such as 
copyrights, publishing rights, inform ation rights, patents and logos 15 20 
Purchased goodwill 10 20 
Source:  Invest in Iceland (2011), Doing Business in Iceland , April.  Viewed at:  http:// www.invest.is/Doing-Business-in-
 Iceland/Tax-system/ [February 2012]. 
(iii) Incentives and other government assistance 
67. Most incentives for business in Iceland rela te to encouraging investment through 
Act No. 99/2010 on Incentives for Initial Investment in Iceland.44  The Act does not apply to 
investments in financial undertakings, insurance ope rations, or securities.  It covers general aids 
available throughout the country, and regional aids  available anywhere outside Reykjavik and the 
surrounding municipalities.  Before end 2013, a comm ittee appointed by the Minister of Industries 
and Innovation is to review the Act, and a decisi on is to be made on extending it.  Should the Act 
expire, any investment agreements made be fore its expiry will remain in force. 
68. Applications for investment incentives must be made to the Ministry of Industries and 
Innovation, where a committee examines applications  taking into account cost-benefit and socio-
economic analyses by Invest in Iceland.  Based on a proposal from the committee, the Minister may 
offer an incentives package with in the terms of the Act.  
69. The Act permits state aids in the categories declared compatible with the common market 
through EU Commission Regulation (EC) No. 800/2008 for approved investment projects.  These aids 
include: 
 training aid up to a maximum of €2 million; 
 investment aids for small and medium-sized en terprises up to €7.5 million or 10% or 20% of 
investment; 
 research and development assistance or environmental assistance up to a maximum of 
€ 7.5 million. 
                                                      
44 See Act No. 99/2010 on Incentives for Initial Investments (in English).  Viewed at:  
http://www.invest.is/Publications/ [February 2012]. WT/TPR/S/273 Trade Policy Review 
Page 40 
  
  70. Regional aids are available for projects outside of Reykjavik and surrounding 
municipalities.45  The aids may include direct grants but  are mostly tax-based incentives along with 
sales or leasing of land from the State or the municipality at less than the market price.  Regional aid is normally limited to 15% of the investment cost  but can be 25% for medium-sized enterprises
46 or 
35% for small enterprises.47  The tax-based incentives include:  
 fixing the rate of income tax at the current rate for 10 years;  
 flexibility in applying capital allowances;  
 exemptions from:  
o customs duties and excise duties on constr uction materials, machinery, equipment 
and other capital goods and spare parts fo r building and operating the investment 
project;  
o the market charge;  and  
o supervision and inspection charges related to  electricity installations and equipment 
and consumer utilities by the responsible authority ( Löggildingarstofa );  and 
 reductions in:   
o stamp duties to 0.15%;  
o property tax by 30% for 10 years;  and  
o the social security charge by 20% for 10 years. 
71. The New Business Venture Fund (NSA Ventures)  (see section (2)(iv)), which is a state-
owned venture-capital firm, provides finance for innovation and start-up businesses through equity investment, loans, and creditor guar antees.  The Fund uses its profits on investments to invest directly 
in companies and to invest in new Icelandic ve nture funds.  Founded in 1998, the Fund had an 
opening balance of ISK 4 billion from the State.   In 2005, the fund received an additional 
ISK 2.5 billion from the proceeds of the privatizatio n of the Iceland Telecom, of which ISK 1 billion 
was earmarked for direct investment into start- ups and ISK 1.5 billion for investment into other 
venture funds in Iceland. 
72. In addition to investment assistance, Icela nd provides support for research and development 
to the Icelandic Centre for Research ( Rannis ) for various programmes, pr incipally the Research Fund 
and the Technology Development Fund (Table III.9) .  Other support is prov ided through various 
government agencies to meet different training, development or social goals.  Subsidies to agriculture 
and fisheries are covered in Chapter IV. 
                                                      
45 EFTA Surveillance Author ity Decision No. 378/06/COL, 6 Decembe r 2006, on the maps of assisted 
areas and levels of aid (Iceland), Official Journal of the European Union  L 54/28, 28 February 2008. 
46 An enterprise that employs 50-250 persons, with an annual turnover not exceeding €50 million 
and/or an annual balance sheet total not exceeding €43 million. 
47 An enterprise that employs less th an 50 persons with an annual tu rnover and/or annual balance sheet 
total that does not exceed €2 million. Iceland WT/TPR/S/273 
 Page 41 
 
 
  Table III.9 
Support programmes for research, 2007-11 
(ISK million) 
 
 2007 2008 2009 2010 2011 
Icelandic research fund 590 750 815 815 783 
Technology Development Fund 500 600 690 720 720 
Equipment Fund 110 115 115 115 111 
Research Fund for Graduate Students 80 90 100 100 96 
Strategic Research Programmes 105 160 315 315 285 
Increased value in fisheries 235 335 335 306 266 
Other 37 56 39 47 66 
Total 1,657 2,106 2,409 2,418 2,327 
Source: Rannis (2011), Research & Development in Iceland 2011,  Reykjavik.  Viewed at: 
 http://www.rannis.is/files/Research%20a nd%20Developement%20in%20Iceland%202011_1595715814.pdf 
 [February 2012]. 
(iv) Standards and other technical requirements 
(a) Technical barriers to trade 
73. The agencies responsible for policy and le gislation on standards and other technical 
requirements depend on the product or service and include:  the Ministry of the Interior; the Ministry of the Environment; the Ministry for Fisheries a nd Agriculture, the Ministry of Welfare; and the 
Ministry of Social Affairs and Social Security .  Responsibility for preparing standards and other 
technical requirements and for their implementa tion is shared among several official agencies, 
including: 
 Icelandic Standards (IST), which is the national standards body of Iceland responsible for the 
publication of standards and represents Iceland in  international and regi onal standards bodies.  
The IST has four committees, each responsible fo r a different sector:  BSTR for building;  
FIF for fishing;  FUT for information technology;   and RST for electrotechnical industry.  IST 
is a member of the International Organization for Standardization (ISO) and an associate member of the International Electrotechnical Commission (IEC).  It is also a member of the European Committee for Standardization (CEN) and the European Committee for 
Electrotechnical Standardization (CENELEC), a nd an associate member of the European 
Telecommunications Standards Institute (ETSI);
48 
 the Consumer Agency, which is responsible for market surveillance of business operators, 
good functioning and transparency of the market s in respect to safety and consumers' legal 
rights as well as enforcement of legislation for th e protection of consumer health, legal, and 
economic rights, and safety of low-voltage electrical consumer appliances.  The Agency was established as an independent entity in July  2005 under Act No. 62/ 2005 on the Consumer 
Agency and Consumer Spokesman.  Under Ac t No. 91/2006 it assumed responsibility for 
legal metrology and calibration services;
49   
 the Customs Directorate, which is responsible for checking imports for conformity with 
product safety rules;   
                                                      
48 IST online information.  Viewed at:  http ://www.stadlar.is/englis h/ [February 2012]. 
49 The Consumer Agency online information.  Viewed at:  http://www.neytendastofa.is/English/The-
Consumer-Agency [February 2011]. WT/TPR/S/273 Trade Policy Review 
Page 42 
  
   the Icelandic Construction Authority, which is responsible for market surveillance for 
electrical equipment (except low-voltage consumer appliances), power plants and electrical installations, buildings and construction wo rks.  The Authority was established in 
January 2011 under the Construction Act No . 160/2010 and replaced the Fire Authority
50;  
and 
 several other agencies, including the Icela ndic Medicines Authority, the Environment 
Agency, and local health authorities, which ha ve specific responsibility for surveillance and 
enforcement for products for which they have competence. 
74. Under the TBT Agreement, Iceland's enquiry point  for technical regulations is the Consumer 
Agency.  The enquiry point for standards is Icela ndic Standards.  In addition, the External Trade 
Department in the Ministry for Fo reign Affairs has been notified as an enquiry point.  In July 2000, 
Iceland notified the TBT Committee51 that it had implemented the technical regulations and 
conformity assessment part of the TBT Agreement (Article 15.2) by Act No. 57/2000 on the Exchange of Information on Technical Regulati ons Regarding Products and Information Society 
Services.  The standards part of the TBT Agreem ent is implemented by Regulation 534/1995.  As 
noted in Iceland's notification, draft and fi nal technical regulations are published in the Icelandic Law  
and Ministerial Gazette  (Stjórnartídindi ).
52  Notices of draft and adopted standards are published in 
the Standards Bulletin (Stadlatídindi ).  Iceland generally allows 90 days for written comments on 
technical regulations and at least 60 days on standards. 
75. As of 30 June 2012, Iceland had not made any notifications to the TBT Committee since its 
last Review. 
76. EEA membership requires Iceland to apply th e EU's legislation on technical regulations, 
standards, testing, and certification.53  Under the EEA Agreement, all signatories must notify draft 
technical regulations prior to their adoption an d these are made available on the EFTA Surveillance 
Authority website.54  Draft technical regulations are also notified on the European Commission 
Enterprise and Industry TRIS database.55  From 1 January 2006 to 30 June 2012, Iceland made 25 
notifications to the EFTA Surveillance Authority.  A "standstill" period of three months is provided 
for before technical regulations are adopted, givi ng the opportunity for other EEA signatories, the 
EFTA Surveillance Authority, and the European Commi ssion to ensure that they do not create new 
barriers to trade or conflict with secondary EEA legislation in force. 
                                                      
50 The Construction Authority online informati on.  Viewed at:  http://www.brunamal.is/ 
brunamalastofnun/forsi da/ [February 2012]. 
51 WTO document G/TBT/2/Add.55/Suppl.1, 11 July 2000.  Regulation 733/2000 implements law 
57/2000.  Information society services are defined as "fee based and provided (a) from a distance, i.e. without 
the parties being present at the same place and the same  time, (b) electronically, i.e.  the service is sent and 
received with the help of electronic equipment that is intended for proce ssing and storing data and is entirely 
sent, transported and received throu gh wire, wireless, fibre optic cable or through electromagnet cable, (c) on 
request of the receiver, i.e. the service is  provided in such a way that data is sent at the request of the receiver."  
52 The Iceland Law and Ministerial Gazette , online information.  Available at:  http://stjornartidindi.is/ 
[February 2012]. 
53 WTO document WT/TPR/S/164/Rev.1, 17 August 2006, p.36. 
54 EFTA Surveillance Authority online information http://www.eftasurv.int/internal-market-affairs/ 
notifications/draft-technical-regulations/ [February 2012]. 
55 European Commission, Enterprise and Industry TRIS database.  Viewed at:  http://ec.europa.eu/ 
enterprise/tris/pisa/app/search/i ndex.cfm?lang=EN [February 2012]. Iceland WT/TPR/S/273 
 Page 43 
 
 
  77. All draft European standards are submitted to a public enquiry in Iceland by means of an 
announcement on the IST website, with a notification by  email to those who have expressed a wish to 
be notified of new drafts.  Anyone may submit a co mment on a draft European standard;  the time-
limit for submission is usually five to six months.  A formal vote on final drafts also takes place by the 
same means, but with a time limit of two months. 
78. As of 1 December 2010, almost 22,620 European st andards (i.e. nearly all standards by CEN, 
CENELEC, and ETSI) had been transposed in Iceland.56  Legislation on technical issues, including 
conformity assessment, is generally found in the sect or-specific law adopted by relevant ministries in 
order to transpose EU Directives, for example, Act No. 91/2006 on Measurements, National 
Standards and Official Weighing, and Re gulation No. 431/1994 on Construction Products.57  
Similarly, legislation on conformity assessment is found in sector-specific legislation, which also 
implements the relevant EU Directives, for ex ample Regulation No. 957/2006 implementing Council 
Decision 93/465/EEC on a common framework for the marketing of products , which will be updated 
to reflect Council Decision 768/2008/EC when this  is incorporated into the EEA Agreement.58 
79. Through EFTA, Iceland has mutual recognition agreements with: 
 New Zealand (2000) covering pharmaceuticals, medical devices, telecommunications 
terminal equipment, low voltage equipment, electromagnetic compatibility, machinery, and 
pressure equipment; 
 Australia (2000) covering electromagnetic co mpatibility, pharmaceuticals, medical devices, 
telecommunications terminal equipment, automotive products, pressure equipment, 
machinery, and low voltage equipment;  
 Canada (2001) covering telecommunications  terminal equipment, electromagnetic 
compatibility, electrical safety, recreational craft, pharmaceuticals, and medical devices;  
 Switzerland (2002) covering machinery, persona l protective equipment, safety of toys, 
medical devices, gas appliances and boilers , pressure equipment, telecommunications 
terminal equipment, equipment and protec tive systems intended for use in potentially 
explosive atmosphere, electrical safety and el ectromagnetic compatibility, construction plant 
and equipment, measuring instruments and pre-packages, motor vehicles, agricultural and forestry tractors, good laboratory practice, good manufacturing practice inspection and batch 
certification;  
 United States, the first (2005) covers mari ne equipment, and the second (2006) covers 
telecommunications equipment, electromagnetic  compatibility, and recreational craft;  and 
 Turkey (2011) covering all sectors.
59 
80. Under Act No. 24/2006 on Accreditation, the Icelandic Board for Technical Accreditation 
(ISAC) became an independent department within th e Icelandic Patent Office.  The Act incorporates 
the main principles of EU Council Regulation No. 765/2008 into Icelandic law.  ISAC is a member of 
the European Cooperation for Accreditation and has a contract of cooperation with the Swedish Board 
for Accreditation and Conformity Assessment (SWEDAC). 
                                                      
56 European Commission (2011) , Chapter 1 - Free Movement of Goods,  p. 3.  
57 Ministry of Foreign Affairs (2011), Chapter 1 - Free Movement of Goods, p. 3. 
58 European Commission (2011) , Chapter 1 - Free Movement of Goods,  p. 5.  
59 EFTA online information.  Vi ewed at:  http://www.efta.int/ eea/mras.aspx [February 2012]. WT/TPR/S/273 Trade Policy Review 
Page 44 
  
  (b) Sanitary and phytosanitary measures 
81. The Ministry of Fisheries and Agriculture is r esponsible for policy and legislation on food 
safety as well as animal and plant health.  Th e Icelandic Food and Veterinary Authority 
(Matvælastofnun  - MAST), under the Ministry of Fisheries and Agriculture, started operations on 
1 January 2008 as the competent authority for food safet y, animal health and welfare, control of feed, 
seed and fertilizers, plant health, and water fo r human consumption.  MAST was established by 
Act No. 167/2007 and took over the work of the Ag ricultural Authoriy of Iceland (which had the 
office of Chief Veterinary Officer (CVO), as well as responsibility for feed, seed and fertilizer services, meat grading, the plant protection service, organic production, and administrative tasks 
carried out by the Farmers' Association of Icela nd), the food division of the Environmental and Food 
Agency of Iceland, and the food division of the Icelandic Directorate of Fisheries.
60  Within MAST 
there is an office for Animal Hea lth and Welfare and an office for F ood Safety and Conumer Affairs.  
The Directorate of Customs and the Icelandic Me dicines Agency are also involved in food safety 
controls. 
82. Up to 30 June 2012, Iceland had not made an y notifications to the SPS Committee in the 
WTO since October 2005 when it notified an emerge ncy measure to ban imports of live poutry and 
poultry products from some countries because of the risk of avian influenza.61  The notification 
authority and enquiry point for SPS matters is the Agricultural Authority of Iceland,62 whose 
responsibilities have been absorbed by MAST.  Si nce its last Review, Ic eland has used the SPS 
Committee to raise concerns about Ukraine' s conditions for import of animal products.63 
83. As a member of the EEA, Iceland has app lied EU legislation on SPS matters, with the 
exception of veterinary issues, which were exem pt from the EEA Agreement.  However, since 
November 2011, the exemption has been limited to tr ade 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.64  Legislation on SPS matters is covered in several laws,65 including: 
 Act No. 93/1995 (as amended) on foodstuffs, which provides the legal basis for measures 
covering the safety and quality of foodstuffs as well as labelling;66 
 Act No. 22/1994 (as amended) on feed, fertilizers, and seed;  
 Act No. 25/1993, 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 gr ounds and provides for conditio ns under which exceptions to 
the ban can be made (Table III.10).  Regul ations 1043/2011 and 1044/2011, passed in 
November 2011, cover trade in animal produc ts from within and from outside the EEA; 
                                                      
60 MAST online information.  Viewed at:  http://www.mast.is/index.aspx?GroupId=1258 
[January 2012]. 
61 WTO document G/SPS/N/ISL/7, 5 October 2005. 
62 WTO document G/SPS/ N/NNA/16 and G/SPS/ENQ/ 26, 11 March 2011. 
63 WTO document G/SPS/R/56, 28 January 2010. 
64 European Commission (2011), Chapter 12 - Food safety, veterinary and phytosanitary policy, p. 3-4.   
65 Most of these Acts, regulations, and notifications of  specific measures are available (in Icelandic) in 
MAST online information, at:  http://w ww.mast.is/index.aspx [February 2012]. 
66 For the consolidated version of the Act, see Ministry for the Environment online information.  
Viewed at:  http://eng.umhverfisraduneyti. is/legislation/nr/375 [February 2012]. Iceland WT/TPR/S/273 
 Page 45 
 
 
   Act No. 143/2009, which amended several other Ac ts and extended EU legislation to cover 
veterinary issues with the exception of live anim als, animal germplasm materials, and some 
other products;  and 
 several other pieces of legislation that cover SPS matters, including:  Act No. 99/1993, which 
bans animal and plant products that ha ve been given growth-promoting agents;  
Act No. 96/1997 on Slaughtering and Slaughter Pr oducts;  Act No. 66/1984 on Veterinarian 
and Animal Health Services; Act No. 51/1981 on Plant Diseases and Pests;  Act No. 80/2005 
on the Food and Veterinary Authority;  Act No. 7/1998 on Control of Hygiene and Pollution;  
and Act No. 55/1998 (as amended) on Handli ng, Processing and Distribution of Marine 
Products. 
84. Iceland is a member of the Codex Alimenta rius and the World Organization for Animal 
Health and a contracting party to the In ternational Plant Protection Convention. 
Table III.10 
Provisionally prohibited imports, 2012 
Act No. 54/1990 
 All live animals as well as their genetic substances 
Act No. 25/1993 
 All imports of food of animal origin  are forbidden.  Imports allowed subject to a positive evaluation by MAST 
Regulation No. 448/2012 
a. Raw meat, processed or unprocessed, as  well as offal and animal by-products 
b. Animal feed containing: 
(1) fallen stock;  (2) animals slaughtered to  eradicate animal diseases;  (3) animal wa ste;  (4) uninspected animal parts (exce pt 
hides, skins, blood and similar products);  (5) spoiled meat and fish products; (6) meat and fish products not meeting import 
requirements;  (7) animal products and anim als wastes containing contaminants dangerous  to human and animal health;  (8) fish 
or fish wastes unsuitable for human consump tion due to contagious diseases;  (9) produc ts from specified risk materials (such a s 
spinal cords, brains, and spleens of cattle or sheep;  (10) products contaminated after heat treatment 
c. Meat meal, bone meal, feed products processed fr om products or by-products from mammals and fowl 
d. Packaging used in agriculture or that has been in contact with animals, animal  products or animal waste 
e. Raw eggs and egg products  
f. Unpasteurised milk and dairy products pr ocessed from unpasteurised milk with the exception of up to 1 kg of cheese from an 
approved establishment in the EEA for personal use.  The Mini ster may approve larger quantities for import for personal use 
g. Hay, straw, manure and compost 
h. Blood, serum, and other organic animal  products, including bacteria, viruses, blood samples, tissues and animal proteins. 
i. Used riding gear, unsterilized riding outfits, equipment that ha s been used to transport or store animals or animal products  
j. Used agricultural machinery and tools 
k. Used fishing gear, unless disinfected 
Source: Act No. 54/1990, Act No. 25/1993, and Regulation No. 448/2012. 
85. Notwithstanding the prohibition on imports of liv e animals, the Minister for Fisheries and 
Agriculture may, based on a recommendation from the Ch ief Veterinary Office, allow imports to take 
place.  However, in practice only pets are imported, subject to obtaining an import permit, plus strict 
health requirements, including vaccination and quarantine.67  Similarly, 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.   
86. Imports of chilled and frozen meat and meat  products, including meat sausages and salted, 
dried or smoked meat68, must be accompanied by certificates confirming that the frozen foods were 
                                                      
67 MAST (2011). 
68 CN codes 0202, 0203, 0204, 0207, 0208, 0210, 1601, and 1602. WT/TPR/S/273 Trade Policy Review 
Page 46 
  
  stored for at least one month at -18oC or less, and are free of salmonella and contaminents.  
Furthermore, products arriving from outside the EEA must be accompanied by certificates showing:  
origin and health;  that the animals from which the products were derived were not given growth-
promoting substances;  and that the animals were slaughtered in premises authorized in the EEA.  
Imports of sausage and salted, dried or smoked meats must also be accompanied by certificates 
showing they meet specific treatment requirements, such as heat treating or curing.   
87. In practice, documents must be submitted to MAST, which processes them and makes a 
recommendation to the Ministry of Fisheries and Ag riculture, which must give prior approval for each 
import consignment of frozen produc ts.  MAST approval is not given for imports from countries that 
have reported outbreaks of diseases previously classified by the OIE under "List A".69 
88. Animal feed may only be imported by regist ered importers.  Feed imports must be 
accompanied by documentation showing the ingredient s, their chemical composition, and, if any 
ingredient is of animal origin, a health certificat e stating the sanitary pro cedures used in production, 
packing, and handling (e.g. method of sterilization, autoclavation, etc.), and the absence of micro-
organisms.  The health certificate must be signed by an official veterinarian.  For imports of feed for 
pets from another EEA country, a commercial document from the manufacturer may replace the 
health certificate. 
89. Imports of used fishing equipment must be disi nfected by a veterinarian in the country of 
embarkation and accompanied by a certificate to this effect.  Imports of some used riding equipment such as saddles, bridles, nosebands, etc. and riding gloves is prohibited.  Riding boots and clothes 
must be washed and/or disinfected before being imported. 
90. Imports of plants and plant part s require certificates and are potentially subject to restriction 
by the Minister for Fisheries and Agriculture under Regulation 189/1990.  Imports of certain types of 
trees and vegetables, soil, cut tree bark, and manure are prohibited.
70 
91. Domestic animals and animal products are also s ubject to strict controls.  Identification and 
traceability systems apply to cattle, ovines, and pigs and movement without identification and 
registration is prohibited.  Under Act No. 25/1993, immediate culling is required in the event of an 
outbreak of many diseases and is an option for others.  In the event of an outbreak of a disease, the Minister for Fisheries and Agricu lture has the authority to stop distribution of products, isolate 
animals, order culling or impose other measures to pr event the disease spreading and to eradicate it.  
All businesses involved in primary food and feed  production must be approved by MAST (for 
production and processing of fish, meat, milk, and eggs ) or local health inspectors (for control at the 
retail level and food business operators producing food of non-animal origin).
71  
                                                      
69 Diseases notifiable to the OIE under the old classification List A were:  foot and mouth disease; 
swine vesicular disease;  peste des petits ruminants;  lumpy skin disease;  bluetongue;  African horse sickness;  classical swine fever;  Newcastle disease;  vesicular stomatitis;  rinderpest;  contagious bovine 
pleuropneumonia;  Rift Valley fever;  sheep pox and goat pox;  African swine fever;  and highly pathogenic 
avian influenza.  See OIE online information.  Viewed  at:  http://www.oie.int/animal_health-in-the-world/the-
world-animal-health-information-system/old-classification-of -diseases-notifiable-to-the-o ie-list-a/ [July 2012]. 
70 European Commission (2011), Chapter 12 - Food safety, veterinary and phytosanitary policy, p. 9.   
71 European Commission (2011), Chapter 12 - Food safety, veterinary and phytosanitary policy, p. 7.   Iceland WT/TPR/S/273 
 Page 47 
 
 
  (v) Intellectual property rights 
92. Under Article 69 of the TRIPS Agreement, Icel and has notified the Ministry of Education, 
Science and Culture as the contact point for copyri ght and related rights, and the Icelandic Patent 
Office (Einkaleyfastofan) as the contact point for industrial property (other TRIPS-related 
questions).72  
93. Iceland is a member of the World Intellectual Property Organization (WIPO) and a signatory 
to a number of international agre ements on intellectual property rights.  In addition, Iceland has 
acceded to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs and the Eu ropean Patent Convention. 
94. During the period under review, there have been several changes to the laws on intellectual 
property and their implementation.  Intellectual property is covered by the EEA, and Iceland has 
indicated that it applies the aquis communautaire  in this area, to the extent that it has been 
incorporated into the EEA Agreement.
73   
(a) Copyrights 
95. Copyrights in Iceland are protected under the Act No. 73/1972 on Copyright, which is 
administered by the Ministry of Education, Scie nce and Culture.  The Act was amended several times 
as EU rules were transposed into Icelandic law (T able III.11).  Under the present legislation copyright 
protection is afforded to literary and artistic work s for 70 years, the author's, producer's or creator's 
life plus. 
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 copy right and certain related rights 
Act No. 9/2006   
Protection of semiconductor topographi es, databases and computer programs 
Act Nos. 78/1993 & 78/1993 Council Directive 87/54/EEC 
on the legal protection of topogr aphies 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, & 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 th e author of an original work of art 
Satellite and cable transmission 
Act 145/1996 Council Directive 93/83/EEC 
on the coordination of certain rule s concerning copyright and rights 
related to copyright applicable to satellite broadcasting and cable 
retransmission 
Table III.11 (cont'd) 
                                                      
72 WTO document IP/N/3/Rev.7, 19 August 2003. 
73 European Commission (2011),  Chapter 7 - Intellectual property law, p. 3.  
 WT/TPR/S/273 Trade Policy Review 
Page 48 
  
  Icelandic legislation Corresponding EU legislation 
Copyright in the information society 
Act No. 9/2006 Directive 2001/29/EC 
on the harmonisation of certain aspects of copyright and related rights in 
the information society 
Source:  European Commission (2011), Screening  report Icel and, Chapter 7 - Intellectual property law, pp. 3-4.  
 Viewed at:  http://ec.europa .eu/enlargement/candidate-countries /iceland/index_en.htm [July 2012]. 
96. Iceland works with other Nordic countries to coordinate a common policy through a working 
group made up of copyright experts from Denmark, No rway, Finland, Sweden, and Iceland.  It also 
participates in the EFTA working group on intellect ual property and has observer status in the EU 
contact committees for Directive 2001/29 on the harmonization of certain aspects of copyright and 
related rights in the information society, and Dir ective 2001/84 on the resale right for the benefit of 
the author of an original work of art. 
97. In October 2009, the authorities launched the co pyright reform initiative, which foresaw a 
new draft Copyright Bill in 2012.  However, this h as been delayed till 2014 due to lack of funds.  The 
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 initiativ es for right holders and users;  and 
 stress the importance of international co-operation. 
98. Between 2006-09, there were 25 infringement actions  at the District Court Level and 20 at the 
Supreme Court level.  Penalties may include fines and prison terms of up to two years, although all 
cases were concluded by awarding damages.  
99. The Icelandic Copyright Act neither requires nor offers registration of copyright in line with 
the Berne Convention for the Protection of Literary  and Artistic Works, which explicitly prohibits 
such formal procedure as prerequisite for copyright protection, cf. Article 5(2):  "the enjoyment and 
the exercise of these rights shall not be subject to any formality…".  Thus, there is no public register 
of copyrights and no delay of protection in the form of registration process. 
(b) Patents 
100. Patents are protected under the Patent Act of 1991 (as amended by Act 22/2004 and 
Regulation No. 5747/1991 on patent a pplications).  The Act is administered by the Icelandic Patent 
Office (IPO), which is part of the Ministry of Econom ic Affairs and will be transferred to the Ministry 
of Industries and Innovation in September 2012.  Patents are valid for 20 years.  Iceland WT/TPR/S/273 
 Page 49 
 
 
  101. In 2011, the Patent Office acknowledged 778 Eur opean patents (EP) a nd approved 65 patents 
out of 71 applications directed to the Icelandic Pa tent Office.  At end 2011, 2,632 patents were in 
force. 
102. Changes to the Patent Act during the review period included:  provi ding the patent holder 
with the right to request the limitation of the pate nt (Article 5 of Act No. 53/2004, which entered into 
force in 2007);  permitting the patent to be can celled in its entirety rather than its surrender 
(Article 7 of Act No. 53/2004);  and allowing the commercial exploitation by a third party, under 
certain conditions in good faith, of  an invention described in a Eu ropean application or European 
patent (Article 9 of Act No. 53/2004).  
103. An amendment was also made to allow for great er cooperation between No rdic Patent Offices 
and enable them to act as one.  Compulsory licen ces are also allowed for the export of pharmaceutical 
products to developing countries facing severe health problems. 
104. A new patent regulation entered into for ce (Regulation No. 477/2012 on Patents) in 
May 2012.  Under the new regulation: 
 the time limit for filing Icelandic translation of claims and abstract is 14 months from the date 
of application or the priority date; 
 the time limit for filing the approved version of the patent claims, the abstract and the 
drawings text is 8 months from the date when the IPO believes there are material reasons for granting a patent;  and 
 the time limit for limiting the scope of an applica tion that involves two or more inventions is 
3 months from the IPO communication. 
105. The fee schedule for patents was amended in 2011.   
106. During the period under review, the Supreme Court ruled on three patent disputes.  The first 
case concerned a dispute between two manufacturers  of machines used in the fishing industry and 
whether the defendant was in breach of Icelandic pa tent No. 1774.  The technical method of the two 
machines used was, according to the evaluation of a specialist not considered to be identical or 
equivalent, which resulted in the defendant being acquitted. 
107. The second case concerned Icelandic Patent No . 2002 and a dispute as to whether a licence 
agreement had been agreed between the parties,  and whether the alleged non-licensee was breaching 
the patent.  Since, according to the Patent Act,  licence agreements were not subject to formal 
requirements, the Supreme Court considered that ba sed on Article 43 of the Act, in conjunction with 
the agreement between the parties, that the parties had entered into a non-revocable licence 
agreement.  The licensee was therefore not considered to be breaching the patent. 
108. The third case concerned a dispute between an  applicant of a national and later an 
international patent application (PCT) and the refu sal of one of the inventors to sign the required 
assignment form in the international phase.  Since the application had been altered since the basic 
application was filed, and with his signature the i nventor would have confirmed that he had read and 
understood documents filed with the application ab road, which were not submitted during the trial, 
the inventor was acquitted. WT/TPR/S/273 Trade Policy Review 
Page 50 
  
  (c) Trademarks 
109. Trademark protection is afforded under the Tr ademarks Act of 1997 (as amended) and the 
Collective Marks Act of 2002.  Both Acts are admi nistered by the IPO.  Trademarks need to be 
registered in Iceland.  Furthermore, by filing an international application, trademarks can also be 
protected in all member countries of the Madrid  Protocol, of which Iceland is a signatory.74  
Trademarks are protected for a ten-year term, wh ich is renewable for as long as the owner desires. 
110. Various changes were made to the trademar k legislation during the period under review 
including: 
 trademark law in the European Union was ha rmonized, under which regional exhaustion of 
rights, i.e. within the EEA, applies in Iceland (Act No. 117/2009);   
 trademark protection has been extended from the type of product, condition, quantity, use, 
price, origin or when it was produced, to  include services represented by a trademark 
(Act No. 53/2012, Article 13);   
 a trademark may not be registered if it is liable to  be confused with a ma rk that has been used 
in another country, at the time when the application was filed or from the date of priority and is still being used there for the same or si milar goods/services (Act No. 53/2012, Article 14); 
 if a trademark application is rejected and the applicant does not make any comments or 
explain his case within a specified time peri od, the application may be invalidated 
(Act No. 53/2012, Article 19); 
 opposition to a trademark is now subject to  a specific opposition fee of ISK 30,000 
(Act No. 53/2012, Article 22); 
 the IPO now has the power to invalidate a regi stration, previously this could only be done 
through a court verdict (Act No. 53/2012, Article 25);  and 
 the requirement that the owner of a trademark or  their agent must be resident in Iceland has 
been eased.  The owner or the agent now needs to be resident in the EEA (Act No. 53/2012, 
Article 35). 
111. During the period under review, five trademark disputes were decided by the courts.  One 
case concerned a dispute on the trademark ICEAVIA.  Company F requested invalidation of the trademark as the proprietor had not used it in Icel and for five consecutive years and thus the mark 
should be invalidated under Article 25 of the Tradem ark Act (No. 45/1997).  The Court ruled that the 
referenced article had entered into Icelandic la w under the EEA Agreement and therefore the case had 
to be judged in light of Iceland's EEA obligations.  According to the Court, the use of a trademark had 
to be genuine and in connection to the goods or services mentioned in the registration and that the 
burden of proof of use lay with the proprietor.  The Court ruled that there was no company named 
ICEAVIA, the proprietor appeared to have used th e mark in a personal capacity, and was not able to 
prove that he had put his services on the market or used the trademark in Iceland in connection with his services.  Therefore company's F request for th e invalidation of the trademark was accepted by the 
                                                      
74 A fee is paid for each designated country, althou gh the decision on whether the trademark can be 
registered is addressed separately in each country. Iceland WT/TPR/S/273 
 Page 51 
 
 
  Court. A case in 2010, pertained to a dispute on th e invalidation of a trademark.  The charges were 
dropped. 
112. In another case, a petition was filed requesti ng the annulment of the Board of Appeals 
decision rejecting the opposition to the registrati on of the trademark VINORELSIN.  The arguments 
of the plaintiff were accepted and the Bo ard of Appeals decision was annulled.   
113. The schedule of fees for trademarks was also changed in 2011. 
(d) Designs 
114. During the period under review, there was no material change to the legislation protecting 
designs.  Designs are protected under the Design Protection Act of 2001, administered by the IPO. 
115. Under the Act, design rights do not include: certa in specified features of the appearance of a 
product;  acts done for private purposes; acts done for experimental purposes, and reproduction for 
use in citations or teaching, provided that such ac ts are compatible with fair trade practices, do not 
unduly prejudice the normal exploitation of the desi gn, and that mention is made of the source; 
equipment on ships and aircraft registered in a nother country when these are temporarily located 
under Icelandic jurisdiction;  the import into Icel and of spare parts and accessories for the purpose of 
repairing ships and aircraft;  and execu tion of repairs on ships and aircraft. 
116. Applications for protection of designs by non-residents must be conveyed through a 
representative domiciled in the EEA.  Regional exhaus tion applies with respect to parallel imports. 
There has only been one dispute concerning designs during the review period.  The case concerned 
allegations regarding the wrongful use of maps owned by an advertisement agency, which were 
protected by copyright, design registrations, an d registered trademarks.  The maps of the 
advertisement agency and those of the plaintiff were  not considered to be si milar, and the defendant 
was acquitted.  The fee schedule for designs was also amended in 2011. 
Geographical indications 
117. Iceland does not have any specific legislation th at covers geographical indications.  However, 
provisions in the Trade Marks 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 registra tion of a mark that causes confusion regarding its 
origin, or of a trade mark 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.   
(vi) State-trading enterprises, state-owned enterprises, and privatization 
(a) State-trading enterprises 
118. The only enterprise notified by Iceland to th e WTO as a state-trading enterprise under GATT 
Article XVII is the State Alcohol and Tobacco Co mpany of Iceland (ÁTVR) which was established 
under Act No. 63/1969 on the Sale of Tobacco and Alcoholic Beverages.
75  The law establishing the 
ÁTVR, was changed recently.  Under the new legisl ation (Act No. 86/2011 on Trade in Alcohol and 
                                                      
75 WTO document WT/TPR/S/164/Rev.1, 17 August 2006, p. 51. WT/TPR/S/273 Trade Policy Review 
Page 52 
  
  Tobacco), the ÁTVR remains a wholly owned state enterprise that operates under the supervision of 
the Minister of Finance and retains its exclusive rights on retail sale and distribution of all alcoholic 
beverages with an alcohol content of more than  2.25% and exclusive rights to sell tobacco at 
wholesale level to retailers.   
119. Under Act No. 86/2011, the ÁTVR is required to sell alcohol products at the same prices in 
each of its 49 retail outlets.  The mark-up for retail,  relative to wholesale prices, is fixed at 18% for 
beverages with 22% alcohol by volume or less and 12% for beverages with more than 22% alcohol.  
Similarly, the mark-up for wholesale of tobacco is fixed at 18%.  Other regul ations set out further 
details on the terms of purchase and sale by the ÁTVR, such as Regulation No. 755/2011 on Selection 
and Sale of Alcohol and Trade Terms with Supplie rs, and Regulations No. 1159 of 2008 concerning 
the purchase, product selection, wholesale, and delive ry of tobacco products and trade terms with 
suppliers.76 
(b) State-owned enterprises and privatization 
120. Following the collapse of the main banks in  2008, the Government passed Act No. 125/2008 
on the Authority for Treasury Disbursements due to  Unusual Financial Market Circumstances.  The 
domestic functions of the main ba nks were nationalized (see Chapte r IV(4)(i)) with the intention of 
returning them to the private sector after cond itions had stabilized enough for them to operate 
independently.  As of end 2010, the State held 81%  in New Landsbanki, 13% in Arion Bank, and 5% 
in Íslandsbanki, at a cost of €1.4 billion (ISK 184 billion), or 13% of GDP.  The creditors owned the 
remaining shares.  Furthermore, the State had to rescue one insurance company, Sjóvá-Almennar 
tryggingar hf, which resulted in ESÍ (the company set  up to administer the assets of the Central Bank) 
owning 73% of share capital.  In July 2011, ESÍ sold most of its stake to SF1 slhf (a limited partnership administered by Stefnir hf, which is a fund management company) leaving the ESÍ with 
20.6%. 
121. The Icelandic State Financial Investments (I SFI) agency was established in 2010 under Act 
No. 88/2009 as a state body with an independent bo ard of directors reporting to the Minister of 
Finance to manage the State's holdings in financ ial undertakings.  A Bill is currently before the 
Parliament, which sets out the process by which the Minister of Finance may dispose of publicly held 
bank shares. 
122. Outside of the financial sector, the general policy concerning state involvement in the 
business sector has not changed.  Over the ten- year period 1997-2007, the Government applied a 
programme of privatization.  The most recent priv atizations were in 2007 when the Government's 
share in a geothermal water and electricity compa ny in southwest Iceland were sold.  The central 
Government's holdings are now restricted to bus inesses involved in the production and distribution of 
electricity company, postal services, the Housing Fi nancing Fund, the Student  Loan Fund, and some 
smaller financial institutions.  In addition, Isav ia, a wholly government-owned entity under the 
Ministry of the Interior, owns and operat es all airports (see Chapter IV(4)(iii)).  
123. Local government holdings are mainly in geothe rmal production of heating and electricity, as 
the municipalities own almost all of the geothermal  power companies, which supply heating to most 
homes in Iceland and, on an increasing scale, elect ricity to the aluminium industry.  Several local 
                                                      
76 For the laws, regulations, and rules governing pricing, sale, advertising, and other aspects of trade in 
alcohol and tobacco, see ÁTVR online information (most in Icelandic only).  Viewed at:  
http://www.vinbudin.is/desktopdefau lt.aspx/tabid-3/ [March 2012]. Iceland WT/TPR/S/273 
 Page 53 
 
 
  governments own operating companies for harbours, in addition to owning their local electricity 
distributors.77 
(vii) Competition policy  
124. Since October 2009, policy and legislation on competition has been the responsibility of the 
Ministry of Economic Affairs, which took over most of the functions of the Ministry of Business, 
including responsibility for the Competition Authority  and the Financial Supervisory Authority.  
These two authorities are responsible for implementing policy in their respective areas.  The principle 
legislation on competition is Competition Law No. 44/2005, as amended by Act Nos. 52/2007, 
94/2008, and 14/2011.78   As noted earlier, in September 2012, the functions of the Ministry of 
Economic Affairs are to be divided between the Mi nistry of Finance and Economic Affairs and the 
Ministry of Industries and Innovation. 
125. Through its membership of the EEA, Iceland's competition policy is aligned with that of 
the EU.  National and EEA rules on competition are applied in parallel:  EEA competition rules apply 
where restrictive practices may a ffect trade between EEA countries,  while national decisions should 
not interfere with the EEA rules.  Iceland has al so subscribed to competition provisions within the 
context of the EFTA Convention and in each of EFTA 's free-trade agreements with third countries. 
126. The Competition Authority in Iceland coopera tes with the authorities from other Nordic 
countries (Norway, Denmark, Sweden, Finland, the Faeroe Islands, and Greenland), including a 
formal agreement on exchange of confidential co mpetition-related information among the authorities 
of Denmark, Iceland, Norway, and Sweden.79  In addition, the Nordic Cartel Network, established in 
2000, is a model for cooperation on cartel investigations.80  Working groups comprising the 
authorities from the Nordic countries publish report s on specific projects, such as:  Competition 
Policy and Green Growth81, Competition Policy and Financial Crises, Competition Challenges in the 
Pharmacy/Pharmaceutical Sector, and Capacity for Competition - Investing for an Efficient Nordic 
Electricity Market.  
127. The Competition Authority is an independent bod y that currently reports to the Minister of 
Economic Affairs.  Under the Competition Law and its Rules of Procedure No. 880/2005, the 
Authority's Board of Directors sets the priorities for the Authority and has final responsibility for 
decisions.  The Authority is responsible for applyi ng Icelandic law, which includes Articles 53 and 54 
of the EEA Agreement on collusion and abuse of a dominant position. 
128. Under the Law, anti-competitive agreements and practices by businesses are prohibited, as are 
abuse of a dominant position and agreements be tween businesses that restrict competition.  The 
Competition Authority must be notified of mergers where the total turnover of the undertakings in 
question is ISK 1 billion or more.  The Authority may set conditions for mergers, prevent them from 
                                                      
77 Central Bank of Iceland (2011), pages 51-52. 
78 Competition Law No. 44/2005 (in English).  View ed at:  http://eng.efnahagsraduneyti.is/laws-and-
regulations/Competition/ [March 2012]. 
79 Agreement between Denmark, Iceland, Norway and Sweden concerning cooperation in matters of 
competition .  Viewed at:  http://www.nor den.org/en/about-nordic-co-ope ration/agreements/treaties-and-
agreements/industry-trade/agreement -between-denmark-iceland-norway-a nd-sweden-concerning-cooperation-
in-matters-of-competition/ [July 2012]. 
80 OECD (2012a).  
81 Nordic Competition Authorities (2 007), (2008), (2 009) and (2010). WT/TPR/S/273 Trade Policy Review 
Page 54 
  
  taking place or annul them after they have been co ncluded if it determines that they would obstruct 
effective competition. 
129. Between its establishment in July 2005 and the end of 2011, the Authority published 286 
decisions.82  The Authority has stated that the post-cr ises economic conditions have led to increased 
concentration in some sectors and it deems it likely that firms may abuse dominant positions or 
collude with competitors to address their financia l difficulties.  Since the beginning of 2008 it has 
annulled or prevented 4 mergers and imposed cond itions on a further 31, and has fined 21 companies 
a total of €12.2 million for collusi on or abuse of a dominant position.83 
130. 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.   The amendment also allows the Authority to 
bring rulings of the Appeals Committee to the courts (in the past only parties opposed to rulings in the 
Appeals Committee had this right). 
131. The general rule for competition cases within the jurisdiction of the EEA is that the European 
Commission has responsibility for cases falling under EU  competition rules affecting trade between 
EU states;  and the EFTA Surveillance Author ity has responsibility for cases where only trade 
between participating EFTA states is affected.  In  cases affecting trade between the EU and one or 
more participating EFTA states, responsibility is a llocated according to the relative importance of the 
turnover of the undertakings concerned. 
                                                      
82 European Commission (2011), Chapter 8 - Competition Policy , p. 4. 
83 Icelandic Competition Authority (2011), p. 4.