on the position to be adopted on behalf of the European Union, within the EEA Joint Committee concerning an amendment of Protocol 31 to the EEA Agreement, on cooperation in specific fields outside the four freedoms, and Protocol 32, on financial modalities for implementation of Article 82 (InvestEU)

EXPLANATORY MEMORANDUM

1.Subject matter of the proposal

This proposal concerns the decision establishing the position to be adopted on the Union's behalf in the EEA Joint Committee in connection with the envisaged adoption of the Joint Committee Decision concerning an amendment of Protocol 31 to the EEA Agreement, on cooperation in specific fields outside the four freedoms, and Protocol 32, on financial modalities for implementation of Article 82

2.Context of the proposal

2.1.The EEA Agreement

The Agreement on the European Economic Area (‘the EEA Agreement’) guarantees equal rights and obligations within the Internal Market for citizens and economic operators in the EEA. It provides for the inclusion of EU legislation covering the four freedoms throughout the 30 EEA States comprising of EU Member States, Norway, Iceland and Liechtenstein. In addition, the EEA Agreement covers cooperation in other important areas such as research and development, education, social policy, the environment, consumer protection, tourism and culture, collectively known as “flanking and horizontal” policies. The Agreement entered into force on 1 January 1994. The European Union together with its Member States is a party to the Agreement.

2.2.The EEA Joint Committee

The EEA Joint Committee is responsible for the management of the EEA Agreement. It is a forum for exchanging views linked to functioning of the EEA Agreement. Its decisions are taken by consensus.

2.3.The envisaged act of the EEA Joint Committee

The EEA Joint Committee is expected to adopt the EEA Joint Committee Decision (‘the envisaged act’) regarding the amendment of Protocol 31 to the EEA Agreement, on cooperation in specific fields outside the four freedoms, and Protocol 32, on financial modalities for implementation of Article 82.

The purpose of the envisaged act is to extend the cooperation of the Contracting Parties to the EEA Agreement to include the participation of the EEA EFTA States in the InvestEU programme. Regulation (EU) 2021/523 of the European Parliament and of the Council of 24 March 2021 establishing the InvestEU Programme and amending Regulation (EU) 2015/1017 shall therefore be incorporated into the EEA Agreement.

As Liechtenstein did not express its interest in participating in the InvestEU Programme, the draft Decision of the EEA Joint Committee concerns only Norway and Iceland. The EEA EFTA States also chose not to participate in the InvestEU Advisory Hub and may choose to participate in one or more financial products under the EU compartment of the InvestEU Fund. In order to enable an adequate financial contribution of the EEA EFTA States, such contribution shall be based on the risk profile of the financial products in which they choose to participate. The contribution from EEA EFTA States shall increase the EU guarantee.

For the purpose of calculating the financial contribution of the EEA EFTA States to the InvestEU Fund, the proportionality factor as stipulated in Article 82(1) of the EEA Agreement for budget lines may not reflect accurately the share of the participation in the InvestEU Fund via the relevant financial products. Therefore, in accordance with Article 8 of Protocol 32, the EFTA States shall enter into contribution agreements with the EU represented by the Commission. In view of the financial contribution taking place via the chosen financial products, it must be left to the contribution agreements to establish the amounts of the EFTA States’ financial contribution to the EU guarantee, lay down terms and conditions for the use of this contribution, establish the frequency and amounts of the payment of the contribution and establish rules for the reimbursement of unused funds and revenues to the EFTA States.

In line with the EU budgetary policy, any participation in an EU activity can take place only once the corresponding financial contribution is paid. The payment can however take place once this draft Council Decision is adopted and the subsequent EU call for funds, established by the European Commission, is submitted to the EEA EFTA States.

Therefore, in order to bridge the period between 1st January 2022 and the reception of the respective payment, the draft Joint Committee Decision shall also be retroactively applicable from 1st January 2022. The retroactivity does not affect the rights and obligations of persons concerned and respects the principle of the legitimate expectations.

The envisaged act will become binding on the parties in accordance with Articles 103 and 104 of the EEA Agreement.

3.Position to be taken on the Union's behalf

The Commission submits the draft Decision of the EEA Joint Committee for adoption by the Council as the Union’s position. The Commission would hope to be able to present it in the EEA Joint Committee at the earliest possible opportunity.

The content and nature of the draft of the annexed Decision of the EEA Joint Committee go beyond what can be considered mere technical adaptations in the sense of Article 1(3) of Council Regulation No 2894/94. The Union position shall therefore be established by the Council.