Recommendation for a COUNCIL DECISION authorising the opening of negotiations for the adaptation of the following agreements in view of the enlargement of the EU to Croatia: the Agreement on the European Economic Area, the Agreement between the Kingdom of Norway and the European Union on a Norwegian Financial Mechanism for the period 2009-2014, the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons and the Agreement on Cooperation and Customs Union with San Marino
Date: 2012-06-01
Institutions: European Commission
Subjects: Croatia, European Economic Area, Norway, San Marino, Switzerland, accession to the European Union, association agreement (EU), bilateral agreement, revision of an agreement

EUROPEAN COMMISSION 

Brussels, 1.6.2012  
COM(2012) 255 final 

Recommendation for a 

COUNCIL DECISION 

authorising the opening of negotiations for the adaptation of the following agreements in 
view of the enlargement of the EU to Croatia: the Agreement on the European 
Economic Area, the Agreement between the Kingdom of Norway and the European 
Union on a Norwegian Financial Mechanism for the period 2009-2014, the Agreement 
between the European Community and its Member States, of the one part, and the Swiss
Confederation, of the other, on the free movement of persons and the Agreement on 
Cooperation and Customs Union with San Marino 

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EXPLANATORY MEMORANDUM 

The Treaty concerning the accession of the Republic of Croatia to the European Union1 was 
signed on 9 December 2011. 

The  European  Union  and  its  Member  States  have  concluded  agreements  on  the  European 
Economic  Area  with  Norway,  Iceland  and  Liechtenstein,  on  a  Norwegian  Financial 
Mechanism for the period 2009-2014, on free movement of persons with Switzerland, and on 
a cooperation and customs union with San Marino. 

These  agreements  need  to  be  adapted  to  include  Croatia  as  a  contracting  party  upon  its 
accession  to  the  European  Union.  The  terms  of  the  adaptation  are  to  be  negotiated  between 
the current contracting parties and the acceding country. The negotiations should be initiated 
in  a  timely  fashion,  in  order  to  ensure  that  the  instruments  for  the  adaptation  of  these 
agreements will enter into force on the date of accession of Croatia to the EU. 

In accordance with Article 6 of the Act concerning the conditions of accession of the Republic 
of  Croatia  (further  on:  Act  of  Accession),  such  negotiations  should  be  carried  out  by  the 
Commission  on  the  basis  of  negotiation  directives  approved  by  the  Council  and  in 
consultation with a committee comprised of the representatives of the Member States. 

Negotiations on behalf of the European Union and its Member States should be launched on 
the basis of the following considerations: 

1. Agreement on the European Economic Area 

Pursuant to Article 6(5) of the Act of Accession concerning the conditions of accession of the 
Republic of Croatia, Croatia has undertaken to accede to the European Economic Area (EEA), 
under  the  conditions  of  that  Act.  In  accordance  with  Article  128  of  the  Agreement  on  the 
EEA, Croatia will therefore submit its application to the EEA. 

To that end, the Commission should be authorised to negotiate, on behalf of the EU and its 
Member  States,  with  the  contracting  parties  of  the  EEA  and  Croatia,  an  Agreement  on  the 
participation of Croatia in the EEA.  

On  the  basis  of  the  experience  from  the  2007  EEA  enlargement  negotiations,  the  following 
issues have been identified as possible subjects for negotiation: 

– 

Derogations  and  transition  periods:  The  derogations  and  transition  periods 
agreed  in  the  context  of  the  Treaty  of  Accession  should  be  taken  over  in  the 
EEA  Agreement.  It  is  unlikely  that  Norway,  Iceland  and  Liechtenstein  will 
oppose this fundamental principle. 

1 

[Treaty between the Kingdom of Belgium, the Republic of Bulgaria, the Czech Republic, the Kingdom 
of Denmark, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, 
the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Republic 
of Latvia, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Hungary, the 
Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, 
the  Portuguese  Republic,  Romania,  the  Republic  of  Slovenia,  the  Slovak  Republic,  the  Republic  of 
Finland, the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland (Member 
States of the European Union) and the Republic of Croatia concerning the accession of the Republic of 
Croatia to the European Union, OJ L 112 of 24 April 2012] 

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– 

– 

Agricultural products and processed agricultural products: Croatia has a fairly 
limited share in EEA trade. However, it cannot be excluded that Norway and 
Iceland will request compensation for the termination of existing bilateral free 
trade  agreements  with  Croatia  from  the  date  of  accession.  As  for  agricultural 
and  processed  agricultural  products,  such  adaptations should be  agreed  within 
the  framework  of  the  regular  negotiations  on  the  basis  of  Article  19  and 
Protocol  3  to  the  Agreement  on  the  EEA,  respectively,  with  the  objective  of 
continued liberalisation of trade in these products.  

through 

the  Agreement  between 

EEA  and  Norway  Financial  Mechanisms:  In  the  2007  EEA  Enlargement 
Agreement, all three EEA EFTA States agreed to contribute an additional €72 
million  to  social  and  economic  cohesion  in  the  enlarged  EEA  (€21.5  million 
for  Bulgaria  and  €50.5  million  for  Romania)   up  to  30  April  2009,  inclusive. 
Norway  alone  contributed  an  additional  €68  million,  through  two  bilateral 
cooperation  programmes  for  promoting  economic  growth  and  sustainable 
development in Bulgaria (€20 million) and Romania (€48 million). From 2009-
the  European  Union,  Iceland, 
2014, 
Liechtenstein  and  Norway  on  an  EEA  Financial  Mechanism  2009-2014,  all 
three EEA EFTA States will contribute, in total, €988.5 million to social and 
economic cohesion in the EEA. Through the Agreement between the European 
Union and Norway on a Norwegian Financial Mechanism for the period 2009-
2014, Norway alone will contribute an additional €800 million in total. The EU 
point of departure for the negotiations was that the EEA EFTA States as part of 
the internal market would benefit as much as Member States from the enlarged 
internal  market,  and  should  therefore  also  participate  to  a  sustainable  and 
equitable development of the internal market by contributing to the alleviation 
of  social  and  economic  disparities  in  the  EU/EEA.  Considering  that  it  is 
envisaged that the EEA and Norway will start negotiations with the EU on the 
financial contribution to the beneficiary states for the EEA / Norway financial 
mechanisms  for  the  period  2015-2020  in  2013,  it  seems appropriate  to  apply 
the same logic used for Bulgaria and Romania for the negotiations concerning 
Croatia  and  that  the  EEA  EFTA  states  should  financially  contribute  to  social 
and  economic  cohesion  in  the  enlarged  EU/EEA  with  the  EEA/Norway 
financial mechanisms, but proportionally, until 2014 and without depriving the 
current beneficiary states of any of the previously agreed funds, based on the 
same criteria. The allocation of the additional funds to Croatia should be based 
on the same criteria as those applied for the two existing financial mechanisms. 
In the revision of the financial mechanisms, it should also be recalled that any 
existing bilateral assistance agreements between the EEA-EFTA countries and 
the new EU Member State will be terminated upon the accession of the latter to 
the EU.  

During the enlargement process with Bulgaria and Romania, it was negotiated 
that the Commission 'may' screen the proposed projects, instead of 'shall'. This 
issue should be included again in the negotiations.  

As a general rule, negotiations should be limited to the main subjects indispensable for EEA 
enlargement,  in  order  to  avoid  lengthy  procedures  that  would  endanger  simultaneous  entry 
into force of the EU and EEA enlargements.  

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2. Switzerland and San Marino 

In accordance with Articles 6(2) and 6(3) of the Act of Accession concerning the conditions 
of accession of the Republic of Croatia, Croatia has undertaken to accede to the agreements 
concluded  or  signed  by  the  present  Member  States  and  the  Union  with  one  or  more  third 
countries or with an international organisation. Pursuant to this same provision, the accession 
of  Croatia  to  such  agreements  shall  be  agreed  by  the  conclusion  of  a  protocol  to  such 
agreements between the Council, acting unanimously on behalf of the Member States, and the 
third country or countries or international organisation concerned. These protocols2 are to be 
negotiated by the Commission on the basis of negotiating directives approved by the Council, 
acting unanimously, and in consultation with a committee comprised of the representatives of 
the Member States and concluded by the Council. 

For  that  purpose,  the  Commission  should  submit  to  the  Council  a  recommendation  for  the 
adoption of a decision authorising the Commission to open negotiations  

Agreement on the Free Movement of Persons with Switzerland 

With reference to Article 6(3) of the Act of Accession, the Agreement on the Free Movement 
of Persons with Switzerland needs to be adapted to include the new EU Member State. The 
following issues are possible subjects of negotiation: 

Transition periods: The Agreement on Free Movement of Persons contains transition periods 
enabling  Switzerland  under  certain  conditions  to  enforce  quantitative  limits  in  respect  of 
access to an economic activity for. They vary between 12 years after the entry into force of 
the Agreement (until 31 May 2014), 8 years after the entry into force of its Protocol of 2004 
regarding the participation as contracting parties to the Agreement of the Member States that 
joined  the  EU  in  2004  (until  31  May  2014),  and  10  years  after  the  entry  into  force  of  its 
Protocol  of  2008  regarding  the  participation  as  contracting  parties  to  the  Agreement  of 
Bulgaria and Romania (until 31 May 2019)3. As with the previous enlargement, Switzerland 
should be granted similar derogations and transition periods to those agreed in the context of 
the  Treaty  of  Accession.  Calculation  of  the  Swiss  quantitative  limits  should  be  obtained  by 
taking account of existing migration from the acceding country, and of its population.  

Agreement on Cooperation and Customs Union with San Marino 

With reference to Article 6(2) of the Act of Accession of Croatia, this agreement also needs to 
be adapted to include the new EU Member State. No particular items of negotiation have been 
identified. 

The Commission therefore recommends to the Council: 

– 

to adopt the attached decision authorising the opening of negotiations to  

– 

adapt  the  Agreement  on  the  European  Economic  Area  in  line  with  the 
enlargement of the European Union to Croatia, 

2 

3 

Unless  those  concerning  agreement  related  exclusively  or  principally  to  the  common  foreign  and 
security policy. 
Article 10 of the Agreement as supplemented by the Protocols of 2004 and 2008. 

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– 

– 

– 

adapt  the  Agreement  between  the  Kingdom  of  Norway  and  the  European 
Union on a Norwegian Financial Mechanism for the period 2009-2014 

adapt  the  Agreement  between  the  European  Community  and  its  Member 
States, of the one part, and the Swiss Confederation, of the other, on the free 
movement  of  persons  in  line  with  the  enlargement  of  the  European  Union  to 
Croatia,  

adapt the Agreement on Cooperation and Customs Union with San Marino in 
line with the enlargement of the European Union to Croatia; 

– 

– 

to issue the negotiating directives attached to that decision; 

to designate a special committee in consultation with which the negotiations must be 
conducted. 

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Recommendation for a 

COUNCIL DECISION 

authorising the opening of negotiations for the adaptation of the following agreements in 
view of the enlargement of the EU to Croatia: the Agreement on the European 
Economic Area, the Agreement between the Kingdom of Norway and the European 
Union on a Norwegian Financial Mechanism for the period 2009-2014, the Agreement 
between the European Community and its Member States, of the one part, and the Swiss 
Confederation, of the other, on the free movement of persons and the Agreement on 
Cooperation and Customs Union with San Marino 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 218(3) and (4) thereof, 

Having  regard  to  Treaty  between  the  Kingdom  of  Belgium,  the  Republic  of  Bulgaria,  the 
Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Republic of 
Estonia,  Ireland,  the  Hellenic  Republic,  the  Kingdom  of  Spain,  the  French  Republic,  the 
Italian Republic, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, 
the  Grand  Duchy  of  Luxembourg,  the  Republic  of  Hungary,  the  Republic  of  Malta,  the 
Kingdom of the Netherlands, the Republic of Austria, the Republic of Poland, the Portuguese 
Republic, Romania, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, 
the Kingdom of Sweden, the United Kingdom of Great Britain and Northern Ireland (Member 
States  of  the  European  Union)  and  the  Republic  of  Croatia  concerning  the  accession  of  the 
Republic  of  Croatia  to  the  European  Union4,  signed  on  9  December  2011,  and  in  particular 
Article 3(4) thereof, 

Having  regard  to the Act concerning the conditions  of  accession of  the  Republic of  Croatia 
and the adjustments to the Treaty on European Union, the Treaty on the Functioning of the 
European  Union  and  to  the  Treaty  establishing  the  European  Atomic  Energy  Community5, 
and in particular the second subparagraph of Article 6(2) and Article 6(5) thereof, 

Having regard to the recommendation from the European Commission, 

Whereas negotiations should be opened for the adaptation in view of the enlargement of the 
EU to Croatia of the Agreement on the European Economic Area, to the Agreement between 
the Kingdom of Norway and the European Union on a Norwegian Financial Mechanism for 
the  period  2009-2014,  the  Agreement  between  the  European  Community  and  its  Member 
States,  of  the  one  part,  and  the  Swiss  Confederation,  of  the  other,  on  the  free  movement  of 
persons and the Agreement on Cooperation and Customs Union with San Marino, 

4 
5 

OJ L 112 of 24 April 2012. 
OJ L 112. of 24 April 2012 

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HAS ADOPTED THIS DECISION:  

Article 1 

The Commission is hereby authorised to negotiate, on behalf of the European Union and its 
Member States, the amendments to the Agreement on the European Economic Area and to the 
Agreement  between  the  Kingdom  of  Norway  and  the  European  Union  on  a  Norwegian 
Financial Mechanism for the period 2009-2014 in view of the enlargement of the European 
Union to Croatia. 

Article 2 

The Commission is hereby authorised to negotiate, on behalf of the European Union and its 
Member  States,  including  –  subject  to  the  entry  into  force  of  the  Treaty  of  Accession  –  the 
Republic  of  Croatia,  the  amendments  to  the  Agreement  between  the  European  Community 
and its Member States, of the one part, and the Swiss Confederation, of the other, on the free 
movement  of  persons  and  to  the  Agreement  on  Cooperation  and  Customs  Union  with  San 
Marino in view of the enlargement of the European Union to Croatia.  

The negotiating directives are set out in the Annex. 

Article 3 

Article 4 

The negotiations shall be conducted in consultation with the [name of the special committee 
to be inserted by the Council]. 

Article 5 

This Decision is addressed to the Commission. 

Done at Brussels, 

For the Council 
The President 

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ANNEX  

DIRECTIVES FOR THE NEGOTIATION 

for the adaptation in view of the enlargement of the EU to Croatia of the Agreement on the 
European Economic Area, the Agreement between the Kingdom of Norway and the European 
Union on a Norwegian Financial Mechanism for the period 2009-2014, the Agreement 
between the European Community and its Member States, of the one part, and the Swiss 
Confederation, of the other, on the free movement of persons and the Agreement on 
Cooperation and Customs Union with San Marino 

1. 

GENERAL OBJECTIVE 

Adaptation of the above mentioned agreements to allow for the accession of Croatia 
to  these  agreements  upon  its  accession  to  the  EU  and  revision  of  the  relevant 
financial  contributions  for  the  alleviation  of  economic  and  social  disparities  in  the 
enlarged EU. 

2. 

START OF THE NEGOTIATIONS 

The  negotiations  on  the  adaptation  of  the  above  agreements  with  the  acceding 
country,  on  the  one  hand,  and  Iceland,  Liechtenstein,  Norway  /  Switzerland  /  San 
Marino, respectively, on the other hand, should start as soon as possible. 

3. 

CONTENT OF THE INSTRUMENTS ADAPTING THE EXISTING AGREEMENTS 

The incoming new Member State of the EU is to accede to the agreements.  

Agreement on the European Economic Area (EEA Agreement) and the Agreement on 
the Norwegian Financial Mechanism  

The derogations and transition periods agreed in the Act concerning the conditions of 
accession  of  the  Republic  Croatia  should  be  taken  over  in  the  EEA  Agreement.  A 
proportional increase in the existing EEA and Norwegian financial mechanisms until 
2014 should be obtained for Croatia, based on the same criteria as those applied for 
the existing mechanisms. Negotiations should as much as possible be limited to the 
main subjects indispensable for EEA enlargement. 

Agreement between the European Community and its Member States, of the one part, 
and the Swiss Confederation, of the other, on the free movement of persons 

The  derogations  and  transition  periods  agreed  in  the  Act  of  Accession  should  be 
taken  over  where  relevant.  Calculation  of  the  Swiss  quantitative  limits  should  be 
obtained by taking account of existing migration from the acceding country and of its 
population. 

Agreement on Cooperation and Customs Union with San Marino 

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This agreement has to be adapted to include Croatia upon its accession to the EU. No 
particular subjects have been identified that require substantial negotiation. 

4. 

RATIFICATION AND ENTRY INTO FORCE 

Negotiations  should  be  concluded  as  soon  as  possible  in  order  to  allow  for  the 
instruments of adaptation to enter into force on the date of and subject to accession of 
Croatia. In case the instruments of adaptation  cannot  enter  into force at  the date of 
accession,  a  provisional  application  should  be  envisaged,  taking  into  account  the 
respective procedures in the EU and in the third countries concerned. 

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FINANCIAL STATEMENT 

1. 

2. 

BUDGET HEADING: 
n.a. 
TITLE: 

DATE:  
APPROPRIATIONS: 

Adaptation of the following mixed agreements in view of the enlargement of the EU to include Croatia:  
Agreement on the European Economic Area,  
Agreement between the Kingdom of Norway and the European Union on a Norwegian Financial 
Mechanism for the period 2009-2014 
Agreement between the European Community and its Member States, of the one part, and the Swiss 
Confederation, of the other, on Free Movement of Persons,  
Agreement on Cooperation and Customs Union with San Marino 

3. 

4. 

5. 

5.0 

LEGAL BASIS:  
Articles 207, 217 and 218 TFEU 

AIMS: 

FINANCIAL IMPLICATIONS 

None 

CHARGED TO THE EU BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

5.1  REVENUE 

OWN RESOURCES OF THE EU  

- 
(LEVIES/CUSTOMS DUTIES) 
NATIONAL 
- 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 
[n] 
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR 
[n+1] 
(EUR million) 

None 

None 

None 

None 

None 

None 

[n+2] 

[n+3] 

[n+4] 

[n+5] 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
OBSERVATIONS: 

YES  

 NO 
 NO 
 NO 

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