ESA takes Iceland to EFTA Court over Protocol 35
Wednesday 30th September 2026 on 12:45 in
Iceland
The EFTA Surveillance Authority (ESA) has decided to bring an infringement case against Iceland before the EFTA Court, saying Icelandic law does not adequately protect the priority of rules incorporated under the EEA Agreement. The decision was reported by mbl.is.
ESA announced its decision on Wednesday, taking a decades-long dispute with Icelandic authorities over Protocol 35 to the EEA Agreement to court. The authority says Iceland has not ensured that individuals and businesses can fully exercise the rights granted to them under the agreement when those rights conflict with other Icelandic laws.
Protocol 35 requires Iceland, Norway and Liechtenstein to ensure that domestic provisions implementing EEA obligations take precedence in the event of a conflict with other national rules, ESA says.
ESA first raised concerns about Iceland’s implementation in 2012. It formally opened infringement proceedings in December 2017 and issued a reasoned opinion in September 2020. The authority also points to a 2023 Supreme Court ruling, which it says confirmed that Icelandic law contains no rule ensuring the priority for incorporated EEA rights envisaged by Protocol 35.
Two Icelandic governments have said they intended to comply with ESA’s position, and bills to do so have been submitted to Alþingi several times. None has become law.
“Individuals and businesses must be able to rely on their rights under the EEA Agreement,” ESA President Arne Røksund said. He said the authority had asked the EFTA Court to rule on whether Iceland had met its obligations.
Protocol 35 was a compromise reached when the EEA Agreement was negotiated. Its preamble sets out the aim of a homogeneous economic area based on common rules, while stating that this does not require the parties to transfer legislative powers to EEA institutions. The protocol’s substantive provision says EFTA states must, where necessary, adopt domestic rules to ensure that incorporated EEA rules take precedence in the event of a conflict.