Iceland has already set out its defence of Protocol 35

Iceland’s previous government set out its arguments against the EFTA Surveillance Authority’s (ESA) case over Protocol 35 in four letters sent in 2020 and 2021, mbl.is reports. The arguments have not yet been tested in court.

It remains unclear how Foreign Minister Þorgerður Katrín Gunnarsdóttir plans to respond to the case. In answers to questions in Parliament on Thursday, she did not say whether work had begun on preparing Iceland’s submission to the EFTA Court or who would be involved.

ESA asked Iceland about how it was applying Protocol 35 in 2012 and sent a formal letter of notice in 2017. After a delay, a group of officials concluded that changing the law was the only realistic option. But Guðlaugur Þór Þórðarson, foreign minister at the time, chose instead to defend Iceland’s position. The government agreed in 2020 to respond to ESA on the substance of the case and wait before making changes. A 24-page submission setting out Iceland’s arguments was sent on April 30, 2021.

One argument concerned the terms of the European Economic Area (EEA) Agreement. During negotiations, the EFTA states rejected a European Community demand that EEA rules should automatically take precedence in the same way as European law within the EU. The compromise was Protocol 35, which provides for a domestic rule of precedence “if necessary.”

Iceland’s Constitution does not generally allow the transfer of legislative power through ordinary laws. In 1993, Parliament therefore provided that laws and regulations should be interpreted in line with the EEA Agreement “to the extent applicable.” EEA rules would be treated as special rules in relation to later laws unless Parliament expressly said it intended to depart from them.

Iceland also cited a 1992 opinion by four legal scholars, led by Þór Vilhjálmsson, who concluded that this approach met the country’s obligations without a constitutional amendment and made approval of the agreement politically possible.

The submission argued that a stronger rule of precedence might not achieve what ESA sought. Parliament could not use ordinary legislation to bind future parliaments to give certain earlier laws precedence over laws passed later; doing so would restrict future legislative power and require a constitutional amendment.

Iceland also pointed to Norway, where a more explicit rule of precedence had been enacted. Norwegian legal scholars nevertheless considered that later laws, if passed clearly, could depart from EEA rules, and ESA had not raised similar objections with Norway. Iceland further argued that ESA could not require constitutional amendments and that the status of EEA legislation in relation to other laws was ultimately a matter for Iceland’s own constitutional system.