The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA

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The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Federal Department of Foreign Affairs FDFA

              Directorate for European Affairs DEA

    The major bilateral
agreements Switzerland-EU

          June 2015
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
B. II
B. I    Bilateral agreements Switzerland-EU

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        © Directorate for European Affairs DEA
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
The first bilateral agreements

1972 Free trade of industrial products
              Abolition of obstacles to trade for
              industrial products (duties, contingents)

1989 Insurance
              Equal rights of establishment for
              insurance companies
              (excluding life insurances)

1990 (completely revised, 2009)
     Customs facilitation and security
              Regulation of controls and formalities
              in goods transport (24-hour rule)

  Relevance                         Mutual market access

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© Directorate for European Affairs DEA
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Free trade
Content:
• Establishes a Switzerland-EU free trade zone for exclusively industrial
  products.
• Prohibits customs duty and similar measures for industrial goods originating
  in the territories of the two contracting parties as well as quantitative trade
  restrictions (quotas).

Relevance:
     Crucial for the Swiss economy: In 2014, 55% of Swiss exports (c. CHF
     114bn) went to the EU-area. Vice versa, 73% of Swiss imports (c. CHF
     131bn) came from the EU.

Entry into force: 1973

     Source: Swiss Customs Administration FCA
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© Directorate for European Affairs DEA
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Insurance
Content:
     Grants mutual and equal freedom of establishment to companies in the
     field of direct insurance for damage (household, motor vehicle, travel and
     liability insurance, etc.).

Relevance:
• Crucial for internationally operating insurance companies.
• Important for the Swiss economy: in 201, the Swiss insurance sector
  provided jobs for 47,832 people in Switzerland and 69,236 abroad.

Entry into force: 1993

     Source: Swiss Insurance Association SIA
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© Directorate for European Affairs DEA
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Customs facilitation and security
Content:
• The agreement of 1990 regulates the controls and formalities for goods
  transport between Switzerland and the EU.
• Aims: simplification of customs clearance of goods and improvement of
  the cooperation at the borders points.
• New Agreement 2009: precludes the obligation to notify goods traffic in
  advance (24-hour-rule) and governs the modalities of further cooperation
  in the area of security.

Relevance:
     Everyday 20,000 trucks cross Switzerland’s
     borders.

Entry into force: 1991; new agreement 2011
     Source: Swiss Customs Administration FCA
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The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Bilaterals I (1999)
1. Free movement of persons
2. Technical obstacles to trade
3. Public procurement market
4. Agriculture
5. Research
6. Civil aviation
7. Overland transport

  Relevance                       Easier access to labour,
                                  goods and service markets

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The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Free movement of persons
Content:
• Entitles Swiss and EU citizens under certain conditions to choose their
  workplace and residence freely within the territories of the Contracting
  Parties.
• Leads to mutual, gradual and controlled opening up of labour markets
  through transitional arrangements.
• «Accompanying measures» to protect employees (ensuring compliance
  with pay and working conditions in Switzerland)

Relevance:
• Important growth effect: Swiss economy is dependent on foreign workers.
• Better opportunities for Swiss nationals in the EU

Entry into force: 2002

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The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
How to proceed with FMA after 9.2.2014?
• Adoption of the initiative «Against mass immigration» on 9.2.2014 with
  50.3% of the votes and the majority of the cantons
• The new Constitutional Article 121a is incompatible with the free
  movement of persons agreement (FMA) with the EU.
• The FMA has to be renegotiated within 3 years and has to be adjusted to
  the new Swiss immigrations system.
• If the Constitutional Article has not come into effect after 3 years, the
  Federal Council shall adopt the implementation provisions temporarily
  by decree until this point.
• Threat of activation of the guillotine clause in case of a possible FMA
  termination: also the other agreements of the Bilaterals I would be
  terminated.

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© Directorate for European Affairs DEA
The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
Technical barriers to trade
Content:
• Mutual recognition of conformity ratings for most industrial products
• Checking of compliance with product regulations, so that a product may be
  brought to market

Relevance:
• Swiss manufacturers obtain market access that is almost the same as that
  of their EU competitors in the sectors covered by the Agreement
• Entrepreneurs save money and time when marketing their new products in
  Europe

Entry into force: 2002

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© Directorate for European Affairs DEA
Public procurement markets
Content:
• Establishes criteria under which certain procurements must be
  internationally and publicly advertised.
• The agreement extends the scope of application of the WTO Agreement:
  it now also covers procurement by regions and municipalities, procurement
  by public and private companies, e.g. in the sectors of rail transport, gas,
  and heating supply.

Relevance:
• Lower expenditure for the Confederation, the Cantons and the Swiss
  municipalities due to greater competition.
• Equal access for Swiss companies to the billion
  market of the EU

Entry into force: 2002

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Agriculture
Content:
     Facilitates trade in agricultural products between Switzerland and the EU
     by reducing:
• Customs duties: cheese, fruits and vegetables, horticulture, meat and wine
• Non-tariff barriers: i.a. wine and spirits, organic agriculture, pest control
  and crop protection, fodder and seeds
• Relevance:
• EU is Switzerland’s main trading partner in the agricultural sector (2014:
  60% of CH-exports went to the EU, 74% of CH-imports came from the EU).
• Creates export growth: cheese export +2.8% per year between 2004-2014
Entry into force:
     2002; 2011 the Agreement for the Mutual Protection of Designations of
     Origin (GUB/GGA) entered into force.
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Research
Content:
• Participation of Swiss research (universities, companies, individuals)
  in EU research programmes (ERP)
• «Horizon 2020»: New generation of programmes
Relevance:
• Technological, scientific and economic benefit
• 100% of the Swiss contributions returned to Switzerland in the form of
  project support.
State of negotiations:
• Negotiations on full association of Switzerland after 9.2.2014 suspended by
  the European Commission.
• On 7.3.2014, the Federal Council agreed to a temporary solution for 2014
• On 5.12.2014, Switzerland and the EU signed an agreement on the partial
  association of Switzerland on Horizon 2020.
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Civil aviation
Content:
• 1. Mutual access to aviation markets for airlines
• 2. Swiss airlines enjoy nearly the same competitive conditions as their
  EU competitors and are no longer discriminated against, for example,
  in landing rights.

Relevance:
     Crucial for the success of Swiss airlines in the highly competitive aviation
     market

Entry into force:
     2002; Since November 2011: negotiations on domestic
     flights by foreign airlines (8th and 9th Freedom)

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© Directorate for European Affairs DEA
Overland transport
Content:
• Mobility: Opens the road and railway transport market for the transport of
  persons and goods.
• Environmental Protection: Contributes to the shifting of transalpine freight
  traffic from road to rail.
• Introduction of a heavy vehicle tax and the increase of the maximum
  weight limit for trucks to 40 tonnes
Relevance:
• Everyday 20,000 trucks cross Switzerland’s borders.
• 2014: 67.3% of goods traffic crossing the Alps by rail
• Revenue from the heavy vehicle tax is used to improve
  the railways (2014: CHF 1.493bn).
Entry into force: 2002; Transit Agreement:1992
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Bilaterals II (2004)
1.      Schengen / Dublin
2.      Taxation of savings
3.      Fight against fraud
4.      Processed agricultural products
5.      MEDIA
6.      Environment
7.      Statistics
8.      Pensions
9.      Education, vocational training, youth

  Relevance                     - Political cooperation in other areas
                                - Improved economic framework
                                  conditions

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© Directorate for European Affairs DEA
Schengen
Content:
• Facilitates travel by abolishing identity checks at the Schengen internal
  borders.
• Guarantees security thanks to closer cross-border cooperation between the
  police and justice systems, i.a. through the Schengen Information System,
  SIS (as from 9 April 2013: SIS II).
• Switzerland takes part in the common visa policy for short stays of not
  more than 3 months (Schengen visa).
Relevance:
     Access to instruments of the international fight
     against crime and economic advantages for tourism
Entry into force operationally:
     12.12.2008; end of controls at Swiss airports for
     flights within the Schengen Area: 29 March 2009
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© Directorate for European Affairs DEA
Schengen Area

            States of the Schengen Area

            Non Schengen Member States
            with special status
            Schengen Member State
            with special status

            Future Member States

            Associated States

© EDA, STS KMZ-Geodienste

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© Directorate for European Affairs DEA
Dublin
Content:
• Coordinates national responsibilities for asylum procedures.
• Access to the EURODAC fingerprint data bank allows the identification of
  multiple and abusive asylum applications.

Relevance:
• Prevents costly and inefficient secondary and multiple
  requests («asylum shopping» or «asylum tourism»).
• Relieves the national asylum systems through
  burden sharing.

Entry into force operationally:
     12 December 2008 (as with Schengen)

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Taxation of savings income
Content:
• Allows for cross-border taxation of savings income of individuals with tax
  residence in the EU.
• Since July 2011, the withholding tax is 35% (of this, 75% goes to the EU
  states and 25% to Switzerland). It can be replaced by voluntary notification
  of the interest payment to the tax authorities of the country of residence.
• Binds the parties to provide administrative assistance on request.
• The parties refrain from taxation on dividends or license-fee payments
  between associated companies.

Relevance:
     Tax contribution in 2013: CHF 501,1m, of which CHF
     382,6m to EU states and CHF 127,5m to Switzerland

Entry into force: 2005, negotiations: revision / AEI
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Automatic exchange of information (AEOI)
• Cross-border tax evasion should be prevented with the help of the new
  global standard by the OECD for the automatic exchange of information
  (AEOI).
• Switzerland and the EU signed such an agreement on 27 May 2015. The
  agreement replaces the taxation of savings agreement with the EU and
  applies for all 28 EU member states.
• The AEI allows a level playing field in competition among financial centers
  and is an important tool in the international effort against tax evasion.

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Fighting against fraud
Content:
     Improves cooperation in the fight against smuggling and other offences in
     relation to indirect taxes (customs, VAT, consumer taxes), subsidies and
     public procurement.

Relevance:
     Reduces the risk of Switzerland being exploited as a hub for illegal business.

Entry into force:
     Early implementation (as of 8 April 2009) by Switzerland
     in cooperation with those EU countries that have ratified it
     (all but Ireland). Notification by Croatia still pending.

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Processed agricultural products
Content:
• Governs trade in processed agricultural products (foods such as chocolate,
  biscuits, pasta).
• Revises Protocol 2 of the Free Trade Agreement of 1972.
• Allows for duty-free export of Swiss food industry products.

Relevance:
• Increases the competitiveness of the Swiss food industry.
• Secures a portion of the 37,000 jobs of the Swiss food industry.
• Trade in processed agricultural products with the
  EU has risen by more than 70% since 2005 and amounted
  to CHF 7,0bn in 2014.

Entry into force: 30 March 2005
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MEDIA
Content:
     Participation of Switzerland in the EU's film funding programme «MEDIA
     2014-2020» as part of the EU framework programme «Creative Europe»

Relevance:
     Funding contributions to Swiss film industry, better opportunities for Swiss
     films in and outside of Europe, greater variety of films on offer in Switzerland

State of negotiations:
• The Federal Council has adopted a negotiating mandate on 19.9.2013.
  That of the EU is still pending.
• The informal talks were suspended by the European
  Commission after 2.9.2014 and resumed after 30.4.2014.
• On 7.3.2014, the Federal Council has agreed to a
  temporary solution for 2014
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© Directorate for European Affairs DEA
Environment
Content:
• Switzerland's participation in the European Environment Agency (EEA)
• The EEA collects and analyses data on the environmental situation,
  provides data collection that follows binding criteria, features an Information
  and Observation Network (Eionet) and advises the European Commission
  on environmental policy.

Relevance:
• Access to a Europe-wide environment data base which covers many areas
• Participation in the organization of projects and research activities
• Better comparability and harmonization of one’s
  activities with those of neighbouring countries
  through intensive exchange of information.

Entry into force: 1 April 2006
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Statistics
Content:
• Adjusts Switzerland's standards of statistical data collection to those of the
  statistics office of the EU (Eurostat).
• Provides access to a Europe-wide basis of comparable data on economic,
  political and social questions.

Relevance:
• A broad statistical base is a prerequisite for sound economic and political
  decisions.
• Strengthening the negotiating position: in terms of negotiations Switzerland
  can rely on statistical data according to European standards.

Entry into force: 1 January 2007

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Pensions
Content:
     Abolishes double taxation on the pensions of former EU officials living in
     Switzerland.

Relevance:
     This applies only to former officials of EU institutions, such as the European
     Parliament, the European Commission, the Council of the EU, and the
     European Court of Justice, who are now living in Switzerland.

Entry into force: 31 May 2005

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Education, vocational training, youth
Content:
• Switzerland's participation in the EU’s education, vocational training and
  youth programmes
• «Erasmus+»: New generation of programmes 2014-2020

Relevance:
• Improves the offer and mobility in education and vocational training, raises
  the quality of education and improves opportunities in the job market.
• Around 6,000 students participated in the exchange programmes CH-EU
  per year (about half each way CH→EU / EU→CH)

State of negotiations:
• Negotiations were suspended by the European Commission after 9.2.2014.
• On 16.4.2014, the Federal Council adopted a temporary solution for 2014
  which he decided to extend for two more years on 19.9.2014.
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© Directorate for European Affairs DEA
Europol
Content:
• Agreement between Switzerland and Europol, the criminal prosecution
  authority of the EU
• Improves cooperation between police authorities in the prevention of and
  fight against serious and organised international crime, and terrorism.
• Facilitates the exchange of information and cooperation for analysis.
• Allows for the exchange of expertise, participation in training activities as
  well as advice and support in investigations.

Relevance:
     The exchange of information is steadily increasing and currently amounts to
     around 500 operative notifications per month.

Entry into force:
     1.3.2006; enlargement of area of application: 1.1.2008
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Eurojust
Content:
• Agreement between Switzerland and Eurojust, the European Union’s
  Judicial Cooperation Unit.
• Expands international cooperation on combating serious crime.
• Co-ordinates investigations and prosecution procedures between member
  states and contributes to the clarification of questions of jurisdiction.
• Facilitates the exchange of information, international legal assistance and
  the execution of extradition requests.

Relevance:
     The number of cases submitted to Eurojust has been
     steadily increasing (2013: 1576, +2.8% compared to 2012)

Entry into force: 22 July 2011

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Framework for Cooperation EDA
Content:
• Legally non binding agreement between Switzerland and the European
  Defence Agency (EDA) on cooperation in the armaments sector.
• Enables Switzerland to detect developments in armaments policy at an
  early state and to have access to multilateral armaments cooperation in
  Europe, primarily in the domain of research, development, procurement
  and maintenance of armaments.
• Switzerland remains free to decide on its own what information it wants
  to exchange within the scope of this framework, and in what projects and
  programmes it wishes to participate.

Relevance:
     The agreement strengthens the economic, research
     and technology position of Switzerland.

Entry into force: 6 March 2012
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Cooperation of competition authorities
Content:
• Agreement on cooperation between Switzerland and the EU to efficiently
  counter obstacles to cross-border competition.
• Shall enable the exchange of confidential information and the cooperation of
  competition authorities in order to avoid redundancies.

Relevance:
• Crucial due to the close economic interconnections between CH and the EU
• Shall enable greater coherence in decisions that deal with the same issues.
• Shall improve the vigor of the Swiss Competition
  Commission (COMCO) thanks to relevant information
  of the EU-commission.

Entry into force: 1 December 2014

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Satellite navigation (Galileo, EGNOS)
Content:
• Switzerland’s participation in the EU satellite navigation programmes
  Galileo and EGNOS including certain rights to a single seat and to a say
• Galileo: reliable and precise satellite navigation system
• EGNOS: regional navigation system which improves global satellite signals
  in terms of accuracy and reliability.

Relevance:
• Galileo and EGNOS enhance independence vis-à-vis US-GPS.
• Data availability in times of peace and crisis
• Improved situation for Swiss aerospace and service
  industry in procurement.

Date of signing: 18 December 2013
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European Asylum Support Office (EASO)
Content:
• Switzerland’s participation in activities of EASO
• EASO supports Schengen states whose asylum systems are under
  particular pressure.
• EASO facilitates, coordinates and promotes cooperation among states on
  asylum-related matters.

Relevance:
• Expression of Switzerland’s solidarity
• Strengthening of the Dublin system and contribution to more efficient
  and fair asylum system within the participating states
• Use of expertise of other Schengen states

Date of signing: 16 June 2014 (ratification still pending)
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