The major bilateral agreements Switzerland-EU - June 2015 - Directorate for European Affairs DEA
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Federal Department of Foreign Affairs FDFA Directorate for European Affairs DEA The major bilateral agreements Switzerland-EU June 2015
B. II B. I Bilateral agreements Switzerland-EU Swiss policy on the EU: The bilateral agreements, June 2015 2 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 3 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 4 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 5 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 6 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 7 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 8 © 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. Swiss policy on the EU: The bilateral agreements, June 2015 9 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 10 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 11 © Directorate for European Affairs DEA
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. Swiss policy on the EU: The bilateral agreements, June 2015 12 © Directorate for European Affairs DEA
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. Swiss policy on the EU: The bilateral agreements, June 2015 13 © Directorate for European Affairs DEA
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) Swiss policy on the EU: The bilateral agreements, June 2015 14 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 15 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 16 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 17 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 18 © 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) Swiss policy on the EU: The bilateral agreements, June 2015 19 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 20 © Directorate for European Affairs DEA
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. Swiss policy on the EU: The bilateral agreements, June 2015 21 © Directorate for European Affairs DEA
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. Swiss policy on the EU: The bilateral agreements, June 2015 22 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 23 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 24 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 25 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 26 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 27 © Directorate for European Affairs DEA
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. Swiss policy on the EU: The bilateral agreements, June 2015 28 © 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 Swiss policy on the EU: The bilateral agreements, June 2015 29 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 30 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 31 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 32 © Directorate for European Affairs DEA
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 Swiss policy on the EU: The bilateral agreements, June 2015 33 © Directorate for European Affairs DEA
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) Swiss policy on the EU: The bilateral agreements, June 2015 34 © Directorate for European Affairs DEA
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