RESTRICTED
WORLD TRADE WT/REG25/1
14March 1996
ORGANIZATION(96-0901)
Original: English
AGREEMENT BETWEEN THE GOVERNMENT OFNORWAY, OFTHE
ONE PART, AND THE GOVERNMENT OFDENMARK AND THE
HOME GOVERNMENT OFTHE FAROE ISLANDS, OFTHE OTHER PART,
ONFREE TRADE BETWEEN NORWAY AND THE FAROE ISLANDS
Thefollowing textreproduces theAgreement between theGovernment ofNorway andthe
Government ofDenmark andtheHome Government oftheFaroe Islands.1
____________________
AGREEMENT BETWEEN THE GOVERNMENT OFNORWAY, OFTHE
ONE PART, AND THE GOVERNMENT OFDENMARK AND THE
HOME GOVERNMENT OFTHE FAROE ISLANDS, OFTHE OTHER PART,
ONFREE TRADE BETWEEN NORWAY AND THE FAROE ISLANDS
THE GOVERNMENT OFNORWAY,
oftheonepart,and
THEGOVERNMENTOFDENMARKANDTHEHOMEGOVERNMENTOFTHEFAROE
ISLANDS,
oftheother part,
HEREINAFTER referred toastheContracting Parties,
RECALLING thestatus oftheFaroe Islands asaself-governing partofDenmark;
CONSIDERING thefactthattheFaroe Islands earlier werepartoftheEuropean FreeTrade
Association (EFTA) through Denmark 'smembership ofthatOrganization, butarenotincluded in
Denmark 'smembership oftheEuropean Communities;
CONSIDERING thevitalimportance forboththeFaroe Islands offisheries, which constitute
theiressential economic activity, fishandfishery products being theirmain export articles;
1TheAnnexes andProtocols thereto havebeensubmitted totheSecretariat forconsultations by
interested Members (Office 3006).WT/REG25/1
Page2
CONSIDERING thevitalimportance offisheries forNorway andforNorwegian coastal
communities,
DESIRING toconsolidate andtoextend theeconomic relations existing between Norway and
theFaroe Islands andtoensure, withdueregard forfairconditions ofcompetition, theharmonious
development oftheirmutual trade inthecontext ofEuropean co-operation;
RESOLVED tothisendtoeliminate progressively theobstacles tosubstantially alltheirtrade,
inaccordance withtheprovisions oftheGeneral Agreement onTariffs andTrade concerning the
establishment offree-trade areas;
DECLARING theirreadiness toexamine, inthelightofanyrelevant factor, andinparticular
ofdevelopments inEuropean co-operation, thepossibility ofdeveloping anddeepening theirrelations
inorder toextend them tofields notcovered bythisAgreement;
HAVE DECIDED, inpursuit ofthese objectives andconsidering thatnoprovisions ofthis
Agreement maybeinterpreted asexempting theContracting Parties fromtheirobligations under other
international agreements,
TOCONCLUDE THIS AGREEMENT:
Article 1
Objectives
TheContracting Parties shallestablish afree-trade area, comprising Norway andtheFaroe
Islands, inaccordance withtheprovisions ofthepresent Agreement.
Theobjectives ofthisAgreement are:
(a) topromote, through theexpansion ofreciprocal trade, theharmonious development ofeconomic
relations between Norway andtheFaroe Islands andthustofoster theadvance ofeconomic
activity, theimprovement ofliving andemployment conditions, andincreased productivity
andfinancial stability;
(b) toprovide fairconditions ofcompetition fortrade between Norway andtheFaroe Islands;
(c) tocontribute inthisway,bytheremoval ofbarriers totrade, totheharmonious development
andexpansion ofworld trade.
Article 2
Scope
ThisAgreement shallapply:
(a) toproducts falling within Chapters 25to97oftheHarmonized Commodity Description and
Coding System excluding theproducts listed inAnnex 1;WT/REG25/1
Page3
(b) tofishandother marine products asprovided forinAnnex 2,
originating inNorway ortheFaroe Islands.
Article 3
Rules ofOrigin andAdministrative Co-operation
1. Annex 3laysdown therules oforigin.
2. Annex 4refers totherules andmethods ofadministrative co-operation incustoms matters.
Article 4
Prohibition andAbolition ofCustoms Duties andCharges having Equivalent Effect
1. Nonewcustoms duties onimports andexports orcharges having equivalent effect shallbe
introduced intrade between Norway andtheFaroe Islands.
2. Customs duties onimports andexports andcharges having equivalent effect shallbeabolished
upon theentry intoforce ofthisAgreement.
3. Annex 5contains provisions fortheabolition ofcustoms duties ofafiscal nature intheFaroe
Islands from 1January 1993.
Article 5
Prohibition andAbolition ofQuantitative Restrictions and
Measures having Equivalent Effect
1. Nonewquantitative restrictions onimports andexports ormeasures having equivalent effect
shallbeintroduced intrade between Norway andtheFaroe Islands.
2. Quantitative restrictions onimports andexports andmeasures having equivalent effect shall
beabolished upon theentry intoforce ofthisAgreement except asprovided forinAnnex 6.
Article 6
Trade inPetroleum Products
TheContractingPartiesreservetheirrightstotakespecialmeasuresregardingtradeinpetroleum
products.WT/REG25/1
Page4
Article 7
Trade inAgricultural Products
1. TheContracting Parties declare theirreadiness tofoster, insofarastheiragricultural policies
allow, harmonious development oftrade inagricultural products.
2. Inpursuance ofthisobjective, theContracting Parties simultaneously conclude anArrangement
providing formeasures tofacilitate tradeinagricultural products between Norway andtheFaroe Islands.
3. TheContractingPartiesshallapplytheirregulationsinveterinary,healthandplanthealthmatters
inanon-discriminatory fashion andshallnotintroduce anynewmeasures thathavetheeffect ofunduly
obstructing trade.
Article 8
Customs Unions, Free-Trade Areas andFrontier Trade
ThisAgreementshallnotpreventthemaintenanceorestablishmentofcustomsunions,free-trade
areasorarrangements forfrontier trade, totheextent thatthesedonotnegatively affect thetraderegimes
provided forbythisAgreement, inparticular theprovisions concerning rules oforigin.
Article 9
Internal Taxation
1. TheContracting Parties shallrefrain fromanymeasure orpractice ofaninternal fiscal nature
establishing, whether directly orindirectly, discrimination between products originating inNorway
andlikeproducts originating intheFaroe Islands.
2. Products originating inNorway exported totheFaroe Islands orproducts originating inthe
Faroe Islands exported toNorway maynotbenefit from repayment ofinternal taxation inexcess of
theamount ofdirect orindirect taxation imposed onthem.
Article 10
Payments
Payments relating totradeandthetransfer ofsuchpayments toNorway ortotheFaroe Islands,
depending onwhere thecreditor resides, shallbefreefrom anyrestrictions.WT/REG25/1
Page5
Article 11
General Exceptions
ThisAgreement shallnotpreclude prohibitions orrestrictions onimports, exports orgoods
intransit justified ongrounds ofpublic morality, public policy orpublic security; theprotection of
health andlifeofhumans, animals orplants andtheenvironment; theprotection ofnational treasures
possessing artistic, historic orarchaeological value; theprotection ofintellectual property; orrules
relating togoldorsilver; orconservation ofexhaustible natural resources, ifsuchmeasures aremade
effective inconjunction withrestrictions ondomestic production orconsumption. Suchprohibitions
orrestrictions shallnot,however, constitute ameans ofarbitrary discrimination oradisguised restriction
ontrade between theContracting Parties.
Article 12
Security Exceptions
Nothing inthisAgreement shallprevent aContracting Party fromtaking anymeasures which
itconsiders necessary:
(a) toprevent thedisclosure ofinformation contrary toitsessential security interests;
(b) totheprotection ofitsessential security interests orfortheimplementation of
international obligations ornational policies
(i) relating tothetraffic inarms, ammunition andimplements ofwar,provided
thatsuchmeasures donotimpair theconditions ofcompetition inrespect of
products notintended forspecifically military purposes, andtotraffic inother
goods, materials andservices asiscarried ondirectly orindirectly forthe
purpose ofsupplying amilitary establishment; or
(ii) relating tothenon-proliferation ofbiological andchemical weapons, nuclear
weapons orother nuclear explosive devices; or
(iii) taken intimeofwarorother serious international tension.
Article 13
Fulfilment ofObligations
1. TheContracting Parties shallrefrain fromanymeasure likely tojeopardize thefulfilment of
theobjectives ofthisAgreement.
2. They shalltakeallgeneral orspecific measures toensure thefulfilment oftheirobligations
under thisAgreement.
Ifeither Contracting Party considers thattheother Contracting Party hasfailed tofulfil an
obligationunderthisAgreement,itmaytakeappropriatemeasuresundertheconditionsandinaccordance
withtheprocedure laiddown inArticle 23.WT/REG25/1
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Article 14
Rules ofCompetition
1. Thefollowing areincompatible withtheproper functioning ofthisAgreement insofarasthey
mayaffect trade between Norway andtheFaroe Islands:
(a) allagreements between undertakings, decisions byassociations ofundertakings and
concerted practices between undertakings which have astheir object oreffect the
prevention, restriction ordistortion ofcompetition asregards theproduction of,or
trade in,goods;
(b) abuse byoneormore undertakings ofadominant position intheterritories ofNorway
oroftheFaroe Islands asawhole orinasubstantial partthereof.
2. IfaContracting Party considers thatagiven practice isincompatible withtheprovisions of
paragraph 1,itmaytakeappropriate measures afterconsultations withtheotherParty orafterthirty days
following referral forsuchconsultations.
Article 15
Public Monopolies
TheContracting Parties shallensure thatanypublic monopoly ofacommercial character in
Norway andintheFaroe Islands beadjusted sothatnodiscrimination regarding theconditions under
which goods areprocured andmarketed willexistbetween residents ofNorway andtheFaroe Islands.
Article 16
Public Aid
1. Anyaidgranted byoneContracting Party orthrough public resources inanyformwhich distorts
orthreatens todistort competition byfavouring certain undertakings ortheproduction ofcertain goods
shallinsofarasitmayaffect trade between Norway andtheFaroe Islands, beincompatible withthe
proper functioning ofthisAgreement.
2. Anypractices contrary toparagraph 1should beassessed onthebasis ofthecriteria setout
inAnnex 7.
3. TheContracting Parties shall ensure transparency ofpublic aidmeasures byexchanging
information asprovided forinparagraph 4ofAnnex 7.
4. IfaContracting Party considers thatagiven practice isincompatible withtheprovisions of
paragraph 1,itmaytakeappropriate measures against thispractice, which shallnotbeinexcess of
theinjury caused bythepractice, under theconditions andinaccordance withtheprocedures laiddown
inArticle 23.WT/REG25/1
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Article 17
Protection ofIntellectual Property
1. TheContracting Parties shall co-operate with theaimofgradually improving thenon-
discriminatoryprotectionofintellectualpropertyrights,includingmeasuresforthegrantandenforcement
ofsuchrights. Rules between theContracting Parties concerning theprotection ofintellectual property
rights shallbeelaborated. These rules shallensure alevelofprotection similar tothatprevailing in
themember states oftheEuropean Communities andinthemember states oftheEuropean FreeTrade
Association.
2. Withrespect toparagraph 1,intellectual property rights shallinclude, inparticular, protection
ofcopyrights, comprising computer programmes, databases andneighbouring rights; trade marks;
geographical indications; industrial design; patents; topographies ofintegrated circuits; aswellas
undisclosed information onknow-how.
Article 18
Public Procurement
1. TheContractingPartiesconsidertheeffectiveliberalizationoftheirrespectivepublicprocurement
markets asadesirable andimportant objective ofthisAgreement.
2. Asoftheentry intoforce ofthisAgreement, theContracting Parties shallgrant eachothers '
companiesaccesstocontractawardproceduresontheirrespectivepublicprocurementmarketsaccording
totheAgreement onGovernment Procurement of12April 1979, asamended byaProtocol of
Amendments of2February 1987, negotiated under theauspices oftheGeneral Agreement onTariffs
andTrade.
3. TheContractingPartiesshallprogressivelydevelopandadjusttherules,conditionsandpractices
governing theparticipation inpublic procurement contracts awarded bypublic authorities andpublic
undertakings, andbyprivate undertakings which havebeengranted special orexclusive rights, soas
toensure freeaccess andtransparency, andthatthere isnodiscrimination between potential suppliers
from theContracting Parties.
4. TheContractingPartiesshallfurtherrecommendoragree,asappropriate,thepracticalmodalities
forthisdevelopment, including i.a.scope, timetable andrules tobeapplied.
Article 19
Dumping
IfoneoftheContracting Parties finds thatdumping within themeaning ofArticle VIofthe
General Agreement onTariffs andTrade istaking place intrade withtheother Contracting Party,
itmaytaketheappropriate measures against thispractice inaccordance withtheAgreement on
Implementation ofArticle VIoftheGeneral Agreement onTariffs andTrade andwiththeprocedures
laiddown inArticle 23.WT/REG25/1
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Article 20
Emergency Action onImports ofParticular Products
Where anyproduct isbeing imported insuchincreased quantities andunder suchconditions
astocause, orthreaten tocause:
(a) serious injury todomestic producers oflikeordirectly competitive products inNorway
orintheFaroe Islands; or
(b) serious disturbances inanysector oftheeconomy ordifficulties which could bring
about serious deterioration intheeconomic situation ofaregion,
theContracting Party concerned maytakeappropriate measures under theconditions andinaccordance
withtheprocedures laiddown inArticle 23.
Article 21
Re-export andSerious Shortage
Where compliance withtheprovisions ofArticles 4and5leadto
(a) re-export towards athird country against which theexporting Contracting Party
maintains, fortheproduct concerned, quantitative export restrictions, export duties
ormeasures orcharges having equivalent effect; or
(b) aserious shortage, orthreat thereof, ofaproduct essential totheexporting Contracting
Party,
andwhere thesituations referred toabove giveriseorarelikely togiverisetomajor difficulties for
theexporting Contracting Party, thatContracting Party maytakeappropriate measures under the
conditions andinaccordance withtheprocedures laiddown inArticle 23.
Article 22
Balance ofPayments Difficulties
Incaseofserious balance ofpayments difficulties orimminent threat thereof forNorway or
theFaroe Islands, theContracting Party concerned maytakeappropriate measures under theconditions
andinaccordance withtheprocedures laiddown inArticle 23.
Article 23
Procedures fortheApplication ofSafeguard Measures
1. Before initiating theprocedures fortheapplication ofsafeguard measures setoutinthisArticle,
theContracting Parties shall endeavour tosolve anydifferences between them through direct
consultations.WT/REG25/1
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2. Without prejudice toparagraph 6ofthisArticle theContracting Party which considers resorting
tosafeguard measures shallpromptly notify theother Contracting Party thereof andsupply allrelevant
information. Consultations between theContracting Parties shalltakeplace without delay withaview
tofinding amutually acceptable solution.
3. Fortheapplication ofparagraph 2thefollowing provisions apply:
(a) Asregards Articles 16(Public Aid), andArticle 18(Public Procurement), the
Contracting Party concerned shallgivetotheother Contracting Party alltheassistance
required fortheexamination ofthecaseandshall, where appropriate, eliminate the
practice objected to.IftheContracting Party inquestion failstoputanendtothe
practice objected towithin aperiod agreed upon between theContracting Parties or
intheabsence ofsuchanagreement, within three months ofthematter being referred
toit,theContracting Party concerned mayadopt theappropriate measures todealwith
thedifficulties resulting from thepractice inquestion.
(b) Asregards Articles 19(Dumping), 20(Emergency Action onImports ofParticular
Products), and21(Re-export andSerious Shortage), theContracting Parties shall
examine thesituation andmaytakeanydecision needed toputanendtothedifficulties
notified bytheContracting Party concerned. Intheabsence ofsuchdecisions within
thirty daysofthematter being raised, theContracting Party concerned mayadopt the
measures necessary inorder toremedy thesituation.
(c) Asregards Article 13(Fulfilment ofObligations), theContracting Party concerned
maytakeappropriate measures aftertheconsultations havebeenconcluded oraperiod
ofthree months haselapsed from thedateofnotification.
4. Thesafeguard measures taken shallbenotified immediately totheother Contracting Party.
They shallberestricted withregard totheirextent andtotheirduration towhatisstrictly necessary
inorder torectify thesituation giving risetotheirapplication andshallnotbeinexcess oftheinjury
caused bythepractice orthedifficulty inquestion. Priority shallbegiven tosuchmeasures aswill
leastdisturb thefunctioning oftheAgreement.
5. ThesafeguardmeasurestakenshallbetheobjectofregularconsultationsbetweentheContracting
Parties withaviewtotheirrelaxation, substitution orabolition assoonaspossible.
6. Whereexceptionalcircumstancesrequiringimmediateactionmakepriorexaminationimpossible,
theContracting Party concerned may, inthecases ofArticles 19(Dumping), 20(Emergency Action
inImports ofParticular Products), and21(Re-export andSerious Shortage), apply forthwith the
precautionarymeasuresstrictlynecessarytoremedythesituation.Themeasuresshallbenotifiedwithout
delay, andconsultations between theContracting Parties shalltakeplace assoonaspossible.
Article 24
Consultation Mechanisms
1. Forthepurpose oftheproper implementation ofthisAgreement, theContracting Parties shall,
whenever necessary, exchange information and,attherequest ofeither Contracting Party, hold
consultations.WT/REG25/1
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2. TheContracting Parties agree thattheimplementation ofthisAgreement shallbesupervised
andadministered byaJointCommittee consisting ofrepresentatives oftheContracting Parties. For
thispurpose, thefollowing shallapply:
(a) Theexchange ofinformation andtheconsultations referred toinparagraph 1,and
especially theconsultations anddecisions referred toinArticle 23,shall, when
appropriate, takeplace intheJoint Committee.
(b) TheJointCommittee maytakedecisions incases provided forinthisAgreement. On
other matters theJoint Committee maymake recommendations.
(c) Forthepurpose oftheproper implementation ofthisAgreement theJointCommittee
shall meet whenever necessary. Each Party tothisAgreement mayrequest thata
meeting beheld.
(d) TheJoint Committee shallactbycommon agreement.
(e) TheJoint Committee shalllaydown itsownrules ofprocedure.
(f) TheJointCommittee maydecide tosetupsuchsub-committees andworking parties
asitconsiders necessary toassist itinaccomplishing itstasks.
(g) TheJoint Committee maydecide toamend theAnnexes.
Article 25
Evolutionary Clause
1. Where aContracting Party considers thatitwould beuseful intheinterest oftheContracting
Parties todevelop therelations established bythisAgreement byextending themtofields notcovered
thereby, itshallsubmit areasoned request totheother Contracting Party.
2. Agreements resulting fromtheprocedure referred toinparagraph 1willbesubject toratification
orapproval bytheContracting Parties inaccordance withtheirownprocedures.
Article 26
Annexes
TheAnnexes tothisAgreement areanintegral partofit.
Article 27
Territorial Application
TheAgreement shallapply, ontheonehand, toNorway, and,ontheother hand, totheFaroe
Islands.WT/REG25/1
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Article 28
Denunciation
Either Contracting Party maydenounce thisAgreement bynotification totheother Contracting
Party. TheAgreement shallcease tobeinforce twelve months afterthedateofwhich suchnotification
wasreceived bytheother Contracting Party.
Article 29
Entry intoForce
ThisAgreement isdrawn upintriplicate intheNorwegian, Danish andFaroese languages,
eachofthese textsbeing equally authentic.
ThisAgreement willbeapproved bytheContracting Parties inaccordance withtheirown
procedures. Itshallenter intoforce onthefirstdayofthemonth following thedayonwhich the
ContractingPartieshavenotifiedeachotherthroughdiplomaticchannelsthattheirrespectiverequirements
fortheentry intoforce ofthisAgreement havebeenfulfilled.
Pending theentry intoforce itshallapply provisionally from 1September 1992.