Swiss policy on the EU: The bilateral agreements

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1 Federal Department of Foreign Affairs FDFA Federal Department of Economic Affairs FDEA Integration Office FDFA/FDEA Information Swiss policy on the EU: The bilateral agreements June 2010

2 Bilateral agreements Switzerland-EU Free trade (of 1972) Insurance (of 1989) Controls of goods (of 1990 and 2009) Pensions Environment MEDIA Education Fight against fraud Statistics Taxation of savings Processed agricultural products Technical barriers to trade Free movement of persons / Agriculture Public procurement Overland transport / Civil aviation / Research Schengen/Dublin Negotiations Signature Phase of approval In Force 2

3 Free trade The Free Trade Agreement establishes a Switzerland-EU free trade zone for industrial products It prohibits any form of customs duty or quotas in trade in industrial products In force since 1973 Great importance for Switzerland as exporting country. In 2009 Switzerland exported goods worth CHF 112 bn to EU countries. 3

4 Insurance The Insurance Agreement grants reciprocal freedom of establishment to insurance companies (excluding life insurance) In force since 1993 Important for international insurance companies 4

5 Customs facilitation and security The agreement regulates the controls and formalities for goods transport at the border between Switzerland and the EU It aims to simplify customs processing as much as possible In force since 1991 Preliminary application of the amended agreement (the 24 hours rule): 1 July 2009 Everyday 23,000 trucks cross Switzerland s borders 5

6 Free movement of persons The agreement provides for the equal treatment of Swiss and EU citizens in taking up residence and work It regulates reciprocal, gradual and controlled opening up of labour markets (transitional arrangements) Recognition of professional diplomas Coordination of the social security systems Accompanying measures were introduced to protect employees (ensuring compliance with pay and working conditions in Switzerland) In force since 2002 Growth effect: Swiss economy dependent on foreign workers Better opportunities for Swiss nationals in the EU 6

7 Transitional arrangements BG/RO EU-8 EU-15 + Malta/Cyprus Free movement of persons with restrictions Free movement of persons with protection clause Free movement of persons 7

8 Free movement of persons EU-17/EFTA EU-8 Bulgaria, Romania 8

9 Technical barriers to trade (MRA Mutual Recognition Agreement ) for most industrial products: reciprocal recognition of conformity ratings (checking of product regulations, e.g. in connection with consumer or environmental protection) In force since 2002 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 9

10 Public procurement markets extends WTO rules on public procurement markets a new feature is that larger tenders by municipalities or licensed entrepreneurs are subject to compulsory tendering In force since 2002 More competition and less expenditure in public procurement Swiss companies have extra opportunities to apply for tenders in EU states. 10

11 Agriculture The agreement simplifies trade in agricultural products between Switzerland and the EU by reducing customs duties and eliminating non-tariff barriers to trade It partly liberalises the agricultural market (free trade for cheese from 1 June 2007) In force since 2002 The EU is the main export market for Swiss agricultural exports. Cheese exports in particular have been increasing steadily: + 16% between 2006 and

12 Overland transport The agreement regulates the introduction of a heavy vehicle tax and the increase of the maximum weight limit for trucks to 40 tonnes It helps to shift freight crossing the Alps from road to rail It coordinates Swiss transport policy with that of the EU in order to meet the demands of increasing mobility and protection of the environment In force since 2002, previous agreement since : 61% of goods traffic crossing the Alps by rail Revenue from the heavy vehicle tax is used to improve the railways (2009: CHF 1.45 bn) 12

13 Civil aviation The agreement regulates the reciprocal access to aviation markets for airlines In force since 2002 Swiss airlines enjoy the same competitive conditions as their EU competitors and are no longer discriminated against, for example, in landing rights. 13

14 Research The agreement covers the participation of Swiss research (universities, companies, individuals) in EU research programmes (ERP) The total budget of the 7th ERP ( ) is about Euro 54.6 bn Switzerland's contribution totals about CHF 2.3 bn In force since 2002, renewed in 2004 and 2007 The success rate of Swiss project proposals is higher than the European average 100% of the Swiss contributions returns to Switzerland in the form of project support. 14

15 Schengen The agreement facilitates travel by abolishing identity checks at the Schengen internal borders It guarantees security thanks to closer cross-border cooperation between the police and justice systems, inter alia through the Schengen Information System, SIS (August 2008) It extends the area of application of the Schengen visa (valid for 3 months) to Switzerland Operational participation: 12 December 2008 Access to important instruments of the international fight against crime (SIS) Economic advantages for tourism 15

16 Schengen Area Member states of the Schengen Area Member states of the Schengen Area with special status Future Member states Associated states Future associated state (FL) 16

17 Dublin The agreement coordinates national responsibilities for asylum procedures It reduces the load of the national asylum systems by preventing multiple applications It gives access to the EURODAC fingerprint data bank Operational participation: 12 December 2008 (like Schengen) 17

18 Taxation of savings The agreement permits cross-border taxation of the savings of individuals liable to taxation in the EU withholding tax increases on a phase basis to 35% (2009 = 20%) revenue is shared: 75% EU states / 25% Switzerland voluntary exchange of information or on request in cases of tax fraud no taxation on dividends or license-fee payments between associated companies In force since 1 June 2005 Tax contribution in 2009: CHF 535 m, of which CHF 401m (75%) to EU states and CHF 134m (25%) to Switzerland 18

19 Fighting against fraud The agreement improves cooperation in the fight against smuggling and other offences relating to indirect taxes (customs, VAT, consumer taxes) Early implementation of the Agreement by Switzerland (as of 8 April 2009) in cooperation with those EU countries that have ratified it Enters into force after ratification by Switzerland as well as by each individual EU member state and the EC itself 19

20 Processed agricultural products (= Protocol to the Free Trade Agreement) The agreement eases trade in processed agricultural products (= food such as confectionery, noodles, etc) It permits duty-free export of Swiss food industry products In force since 30 March 2005 The export of processed agricultural products to the EU rose by an average of 17% a year from 2005 to

21 Statistics The agreement adjusts Switzerland's standards of statistical data collection to those of Eurostat, the statistics office of the European Communities It provides access to a European-wide basis of comparable data on economic, political and social questions In force since 1 January 2007 A broad statistical base is necessary for accurate economic and political decisions 21

22 Environment The agreement regulates Switzerland's participation in the European Environment Agency. The Agency collects and analyses data on the environmental situation, and advises the European Commission on environmental policy In force since 1 April 2006 Access to a Europe-wide environment data base which covers many areas including air, water, noise, ground, waste products and biodiversity 22

23 MEDIA The agreement regulates the participation of Swiss film-makers in the EU's MEDIA programmes MEDIA 2007 primarily supports the distribution and marketing of European films across national and linguistic borders. Budget ( ): euro 755m In force since 1 April 2006 Signature of the renewed agreement: 11 October 2007 Provisionally in force since 1 September 2007 Better opportunities for Swiss films in Europe Greater variety of films on offer in Switzerland 23

24 Pensions The agreement abolishes double taxation on the pensions of former EU officials living in Switzerland. In force since 31 May 2005 About 50 individuals benefit from this agreement. 24

25 Education, vocational training The agreement regulates Switzerland's participation in the EU s education programmes It improves the offer and mobility in education and vocational training It raises the quality of education and improves individuals' opportunities on the job market The Lifelong learning and Youth in Action programmes have an overall budget of euro 7bn (in the period from ) Agreement signed on 15 February 2010 Implementation from 2011 In 2009, approx. 5,900 students participated in the exchange programmes (about half each way CH EU / EU CH) 25