The major bilateral agreements Switzerland EU

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1 Federal Department of Foreign Affairs FDFA Directorate for European Affairs DEA The major bilateral agreements Switzerland EU August 2017

2 Bilateral agreements Switzerland EU B. I B. II 2

3 The first bilateral agreements 1972 Free trade of industrial products Abolition of obstacles to trade (duties, quotas) for industrial products 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) : Mutual market access 3

4 Free trade 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) Crucial for the Swiss economy: In 2016, 54% of Swiss exports (c. CHF 113bn) went to the EU-area; vice versa, 72% of Swiss imports (c. CHF 124bn) came from the EU Entry into force: 1973 Source: Swiss Customs Administration FCA 4

5 Insurance 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.) Crucial for internationally operating insurance companies Important for the Swiss economy: in 2016, the Swiss insurance sector provided jobs for 46,425 people in Switzerland and 71,654 abroad Entry into force: 1993 Source: Swiss Insurance Association SIA 5

6 Customs facilitation and security 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 Amended 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 Everyday 20,000 trucks cross Switzerland s borders Entry into force: 1991; amended agreement 2011 Source: Swiss Customs Administration FCA 6

7 Bilaterals I (1999) 1. Free movement of persons (AFMP) 2. Technical obstacles to trade 3. Public procurement market 4. Agriculture 5. Research 6. Civil aviation 7. Overland transport : Easier access to labour, goods and service markets Flughafen Zürich AG Swiss PDO-PGI Association 7

8 Free movement of persons (AFMP) 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) Important growth effect: Swiss economy is dependent on foreign workers Better opportunities for Swiss nationals in the EU Entry into force:

9 Technical barriers to trade Mutual recognition of conformity ratings for most industrial products Checking of compliance with product regulations, so that a product may be brought to market 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 Entry into force:

10 Public procurement markets 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 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:

11 Agriculture 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 EU is Switzerland s main trading partner in the agricultural sector (2016: 54% of CH-exports went to the EU, 72% of CH-imports came from the EU) Creates export growth: cheese export +2.3% per year ( ) Entry into force: 2002; 2011 the Agreement on mutual recognition of Protected Designations of Origin (PDO) and Protected Geographical Indications (PGI) entered into force 11

12 Research Participation of Swiss research (universities, companies, individuals) in EU research programmes (ERP) «Horizon 2020»: New generation of programmes Technological, scientific and economic benefit 100% of the Swiss contributions returned to Switzerland in the form of project support State of negotiations In the follow-up to , Switzerland and the EU signed on an agreement on Switzerland s partial association with Horizon 2020, which was extended until the end of 2016 Full association as from 2017 after Switzerland s ratification of Protocol III of the AFMP 12

13 Civil aviation Mutual access to aviation markets for airlines Swiss airlines enjoy nearly the same competitive conditions as their EU competitors and are no longer discriminated against, for example, in landing rights 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) 13

14 Overland transport 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 Everyday 20,000 trucks cross Switzerland s borders 2016: 71% of goods traffic crossing the Alps by rail Revenue from the heavy vehicle tax is used to improve the railways (2016: CHF 1.45bn) Entry into force: 2002; Transit Agreement:

15 Bilaterals II (2004) 1. Schengen/Dublin 2. Taxation of savings 3. Fight against fraud 4. Processed agricultural products 5. MEDIA (Creative Europe) 6. Environment 7. Statistics 8. Pensions 9. Education, vocational training, youth : Enhanced cooperation in other areas, improved economic environment 15

16 Schengen 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) Access to instruments of the international fight against crime and economic advantages for tourism Entry into force operationally: ; end of controls at Swiss airports for flights within the Schengen Area: 29 March

17 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 17

18 Dublin Coordinates national responsibilities for asylum procedures Access to the EURODAC fingerprint data bank allows the identification of multiple and abusive asylum applications 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) 18

19 Automatic exchange of information Replaces from 2017 the taxation of savings agreement with the EU which has been in force since 2005 and is applicable to all 28 EU member states Based on the OECD s global standard for the automatic exchange of information (AEOI) CH makes an important contribution to the prevention of tax evasion The abolition of taxation at source on the payment of dividends, interest and licence fees between affiliated companies in CH and the EU increases the attractiveness of Switzerland for internationally active companies Entry into force: 1 January 2017; Switzerland and EU-28 have been collecting account data and will exchange it as from

20 Fighting against fraud Improves cooperation in the fight against smuggling and other offences in relation to indirect taxes (customs, VAT, consumer taxes), subsidies and public procurement Reduces the risk of Switzerland being exploited as a hub for illegal business Entry into force: Has not entered into force yet; 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 20

21 Processed agricultural products 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 Increases the competitiveness of the Swiss food industry Secures a portion of the Swiss food industry Trade in processed agricultural products with the EU has risen by more than 60% since 2005 and amounted to CHF 6.8bn in 2016 Entry into force: 30 March

22 MEDIA (Creative Europe) Switzerland's participation in the EU s Creative Europe framework programme: EU s MEDIA film funding programme and cultural programme Funding contributions to Swiss film industry, better opportunities for Swiss films in Europe, greater variety of films on offer in Switzerland Funding for Swiss artists, participation in cultural prizes State of negotiations The Federal Council has adopted the negotiating mandates for negotiations with the EU (MEDIA on and Culture on ) Negotiations have been under way since the EU also adopted a negotiating mandate on

23 Environment 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 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

24 Statistics 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 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

25 Pensions Abolishes double taxation on the pensions of former EU officials living in Switzerland This applies only to former officials of EU institutions, such as the European Parliament, the European Commission, the Council of the EU, and the Court of Justice of the EU, who are now living in Switzerland Entry into force: 31 May

26 Education, vocational training, youth Switzerland's participation in the EU s education, vocational training and youth programmes «Erasmus+»: New generation of programmes Improves the offer and mobility in education and vocational training, raises the quality of education and improves opportunities in the job market In 2016 around 8,650 students participated in the exchange programmes State of negotiations Interim solution was extended by the government until the end of 2017 The association to a «Erasmus+» follow-on programme starting from 2021 is being examined 26

27 Europol 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 The exchange of information is steadily increasing and currently amounts to around 1100 operative notifications per month (2016) Entry into force: 1 March 2006; enlargement of area of application: 1 January

28 Eurojust 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 The number of cases submitted to Eurojust has been steadily increasing (2016: 2306, +4% compared to 2015) Entry into force: 22 July 2011 Eurojust 28

29 Cooperation with the EDA 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 The agreement strengthens the economic, research and technology position of Switzerland Entry into force: 16 March

30 Cooperation of competition authorities 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 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

31 Satellite navigation (Galileo, EGNOS) 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 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 Ratification: 7 July 2015, provisional implementation since 1 January 2014 (ongoing ratification process in EU) 31

32 European Asylum Support Office (EASO) 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 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 Entry into force: 1 March

33 Further information Switzerland s European policy Publications Free movement of persons (German) 33