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Iceland and the United Kingdom (UK) enjoy a close relationship which is today based primarily on the European Economic Area (EEA) Agreement. The EEA, which has been in force since 1994, allows Iceland, along with Norway and Liechtenstein, to participate in the EU’s Single Market and provides a solid framework for relations with the EU and its Member States. Upon exiting the EU, the UK will no longer be a party to this Agreement. The UK’s withdrawal from the EU will therefore have a direct impact on all participants in the EEA, including Iceland.

A transition or implementation period in which EU rules continue to apply in the UK may bridge the gap between the UK’s formal departure from the EU in March 2019 and until a future agreement is in place. Iceland underlines the importance of allowing for the continued application of Single Market rules between the EEA EFTA States (Iceland, Liechtenstein and Norway) and the UK during such a period. This is necessary to preserve our common rules and the principle of equal treatment throughout the European Economic Area. In addition, to avoid the risk of fragmentation within the Single Market, necessary arrangements should be agreed concerning certain terms of withdrawal which affect the European Economic Area as a whole (e.g. citizens’ rights). These arrangements should be applicable at the same time as the withdrawal agreement between the European Union and the United Kingdom.

In the long term, Iceland’s aim is to ensure a robust future relationship with the UK which includes trade as well as close cooperation in key areas of mutual interest such as transport, research and development, fisheries management, police cooperation, security and defence, climate change and gender equality. In general, Iceland is an export driven economy and strong supporter of global free trade. The benefits of trading freely are clearly visible in Europe. Therefore, Iceland’s view is that new barriers to trade should not arise as a result of Brexit. Rather, the shifting environment should be used as an opening to explore new ways of ensuring seamless trade flows.

Structure of our work

The Icelandic government is committed to safeguard Iceland’s interests and to explore fully any potential opportunities to strengthen bilateral relations with the United Kingdom. To this end ministers and officials have had a number of productive high-level meetings with their counterparts in the UK while at the same time working closely with EFTA partners and with the EU and its Member States.

Soon after the UK voted to leave the EU in June 2016 a Ministerial Committee was established with an overall responsibility for Iceland’s approach towards Brexit. A Steering Committee led by the Ministry for Foreign Affairs has also been set up and is supported by five working groups responsible for designated topics:

  • Working Group I: market access particularly for fisheries, agricultural and industrial products.
  • Working Group II: technical barriers to trade, food law, energy, intellectual property, procurement, competition and state aid.
  • Working Group III: services, establishment, free movement of capital and investment, financial services, transport, telecommunications,  company law, data protection and audiovisual services.
  • Working Group IV: free movement of persons, citizens’ rights, social security, recognition of professional qualifications, consumer affairs, environment, research and development, education and culture, equal treatment and labour law.
  • Working Group V: areas falling outside the scope of the EEA Agreement such as security and defense, fisheries management and justice  and home affairs.

The working groups are responsible for assessing Iceland’s interests and defining potential objectives in each of the areas falling under their respective mandates in preparation for discussions on a future relationship with the UK. As such they follow closely any developments in negotiations between the EU and the UK in their fields and are in contact with relevant officials in the UK, the EU and the other EFTA States. The working groups also consult closely with interest groups at national level and Althingi, the Icelandic Parliament.

Status of UK nationals living in Iceland and Icelandic nationals in the UK

The rights of UK nationals to reside in Iceland (and vice versa), as enumerated by the EEA Agreement, will continue to apply until the UK exits the EU on 29 March 2019.

On 8 December 2017 a joint report was published from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of the negotiations, on citizens‘ rights, among other matters. The joint report forsees that an agreement was reached on citizens’ rights that allows EU citizens living in the UK retain their right to stay after the UK leaves the EU and continue to access public funds and services. Discussions have taken place with the UK with the aim of granting nationals of Iceland, Liechtenstein and Norway equivalent rights post-Brexit as those from EU Member States. Following from these discussions, the UK and EEA EFTA countries have issued the following joint-statement:
Officials from the EEA EFTA States (Iceland, Liechtenstein and Norway) and the United Kingdom met on 12 February 2018 to discuss the agreement reached by the United Kingdom and the European Union on citizens’ rights in December 2017. Positive discussions on these issues took place at the meeting and the parties affirmed their desire to secure the status and protect the rights of UK nationals living in Iceland, Norway and Liechtenstein and nationals of those countries living in the UK.

Further engagement between the parties will now take place in order to finalise the details of such an agreement.


On 25 November 2017 the Icelandic Ministry for Foreign Affairs published a report which explores the potential implications of the United Kingdom's departure from the European Economic Area for Iceland. The following contains a brief introduction and a summary of the report's key findings in English.

The full report in Icelandic
English summary


For further information contact Andri Lúthersson (andri.luthersson [at]utn.stjr.is)

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