The Withdrawal Agreement negotiated by the UK and the EU provides for a transition period in which EU rules and international agreements, including the EEA, continue to apply to the UK after the UK’s departure from the EU and until the end of 2020. Icelandic legislation ensures the continued application of EEA rules to the UK during this period.
Status of UK nationals living in Iceland
Arrangements have been agreed between the EEA EFTA States and the UK concerning withdrawal issues which fall under the EEA, predominantly citizens’ rights. These arrangements mirror those contained in the Withdrawal Agreement between the UK and the EU. This means that UK citizens registered as residents in Iceland before the end of the transition period will be able to keep broadly the same rights as they have now. It is important that all UK citizens living in Iceland have registered their domicile with Registers Iceland which confirms their right to stay in Iceland. For further information, see the website of the Directorate of Immigration. For further information on recognition of professional qualifications see the website of the Directorate of Health.
Future relationship and changes after the transition period
A Contingency Trade Agreement between Iceland the United Kingdom will enter into force on 1 January 2021. The aim of the agreement is to maintain current tariff preference for trade in goods between the parties as previously applicable according to the Agreement on the European Economic Area (‘EEA Agreement‘) and other related trade agreements. The Contingency Agreement is intended to serve as a bridge arrangement until a new and comprehensive Free Trade Agreement can enter into force between the parties.
Iceland and the UK have also signed an air transport agreement which for them most part guaranties Icelandic and British flight operators the same air traffic rights as they‘ve had through the EEA Agreement
Iceland is currently negotiating a comprehensive free trade agreement with the UK along with EEA EFTA partners Norway and Liechtenstein. Alongside this work, Iceland and the UK are also discussing other key aspects of their future relationship including key areas of mutual interest such as social security, aviation, education and research, fisheries management, and police cooperation,
The European Economic Area (EEA) Agreement, 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.
The relationship between Iceland and the United Kingdom (UK) has been based primarily on the EEA Agreement. Upon exiting the EU, the UK is no longer a party to this Agreement and it will cease to apply to the UK after the transtition period. This will entail substantial changes to the relationship between Iceland and the UK. As negotiations on future agreements between Iceland and the UK are ongoing, the precise nature of these changes is still to be determined.
Frequently asked questions on EFTA, the EEA, EFTA membership and Brexit are available on the website of the EFTA Secretariat.
UK driving licensces
The government of Iceland is working on an aggreement with the UK government concerning the continued mutual recognition of driving licences. The agreement will make sure that UK licences will continue to be valid in Iceland and that UK motorists residing in Iceland will continue to be able to exhange their licences for Icelandic licences without the need for a retest and vice versa. The Icelandic regulation on driving licences has a temporary article that guarantees that UK motorists residing in Iceland will continue to be able to exchange their licences for Icelandic ones without the need for a retest until February 1st 2021. If the aforementioned agreement will not have taken effect before that date, the Icelandic Minister of Transport and Local Government has indicated that he will prolong the temporary article so that the rights of UK motorists, regarding driving licences, will continue to stay the same as they were before Brexit.