Switzerland and the acquis

I have written previously about the challenge that the Single European Act of 1987, with its objective of creating a single market by 1992, presented to the EFTA states. In August 1988, the Swiss Federal Council published a Report on European Integration, in which it rejected EC membership as incompatible with its neutrality policy, in current conditions at least, but advocated instead ‘an active integration policy’ aiming at the establishment of ‘conditions as similar to the internal market as possible’. 1

In May 1988, the Federal Council decided to examine all reports and proposals submitted to parliament to ascertain their compatibility with European law. The goal was ‘to ensure the greatest possible compatibility of our legal provisions with those of our European partners in all areas having a transborder dimension (and only in those)’. 2 Thus began the process known as autonomer nachvollzug (‘automomous enactment’) by which Switzerland has voluntarily adapted its own legislation to conform in greater or lesser degree to Community legislation.

On 17 January 1989, as I have previously described, Jacques Delors set out his vision for a new partnership between the EC and EFTA, with common decision-making institutions. Negotiations on a European Economic Area were brought to completion, but the common decision-making fell by the wayside, and as a result almost all the EFTA states (Iceland being an exception) decided to make applications to accede to the Community. Already by October 1991, at the time of the completion of the EEA negotiations (but before the ECJ ruling that extended them), the Federal Council made it clear that:

It is a fact that the EEA treaty does not respect the fundamental of equality between parties to the treaty in all respects and especially fails to envision joint decision-making. 3

On 19 October 1991 the decision was taken to:

define EC accession as the goal of our integration policy and to regard the EEA as a particularly important phase from the domestic policy angle towards the attainment of that goal. 4

Accordingly, having signed the EEA Agreement on 2 May 1992, Switzerland applied for EC membership just three weeks later, on 26 May. At the same time, on 18 May 1992, a report was presented to parliament containing the adjustments to Swiss law which were deemed to be required in preparation for participation in the EEA. The package, consisting of the modification of sixty-one laws, and the addition of nine new ones, came to be known as ‘Eurolex’. 5

It can be seen that by the summer of 1992, Switzerland had begun the process of conforming its domestic legislation to make it compatible with the single market acquis, in preparation for participation in the EEA (due to come into being on 1 Jan 1993), and for subsequent accession to the Community. It came as a shock then, when the EEA Agreement was rejected in the referendum of 6 December 1992, called ‘black Sunday’ by Jean-Pascal Delamuraz, the Minister for External Economic Affairs. As a result, Switzerland’s membership application was put on hold, and the Eurolex package was not enacted as law.

On 24 February 1993, the Federal Council presented to Parliament a new report on European integration, in the light of the referendum result. It was decided not to withdraw formally the EC membership application; and a part of the Eurolex package was retained and renamed ‘Swisslex’, consisting now of twenty-seven legal acts. 6 Maiani comments that:

The Swisslex package, launched in 1993 and completed by a second round of reforms in 1995, laid the foundations for a eurocompatible Swiss economic order. Legislation was passed in wide-ranging fields, inter alia technical standards, intellectual property, consumer protection, and labour law, in order to transpose Community law into Swiss law. 7

The February 1993 report also spoke of the eurocompatibility of Swiss legislation as a fundamental principle (‘un principle fondamental’, p. 785), and Maiani says that by this time ‘the qualification that eurocompatibility would only be sought in “fields having a trans-boundary dimension” had largely been dropped’. 8 By 1999, ‘the autonomous implementation of EU law had become “systematic”‘, and indeed ‘it was noted that “[i]n practice, the Parliament and Government adopt[ed] measures that [were] not [euro-] compatible only in exceptional cases”‘, Maiani clarifying that this last statement referred essentially to economic law. 9

The autonomous implementation of EU law has continued unabated until the present day, and is ‘a large-scale phenomenon’. 10 It is not the case, however, that EU law is incorporated into domestic legislation just as it is. Maiani explains that:

the implementation of EU law is nearly always selective. The Swiss legislator may choose to make a Federal Act wholly compatible with EU law, to make certain deviations from EU law or, conversely, to make just certain approximations in an otherwise «purely Swiss» Act. 11

The end result is thus a:

hybrid «EU-ized » Swiss legislation that stands apart from ordinary Swiss legislation both legally and politically, but is not quite the same as EU law 12

In similar vein, Cottier writes that:

Swiss legislation is often prepared on the basis of EU law, but undergoes substantial changes in domestic legislative processes and outcomes. What results is often a set of rules inspired by, but not fully compatible with, EU law…. [or] in other words … a rather complex European law sui generis in Switzerland. 13

The Bilateral Agreements

The forthcoming accession of the UK and Denmark to the EEC in 1973 had prompted the negotiation of bilateral Free Trade Agreements between the Community and the remaining EFTA states, the immediate purpose being to allow the continuation of tariff-free trade between the UK and Denmark, and EFTA. Accordingly, Switzerland signed an FTA with the EEC on 22 July 1972, to enter into force on 1 January 1973, the same day as the accession of the UK and Denmark.

After the rejection of the EEA Agreement in the referendum of December 1992, the Swiss government set out a proposal to build upon the FTA by negotiating sectoral agreements with the EC, naming the following 15 sectors:

1) Technical barriers to trade; 2) Public procurement; 3) Research; 4) Road transport; 5) Animal and plant protection legislation; 6) Air traffic; 7) Intellectual property, including labels of origins and geographic designations; 8) Processed agricultural goods; 9) Statistics; 10) Audio-visual sector; 11) Education, training and youth; 12) Outward processing of textiles; 14) Country of origin; and 15) Product liability. 14

The EU (as it had just become on the first day of the month) responded in November 1993 with its own list of six areas, which included the free movement of persons. Negotiations began in December 1994 on the following seven areas:

1) Free movement of persons; 2) Technical barriers to trade; 3) Public procurement markets; 4) Agriculture; 5) Research; 6) Civil aviation; 7) Overland transport;

and were completed in December 1998. The agreements were signed on 21 June 1999, and ratified by Switzerland in October 2000, and by the EU in early 2002, allowing them to come into force on 1 June 2002. The seven agreements were linked, so that one could not come into force without the others; and so that, in particular, if Switzerland were to terminate the FMPA (Free Movement of Persons Agreement) after its initial duration of seven years, the other six would cease to apply six months later. (See Article 25(2) and 25(4) FMPA).

Bilaterals I were succeeded by Bilaterals II, but my purpose here is to investigate what kind of relationship Switzerland has with the EU acquis. Has it, like the other EFTA nations, become a mainly passive recipient of laws made by others, or has it retained its ability and right to act independently? To answer this question, one has to look in detail at the substance of the agreements, of which the most important in Bilaterals I was the FMPA.

Free Movement of Persons Agreement

With regard to the free movement of persons, Switzerland was joining a regime that was highly specific to the European Union, with the principle expressed in Article 45 TFEU, and rules laid down in Council Directive 68/360/EEC and Council Regulation 1612/68, among others, as interpreted by a series of rulings by the Court of Justice of the European Communities (as the CJEU was called prior to 2009). It is not surprising then that in the Preamble to the FMPA there exists a clear statement that the rules of the EU are to apply in the agreement:

Resolved to bring about the free movement of persons between them on the basis of the rules applying in the European Community,

In Article 16(1) of the Agreement, a basis is laid down for making reference to EU law; and in 16(2), it is stated that CJEC rulings prior to the date of signature of the agreement shall be taken into account:

Article 16 FMPA

Such references to EU law are to be found in the Annexes to the Agreement, for example in Annex I, Article 4:

Annex I Article 4 FMPA

By such means, therefore, parts of the single market acquis were brought into play in Switzerland, through this bilateral agreement. Moreover, so far as I have been able to ascertain so far, the rules and principles contained in the FMPA are indeed more or less equivalent to those pertaining to the free movement of persons in the EU as of 2002 when it came into force.

To give one example, the following requirement in FMPA Annex I, Article 3(1):

An employed person must possess housing for his family which is regarded as of normal standard for national employed persons in the region where he is employed, but this provision may not lead to discrimination between national employed persons and employed persons from the other Contracting Party.

derives directly from Article 10(3) of Regulation (EEC) 1612/68 of The Council:

… the worker must have available for his family housing considered as normal for national workers in the region where he is employed; this provision, however must not give rise to discrimination between national workers and workers from the other Member States.

Directive 2004/38/EC

Matthew Jay has shown, however, that since the implementation of Directive 2004/38/EC ‘on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States’, the situation has changed, with a considerable disparity between EU/EEA rules and the rules for the movement of persons between Switzerland and EU/EEA states.

Directive 2004/38/EC amended Regulation 1612/68, just mentioned above, and repealed Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC. It was incorporated into the EEA Agreement by Joint Committee Decision 158/2007. To bring the FMPA into line with this Directive however, would require treaty revision and this, it being a ‘mixed’ treaty, would require ratification by all 28 EU member states. 15 Since this has not been accomplished, the following differences, among others, now exist between the EU/EEA free movement regime, and the Switzerland-EU/EEA regime:

  1. Under the FMPA, jobseekers can remain for up to six months (Annex I, Article 2(1)). Under Directive 2004/38/EC (Article 14(4)(b)) jobseekers can remain indefinitely if they ‘can provide evidence that they are continuing to seek employment and that they have a genuine chance of being engaged’.
  2. Under the FMPA (Annex I, Article 24(1)), non-economically active persons have to prove that they have ‘sufficient financial means not to have to apply for social assistance benefits during their stay’; under Directive 2004/38/EC (Article 7(1)(c)), they have right of residence if they ‘have sufficient financial resources … not to become a burden on the social assistance system of the host Member State’.
  3. Under the FMPA (Annex I, Articles 7-9) workers are to receive equal treatment to workers of the host nation. Under Directive 2004/38/EC (Article 24), rights of equal treatment are extended, albeit with some exceptions, to EU citizens, whether they are workers or not.
  4. Under the FMPA (Annex I, Article 3(2)), family members include the spouse and relatives in the descending and ascending lines. Under Directive 2004/38/EC (Article 2(2)), registered partners and their relatives in the descending and ascending lines are also included.
  5. Under the FMPA (Annex I, Article 2(1)), the right of residence is substantiated by a residence permit. Under Directive 2004/38/EC, the entitlement to rights of residence does not depend on any particular means of proof of those rights.
  6. Directive 2004/38/EC (Article 16) introduced a right of permanent residence for EU citizens who have resided legally for a continuous period of five years in the host nation. No such right of permanent residence exists under the FMPA.

Jay concludes his paper by contrasting the free movement regime under the EEA Agreement, with that under the Swiss-EU Bilaterals:

Through integrationist interpretations by the EFTA Court, nationality of one of the EEA-EFTA States has almost been equated with Union citizenship, at least insofar as movement and residence goes. Owing to Directive 2004/38’s incorporation into the EEA Agreement, no other conclusion would be viable….

The situation in Switzerland is less happy from a homogeneity perspective. An older form of the law is in force. The only basis on which to decide whether a person can secure the old rights or the more effective ones under Directive 2004/38 is the arbitrary distinction of nationality: this is hardly conducive to ensuring European integration and social solidarity, though it may secure Swiss independence. 16

 

Preliminary conclusions

Along with the other EFTA states, Switzerland responded eagerly to Delors’ proposal for a European Economic Space with joint EFTA-EU decision-making institutions. When these institutions failed to materialise, and again in common with almost all the EFTA states, Switzerland applied to join the Community, so that its participation in the EFTA pillar of the EEA would only be temporary. When this plan was rejected by the Swiss people in December 1992, the Federal Council adopted a two-fold strategy, which continues to this day of:

  1. Making its domestic legislation ‘euro-compatible’, wherever possible, so as to facilitate participation in the single market;
  2. Entering into bilateral sectoral agreements with the EU, so as to replicate, in those sectors, the regimes pertaining in the single market.

With regard to domestic legislation, the result has been a Swiss-EU hybrid. With regard to the most important of the seven agreements of Bilaterals I, the FMPA, the result is a free movement regime more or less equivalent to that which pertained in the EU in 2002, but significantly different to that which pertains today in the EEA.

Andrew

Notes:

  1. Sieglinde Gstöhl, ‘Reluctant Europeans: Norway, Sweden and Switzerland in the process of integration’ (London: Rienner, 2002) p. 159
  2. Gstöhl, ‘Reluctant Europeans’, p. 160
  3. L. Goetschel et al, ‘Swiss Foreign Policy: Foundations and Possibilities’ (London: Routledge, 2005) p. 69
  4. ‘Switzerland-European Union: Integration Report 1999 – extracts’, p. 3 of pdf. Link.
  5. T. Blanchet et al, ‘The Agreement on the European Economic Area (EEA)’, (Oxford: Clarendon Press, 1994) p. 247
  6. Blanchet, ‘The Agreement on the [EEA]’, p. 249
  7. F. Maiani, ‘Lost in translation: euro-compatibility, legal security, and the autonomous implementation of EU law in Switzerland’, European Law Reporter, No. 1 (2013) p. 29. Link.
  8. Maiani, ‘Lost in translation’, p. 29
  9. Maiani, ‘Lost in translation’, pp. 29-30
  10. Maiani, ‘Lost in translation’, pp. 30, 31
  11. Maiani, ‘Lost in translation’, p. 31
  12. Maiani, ‘Lost in translation’, p. 33
  13. T. Cottier, ‘Swiss Model of European Integration’,  in Astrid Epiney and Stefan Diezig (eds), Schweizerisches Jahrbuch für Europarecht 2012/2013, Bern 2013, pp. 6-7
  14. M. Vahl and N. Grolimund, ‘Integration without Membership: Switzerland’s Bilateral Agreements with the European Union’ (Brussels, Centre for European Policy Studies, 2006) p. 11. Link.
  15. M. Jay, ‘Homogeneity, the free movement of persons and integration without membership: Mission Impossible?’, Croatian Yearbook of European Law and Policy, Vol. 8 (2012) p. 99. Link.
  16. Jay, ‘Homogeneity’,  p. 113.

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