Hoyvík Agreement

The Hoyvíker Agreement is an international agreement between Iceland and the Faroe Islands. It is directed between the two countries a comprehensive free trade area.

History

The contract was signed by the Icelandic Prime Minister Oddsson Davíð and the Faroese Prime Minister Jóannes Eidesgaard at the National Museum of the Faroe Islands in Hoyvík, a suburb of the capital Tórshavn on 31 August 2005. The agreement was ratified by both parliaments in 2006. However, since the Faroe constitutionally belong to Denmark, the contract had to be ratified by the Danish parliament in order to gain full force and effect.

Content

It is the most far-reaching free trade agreement between Iceland and the Faroe Islands. It guarantees an almost unlimited freedom of movement for people, goods, services and capital. It also deals with competition policy and subsidies and prohibits any discrimination on grounds of nationality ( apart from contractually specified exceptions). For Iceland it is the first contract, which also includes agricultural products. This sector protects the Icelandic government usually from foreign influences. However, an important exception is the fishing industry, which does not include the contract. Existing restrictions on foreign investment in the industry remain unaffected.

In addition to the purely economic aspects of further measures for closer cooperation were adopted. They refer to such diverse areas as culture, education, sports, health care, transportation, communications, tourism, environmental protection, energy and resources utilization.