News

Response to notification from the EFTA Surveillance Authority (ESA) of formal investigation of Iceland's investment incentives scheme

4/30/2013

The Ministry of Industries and Innovation has expressed its objections to the decision by the EFTA Surveillance Authority, ESA, to open a formal investigation of the implementation of the scheme providing incentives for new investment in Iceland.

The scheme was adopted in 2010 and entered into force following its review and approval by ESA that the arrangements complied with rules of the European Economic Area Agreement. Since that time, one amendment has been made to a Regulation, which did not result in any substantial change to the approved arrangements. In March 2013, the Icelandic parliament Althingi passed an amendment to the scheme which has not yet entered into effect, as it is subject to ESA's approval and has been undergoing the Authority's procedure in recent months.

Since the entry into force of the scheme, six investment agreements have been concluded with undertakings under the scheme, all of which have been announced publicly. Extensive efforts have gone into all of these projects and the Icelandic authorities did their utmost to satisfy properly all the formal and substantial requirements, in accordance with ESA's decision of 2010 when the scheme was approved.

Today the Ministry has sent ESA a detailed summary, providing an account of the premises underlying each of the investment agreements.

The impact of this investigation of the incentives scheme is that while it is underway, the prior consent of ESA is required before any new investment agreements concluded under the scheme can take effect.