The Norwegian government’s view on the EEA Agreement’s scope of application – at risk of a Pyrrhic victory in the EFTA Court?

The EEA Agreement’s scope of application is a contested issue. The view of the EU is that the scope is determined based on functional criteria, as in EU law. The view of the Norwegian government is that Article 126 of the Main Part of the Agreement delimits the scope of EEA law geographically to the ‘territories’ of the EEA/EFTA States, and that this refers to the meaning attributed to the word ‘territory’ in international law, thus limiting the scope of application for the EEA Agreement to the land territories, the internal waters and the territorial waters of these States. The question has now come up before the EFTA Court in the case of Saga Subsea, following a reference from the Norwegian Supreme Court.

Authors: Halvard Haukeland Fredriksen and Tollef Otterdal Heggen, both at University of Bergen and at its Centre on the Europeanization of Norwegian Law (CENTENOL)

In its judgment in the case of Scanteam in 2020, the EFTA Court ruled that the EEA Agreement is applicable outside the territory of Norway – in the case at hand to a procurement by the Norwegian Embassy in Luanda – if the link between the circumstances of the case and the internal market is ‘sufficiently close’. Implicitly, the EFTA Court thereby ruled that Article 126 of the Main Part of the Agreement (EEAA) does not preclude such ‘extraterritorial application’ of EEA law, even though it refrained from explicitly examining that article. To EU lawyers, the EFTA Court followed the CJEU’s lead in cases like Boukhalfa, but stepped back from expressing its opinion on whether the CJEU’s functional understanding of the “territory” of EU Member States in, e.g., Salemink is transferable to the EEA.  

In the wake of Scanteam, much has been written in Norwegian legal scholarship concerning the scope of application of the EEA Agreement. An argument which, in our view, has not received the attention it deserves, is the potential consequences if the view of the Norwegian government should prevail before the EFTA Court in the Saga Subsea case, in particular with regard to EU legal acts of EEA relevance which the government itself wants to be applicable in the exclusive economic zone and/or on the continental shelf.

Article 126 EEAA as a limitation on the decisions of the EEA Joint Committee?

The EU’s functional approach to the scope of the EEA Agreement means that the agreement applies in accordance with the jurisdiction of the Member States, just as the EU treaties do for the EU Member States. Under this view, EEA law applies not only to the land territories, internal waters and territorial waters of the Member States, but also to the exclusive economic zones and continental shelves, insofar as the EEA Member States have jurisdiction there. Furthermore, a functional approach provides for the application of EEA law outside of the jurisdiction of the Member States if the link to the EEA internal market is sufficiently close, as it was in the case of Scanteam mentioned above.

The approach of the Norwegian government has most recently been set out in its written observations in the case of Saga Subsea mentioned above. As already noted, it argues that Article 126 EEAA delimits the scope of the agreement geographically to the ‘territories’ of the EEA/EFTA States in the international law meaning of that term, so that the exclusive economic zones and the continental shelves are excluded. Moreover, the Norwegian government considers there to be no room for an assessment of whether, in specific cases, there is a sufficiently close link to EEA law. In other words, the approach of the EFTA Court in Scanteam was wrong, and must be reversed!

Importantly, the Norwegian government further argues that all legal acts which are implemented into the EEA Agreement must be read in light of Article 126 EEAA, so that even directives and regulations which ostensibly regulate matters in the exclusive economic zones and/or on the continental shelves do not apply there as a matter of EEA law.

At the same time, however, the Norwegian government argues that the EEA Joint Committee is competent to extend the geographical scope of individual legal acts when implementing them into the EEA Agreement, and that this has indeed been done with respect to certain legal acts. No examples are given in the written observations in the Saga Subsea case, but one such example appears to be the Carbon Capture and Storage Directive, which was implemented into the EEA Agreement in 2012. The Norwegian government takes the view that this directive applies on the Norwegian continental shelf by virtue of EEA law, as opposed to merely being an example of Norway implementing the directive beyond the obligations flowing from EEA law. The applicability of the directive qua EEA law is necessary for the directive to bind not only Norway and those subject to Norwegian law, but also the EU, its Member States and the legal subjects bound by their law.

The competence of the EEA Joint Committee

A question that remains unresolved in the written observations of the Norwegian Government in the Saga Subsea case is how the EEA Joint Committee can be competent to extend the geographical scope of the EEA Agreement on an ad hoc basis. Such a competence is difficult to reconcile with the government’s view of Article 126 EEAA as a general limitation on the geographical reach of all decisions of the EEA Joint Committee which cannot be amended or disregarded unless the procedure set out in Article 118 EEAA is followed.

Another unresolved question, if one accepts the view of the Norwegian government, is how the European Commission can be considered competent under EU external relations law to bind the EU to ad hoc geographical extensions of the scope of EEA legal acts without the procedure set out in Article 118 EEAA being followed. Amending the Main Part of the EEA Agreement requires, e.g., the consent of the European Parliament, in accordance with Article 218(6) TFEU. If the Joint Committee is competent to circumvent Article 126 EEAA (as interpreted by Norway) whenever this is considered desirable, what is then left of Article 118 EEAA?

How does one find out if the geographical scope of a legal act has been extended?

Another problem with the Norwegian government’s approach is that there is no trace in any decision from the EEA Joint Committee of the EU side ever accepting Article 126 EEAA as a general limitation on the geographical scope of all decisions of the EEA Joint Committee, and therefore no trace of the EU side ever accepting an ad hoc extension of the scope of any given legal act either. The submission in the Saga Subsea case that expansions of the geographical scope of specific legal acts have been “agreed between the parties upon incorporation of the relevant acts into the EEA Agreement” is quite a stretch when there is no trace of any such agreement in the decisions of the Joint Committee. By way of example, the abovementioned Carbon Capture and Storage Directive was implemented with no adaptations as to its geographical reach. If Norway really got the EU side to acknowledge that this was an ad hoc extension of the scope of the directive, surely that should have been reflected in the Joint Committee’s decision?

The Norwegian government’s implicit suggestion that ad hoc expansions of the geographical scope of specific legal acts can be agreed in the EEA Joint Committee without any trace in the Committee’s decisions would, if accepted, make it exceedingly difficult to ascertain the geographical scope of specific legal acts. With respect to legal acts conferring rights and obligations on private individuals, how can this comply with the EEA law principle of legal certainty?

Admittedly, indications of the Norwegian view on the geographical applicability of specific legal acts can sometimes be found in Norwegian preparatory works, but that is insufficient in an EEA-law perspective. There is no reason why Norwegian preparatory works should be decisive for determining the geographical scope of EEA legal acts, and non-Norwegian parties cannot be expected to be familiar with such preparatory works. Moreover, Norwegian preparatory works do not reveal whether the EU shares the Norwegian view that a specific legal act has an extended geographical scope while another one does not.

And what happens if Norwegian preparatory works apply a different approach to that set out by the State in the written observations in the case of Saga Subsea, as the Ministry of trade, Industry and Fisheries appears to have done in Prop. 88 L (2024-2025) on the applicability of the Act on general application of collective agreements to domestic shipping and rights holders’ duty to ensure Norwegian pay on ships (section 5.3.2)?

“Decision no. 70/97 of the EEA Joint Committee on implementing Regulation [3577/92/EEC on maritime cabotage within Member States] makes no adaptations as regards the geographical scope of the Regulation. The Ministry therefore takes the view that the cabotage Regulation also applies outside Norwegian territorial waters when it comes to supply services (offshore cabotage).” (our translation and italicization)

In section 5.3.3 of the same preparatory work, the Ministry takes the view that another Regulation (Regulation 4055/86 on maritime cabotage between Member States and with third countries), is not applicable in the Norwegian exclusive economic zone and on the continental shelf, as it must be read in light of Article 126 of the EEA Agreement.

An additional complicating element is the instances where the Norwegian government claims to have voluntarily adjusted Norwegian law in line with corresponding EU law without there being an EEA law obligation to that effect. The most prominent example is the Norwegian Social Security Act § 2-4, which makes the Social Security Regulation applicable to workers within the personal scope of the EEA Agreement exploring or extracting oil, gas or other natural resources on the Norwegian continental shelf. The provision was introduced in 2001 following pressure from the EFTA Surveillance Authority, but the Norwegian government maintains that the provision is the result of a voluntary extension of the scope of the Social Security Regulation.

What if the Norwegian government wins approval for its approach?

The prospects for the Norwegian government winning approval for its approach to Article 126 EEAA appear slim and in our opinion rightly so. If this were nevertheless to happen, the victory could turn out to be Pyrrhic. Claims from the Norwegian government that a legal act implemented into the EEA Agreement has been given an extended geographical scope by the EEA Joint Committee could then be met with objections from lawyers in the EU based on the Norwegian government’s own arguments based on Article 126. Furthermore, Norwegian wishes to make new legal acts applicable in the exclusive economic zone and/or on the continental shelf could be met with a formalistic answer from the Commission that this requires the procedure in Article 118 EEAA to be followed.

Moreover, the coordination of social security rights on the Norwegian continental shelf would become quite complicated if competent authorities in the EU were to start taking the Norwegian government at its word and deem the continental shelf to be excluded.  

Note: a shorter version of this text was published in Norwegian on www.rett24.no (9 September 2025)

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How to cite

Fredriksen, Halvard Haukeland; Heggen, Tollef Otterdal (2025): The Norwegian government’s view on the EEA Agreement’s scope of application – at risk of a Pyrrhic victory in the EFTA Court? Blog. EFTA-Studies.org.