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PR(98)25: The EFTA Surveillance Authority has opened infringement procedures against Iceland in the field of public procurement

3.10.2002

The EFTA Surveillance Authority has on 16 December 1998, in accordance with Article 31 of the Surveillance and Court Agreement, sent a letter of formal notice to Iceland for failure to apply the EEA public procurement procedures to a contract award procedure relating to the procurement of a new coast guard vessel.

 The Government of Iceland decided in October not to apply the EEA public procurement procedures and to build the new coast guard vessel in Iceland. The Government relies on EEA provisions which provide for an exemption from the EEA Agreement or a derogation from the public procurement rules in connection with essential or basic security interests of the State.  It considers the decision justified in the light of the tasks of the Coast Guard, which make it necessary to keep the structure and properties of the coast guard vessel fully confidential due to security interests of the State.

The provisions which the Government of Iceland has relied upon are to be interpreted restrictively, in line with several rulings of the European Court of Justice.  The EFTA Surveillance Authority has concluded, based on the information it has received, that the Government of Iceland has not justified its decision. Consequently, the EEA public procurement procedures must be applied to the envisaged procurement of the coast guard vessel.

The Government of Iceland has been invited to submit its observations to the content of the letter of formal notice within two months after receipt, and has been requested not to take any measures that could infringe the EEA Agreement.

For further information, please contact Lilja Vidarsdottir on telephone (32 2) 286 18 70 or Tore N. Thomassen on telephone (32 2) 286 18 77.




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