Communication: Liechtenstein sectoral adaptations – review

Protocol 15 of the Agreement on the European Economic Area (EEA Agreement) on transitional periods on the free movement of persons stated that Liechtenstein could maintain in force quantitative limitations for new residents until 1 January 1998 with regard to nationals of EC Member States and other EFTA States.

Decision No 1/95 of 10 March 1995 of the EEA Council on the entry into force of the Agreement on the European Economic Area for the Principality of Liechtenstein included a special Declaration by the EEA Council on the free movement of persons. This Joint Declaration states that a review is to be carried out at the end of a transitional period provided for in Protocol 15 of the EEA Agreement, taking into account Liechtenstein’s ‘specific geographic situation’.

The Declaration provides some guidance on what this specific situation implies: ‘The EEA Council recognises that Liechtenstein has a very small inhabitable area of rural character with an unusually high percentage of non-national residents and employees. Moreover, it acknowledges the vital interest of Liechtenstein to maintain its own national identity.’

After the expiry of Protocol 15 of the EEA Agreement on the free movement of persons, Liechtenstein and the European Union came to a specific arrangement in 1999. This arrangement, known as the ‘Sectoral Adaptations’, was initially laid down in the Decision of the Joint Committee 191/1999 and then incorporated into Annexes V (Free movement of workers) and VIII (Right of establishment) to the EEA Agreement.

Under the Sectoral Adaptations, the free movement of persons applies to Liechtenstein. However, EEA citizens wishing to take up residence in Liechtenstein have to obtain a residence permit. The Adaptations establish a minimum number of permits to be issued to EEA citizens every year, constituting a yearly net increase in the residing EEA population of 1.75% (for economically active people) and 0.5% (for economically inactive people). Obtaining residence permits, however, is not a prerequisite to work in Liechtenstein.

In the course of the 2004 enlargement, these arrangements, first agreed for a term of five years, were continued subject to the requirement that they should be reviewed every five years. Following the first review in 2009, a second review was launched in 2014. This Communication is part of that review. Its focus is on whether Liechtenstein should be allowed to continue applying these restrictions to the number of residence permits it grants.