The Council of the European Union adopted a decision on 3 May 2026 authorising the signing of a new association agreement with Andorra and San Marino, integrating the two microstates into the EU's single market while excluding EU citizenship and immigration policy. The agreement, now set for signature and ratification, will affect over 80,000 residents and EU businesses trading with the principalities.
The decision was taken under the Portuguese Presidency and constitutes a formal Council decision authorising signature of the agreement, which will be legally binding under international law once ratified by all parties.
Key policy orientations and trade-offs
The agreement incorporates Directive 2004/38/EC on free movement of persons, granting Andorran and San Marinese citizens the right to move and reside freely within the EU. However, it explicitly states that the agreement does not confer EU citizenship or extend EU immigration policy to the two states. This represents a compromise between deeper integration and preserving national sovereignty over citizenship.
In the area of tobacco control, Andorra commits to aligning with EU public health and anti-fraud standards, a sensitive issue given the principality's historical role as a tobacco producer and exporter. The trade-off is between Andorra's economic interests in tobacco and the EU's public health objectives.
Impact on stakeholders
- EU businesses and traders: They will benefit from reduced barriers to trade and investment with Andorra and San Marino, as the agreement harmonises rules on goods, services, and capital. However, they may face new compliance costs in sectors like tobacco, where stricter EU rules will apply. - Andorran and San Marinese citizens: They gain the right to live, work, and study anywhere in the EU, a major expansion of personal freedoms. However, they do not acquire EU citizenship or the right to vote in European Parliament elections. - EU member states: They retain control over their immigration policies vis-à-vis third-country nationals, as the agreement does not oblige them to extend free movement to non-EU citizens residing in Andorra or San Marino. - Tobacco producers in Andorra: They face significant regulatory costs to comply with EU public health and anti-fraud standards, potentially reducing their competitiveness in the EU market.
Expected institutional follow-up
The Council's decision authorises the signature of the agreement. Next steps include the formal signing ceremony, followed by ratification by the European Parliament and all EU member states, as well as by Andorra and San Marino. The agreement is expected to enter into force after all parties have completed their ratification procedures.
← Atlas › News › Foreign affairs