The Customs Agreement between Andorra and the European Union: origins and foundations of an essential relationship

Reading time: 8 minutes

🏁 Introduction

Before 1990, Andorra maintained a unique and fragmented trade relationship with its neighbours: trade with France and Spain depended on bilateral agreements and occasional tariff exemptions, but no stable framework governed the Principality’s external trade.

With no maritime access or international airport, the country relied entirely on road transport through France and, above all, Spain. In this context, the absence of a recognised customs regime limited Andorra’s economic development, legal certainty, and integration into European trade flows.

Everything changed on 28 June 1990, when Andorra and the European Economic Community (now the European Union) signed the Customs Agreement, which entered into force on 1 January 1991. This founding text remains the legal cornerstone of Andorra–EU economic relations.

➤ To understand how this relationship has evolved, you can read The Andorra–EU Association Agreement, which explains its current scope and implications.

📖 Background and need for the agreement

For decades, Andorra operated under a virtually autarkic customs regime. Goods from France or Spain were subject to local fiscal arrangements and a domestic indirect tax system, while imports from third countries often passed through France or Spain, involving complex procedures.

This model led to tax duplications, logistical delays and significant legal risks, especially for companies trading with European partners. The need for a harmonised framework was clear: without a common customs regime with Europe, Andorra’s economic growth faced structural limits.

➤ To see how this agreement fits within the country’s fiscal framework, read Taxation in Andorra: advantages and obligations for companies and residents.

📣 The 1990 Agreement: essential content

The Customs Agreement between the EEC and the Principality of Andorra established a partial customs union, limited to industrial goods (Chapters 25–97 of the Harmonised System). Agricultural and agri-food products (Chapters 1–24) were excluded from the main regime, although they benefit from some preferences.

The pillars of the agreement are:

• Elimination of customs duties and quantitative restrictions on industrial goods between Andorra and the EU.
• Application of the EU Customs Code and procedures to imports and exports.
• Creation of a Joint Andorra–EEC Committee to oversee implementation and resolve disputes.
• Special traveller regime setting tax exemptions for goods such as tobacco, alcohol and perfumes.
• Administrative cooperation and regulatory alignment ensuring consistent customs control.

This framework allows Andorran products to circulate freely within the European market and enables European goods to enter Andorra without tariff barriers, consolidating a single market for industrial goods.

🚛 Economic impact and national benefits

The signing of the agreement profoundly transformed Andorra’s economy. It integrated the country into the European logistics network, allowing imports and exports under the same conditions as EU Member States for industrial goods.

It also removed discretionary practices and provided legal certainty for Andorran businesses, enabling them to operate under predictable, stable rules. This fostered light industry, distribution and, later, the retail and tourism development that define Andorra today.

Moreover, as a landlocked country without a port or airport, road connectivity with the EU became vital: without this agreement, every truck crossing the border would have been treated as a full import, with all the associated costs and procedures.

➤ You can explore this economic opening further in Foreign investment in Andorra: origins and current regulation, which analyses how the country has consolidated its model of attracting international capital.

⚖️ Later evolution and regulatory adaptation

The 1990 agreement remains in force in its essence, though it has been expanded and updated by several international instruments.

The most significant is the 2011 Protocol, introducing a Title IIA on customs security measures, aligning Andorra with EU legislation on risk control, advance declarations and authorised economic operators.

This protocol strengthens technical cooperation between customs authorities and improves the traceability and safety of goods circulating through or towards the European Union.

🌍 A step toward European integration

The Customs Agreement was, in fact, the first formal step in Andorra’s integration into the European Economic Area and laid the foundation for its modern relationship with the EU.

Its philosophy — ensuring the free movement of goods without compromising fiscal or institutional sovereignty — anticipates the balanced model that also inspires the Andorra–EU Association Agreement, now in the process of being signed.

➤ You can also read Andorra’s international evolution: from tradition to a global presence, which explains how the Principality strengthened its international profile while preserving its sovereignty.

🧩 Conclusion

The 1990 Customs Agreement is not just a historical text: it is the instrument that enabled Andorra to open up to the world without losing its legal identity. With no sea, no airport and only two land borders, the Principality transformed its geographic constraints into an economic bridge to Europe.

More than thirty years later, this agreement remains the foundation of a stable, prosperous and internationally recognised trade relationship.

📞 If you wish to understand how this framework might affect your business or investments in Andorra, you can request a personalised meeting below or contact us via the form.

Last updated: October 2025