On 14 June 1985, the governments of Germany, France, Belgium, the Netherlands and Luxembourg signed an agreement in Schengen (a city in Luxembourg) called the Schengen Agreement, aimed at gradual lifting of border controls along their common border.

The Schengen Agreement was first introduced as a declaration of intent, defining the objectives that were determined by the signatory governments in order to establish the regime of free movement. Several years later, on 19 June 1990, the declaration of intent culminated with the creation of complementary regulations known as the Convention Implementing the Schengen Agreement of 1985, which was signed by the original signatory Member States of the Schengen Agreement. This document included the establishment of an area of free movement of persons, capital, goods and services.

The articles of the Convention include a set of important principles among which the following should be highlighted:

• introduction of free movement of persons, both citizens of the European Union and non-citizens, within the Schengen area;
• establishment of a new term "external border", with the emphasis on the conditions required for allowing entry to citizens of third countries;
• definition of the Schengen common policy on visas and introduction of a standardized visa which is valid throughout the entire territory;
• as regards refugees, definition of a series of procedural rules and several criteria which must be used when determining the country responsible for processing a request for asylum whenever the asylum seeker has or has had connections with more than one Member State;
• as regards police cooperation, the Convention makes use of a whole range of special mechanisms such as discreet cross-border surveillance and pursuit on the territories of other Member States;
• establishment of a computer system which is common to all Member States and called the "Schengen Information System (SIS)" and
• finally, the establishment of a joint supervisory body, responsible for ensuring the protection of persons in relation to automatic processing of personal data.