WORLD TRADE
ORGANIZATIONWT/REG1/6
27 September 2002
(02-5196)
Committee on Regional Trade Agreements Original:  English/
French/
Spanish
EUROPE AGREEMENT BETWEEN
THE EUROPEAN COMMUNITIES AND BULGARIA
The following text reproduces the Europe Agreement between the European Communities
and Bulgaria.1
_______________
EUROPE AGREEMENT ESTABLISHING AN ASSOCIATION BETWEEN
THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES,
OF THE ONE PART,
AND THE REPUBLIC OF BULGARIA, OF THE OTHER PART
The Kingdom of Belgium, The Kingdom of Denm ark, The Federal Republic of Germany, The
Hellenic Republic, The Kingdom of Spain, The French Republic, Ireland, The Italian Republic, The
Grand Duchy of Luxembourg, The Kingdom of The Netherlands, The Portuguese Republic, The
United Kingdom of Great Britain and Northern Ireland,
Contracting Parties to the Treaty establishing the European Economic Community , the Treaty
establishing the European Coal and Steel Community , and the Treaty establishing the European
Atomic Energy Community ,
hereinafter referred to as 'Member States', and
The European Economic Community , the European Atomic Energy Community  and the
European Coal and Steel Community , hereinafter referred to as 'the Community',
of the one part, and
The Republic of Bulgaria , hereinafter referred to as 'Bulgaria',
of the other part,Considering  the importance of the traditional links existing between the Community, its
Member States and Bulgaria and the common values that they share,
                                                     
1  The Annexes and Protocols thereto have been submitted to the Secretariat for consultation by
interested Members (Office 1174).  The text of the Agreement together with its Annexes and Protocols is alsoavailable on the Europa website:http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=21994A12
31(24)&model=guichettWT/REG1/6
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Recognizing  that the Community and Bulgaria wish to strengthen these links and to establish
close and long lasting relations, based on mutual interest and reciprocity, which would allow Bulgaria
to take part in the process of European integration, thus strengthening and widening the relations
established in the past notably by the Agreement on Trade and Commercial and EconomicCooperation, signed on 8 May 1990,
Considering  the opportunities for a relationship of a new quality offered by the emergence of
a new democracy in Bulgaria,
Considering  the commitment of the Community and its Member States and of Bulgaria to
strengthening the political and economic freedoms which constitute the very basis of the association,
Recognizing  the fundamental character of the democratic changes in Bulgaria, taking place in
a peaceful manner and aimed at building a new political and economic system, based on the rule of
law and human rights, political pluralism, and a pluralist multi-party system involving free and
democratic elections and the creation of the legislative and economic conditions, necessary for thedevelopment of a market economy, as well as the need to continue and complete that process with the
assistance of the Community,
Considering  the firm commitment of the Community and its Member States and of Bulgaria
to the rule of law and human rights, including those of persons belonging to minorities, and to the fullimplementation of all other principles and provisions contained in the Final Act of the Conference on
Security and Cooperation in Europe (CSCE), the concluding documents of Vienna and Madrid, the
Charter of Paris for a new Europe, as well as to the principles and provisions of the European Energy
Charter,
Willing  to promote improved contacts among their citizens as well as the free flow of
information and ideas, as agreed by the Parties in the framework of the CSCE,
Conscious  of the importance of this Agreement to establishing and enhancing in Europe a
system of stability based on cooperation, with  the Community as one of the cornerstones,
Believing  that a link should be made between full implementation of association, on the one
hand, and continuation of the actual accomplishment of Bulgaria's political, economic and legal
reforms on the other hand, as well as the introduction of the factors necessary for cooperation and the
actual rapprochement between the Parties' systems, notably in the light of the conclusions of the
CSCE Bonn Conference,
Desirous  of establishing regular political dialogue on bilateral and international issues of
mutual interest to enhance and complete the association,
Taking account  of the Community's willingness to provide decisive support for the
completion of the transition towards a market economy in Bulgaria and to help Bulgaria cope with theeconomic and social consequences of structural readjustment,
Taking account  furthermore of the Community's willingness to set up instruments of
cooperation and economic, technical and financial assistance on a global and multiannual basis,
Considering  the commitment of the Community and Bulgaria to free trade, and in particular
in respect of the General Agreement on Tariffs and Trade principles,WT/REG1/6
Page 3
Bearing in mind the economic and social disparities between the Community and Bulgaria
and thus recognizing that the objectives of this association should be reached through appropriate
provisions of this Agreement,
Convinced  that this Agreement will create a new climate for their economic relations and in
particular for the development of trade and investment, instruments which are indispensable for
economic restructuring and technological modernization of the Bulgarian economy,
Desirous  of establishing cultural cooperation and developing exchanges of information,
Recognizing  the fact that Bulgaria's ultimate objective is to become a member of the
Community, and that this association, in the view of the Parties, will help Bulgaria to achieve thisobjective,
Have decided  to conclude this Agreement and to this end have designated as their
plenipotentiaries,
THE KINGDOM OF BELGIUM:
Robert URBAIN,
Minister for Foreign Trade and European Affairs;
THE KINGDOM OF DENMARK:
Jørgen ØSTRØM MØLLER,
State Secretary for Foreign Affairs;
THE FEDERAL REPUBLIC OF GERMANY:
Klaus KINKEL,Federal Minister for Foreign Affairs;
THE HELLENIC REPUBLIC:
Michel PAPACONSTANTINOU,
Minister for Foreign Affairs;
THE KINGDOM OF SPAIN:
Javier SOLANA,
Minister for Foreign Affairs;
THE FRENCH REPUBLIC:
Elisabeth GUIGOU,Minister responsible for European Affairs;
IRELAND:
Dick SPRING,
Minister for Foreign Affairs;
THE ITALIAN REPUBLIC:
Valdo SPINI,
State Secretary for Foreign Affairs;
THE GRAND DUCHY OF LUXEMBOURG:
Jacques POOS,
Minister for Foreign Affairs;WT/REG1/6
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THE KINGDOM OF THE NETHERLANDS:
P. KOOIJMANS,
Minister for Foreign Affairs;
THE PORTUGUESE REPUBLIC:
J. M. DURAO BARROSO,
Minister for Foreign Affairs;
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND:
Douglas HURD,
Secretary of State for Foreign and Commonwealth Affairs;
THE EUROPEAN ECONOMIC COMMUNITY, THE EUROPEAN ATOMIC ENERGY
COMMUNITY AND THE EUROPEAN COAL AND STEEL COMMUNITY:
Niels HELVEG PETERSEN,
Minister for Foreign Affairs of the Kingdom of De nmark, President-in-Office of the Council of the
European Communities;
Sir Leon BRITTAN,
Member of the Commission of the European Communities;
Hans VAN DEN BROEK,
Member of the Commission of the European Communities;
THE REPUBLIC OF BULGARIA:
Luben BEROV,Prime Minister and Minister for Foreign Affairs;
Who, having exchanged their full powers, formed in good and due form,
Have agreed as follows :
Article 1
1. An association is hereby established between the Community and its Member States on the
one part, and Bulgaria on the other part.
2. The objectives of this association are:
- to provide an appropriate framework for the political dialogue between the Parties
allowing the development of close political relations,
- to establish gradually a free trade area between the Community and Bulgaria covering
substantially all trade between them,
- to promote the expansion of trade and the harmonious economic relations between
the Parties and so to foster the dynamic economic development and prosperity in
Bulgaria,
- to provide a basis for economic, financial, cultural and social cooperation, as well as
for the Community's assistance to Bulgaria,WT/REG1/6
Page 5
- to support Bulgaria's efforts to develop its economy and to complete the transition
into a market economy,
- to provide an appropriate framework for the gradual integration of Bulgaria into the
Community. To this end new rules, policies and practices will be established incompliance with market mechanisms, and Bulgaria shall work towards fulfilling the
necessary requirements in this respect,
- to set up institutions suitable to make the association effective.
TITLE I
POLITICAL DIALOGUE
Article 2
A regular political dialogue shall be established between the Parties which they intend to
develop and intensify. It shall accompany and consolidate the rapprochement between the Community
and Bulgaria, support the political and economic changes underway in that country and contribute to
the establishment of new links of solidarity and new forms of cooperation. The political dialogue and
cooperation, based on shared values and aspirations:
- will facilitate Bulgaria's full integration into the community of democratic nations and
progressive rapprochement with the Community. The economic rapprochement
provided for in this Agreement will lead to greater political convergence,
- will bring about better mutual understanding and an increasing convergence of
positions on international issues, and in particular on those matters likely to have
substantial effects on one or the other Party,
- will enable each Party to consider the position and interests of the other in their
respective decision-making process,
- will contribute to the rapprochement of the Parties' positions on security issues and
will enhance security and stability in the whole of Europe.
Article 3
1. Meetings as appropriate shall take place between the President of the European Council and
the President of the Commission of the European Communities on one side and the President of the
Republic of Bulgaria on the other.
2. At ministerial level, political dialogue shall take place within the Association Council. This
shall have general responsibility for all matters which the Parties might wish to put to it.
Article 4
Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in
particular in the following forms:WT/REG1/6
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- meetings at senior official level (political directors) between officials of Bulgaria on
the one hand, and the Presidency of the Council of the European Communities and
the Commission of the European Communities, on the other,
- taking full advantage of all diplomatic channels between the Parties, including
appropriate contacts in the bilateral as well as multilateral field, such as the UN,
CSCE meetings and other multilateral fora,
- including Bulgaria in the group of countries receiving regular information on the
issues dealt with by the European Political Cooperation as well as exchanging
information with a view to achieving the objectives set out in Article 2,
- any other means which would contribute to consolidating, developing and stepping
up this dialogue.
Article 5
Political dialogue at parliamentary level shall take place within the framework of the
Parliamentary Association Committee.
TITLE II
GENERAL PRINCIPLES
Article 6
Respect for the democratic principles and human rights established by the Helsinki Final Act
and the Charter of Paris for a New Europe inspires the domestic and external policies of the Parties
and constitutes an essential element of the present association.
Article 7
1. The association includes a transitional period of a maximum duration of 10 years divided into
two successive stages, each in principle lasting five years. The first stage shall begin when theAgreement enters into force.
2. The Association Council, bearing in mind that the principles of the market economy are
essential to the present association, shall proceed  regularly to examine the application of the
Agreement and Bulgaria's accomplishment in the process leading to a market economy system on thebasis of the principles established in the preamble.
3. During the course of the 12 months preceding the expiration of the first stage, the Association
Council shall meet to decide the transition to the second stage as well as on any possible changes to be
brought about as regards measures concerning the implementation of the dispositions governing thesecond stage. In doing this, it will take into  account the results of the examination mentioned in
paragraph 2.
4. The two states envisaged under 1, 2 and 3 do not apply to Title III.WT/REG1/6
Page 7
TITLE III
FREE MOVEMENT OF GOODS
Article 8
1. The Community and Bulgaria shall gradually establish a free trade area in a transitional
period lasting a maximum of 10 years starting from the entry into force of this Agreement, in
accordance with the provisions of this Agreement and in conformity with those of the General
Agreement on Tariffs and Trade (GATT).
2. The combined nomenclature of goods shall be applied to the classification of goods for
imports into the Community. The Bulgarian Customs Tariff shall be applied to the classification of
goods for imports into Bulgaria.
3. For each product, the basic duty to which the successive reductions set out in this Agreement
are to be applied shall be that actually applied erga omnes on the day preceding the entry into force ofthe Agreement.
4. If, after the entry into force of the Agreement, any tariff reduction is applied on an erga omnes
basis, in particular, reductions resulting from the tariff agreement concluded as a result of the GATT
Uruguay Round, such reduced duties shall replace the basic duties referred to in paragraph 3 as fromthat date when such reductions are applied.
5. The Community and Bulgaria shall communicate to each other their respective basic duties.
CHAPTER I
Industrial products
Article 9
1. The provisions of this chapter shall apply to  products originating in the Community and in
Bulgaria listed in Chapters 25 to 97 of the combined nomenclature and of the Bulgarian Customs
Tariff with the exception of the products listed in Annex I.
2. The provisions of Articles 10 to 14 included do not apply to products mentioned in
Articles 16 and 17.
Article 10
1. Customs duties on imports applicable in the Community to products originating in Bulgaria
other than those listed in Annexes IIa, IIb and III shall be abolished on the entry into force of theAgreement.
2. Customs duties on imports applicable in the Community to products originating in Bulgaria
which are listed in Annex IIa shall be progressively abolished in accordance with the following
timetable:
- on the date of entry into force of the Agreement, each duty shall be reduced to 50 %
of the basic duty,WT/REG1/6
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- one year after the date of entry into for ce of the Agreement, the remaining duties shall
be eliminated.
Customs duties on imports applicable in the Community to products originating in Bulgaria
listed in Annex IIb shall be progressively reduced, from the date of entry into force of the Agreement,by annual reductions of 20 % of the basic duty so as to arrive at total abolition by the end of the fourth
year after the date of entry into force of the Agreement.
3. The products of Bulgarian origin listed in Annex III shall benefit from a suspension of
customs duties on imports within the limits of annual Community tariff quotas or ceilings increasing
progressively in accordance with the conditions defined in that Annex so as to arrive at a complete
abolition of customs duties on imports of the products concerned at the end of the fifth year at thelatest.
At the same time, the customs duties on imports to be applied to import quantities when the
quotas have been exhausted or when the levying of customs duties has been reintroduced with respect
to products covered by a tariff ceiling, shall be progressively dismantled from the entry into force ofthe Agreement by annual reductions of 15 % of the basic duty. By the end of the fifth year, remaining
duties shall be abolished.
4. Quantitative restrictions on imports to the Community and measures having an equivalent
effect shall be abolished on the date of entry into force of the Agreement with regard to the productsoriginating in Bulgaria.
Article 11
1. Customs duties on imports applicable in Bulgaria to products originating in the Community
which are listed in Annex IV shall be abolished on the date of entry into force of the Agreement.
2. Customs duties on imports applicable in Bulgaria to products originating in the Community
which are listed in Annex V shall be progressively reduced in accordance with the following
timetable:
- one year after the entry into force of th e Agreement, each duty shall be reduced to
80 % of the basic duty,
- three years after the entry into force of the Agreement, each duty shall be reduced to
40 % of the basic duty,
- five years after the entry into force of the Agreement, the remaining duties shall be
eliminated.
3. Customs duties on imports applicable in Bulgaria to products originating in the Community
which are listed in Annex VI shall be progressively reduced in accordance with the followingtimetable:
- three years after the entry into force of the Agreement, each duty shall be reduced to
80 % of the basic duty,
- five years after the entry into force of the Agreement, each duty shall be reduced to
60 % of the basic duty,WT/REG1/6
Page 9
- six years after the entry into force of the Agreement, each duty shall be reduced to
45 % of the basic duty,
- seven years after the entry into force of th e Agreement, each duty shall be reduced to
30 % of the basic duty,
- eight years after the entry into force of the Agreement each duty shall be reduced to
15 % of the basic duty,
- nine years after the entry into force of the Agreement, the remaining duties shall be
eliminated.
4. Quantitative restrictions on imports into Bulgaria of products originating in the Community
and measures having an equivalent effect shall be abolished upon entry into force of the Agreement,
except for those listed in Annex VII which shall be abolished in accordance with the timetable
provided for in that Annex.
Article 12
The provisions concerning the abolition of customs duties on imports shall also apply to
customs duties of a fiscal nature.
Article 13
1. The Community shall abolish in its imports from Bulgaria any charges having an effect
equivalent to customs duties on imports upon the entry into force of the Agreement.
2. Bulgaria shall abolish in its imports from the Community any charges having an equivalent
effect to customs duties on imports upon entry into force of the Agreement, except for those listed in
Annex VIII, which shall be abolished in accordan ce with the timetable provided in that Annex.
Article 14
1. The Community and Bulgaria shall progressively abolish between them at the latest by the
end of the fifth year after entry into force of the Agreement any customs duties on exports and charges
having equivalent effect.
2. Quantitative restrictions on exports to Bulgaria and any measures having equivalent effect
shall be abolished by the Community on the entry into force of the Agreement.
3. Quantitative restrictions on exports to the Community and any measures having equivalent
effect shall be abolished by Bulgaria upon entry into force of the Agreement, with the exception of
those listed in Annex IX, which shall be abolished at the latest by the end of the fifth year after the
entry into force of the Agreement.
Article 15
Each Party declares its readiness to reduce its customs duties in trade with the other Party
more rapidly than is provided for in Articles 10 and 11 of its general economic situation and thesituation of the economic sector concerned so permit.
The Association Council may make recommendations to this effect.WT/REG1/6
Page 10
Article 16
Protocol 1 lays down the arrangements applicable to the textile products referred to therein.
Article 17
Protocol 2 lays down the arrangements applicable to products covered by the Treaty
establishing the European Coal and Steel Community.
Article 18
1. The provisions of this chapter do not preclude the retention by the Community of an
agricultural component in the duties applicable to  products listed in Annex X in respect of products
originating in Bulgaria.
2. The provisions of this chapter do not preclude the introduction of an agricultural component
by Bulgaria in the duties applicable to the products listed in Annex X in respect of productsoriginating in the Community.
CHAPTER II
Agriculture
Article 19
1. The provisions of this chapter shall apply to agricultural products originating in the
Community and in Bulgaria.
2. The term 'agricultural products' means the products listed in Chapters 1 to 24 of the combined
nomenclature and of the Bulgarian Customs Tariff a nd the products listed in Annex I, but excluding
fishery products as defined by Regulation (EEC ) No 3687/91 on the common organization of the
market in fishery products.
Article 20
Protocol 3 lays down the trade arrangements for processed agricultural products which are
listed in such protocol.
Article 21
1. The Community shall abolish at the date of entry into force of the Agreement the quantitative
restrictions on imports of agricultural products originating in Bulgaria maintained by virtue of Council
Regulation (EEC) No 3420/83 in the form existing on the date of signature hereof.
2. The agricultural products originating in Bulgaria listed in Annex XI shall benefit, upon the
date of entry into force of the Agreement, from the reduction of customs duties and levies within the
limits of Community quotas and upon the conditions provided in the same Annex.
3. Agricultural products originating in the Community listed in Annex XIIa shall be imported
into Bulgaria free of quantitative restrictions.WT/REG1/6
Page 11
Agricultural products originating in the Commun ity listed in Annex XIIb shall be subject to
the quantitative restrictions set out in that Annex.
4. The Community and Bulgaria shall grant each other the concessions referred to in Annexes
XIII and XIV, on a harmonious and reciprocal basis, in accordance with the conditions laid downtherein.
5. Taking account of the volume of trade in agricultural products between them, of their
particular sensitivity, of the rules of the Common Agricultural Policy of the Community, of the rules
of the agricultural policy in Bulgaria, of the role of agriculture in Bulgaria's economy, and of the
consequences of the multilateral trade negotiations under the General Agreement on Tariffs and
Trade, the Community and Bulgaria shall examine in the Association Council, product by product andon an orderly and reciprocal basis, the possibilities of granting each other further concessions.
Article 22
Notwithstanding other provisions of this Agreement, and in particular Article 31, if, given the
particular sensitivity of the agricultural markets, imports of products originating in one Party, which
are the subject of concessions granted in Article 21, cause serious disturbance to the markets in the
other Party, both Parties shall enter into consulta tions immediately to find an appropriate solution.
Pending such a solution, the Party concerned may take the measures it deems necessary.
CHAPTER III
Fisheries
Article 23
The provisions of this chapter shall apply to  fishery products originating in the Community
and in Bulgaria, which are covered by Regulation (EEC) No 3687/91.
Article 24
The provisions of Article 21 (5) shall apply mutatis mutandis to fishery products.
CHAPTER IV
Common provisions
Article 25
The provisions of this chapter shall apply to trade in all products, except where otherwise
provided herein or in Protocols 1, 2 or 3.
Article 26
1. No new customs duties on imports or exports or  charges having equivalent effect shall be
introduced, nor shall those already applied be increased, in the trade between the Community and
Bulgaria from the date of entry into force of the Agreement.WT/REG1/6
Page 12
2. No new quantitative restrictions on imports or exports or measure having equivalent effect
shall be introduced, nor shall those existing be made more restrictive, in the trade between the
Community and Bulgaria from the date of entry into force of the Agreement.
3. Without prejudice to the concessions granted under Article 21, the provisions of paragraphs 1
and 2 of this Article shall not restrict in any way the pursuance of the respective agricultural policies
of Bulgaria and the Community or the taking of any measures under such policies.
Article 27
1. The two Parties shall refrain from any measure or practice of an internal fiscal nature
establishing, whether directly or indirectly, discrimination between the products of one Party and likeproducts originating in the territory of the other Party.
2. Products exported to the territory of one of the two Parties may not benefit from repayment of
internal taxation in excess of the amount of direct or indirect taxation imposed on them.
Article 28
1. This Agreement shall not preclude the maintenance or establishment of customs unions, free
trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements
provided for in this Agreement.
2. Consultations between the Parties shall take place within the Association Council concerning
agreements establishing such customs unions or free trade areas and, where requested, on other major
issues related to their respective trade policies with third countries. In particular in the event of a third
country acceding to the Community, such consultations shall take place so as to ensure that account
can be taken of the mutual interests of the Community and Bulgaria stated in this Agreement.
Article 29
Exceptional measures of limited duration which derogate from the provisions of Articles 11
and 26 (1) may be taken by Bulgaria in the form of increased customs duties.
These measures may only concern infant industries, or certain sectors undergoing
restructuring or facing serious difficulties, particularly where these difficulties produce important
social problems.
Customs duties on imports applicable in Bulgaria to products originating in the Community
introduced by these measures may not exceed 25 % ad valorem and shall maintain an element of
preference for products originating in the Community. The total value of imports of the products
which are subject to these measures may not exceed 15 % of total imports from the Community of
industrial products as defined in Chapter I, during the last year for which statistics are available.
These measures shall be applied for a period not exceeding five years, unless a longer
duration is authorized by the Association Council. They shall cease to apply at the latest at the
expiration of the transitional period.
No such measures can be introduced in respect of a product if more than three years have
elapsed since the elimination of all duties and quantitative restrictions or charges or measures having
an equivalent effect concerning that product.WT/REG1/6
Page 13
Bulgaria shall inform the Association Council of any exceptional measures it intends to take
and, at the request of the Community, consultations shall be held in the Association Council on such
measures and the sectors to which they apply before they are applied. When taking such measures,
Bulgaria shall provide the Association Council with  a schedule for the elimination of the customs
duties introduced under this Article. This schedule shall provide for a phasing out of these dutiesstarting at the latest two years after their introduction at equal annual rates. The Association Council
may decide on a different schedule.
Article 30
If one of the Parties finds that dumping is taking place in trade with the other Party within the
meaning of Article VI of the General Agreement on Tariffs and Trade, it may take appropriatemeasures against this practice in accordance with the Agreement relating to the application of
Article VI of the General Agreement on Tariffs and Trade, with related internal legislation and with
the conditions and procedures laid down in Article 34.
Article 31
Where any product is being imported in such increased quantities and under such conditions
as to cause, or threaten to cause:
- serious injury to domestic producers of like or directly competitive products in the
territory of one of the Parties, or
- serious disturbances in any sector of the economy or difficulties which could bring
about serious deterioration in the economic situation of a region,
the Community or Bulgaria, whichever is concerned, may take appropriate measures under the
conditions and in accordance with the procedures laid down in Article 34.
Article 32
Where compliance with the provisions of Articles 14 and 26 leads to:
(i) re-export towards a third country against which the exporting Party maintains, for the
product concerned, quantitative export restrictions, export duties or measures having
equivalent effect;
or(ii) a serious shortage, or threat thereof, of a product essential to the exporting Party,
and where the situations above referred to give rise, or are likely to give rise, to major difficulties for
the exporting Party, that Party may take appropriate measures under the conditions and in accordancewith the procedures laid down in Article 34. The measures shall be non-discriminatory and be
eliminated when conditions no longer justify their maintenance.
Article 33
The Member States and Bulgaria shall progressively adjust any State monopolies of a
commercial character so as to ensure that, by the end of the fifth year following the entry into force of
this Agreement, no discrimination regarding the conditions under which goods are procured andWT/REG1/6
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marketed exists between nationals of the Member States and of Bulgaria. The Association Council
will be informed of the measures adopted to implement this objective.
Article 34
1. In the event of the Community or Bulgaria subjecting imports of products liable to give rise to
the difficulties referred to in Article 31 to an administrative procedure having as its purpose the rapid
provision of information on the trend of trade flows, it shall inform the other Party.
2. In the cases specified in Articles 30, 31 and 32, before taking the measures provided for
therein or, in cases to which paragraph 3 (d) applies, as soon as possible, the Community or Bulgaria,
as the case may be, shall supply the Association C ouncil with all relevant information, with a view to
seeking a solution acceptable to the two Parties.
In the selection of measures, priority must be given to those which least disturb the
functioning of this Agreement.
The safeguard measures shall be notified imme diately to the Association Council and shall be
the subject of periodic consultations within that body, particularly with a view to establishing a
timetable for their abolitions as soon as circumstances permit.
3. For the implementation of paragraph 2, the following provisions shall apply:
(a) As regards Article 31, the difficulties arising from the situation referred to in that
Article shall be referred for examination to the Association Council, which may take
any decision needed to put an end to such difficulties.
If the Association Council or the exporting Party has not taken a decision putting an
end to the difficulties or no other satisfactory solution has been reached within
30 days of the matter being referred, the importing Party may adopt the appropriate
measures to remedy the problem. These measures must not exceed the scope of what
is necessary to remedy the difficulties which have arisen.
(b) As regards Article 30, the Association Council shall be informed of the dumping case
as soon as the authorities of the importing Party have initiated an investigation. When
no end has been put to the dumping or no other satisfactory solution has been reached
within 30 days of the matter being referred  to the Association Council, the importing
Party may adopt the appropriate measures.
(c) As regards Article 32, the difficulties ar ising from the situations  referred to in that
Article shall be referred for examination to the Association Council.
The Association Council may take any d ecision needed to put an end to the
difficulties. If it has not taken such a decision within 30 days of the matter beingreferred to it, the exporting Party may apply appropriate measures on the exportation
of the product concerned.
(d) Where exceptional circumstances requirin g immediate action make prior information
or examination, as the case may be, impossible, the Community or Bulgaria,whichever is concerned, may, in the situations specified in Articles 30, 31 and 32,
apply forthwith the precautionary and provisional measures strictly necessary to deal
with the situation, and the Associatio n Council will be informed immediately.WT/REG1/6
Page 15
Article 35
Protocol 4 lays down rules of origin for the application of tariff preferences foreseen in this
Agreement.
Article 36
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods
in transit justified on grounds of public morality, public policy or public security; the protection of
health and life of humans, animals or plants; the protection of the exhaustible natural resources; the
protection of national treasures of artistic, historic or archaeological value or the protection of
intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitionsor restrictions shall not, however, constitute a m eans of arbitrary discrimination or a disguised
restriction on trade between the Parties.
Article 37
Protocol 5 lays down the specific provisions to apply to trade between Bulgaria of the one
part and Spain and Portugal of the other part.
TITLE IV
MOVEMENT OF WORKERS, ESTABLISHMENT, SUPPLY OF SERVICES
CHAPTER I
Movement of workers
Article 38
1. Subject to the conditions and modalities applicable in each Member State:
- the treatment accorded to workers of Bulgarian nationality, legally employed in the
territory of a Member State shall be free from any discrimination based on
nationality, as regards working conditions, remuneration or dismissal, as compared to
its own nationals,
- the legally resident spouse and children of a worker legally employed in the territory
of a Member State, with the exception of seasonal workers and of workers coming
under bilateral Agreements in the sense of Article 42, unless otherwise provided by
such Agreements, shall have access to the labour market of that Member State, during
the period of that worker's authorized stay of employment.
2. Bulgaria shall, subject to the conditions and m odalities applicable in that country, accord the
treatment referred to in paragraph 1 to workers who are nationals of a Member State and are legally
employed in its territory as well as to their spouse and children who are legally resident in the said
territory.WT/REG1/6
Page 16
Article 39
1. With a view to coordinating social security systems for workers of Bulgarian nationality,
legally employed in the territory of a Member State and for the members of their family, legally
resident there, and subject to the conditions and modalities applicable in each Member State,
- all periods of insurance, employment or residence completed by such workers in the
various Member States shall be added to gether for the purpose of pensions and
annuities in respect of old age, invalidity and death and for the purpose of medical
care for such workers and such family members,
- any pensions or annuities in respect of old age, death, industrial accident or
occupational disease, or of invalidity resu lting therefrom, with the exception of non-
contributory benefits, shall be freely transferable at the rate applied by virtue of the
law of the debtor Member State or States,
- the workers in question shall receive family allowances for the members of their
family as defined above.
2. Bulgaria shall accord to workers who are nationals of a Member State and legally employed
in its territory, and to members of their families legally resident there, treatment similar to that
specified in the second and third indents of paragraph 1.
Article 40
1. The Association Council shall by decision adop t the appropriate provisions to implement the
objective set out in Article 39.
2. The Association Council shall by decision adop t detailed rules for administrative cooperation
providing the necessary management and control guarantees for the application of the provisions
referred to in paragraph 1.
Article 41
The provisions adopted by the Association Council in accordance with Article 40 shall not
affect any rights or obligations arising from bilateral Agreements linking Bulgaria and the Member
States where those Agreements provide for more favourable treatment of nationals of Bulgaria or of
the Member States.
Article 42
1. Taking into account the labour market situation in the Member State, subject to its legislation
and to the respect of rules in force in that Member State in the area of mobility of workers,
- the existing facilities for access to employment for Bulgarian workers accorded by
Member States under bilateral Agreements ought to be preserved and if possible
improved,
- the other Member States shall consider favourably the possibility of concluding
similar Agreements.WT/REG1/6
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2. The Association Council shall examine grantin g other improvements including facilities of
access for professional training, in conformity with rules and procedures in force in the Member
States, and taking account of the labour market situation in the Member States and in the Community.
Article 43
During the second stage referred to in Article 7, or earlier if so decided, the Association
Council shall examine further ways of improving the movement of workers, taking into account inter
alia the social and economic situation in Bulgaria and the employment situation in the Community.
The Association Council shall make recommendations to such end.
Article 44
In the interest of facilitating the restructuring of labour resources resulting from the economic
restructuring in Bulgaria, the Community shall provid e technical assistance for the establishment of a
suitable social security system in Bulgaria as set out in Article 89.
CHAPTER II
Establishment
Article 45
1. Each Member State shall grant, from entry into  force of the Agreement, for the establishment
of Bulgarian companies and nationals and for the operation of Bulgarian companies and nationals
established in its territory, a treatment no less fav ourable than that accorded to its own companies and
nationals, save for matters referred to in Annex XVa.
2. Bulgaria shall
(i) grant, from entry into force of the Ag reement, for the establishment of Community
companies and nationals a treatment no less favourable than that accorded to its own
companies and nationals, save for the sectors and matters referred to in Annexes XVband XVc, where such treatment shall be granted at the latest by the end of the
transitional period referred to in Article 7;
(ii) grant, from entry into force of th e Agreement, in the operation of Community
companies and nationals established in Bulgaria a treatment no less favourable thanthat accorded to its own companies and nationals.
3. The provisions contained in paragraph 2 of this Article shall not apply to the matters listed in
Annex XVd.
4. Bulgaria shall, during the transitional period referred to in paragraph 2 (i), not adopt any new
regulations or measures which introduce discrimination as regards the establishment of Community
companies and nationals in its territory in comparison to its own companies and nationals.
5. For the purposes of this Agreement
(a) 'establishment' shall meanWT/REG1/6
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(i) as regards nationals, the right to take up and pursue economic activities as
self-employed persons and to set up and manage undertakings, in particular
companies, which they effectively co ntrol. Self-employment and business
undertakings by nationals shall not extend to seeking or taking employment
in the labour market or confer a right of access to the labour market of theother Party. The provisions of this chapter do not apply to those who are not
exclusively self-employed;
(ii) as regards companies, the right to take up and pursue economic activities by
means of the setting up and management of subsidiaries, branches and
agencies;
(b) 'subsidiary' of a company shall mean a company which is effectively controlled by
the first company;
(c) 'economic activities' shall in particular include activities of an industrial character,
activities of a commercial character, activities of craftsmen and activities of the
professions.
6. The Association Council shall, during the tran sitional period referred to in paragraph 2 (i),
examine regularly the possibility of accelerating the granting of national treatment in the sectors
referred to in Annexes XVb and XVc and the inclusion of areas or matters listed in Annex XVd
within the scope of application of the provisions of paragraph 2 (i) of this Article. Amendments may
be made to these Annexes by decision of the Association Council.
Following the expiration of the transitional period referred to in paragraph 2 (i), the
Association Council may exceptionally, upon request by Bulgaria, and if the necessity arises, decide
to prolong the duration of exclusion of certain areas or matters listed in Annexes XVb and XVc for a
limited period of time.
Article 46
1. Subject to the provisions of Article 45 with the exception of financial services described in
Annex XVb, each Party may regulate the establishment and operation of companies and nationals on
its territory, in so far as these regulations do not discriminate against companies and nationals of the
other Party in comparison to its own companies and nationals.
2. In respect of financial services, described in Annex XVb, this Agreement does not prejudice
the right of the Parties to adopt measures necessary for the conduct of the Party's monetary policy, or
for prudential grounds in order to ensure the protection of investors, depositors, policy holders, or
persons to whom a fiduciary duty is owed, or to ensure the integrity and stability of the financialsystem. These measures shall not discriminate on grounds of nationality against companies and
nationals of the other Party in comparison to its own companies and nationals.
Article 47
In order to make it easier for Community nationals and Bulgarian nationals to take up and
pursue regulated professional activities in Bulgaria and the Community respectively, the Association
Council shall examine which steps are necessary to be taken to provide for the mutual recognition of
qualifications. It may take all necessary measures to that end.WT/REG1/6
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Article 48
The provisions of Article 46 do not preclude the application by a Party of particular rules
concerning the establishment and operation in its territory of branches and agencies of companies of
another Party not incorporated in the territory of the first Party, which are justified by legal ortechnical differences between such branches and agencies as compared to branches and agencies of
companies incorporated in its territory, or, as regards financial services, for prudential reasons. The
difference in treatment shall not go beyond what is strictly necessary as a result of such legal or
technical differences, or, as regards financial services, described in Annex XVb, for prudential
reasons.
Article 49
1. A 'Community company' and a 'Bulgarian company' respectively shall, for the purpose of this
Agreement, mean a company or a firm set up in accordance with the laws of a Member State or of
Bulgaria respectively and having its registered office, central administration, or principle place of
business in the territory of the Community or Bulgaria respectively. However, should the company orfirm, set up in accordance with the laws of a Member State or of Bulgaria respectively, have only its
registered office in the territory of the Community or Bulgaria respectively, its operations must
possess a real and continuous link with the economy of one of the Member States or Bulgaria
respectively.
2. With regard to international maritime transp ort, a national or a shipping company of the
Member States or of Bulgaria, respectively established outside the Community or Bulgaria
respectively and controlled by nationals of a Member State, or Bulgarian nationals respectively, shall
also be beneficiaries of the provisions of this chapter and Chapter III of this title, if their vessels are
registered in that Member State or in Bulgar ia respectively in accordance with their respective
legislations.
3. A 'Community national' and a 'Bulgarian national' respectively shall, for the purpose of this
Agreement, mean a natural person who is a national of one of the Member States or of Bulgaria
respectively.
4. The provisions of this Agreement shall not prejudice the application by each Party of any
measure necessary to prevent the circumvention of its measures concerning third country access to its
market, through the provisions of this Agreement.
Article 50
For the purpose of this Agreement 'financial services' shall mean those activities described in
Annex XVb. The Association Council may extend or modify the scope of Annex XVb.
Article 51
During the first five years following the date of entry into force of this Agreement, or for the
sectors referred to in Annex XVb and XVc during the transitional period referred to in Article 7,
Bulgaria may introduce measures which derogate from the provisions of this chapter as regards the
establishment of Community companies and nationals if certain industries:
- are undergoing restructuring, or
- are facing serious difficulties, particularly where these entail serious social problems
in Bulgaria, orWT/REG1/6
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- face the elimination or a drastic reduction of the total market share held by Bulgarian
companies or nationals in a given sector or industry in Bulgaria, or
- are newly emerging industries in Bulgaria.Such measures:(i) shall cease to apply at the latest two years after the expiration of the fifth year
following the date of entry into force of this Agreement; and
(ii) shall be reasonable and necessary in order to remedy the situation; and(iii) shall only relate to establishments in Bu lgaria to be created after the entry into force
of such measures and shall not introduce discrimination concerning the operations of
Community companies or nationals already established in Bulgaria at the time of
introduction of a given measure compared to Bulgarian companies or nationals.
The Association Council may exceptionally, upon request by Bulgaria, and if the necessity
arises, decide to prolong the period referred to in indent (i) for a given sector for a limited period of
time not exceeding the duration of the transitional period referred to in Article 7.
While devising and applying such measures, Bulgaria shall grant whenever possible to
Community companies and nationals a preferential treatment, and in no case a treatment less
favourable than that accorded to companies or nationals from any third country.
Prior to the introduction of these measures, Bulgaria shall consult the Association Council
and shall not put them into effect before a one month period following the notification to the
Association Council of the concrete measures to be introduced by Bulgaria, except where the threat of
irreparable damage requires the taking of urgent measures in which case Bulgaria shall consult the
Association Council immediately after their introduction.
Upon the expiration of the fifth year following th e entry into force of the Agreement, or for
the sectors referred to in Annexes XVb and XVc upon expiration of the transitional period referred toin Article 7, Bulgaria may introduce such measures  only with the authorization of the Association
Council and under conditions determined by the latter.
Article 52
1. The provisions of this chapter shall not apply to air transport services, inland-waterways
transport services and maritime cabotage transport services.
2. The Association Council may make recommendations for improving establishment and
operations in the areas covered by paragraph 1.
Article 53
1. Notwithstanding the provisions of Chapter I of this title, the beneficiaries of the rights of
establishment granted by Bulgaria and the Community respectively shall be entitled to employ, orhave employed by one of their subsidiaries, in accordance with the legislation in force in the host
country of establishment, in the territory of Bulgaria and the Community respectively, employees who
are nationals of Community Member States and Bulgaria respectively, provided that such employees
are key personnel as defined in paragraph 2, and that they are employed exclusively by suchWT/REG1/6
Page 21
beneficiaries or their subsidiaries. The residence and work permits of such employees shall only cover
the period of such employment.
2. Key personnel of the beneficiaries of the rights of establishment, herein referred to as
'organization', are:
(a) senior employees of an organization who primarily direct the management of the
organization, receiving general supervision or direction principally from the board of
directors or shareholders of the business, including:
- directing the organization or a departme nt or sub-division of the organization,
- supervising and controlling the work of other supervisory, professional or
managerial employees,
- having the authority personally to engage and dismiss or recommend
engaging, dismissing or other personnel actions.
(b) persons employed by an organi zation who possess high or uncommon:
- qualifications referring to a type of work or trade requiring specific technical
knowledge,
- knowledge essential to the organization's service, research equipment,
techniques or management.
These may include, but are not limited to, members of accredited professions.Each such employee must have been employed by the organization concerned for at least one
year preceding the detachment by the organization.
Article 54
1. The provisions of this chapter shall be applied subject to limitations justified on grounds of
public policy, public security or public health.
2. They shall not apply to activities which in the territory of each party are connected, even
occasionally, with the exercise of official authority.
Article 55
Companies which are controlled and exclusively owned jointly by Bulgarian companies or
nationals and Community companies or nationals shall also be beneficiaries of the provisions of this
chapter and Chapter III of this title.WT/REG1/6
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CHAPTER III
Supply of services between the Community and Bulgaria
Article 56
1. The Parties undertake in accordance with the provisions of this chapter to take the necessary
steps to allow progressively the supply of services by Community or Bulgarian companies or
nationals who are established in a Party other than  that of the person for whom the services are
intended taking into account the development of the services sectors in the Parties.
2. In step with the liberalization process mentio ned in paragraph 1, and subject to the provisions
of Article 59 (1), the Parties shall permit the temporary movement of natural persons providing the
service or who are employed by the service provider as key personnel as defined in Article 53 (2),
including natural persons who are representatives of a Community or Bulgarian company or national
and are seeking temporary entry for the purpose of negotiating for the sale of services or entering into
Agreements to sell services for that service provider, where those representatives will not be engagedin making direct sales to the general public or in supplying services themselves.
3. The Association Council shall take the measur es necessary to implement progressively the
provisions of paragraph 1 of this Article.
Article 57
With regard to supply of transport services between the Community and Bulgaria, the
following replaces the provisions of Article 56:
1. With regard to international maritime transpor t, the Parties undertake to apply effectively the
principle of unrestricted access to the market and traffic on a commercial basis.
(a) The above provision does not prejudice the rights and obligations under the United
Nations Code of Conduct for Liner Conferences, as applied by one or the other
Contracting Party to this Agreement.
Non-conference liners will be free to opera te in competition with a conference as long
as they adhere to the principle of fair competition on a commercial basis.
(b) The Parties affirm their commitment to a freely competitive environment as being an
essential feature of the dry and liquid bulk trade.
2. In applying the principles of point 1, the Parties shall:
(a) not introduce cargo sharing clauses in future bilateral agreements with third countries,
other than in those exceptional circumstances where liner shipping companies fromone or other Party to this Agreement would not otherwise have an effective
opportunity to ply for trade to and from the third country concerned;
(b) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and
liquid bulk trade;
(c) abolish, upon entry into force of the Agreement, all unilateral measures,
administrative, technical and other obstacles which could have restrictive orWT/REG1/6
Page 23
discriminatory effects on the free supply of services in international maritime
transport.
3. With a view to assuring a coordinated development and progressive liberalization of transport
between the Parties adapted to their reciprocal co mmercial needs, the conditions of mutual market
access in air transport and in inland transport shall be dealt with by special transport Agreements to be
negotiated between the Parties after the entry into force of the Agreement.
4. Prior to the conclusion of the Agreements referred to in paragraph 3, the Parties shall not take
any measures or actions which are more restrictive or discriminatory as compared to the situation
existing on the day preceding the day of entry into force of the Agreement.
5. During the transitional period, Bulgaria shall progressively adapt its legislation including
administrative, technical and other rules to that of the Community legislation existing at any time in
the field of air and inland transport in so far as it serves liberalization purposes and mutual access to
markets of the Parties and facilitates the movement of passengers and of goods.
6. In step with the common progress in the achievement of the objectives of this chapter, the
Association Council shall examine ways of creating the conditions necessary for improving freedom
to provide air and inland transport services.
Article 58
The provisions of Article 54 shall apply to the matters covered by this chapter.
CHAPTER IV
General provisions
Article 59
1. For the purpose of Title IV, nothing in the Agreement shall prevent the Parties from applying
their laws and regulations regarding entry and stay, work, labour conditions and establishment ofnatural persons and supply of services, provided that, in so doing, they do not apply them in a manner
as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the
Agreement. The above provision does not prejudice the application of Article 54.
2. The provisions of Chapters II, III and IV of Title IV shall be adjusted by decision of the
Association Council in the light of the result of the negotiations on services taking place in the
Uruguay Round and in particular to ensure that unde r any provision of this Agreement a Party grants
to the other Party a treatment no less favourable than that accorded under the provisions of a future
General Agreement on Trade and Services (GATS).
Pending Bulgaria's accession to a future GATS Agreement, and without prejudice to any
decisions the Association Council may take,
(i) the Community shall grant to Bulgarian companies and nationals a treatment no less
favourable than that accorded under the provisions of a future GATS Agreement tocompanies and nationals of other members of that Agreement;WT/REG1/6
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(ii) Bulgaria shall grant Community companies and nationals a treatment no less
favourable than that accorded by Bulgaria to companies and nationals from any third
country.
3. The exclusion of Community companies and nationals established in Bulgaria in accordance
with the provisions of Chapter II of Title IV from public aid granted by Bulgaria in the areas of public
education services, health-related and social services and cultural services shall, for the duration of the
transitional period referred to in Article 7, be deemed compatible with the provisions of Title IV and
with the competition rules referred to in Title V.
TITLE V
PAYMENTS, CAPITAL, COMPETITION AND OTHER ECONOMIC PROVISIONS,
APPROXIMATION OF LAWS
CHAPTER I
Current payments and movement of capital
Article 60
The Parties undertake to authorize, in freely convertible currency, any payments on the
current account of balance of payments to the extent that the transactions underlying the payments
concern movements of goods, services, or persons between the Parties which have been liberalized
pursuant to this Agreement.
Article 61
1. With regard to transactions on the capital account of balance of payments, from entry into
force of the Agreement, the Member States and Bulgaria respectively shall ensure the free movement
of capital relating to direct investments made in companies formed in accordance with the laws of the
host country and investments made in accordance to the provisions of Chapter II of Title IV, and the
liquidation or repatriation of these investments and of any profit stemming therefrom.
Notwithstanding the above provision, such free movement, liquidation and repatriation shall
be ensured by the end of the first stage referred to in Article 7 for all investments linked to
establishment of Community nationals establishing in Bulgaria as self-employed persons pursuant to
Chapter II of Title IV.
2. Without prejudice to paragraph 1, the Member States, as from the entry into force of the
Agreement, and Bulgaria as from the end of the fifth year following the entry into force of the
Agreement, shall not introduce any new foreign exchange restrictions on the movement of capital and
current payments connected therewith between reside nts of the Community and Bulgaria and shall not
make the existing arrangements more restrictive.
3. The provisions of paragraphs 1 and 2 shall not prevent Bulgaria from applying restrictions on
outward investments by Bulgarian nationals and companies. However, the liquidation or repatriation
of investments made in Bulgaria and of any profit stemming therefrom shall not be affected.
4. The Parties shall consult each other with a view to facilitating the movement of capital
between the Community and Bulgaria in order to promote the objectives of this Agreement.WT/REG1/6
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Article 62
1. During the five years following the date of entr y into force of the Agreement, the Parties shall
take measures permitting the creation of the necessary conditions for the further gradual application of
Community rules on the free movement of capital.
2. By the end of the fifth year from the entry into force of the Agreement, the Association
Council shall examine ways of enabling Community rules on the movement of capital to be applied in
full.
Article 63
With reference to the provisions of this chapter, and notwithstanding the provisions of
Article 65, until a full convertibility of Bulgarian currency in the meaning of Article VIII of the
International Monetary Fund (IMF) is introduced, Bulgaria may in exceptional circumstances apply
exchange restrictions connected with the granting or taking up of short and medium-term credits to
the extent that such restrictions are imposed on Bulgaria for the granting of such credits and arepermitted according to Bulgaria's status under the IMF.
Bulgaria shall apply these restrictions in a non-discriminatory manner. They shall be applied
in such a manner as to cause the least possible disrup tion to this Agreement. Bulgaria shall inform the
Association Council promptly of the introduction of such measures and of any changes therein.
CHAPTER II
Competition and other economic provisions
Article 64
1. The following are incompatible with the proper functioning of this Agreement, in so far as
they may affect trade between the Community and Bulgaria:
(i) all Agreements between undertakings, decisions by associations of undertakings and
concerted practices between undertakings which have as their object or effect the
prevention, restriction or distortion of competition;
(ii) abuse by one or more undertakings of a dominant position in the territories of the
Community or of Bulgaria as a whole or in a substantial part thereof;
(iii) any public aid which distorts or threatens to distort competition by favouring certain
undertakings or the production of certain goods.
2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the
application of the rules of Articles 85, 86, and 92 of the Treaty establishing the European Economic
Community.
3. The Association Council shall, within three ye ars of the entry into force of the Agreement,
adopt the necessary rules for the implementation of paragraphs 1 and 2.
4. a) For the purposes of applying the provision of paragraph 1, point (iii), the Parties
recognize that during the first five years after the entry into force of the Agreement,
any public aid granted by Bulgaria shall be assessed taking into account the fact thatWT/REG1/6
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Bulgaria shall be regarded as an area identical to those areas of the Community
described in Article 92 (3) (a) of the Treaty establishing the European Economic
Community. The Association Council shal l, taking into account the economic
situation of Bulgaria, decide whether that period should be extended by further
periods of five years.
(b) Each Party shall ensure tran sparency in the area of public aid, inter alia by reporting
annually to the other Party on the total amount and the distribution of the aid given
and by providing, upon request, information on aid schemes. Upon request by one
Party, the other Party shall provide information on particular individual cases of
public aid.
5. With regard to products referred to in Chapters II and III of Title III:
- the provision of paragraph 1 (iii) does not apply,- any practices contrary to paragraph 1 (i) should be assessed according to the criteria
established by the Community on the basis of Articles 42 and 43 of the Treaty
establishing the European Economic Community and in particular of those
established in Council Regulation No 26/1962.
6. If the Community or Bulgaria considers that a particular practice is incompatible with the
terms of paragraph 1, and:
- is not adequately dealt with under the implementing rules referred to in paragraph 3,
or
- in the absence of such rules, and if such practice causes or threatens to cause serious
prejudice to the interest of the other Party or material injury to its domestic industry,
including its services industry,
it may take appropriate measures after consulta tion within the Associa tion Council or after 30
working days following referral for such consultation.
In the case of practices incompatible with paragraph 1 (iii) of this Article, such appropriate
measures may, where the General Agreement on Tariffs and Trade applies thereto, only be adopted in
conformity with the procedures and under the conditions laid down by the General Agreement on
Tariffs and Trade and any other relevant instrument negotiated under its auspices which are applicable
between the Parties.
7. Notwithstanding any provisions to the contrary  adopted in conformity with paragraph 3, the
Parties shall exchange information taking into a ccount the limitations imposed by the requirements of
professional and business secrecy.
8. This Article shall not apply to the products covered by the Treaty establishing the European
Coal and Steel Community which are the subject of Protocol 2.
Article 65
1. The Parties shall endeavour to avoid the imposition of restrictive measures including
measures relating to imports for balance of payments purposes. In the event of their introduction, the
Party having introduced the same shall present to the other Party a time schedule for their removal.WT/REG1/6
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2. Where one or more Member States or Bulgaria is in serious balance of payments difficulties,
or under imminent threat thereof, the Community or Bulgaria, as the case may be, may, in accordance
with the conditions established under the General Agreement on Tariffs and Trade, adopt restrictive
measures, including measures relating to imports, which shall be of limited duration and may not go
beyond what is necessary to remedy the balance of payments situation. The Community or Bulgaria,as the case may be, shall inform the other Party forthwith.
3. Any restrictive measures shall not apply to transfers related to investments and in particular to
the repatriation of amounts invested or reinvested and of any kind of revenues stemming therefrom.
Article 66
With regard to public undertakings and undertakings to which special or exclusive rights have
been granted, the Association Council shall ensure that , as from the third year from the date of entry
into force of the Agreement, the principles of  the Treaty establishing the European Economic
Community, notably Article 90, and the principles of the concluding document of the April 1990
Bonn meeting of the Conference on Security and Cooperation in Europe (notably entrepreneurs'freedom of decision) are upheld.
Article 67
1. Bulgaria shall continue to improve the protection of intellectual, industrial and commercial
property rights in order to provide, by the end of the fifth year after the entry into force of the
Agreement, for a level of protection similar to th at existing in the Community, including comparable
means of enforcing such rights.
2. Within the same time, Bulgaria shall apply to accede to the Munich Convention on the Grant
of European Patents of 5 October 1973. Bulgaria shall also accede to the other multilateral
convention(s) on intellectual, industrial and commercial property rights (referred to in paragraph 1 of
Annex XVI) to which Member States are Parties, or which are de facto applied by Member States.
Article 68
1. The Parties consider the opening up of the award of public contracts on the basis of the
principles of non-discrimination and reciprocity, in particular in the GATT context, to be a desirable
objective.
2. The Bulgarian companies as defined in Article 49 shall be granted access to contract award
procedures in the Community pursuant to Community procurement rules under a treatment no lessfavourable than that accorded to Community compan ies as of the entry into force of the Agreement.
Community companies as defined in Article 49 shall be granted access to contract award
procedures in Bulgaria under a treatment no less favourable than that accorded to Bulgarian
companies at the latest at the end of the transitional period referred to in Article 7.
Community companies established in Bulgaria under the provisions of Chapter II of Title IV
in the form of subsidiaries as described in Article 45 and in the forms described in Article 55 shall
have upon entry into force of the Agreement access to contract award procedures under a treatment no
less favourable than that accorded to Bulgarian companies. Community companies established inBulgaria in the form of branches and agencies as described in Article 45 shall be granted such
treatment at the latest by the end of the transitional period.WT/REG1/6
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The Association Council shall periodically exam ine the possibility for Bulgaria to introduce
access to award procedures in Bulgaria for all Community companies prior to the end of the
transitional period.
3. As regards establishment, operations, supply of services between the Community and
Bulgaria, as well as employment and movement of la bour linked to the fulfilment of public contracts,
the provisions of Articles 38 to 59 are applicable.
CHAPTER III
Approximation of laws
Article 69
The Parties recognize that an important conditio n for Bulgaria's economic integration into the
Community is the approximation of Bulgaria's existing and future legislation to that of theCommunity. Bulgaria shall endeavour to ensure that its legislation will be gradually made compatible
with that of the Community.
Article 70
The approximation of laws shall extend to the following areas in particular: customs law,
company law, banking law, company accounts and taxes, intellectual property, protection of workers
at the workplace, financial services, rules on competition, protection of health and life of humans,
animals and plants, consumer protection, indirect taxation, technical rules and standards, nuclear law
and regulation, transport and the environment.
Article 71
The Community shall provide Bulgaria with t echnical assistance for the implementation of
these measures, which may include inter alia:
- the exchange of experts,- the provision of early information especially on relevant legislation,- organization of seminars,
- training activities,
- aid for the translation of Community legislation in the relevant sectors.
TITLE VI
ECONOMIC COOPERATION
Article 72
1. The Community and Bulgaria shall establish economic cooperation aimed at contributing to
Bulgaria's development and growth potential. Such cooperation shall strengthen existing economic
links on the widest possible foundation, to the benefit of both Parties.WT/REG1/6
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2. Policies and other measures will be designed to bring about economic and social development
of Bulgaria and will be guided by the principle of sustainable development. These policies should
ensure that environmental considerations are also fu lly incorporated from the outset and that they are
linked to the requirements of harmonious social development.
3. To this end, the cooperation should focus in particular on policies and measures related to
industry including investment, agriculture and agro-industrial sector, energy, transport,
telecommunications, regional development and tourism.
4. Special attention shall be devoted to measures capable of fostering cooperation between the
countries of central and eastern Europe with a view to a harmonious development of the region.
Article 73
Industrial cooperation
1. Cooperation shall seek to promote the following in particular:
- industrial cooperation between economic operators of both sides, with the particular
objective of strengthening the private sector,
- Community participation in Bulgaria's efforts in both public and private sectors to
modernize and restructure its industry, which will effect the transition from a
centrally planned system to a market economy under conditions which ensure that the
environment is protected,
- the restructuring of individual sectors; in this context the Association Council will
examine in particular the problems affecting the sector of coal and steel and the
conversion of the defence industry,
- the establishment of new undertakings in areas offering potential for growth,
particularly in branches of light industry, consumer goods and market services,
- transfer of technology and know-how.
2. Industrial cooperation initiatives shall take into account priorities determined by Bulgaria.
The initiatives should seek in particular to establish a suitable framework for undertakings, to improve
management know-how and to promote transparency as regards markets and conditions forundertakings, and will include technical assistance where appropriate.
Article 74
Investment promotion and protection
1. Cooperation shall aim at maintaining and, if necessary, improving a legal framework and a
favourable climate for private investment and its protection, both domestic and foreign, which is
essential to economic and industrial reconstruction and development in Bulgaria. The cooperation
shall also aim to encourage and promote foreign investment and privatization in Bulgaria.
2. The particular aims of cooperation shall be:WT/REG1/6
Page 30
- the conclusion, where appropriate, by the Member States and Bulgaria of agreements
for the promotion and protection of investment,
- the conclusion, where appropriate, of agreements between Member States and
Bulgaria to avoid double taxation,
- to implement suitable arrangements for the transfer of capital,- to proceed with deregulation and to improve economic infrastructure,- to exchange information on investment opportunities in the form of trade fairs,
exhibitions, trade weeks and other events,
- to exchange information on laws, regulations and administrative practices in the field
of investment.
3. Bulgaria shall honour the rules on trade related aspects of investment measures (TRIMs),
once these have been adopted within the GATT.
Article 75
Agro and industrial standards and conformity assessment
1. The Parties shall cooperate with the aim to reduce differences in the fields of standardization
and conformity assessment procedures.
2. To this end, the cooperation shall seek:
- to promote the use of Community technical regulations and European standards and
conformity assessment procedures,
- where appropriate, to conclude agreements on mutual recognition in these fields,- to encourage Bulgaria's active and regular participation in the work of specialized
organizations (CEN, Cenelec, ETSI, EOTC),
- to support Bulgaria in the European measurement and testing programmes,- to promote the exchange of technical and methodological information in the field of
quality control and production process.
3. The Community will provide Bulgaria with technical assistance where appropriate.
Article 76
Cooperation in science and technology
1. The Parties shall promote cooperation in research and technological development activities.
They shall devote special attention to the following:
- the exchange of information on each other's science and technology policies,- the organization of joint scientific meetings (seminars and workshops),WT/REG1/6
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- joint R& D activities aimed at encouraging scientific progress and the transfer of
technology and know-how,
- training activities and mobility programmes for researchers and specialists from both
sides,
- the development of an environment conducive to research and the application of new
technologies and adequate protection of intellectual property of the results of
research,
- participation of Bulgaria in the Community programmes in accordance with
paragraph 3.
Technical assistance shall be provided where appropriate.
2. The Association Council shall determine the appropriate procedures for developing
cooperation.
3. Cooperation under the Community's framework programme in the field of research and
technological development shall be implemented acco rding to specific arrangements to be negotiated
and concluded in accordance with the legal procedures of each Party.
Article 77
Education and training
1. Cooperation shall aim at a harmonious development of human resources and at raising the
level of general education and professional qualifications in Bulgaria, both in public and private
sectors, taking into consideration the priorities of Bulgaria. Institutional frameworks and plans of
cooperation will be established (building on the European Training Foundation, when established, and
the Tempus programme). Participation of Bulgaria in other Community programmes shall also be
considered in this context.
2. The cooperation shall focus in particular on the following areas:
- reform of the education and training system in Bulgaria,- initial training, in-service training and retraining, including the training of public and
private sector executives and senior civil servants, particularly in priority areas to be
determined,
- cooperation between universities, cooperation between universities and firms, and
mobility for teachers, students, administrators and young people,
- promoting teaching in the field of European Studies within the appropriate
institutions,
- mutual recognition of periods of studies and diplomas,- teaching Community languages and the Bulgarian language,WT/REG1/6
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- training translators and interpreters and promoting the use of Community linguistic
norms and terminology.
Article 78
Agriculture and the agro-industrial sector
1. Cooperation in this area shall have as its aim the modernization, restructuring and
privatization of agriculture and the agro-industrial sector in Bulgaria. It shall endeavour notably to:
- develop private farms and distribution channels, methods of storage, marketing,
management etc.,
- modernize the rural infrastructure (transport, water supply, telecommunications),- improve land-use planning, including construction and urban planning,
- improve productivity and quality by using appropriate methods and products; provide
training and monitoring in the use of anti-pollution methods connected with inputs,
- restructure, develop and modernize processing firms and their marketing techniques,
- promote complementarity in agriculture,
- promote industrial cooperation in agriculture and the exchange of know-how,
particularly between the private sectors in the Community and Bulgaria,
- develop cooperation on animal and plant health, agrifood health (in particular
ionization) including veterinary legislation and inspection, vegetal and phytosanitary
legislation with the aim of bringing about gradual harmonization with Community
standards through assistance for training and the organization of checks,
- develop ecologically clean regions, technologies and crops,
- develop and promote effective cooperation on quality assurance systems compatible
with the Community models,
- promote integrated rural development in Bulgaria,
- exchange information in respect of agricultural policy and legislation.
2. To these ends, technical assistance shall be provided by the Community as appropriate.
Article 79
Energy
1. Within the framework of the principles of the market economy and the European Energy
Charter, the Parties shall cooperate to develop the progressive integration of the energy markets inEurope.
2. Cooperation shall include among others technical assistance when appropriate in the
following areas:WT/REG1/6
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- formulation and planning of energy policy, including its long-term aspects,
- management and training for the energy sector,
- the promotion of energy saving and energy efficiency,
- the development of energy resources,- improvement of distribution as well as improvement and diversification of supply,- the environmental impact of energy production and consumption,- the nuclear energy sector,- opening up the energy market to a greater degree, including facilitating transit of gas
and electricity,
- the electricity and gas sectors, including the consideration of the possibility of the
interconnection of the supply networks,
- modernization of energy infrastructures,- the formulation of framework conditions for cooperation between undertakings in this
sector,
- the transfer of technology and know-how.
Article 80
Nuclear safety
1. The aim of cooperation is to provide for a safer use of nuclear energy.
2. Cooperation shall mainly cover the following topics:
- improvement of the operational safety of Bulgarian nuclear power plants,- evaluation of the feasibility of backfitting the existing power plant equipped with
VVER-440 reactors,
- upgrading training of management and other personal of nuclear installations,- upgrading Bulgaria's laws and regulations on nuclear safety and strengthening the
supervisory authorities and their resources,
- nuclear safety, nuclear emergency preparedness and management,- radiation protection, including environmental radiation monitoring,- fuel cycle problems and safeguarding of nuclear materials,- radioactive waste management,WT/REG1/6
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- decomissioning and dismantling of nuclear installations,
- decontamination.
3. Cooperation will include exchange of information and experience and R& D activities in
accordance with Article 76.
Article 81
Environment
1. The Parties shall develop and strengthen their cooperation on environment and human health,
which they have judged to be a priority.
2. Cooperation shall concern:
- effective monitoring of pollution levels; systems of information on the state of the
environment,
- combating local, regional and transboundary air and water pollution,
- sustainable, efficient and environmentally effective production and use of energy;
safety of industrial plants,
- the management of water resources for border waterways, including transboundary
waterways, in compliance with the principles of international law and in particular inconformity with the provisions of the Convention on the protection and use of
transboundary watercourses and international lakes,
- classification and safe handling of chemicals,- water quality, particularly of transboundary waterways (including the Danube and of
the Black Sea),
- effective prevention and reduction of water pollution, especially of sources of
drinking water,
- waste reduction, recycling and safe disposal, implementation of the Basle
Convention,
- the environmental impact of agriculture; soil degradation, salinity and acidification,- the protection of forests and flora and fauna; restoring ecological stability of the
countryside,
- land-use planning, including construction and urban planning,- coastal zone management,- use of economic and fiscal instruments,- global climate change and its prevention,WT/REG1/6
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- environment education and awareness,
- implementation of regional international programmes, inter alia of the Danube Basin
and the Black Sea.
3. Cooperation shall take place notably through:
- exchange of information and experts, in cluding information and experts dealing with
the transfer of clean technologies,
- training programmes,- harmonization of laws (Community standards) regulations standards, norms and
methodology,
- cooperation at regional level, possibly including the implementation of joint
programmes at international level, particularly as regards the management, the
protection and quality of the waters of transboundary waterways; cooperation within
the framework of the European Environment Agency once it comes into existence,
- development of strategies, particularly with regard to global and climatic issues,- environmental impact studies,- improvement of the environmental management, inter alia water management.
4. Protocol 8 lays down the arrangements appli cable to the management, protection and quality
of the waters of transboundary waterways.
Article 82
Transport
1. The Parties shall develop and strengthen their cooperation so as to enable Bulgaria to:
- restructure and modernize transport,- improve the movement of passengers and goods and the access to the transport
market by removing administrative, technical and other obstacles,
- facilitate Community transit through Bulgaria by road, rail, inland waterway and
combined transport,
- achieve operating standards comparable to those in the Community.
2. Cooperation shall include the following in particular:
- economic, legal and technical training programmes,- the provision of technical assistance and advice, and exchange of information.
3. Cooperation shall include the following priority areas:WT/REG1/6
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- road transport, including the gradual easing of transit conditions,
- the management of railways and airports, including cooperation between the
appropriate national authorities,
- the development of a road network and the modernization, on major routes of
common interest and trans-European links, of road, inland waterway, railway,
combined transport port and airport infrastructure,
- land-use planning including construction and urban planning,
- the upgrading of technical equipment to meet Community standards, particularly in
the fields of road and rail transport, multimodal transport and transhipment,
- the setting up of consistent transport policie s compatible with those applicable in the
Community,
- the promotion of joint technological and research programmes in accordance with
Article 76.
Article 83
Telecommunications and postal services
1. The Parties shall expand and strengthen cooperation in this area, and shall to this end initiate
notably the following actions:
- exchange information on telecommunications and postal services policies,- exchange technical and other information and organize seminars, workshops and
conferences for experts of both sides,
- conduct training and advisory operations,- carry out transfers of technology and know-how in all elements of
telecommunications and postal services,
- have the appropriate bodies from both sides carry out joint projects,- promote European standards, systems of certification and regulatory approaches,- promote new communications facilities, services and installations, particularly those
with commercial applications.
2. These activities shall focus on the following priority areas:
- development and application of a sectorial market policy in telecommunications and
postal services in Bulgaria, of legal and regulatory acts and procedures,
- the modernization of Bulgaria's telecommunications network and its integration into
European and world networks,WT/REG1/6
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- cooperation within the structures of European standardization,
- the integration of trans-European systems; the legal and regulatory aspects of
telecommunications,
- the management of telecommunications in the new economic environment:
organizational structures, strategy and planning, purchasing principles.
Article 84
Banking, insurance and other financial services
1. The Parties shall cooperate with the aim of establishing and developing a suitable framework
for the encouragement of a banking, insurance and financial services sector in Bulgaria.
2. Cooperation shall focus on:
- the improvement of efficient accounting and audit systems in Bulgaria based on
European Community standards,
- the strengthening and restructuring of the banking and financial systems,
- the improvement and harmonization of supervision and regulation system of banking
and financial services,
- the preparation of glossaries of terminology,
- the exchange of information in particular in respect of proposed legislation,
- the preparation and translation of Community and Bulgarian legislation.
3. To this end, the cooperation shall include the provision of technical assistance and training.
Article 85
Audit and financial control cooperation
1. The Parties shall cooperate with the aim of developing efficient financial control and audit
systems in the Bulgarian administration following standard Community methods and proceedings.
2. Cooperation shall focus on:
- the exchange of relevant information on audit systems,
- the unification of audit documentation,
- training and advisors' operations.
3. To this end, technical assistance shall be provided by the Community as appropriate.WT/REG1/6
Page 38
Article 86
Monetary policy
At the request of the Bulgarian authorities, the Community shall provide technical assistance
designed to support the efforts of Bulgaria towards the introduction of full convertibility of the leva
and the gradual approximation of its policies to those of the European Monetary System. This will
include informal exchange of information concerning the principles and the functioning of the
European Monetary System.
Article 87
Money laundering
1. The Parties will establish a framework for cooperation aimed at preventing the use of their
financial systems for laundering of proceeds from criminal activities in general and drug offences in
particular.
2. Cooperation in this area shall include administrative and technical assistance with the purpose
of establishing suitable standards against money laundering equivalent to those adopted by the
Community and international fora in this field, including the Financial Action Task Force (FATF).
Article 88
Regional development
1. The Parties shall strengthen cooperation between them on regional development and land-use
planning.
2. To this end, any of the following measures may be undertaken:
- the exchange of information by national, regional or local authorities on regional and
land-use planning policy, and, where appropriate, the provision of assistance to
Bulgaria for the formulation of such policy,
- joint action by regional and local authorities in the area of economic development,- study of a joint approach for the development of regions situated on Bulgaria's border
with the Community,
- exchange visits to explore the opportunities for cooperation and assistance,- the exchange of civil servants or experts,
- the provision of technical assistance, with special emphasis on the development of
disadvantaged areas,
- the establishment of programmes for the exchange of information and experience, by
methods including seminars.WT/REG1/6
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Article 89
Social cooperation
1. With regard to health and safety, the Partie s shall develop cooperation between them with the
aim of improving the level of protection of the health and safety of workers, taking as a reference the
level of protection existing in the Community. Coopera tion shall comprise the following in particular:
- the provision of technical assistance,- the exchange of experts,
- cooperation between firms,
- information and administrative and other relevant assistance to firms and training
operations,
- cooperation in public health.
2. With regard to employment, cooperation between the Parties shall focus notably on:
- the organization of the labour market,- job-finding and careers advice services,- the planning and the implementation of regional restructuring programmes,
- the encouragement of local employment development.
Cooperation in this field shall be realized through actions such as the performance of studies,
provision of the services of experts and information and training.
3. With regard to social security, cooperati on between the Parties shall seek to adapt the
Bulgarian social security system to the new economic and social situation, primarily by providing theservices of experts and information and training.
Article 90
Tourism
The Parties shall increase and develop cooperation between them, which shall include:- facilitating the tourist trade and, where appropriate, reducing relevant formalities,
- assistance to Bulgaria for the privatization of the tourist sector as well as for the
working out of efficient state and company policies for establishing optimal legal
administrative and financial mechanisms for its further development,
- increasing the flow of information through international networks, data bases, etc.,- transferring know-how through training, exchanges, seminars,WT/REG1/6
Page 40
- studying the opportunities for joint operations (cross-border projects, town-twinning,
etc.),
- exchanging views and providing for appropriate exchanges of information on major
issues of mutual interest affecting the tourism sector.
Article 91
Small and medium-sized enterprises
1. The Parties shall aim to develop and strengthen small and medium-sized enterprises (SMEs),
in particular in the private sector, and cooperation between SMEs in the Community and Bulgaria.
2. They shall encourage the exchange of info rmation and know-how in  the following areas:
- improving, where appropriate, the legal, administrative, technical, tax and financial
conditions for the setting-up and expansion of SMEs and for cross-bordercooperation,
- the provision of the specialized services required by SMEs (management training,
accounting, marketing, quality, control, etc.) and the strengthening of agencies
providing such services,
- the establishment of appropriate links with Community operators in order to improve
the flow of information to SMEs and promoting cross-border cooperation (for
example the business cooperation network (BC-NET), Euro-info Centres,
conferences, etc.).
3. Cooperation will include the supply of technical assistance in particular for the establishment
of appropriate institutional support for SME's, at both national and regional level, regarding financial,
training, advisory, technological and marketing services.
Article 92
Information and the audiovisual sector
1. The Community and Bulgaria shall take appropriate steps to stimulate the effective mutual
exchange of information. Priority shall be given to programmes aimed at providing the general public
with basic information about the Community and professional circles in Bulgaria with morespecialized information, including, where possible, access to Community databases.
2. The Parties shall cooperate in the promotion of the audiovisual industry in Europe. The
audiovisual sector in Bulgaria could most notably take part in activities set up by the Community in
the framework of the Media programme under procedures laid down by the bodies responsible formanaging each activity and in accordance with the provisions of the Decision of the Council of the
European Communities of 21 December 1990, which established the programme. The Community
will encourage the Bulgarian audiovisual sector to participate in the appropriate Eureka programmes.
The Parties shall coordinate and, where appropriate, harmonize their policies regarding the
regulation of cross-border broadcasting, technical norms in the audiovisual field and the promotion of
European audiovisual technology.WT/REG1/6
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Cooperation could include inter alia the exchange of programmes, bursaries and facilities for
the training of journalists and other media professionals.
Article 93
Consumer protection
1. The Parties shall cooperate with the aim of achieving full compatibility between the systems
of consumer protection in Bulgaria and the Community.
2. To this end, cooperation shall comprise, within existing possibilities:
- the exchange of information and experts,
- access to Community databases,- training operations and technical assistance.
Article 94
Customs
1. The aim of cooperation shall be to guarantee compliance with all the provisions scheduled for
adoption in connection with trade and to achieve the approximation of Bulgaria's customs system to
that of the Community, thus helping to ease the steps towards liberalization planned under this
Agreement.
2. Cooperation shall include the following in particular:
- the exchange of information,- the development of appropriate infrastructure of crossing points between the Parties,- the introduction of the single administrative document and the combined
nomenclature by Bulgaria,
- the interconnection between the transit systems of the Community and Bulgaria,- the simplification of inspections and formalities in respect of the carriage of goods,- the organization of seminars and training periods,- support in the introduction of modern customs information systems.
Technical assistance shall be provided where appropriate.
3. Without prejudice to further cooperation foreseen in this Agreement, and in particular
Article 97, the mutual assistance between administrative authorities in customs matters of the Parties
shall take place in accordance with the provisions of Protocol 6.WT/REG1/6
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Article 95
Statistical cooperation
1. Cooperation in this area shall have as its aim the development of an efficient statistical system
to provide, in a rapid and timely fashion, the reliable statistics needed to support and monitor the
process of economic reform and contribute to the development of private enterprise in Bulgaria.
2. The Parties shall cooperate in particular:
- to strengthen Bulgaria's statistical apparatus,
- to bring about harmonization with international (and particularly Community)
methods, standards and classifications,
- to provide the data needed to maintain and monitor economic reform,
- to provide private-sector economic operators with the appropriate macro-economic
and micro-economic data,
- to guarantee the confidentiality of data,
- to exchange statistical information.
3. Technical assistance shall be provided by the Community as appropriate.
Article 96
Economics
1. The Community and Bulgaria will facilitate the process of economic reforms and integration
by cooperating to improve understanding of the fundamentals of their respective economies and the
devising and implementing of economic policy in market economies.
2. To these ends the Community and Bulgaria will:
- exchange information on macro-economic performance and prospects and on
strategies for development
- analyse jointly economic issues of mutual interest, including the framing of economic
policy and the instruments for implementing it,
- through the programme of Action for Cooperation in Economics (ACE) in particular,
encourage extensive cooperation among economists and managers in the Communityand Bulgaria, in order to expedite the tr ansfer of know-how for the drafting of
economic policies, and provide for wide dissemination of the results of policy-
relevant research.WT/REG1/6
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Article 97
Drugs
1. The cooperation is in particular aimed at increasing the efficiency of policies and measures to
counter the supply and illicit traffic of narcotic drugs and psychotropic substances and to reduce the
abuse of these products.
2. The Parties shall agree on the necessary methods of cooperation to attain these objectives,
including the modalities of the implementation of common actions. Their actions will be based on
consultation and close coordination over the objectives and the policy measures in the fields targeted
in paragraph 1.
3. Cooperation between the Parties will comprise technical and administrative assistance which
could deal in particular with the following areas:
- the drafting and implementation of national legislation,- the creation or strengthening of institutions and information centres and of social and
health centres,
- increasing the efficiency of the institutions engaged in combating illicit drug
trafficking,
- the training of personnel and research,- the prevention of diversion of precursors and other essential chemicals used for the
purpose of illicit manufacture of narcotic drugs or psychotropic substances, by
establishing suitable standards equivalent to those adopted by the Community and
relevant international bodies, in particular the Chemical Action Task Force (CATF).
The Parties may agree to include other areas.
TITLE VII
CULTURAL COOPERATION
Article 98
Taking into account the Solemn Declaration on European Union, the Parties undertake to
promote, encourage and facilitate cultural cooperation. Where appropriate, the Community's cultural
cooperation programmes or those of one or more Member States may be extended to Bulgaria and
further activities of interest to both sides developed.
This cooperation may notably cover:- exchange of non-commercial works of art and artists,
- film production and film industry, taking into account the cooperation in the
audiovisual sector as envisaged in Article 92,
- translation of literary works,WT/REG1/6
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- conservation and restoration of monuments and sites (architectural and cultural
heritage),
- training for those dealing with cultural affairs,
- the organization of European-oriented cultural events.
TITLE VIII
FINANCIAL COOPERATION
Article 99
In order to achieve the objectives of this Agreement and in accordance with Articles 100, 101,
103 and 104, without prejudice to Article 102, Bulgaria shall benefit from temporary financial
assistance from the Community in the form of gr ants and loans, including loans from the European
Investment Bank according to the provisions of Article 18 of the Statute of the Bank, to accelerate the
economic transformation of Bulgaria and to help Bulgaria to cope with the economic and social
consequences of structural readjustment.
Article 100
This financial assistance shall be covered:- either within the framework of the Operation Phare foreseen in Council Regulation
(EEC) No 3906/89, as amended, on a multiannual basis, or within a new financialmultiannual framework established by the Community following consultations with
Bulgaria and taking into account the considerations set out in Articles 103 and 104 of
this Agreement,
- by the loans provided by the European Investment Bank until the expiry date of the
availability thereof; following consultations with Bulgaria the Community shall fix
the maximum amount and period of availability of loans from the EuropeanInvestment Bank for Bulgaria for subsequent years.
Article 101
The objectives and the areas of the Community's financial assistance shall be laid down in an
indicative programme to be agreed between the two Parties. The Parties shall inform the Association
Council.
Article 102
1. The Community shall, in case of special need, taking into account the G-24's guidelines for
action and the availability of all financial resources, on request by Bulgaria and in coordination with
international financial institutions, in the contex t of the G-24, examine the possibility of granting
temporary financial assistance:
- to support measures with the aim to intr oduce and maintain the convertibility of the
Bulgarian currency,WT/REG1/6
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- to support medium-term stabilization and structural adjustment efforts, including
balance of payments assistance.
2. This financial assistance is subject to Bulgaria's presentation of IMF supported programmes
in the context of the G-24, as appropriate, for convertibility and/or for restructuring its economy, tothe Community's acceptance thereof, to Bulgaria's continued adherence to these programmes and, as
an ultimate objective, to rapid transition to reliance on finance from private sources.
3. The Association Council will be informed of  the conditions under which this assistance will
be provided and of the respect of the obligations undertaken by Bulgaria concerning such assistance.
Article 103
The Community financial assistance shall be evaluated in the light of the needs which arise
and of Bulgaria's development level, and taking into account established priorities and the absorption
capacity of Bulgaria's economy, the ability to repay loans and progress towards a market economy
system and restructuring in Bulgaria.
Article 104
In order to permit optimum use of the resources available, the Parties shall ensure that
Community contributions are made in close coordination with those from other sources such as theMember States, other countries, including the G-24, and international financial institutions, such as
the International Monetary Fund, the International Bank for Reconstruction and Development and the
European Bank for Reconstruction and Development.
TITLE IX
INSTITUTIONAL, GENERAL AND FINAL PROVISIONS
Article 105
An Association Council is hereby established which shall supervise the implementation of
this Agreement. It shall meet at ministerial level once a year and when circumstances require. It shall
examine any major issues arising within the framework of the Agreement and any other bilateral or
international issues of mutual interest.
Article 106
1. The Association Council shall consist of the members of the Council of the European
Communities and members of the Commission of the European Communities, on the one hand, and of
members appointed by the Government of Bulgaria, on the other.
2. Members of the Association Council may arrange to be represented, in accordance with the
conditions to be laid down in its rules of procedure.
3. The Association Council shall establish its rules of procedure.
4. The Association Council shall be presided in  turn by a member of the Council of the
European Communities and a member of the Government of Bulgaria, in accordance with the
provisions to be laid down in its rules of procedure.WT/REG1/6
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5. Where appropriate, the European Investment Bank will take part, as an observer, in the work
of the Association Council.
Article 107
The Association Council shall, for the purpose of attaining the objectives of the Agreement,
have the power to take decisions in the cases provided for therein. The decisions taken shall be
binding on the Parties which shall take the measures necessary to implement the decisions taken. The
Association Council may also make appropriate recommendations.
It shall draw up its decisions and recommenda tions by Agreement between the two Parties.
Article 108
1. Each of the two Parties may refer to the Association Council any dispute relating to the
application or interpretation of this Agreement.
2. The Association Council may settle the dispute by means of a decision.
3. Each Party shall be bound to take the measures involved in carrying out the decision referred
to in paragraph 2.
4. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either
Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a
second arbitrator within two months. For the application of this procedure, the Community and the
Member States shall be deemed to be one Party to the dispute.
The Association Council shall appoint a third arbitrator.
The arbitrators' decisions shall be taken by majority vote.Each Party to the dispute must take the step s required to implement the decision of the
arbitrators.
Article 109
1. The Association Council shall be assisted in th e performance of its duties by an Association
Committee composed of representatives of the members of the Council of the European Communities
and of members of the Commission of the European Communities on the one hand and ofrepresentatives of the Government of Bulgaria on the other, normally at senior civil servant level.
In its rules of procedure the Association Council shall determine the duties of the Association
Committee, which shall include the preparation of meetings of the Association Council and how the
Committee shall function.
2. The Association Council may delegate to the Association Committee any of its powers. In
this event the Association Committee shall take its decisions in accordance with the conditions laid
down in Article 107.
Article 110
The Association Council may decide to set up any other special committee or body that can
assist it in carrying out its duties.WT/REG1/6
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In its rules of procedure, the Association C ouncil shall determine the composition and duties
of such committees or bodies and how they shall function.
Article 111
An Association Parliamentary Committee is hereby established. It shall be a forum for
members of the Bulgarian Parliament and the European Parliament to meet and exchange views. It
shall meet at intervals which it shall itself determine.
Article 112
1. The Association Parliamentary Committee shall consist of members of the European
Parliament, on the one hand, and of members of the Bulgarian Parliament, on the other.
2. The Association Parliamentary Committee shall establish its rules of procedure.3. The Association Parliamentary Committee shall be presided in turn by each the European
Parliament and the Bulgarian Parliament, in accordance with the provisions to be laid down in its
rules of procedure.
Article 113
The Association Parliamentary Committee may request relevant information regarding the
implementation of this Agreement from the Association Council, which shall then supply the
Committee with the requested information.
The Association Parliamentary Committee shall be informed of the decisions of the
Association Council.
The Association Parliamentary Committee may make recommendations to the Association
Council.
Article 114
Within the scope of this Agreement, each Party undertakes to ensure that natural and legal
persons of the other Party have access free of discrimination in relation to its own nationals to the
competent courts and administrative organs of the Parties to defend their individual rights and their
property rights, including those concerning intellectual, industrial and commercial property.
Article 115
Nothing in this Agreement shall prevent a Contracting Party from taking any measures:(a) which it considers necessary to prevent the disclosure of information contrary to its
essential security interests;
(b) which relate to the production of, or trade in, arms ammunition or war materials or to
research, development or production indispensable for defence purposes, provided
that such measures do not impair the conditions of competition in respect of productsnot intended for specifically military purposes;
(c) which it considers essential to its own security in the event of serious internal
disturbances affecting the maintenance of law and order, in time of war or seriousWT/REG1/6
Page 48
international tension constituting threat of war or in order to carry out obligations it
has accepted for the purpose of maintaining peace and international security.
Article 116
1. In the fields covered by this Agreement and without prejudice to any special provisions
contained therein:
- the arrangements applied by Bulgaria in respect of the Community shall not give rise
to any discrimination between the Member States, their nationals, or their companies
or firms,
- the arrangements applied by the Community in respect of Bulgaria shall not give rise
to any discrimination between Bulgarian nationals or its companies or firms.
2. The provisions of paragraph 1 are without prejudice to the right of the Parties to apply the
relevant provisions of their fiscal legislation to tax payers who are not in identical situations asregards their place of residence.
Article 117
Products originating in Bulgaria shall not enjoy more favourable treatment when imported
into the Community than that applied by Member States among themselves.
The treatment granted to Bulgaria under Title IV and Chapter I of Title V shall not be more
favourable than that accorded by Member States among themselves.
Article 118
1. The Parties shall take any general or specific measures required to fulfil their obligations
under the Agreement. They shall see to it that the objectives set out in the Agreement are attained.
2. If either Party considers that the other Party has failed to fulfil an obligation under the
Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, itshall supply the Association Council with all relevant information required for a thorough
examination of the situation with a view to seeking a solution acceptable to the Parties.
In the selection of measures, priority must be given to those which least disturb the
functioning of the Agreement. These measures sh all be notified immediately to the Association
Council and shall be the subject of consultations within the Association Council if the other Party so
requests.
Article 119
This Agreement shall not, until equivalent rights for individuals and economic operators have
been achieved under this Agreement, affect rights assured to them through Agreements binding one or
more Member States, on the one hand, and Bulgaria, on the other, except for sectors of Community
competence and without prejudice to Member States' obligations resulting from this Agreement in
sectors of their competence.WT/REG1/6
Page 49
Article 120
Protocols 1, 2, 3, 4, 5, 6, 7 and 8, and Annexes I to XVI shall form an integral part of this
Agreement.
Article 121
This Agreement is concluded for an unlimited period.Either Party may denounce this Agreement by notifying the other Party. This Agreement shall
cease to apply six months after the date of such notification.
Article 122
This Agreement shall apply, on the one hand, to the territories in which the Treaties
establishing the European Economic Community, the European Atomic Energy Community and the
European Coal and Steel Community are applied and under the conditions laid down in those Treatiesand, on the other hand, to the territory of the Republic of Bulgaria.
Article 123
This Agreement is drawn up in duplicate in the Danish, Dutch, English, French, German,
Italian, Spanish, Greek, Portuguese and Bulgarian languages, each of these texts being equally
authentic.
Article 124
This Agreement will be approved by the Parties in accordance with their own procedures.
This Agreement shall enter into force on the fi rst day of the second month following the date
on which the Parties notify each other that the procedures referred to in the first paragraph have been
completed.
Upon its entry into force, the Agreement shall replace the Agreement between the European
Economic Community, the European Atomic Energy Community and Bulgaria on trade and economic
and commercial cooperation signed in Brussels on 8 May 1990.
Article 125
1. In the event that, pending the completion of th e procedures necessary for the entry into force
of this Agreement, the provisions of certain parts of this Agreement, in particular those relating to the
movement of goods, are put into effect in 1993 by means of an Interim Agreement between the
Community and Bulgaria, the Contracting Parties ag ree that, in such circumstances for the purposes
of Title III, Articles 64 and 67 of this Agreement and Protocol 1, 2, 3, 4, 5, 6 and 7 hereto, the terms'date of entry into force of the Agreement' shall mean
- the date of entry into force of the Interim Agreement in relation to obligations taking
effect on that date, and
- 1 January 1993 in relation to obligations taking effect after the date of entry into force
by reference to the date of entry into force.WT/REG1/6
Page 50
2. In the case of entry into force after 1 January, the provisions of Protocol 7 shall apply.
In witness whereof the undersigned Plenipotentiaries have signed this Agreement.
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