WORLD TRADE
ORGANIZATIONWT/REG143/1
14 January 2003
(03-0187)
Committee on Regional Trade Agreements Original:  English/
French/
Spanish
EUROPEAN COMMUNITIES – LATVIA EUROPE AGREEMENT
The following text reproduces the Agreement between the European Communities and
Latvia.1
_______________
EUROPE AGREEMENT
establishing an Association between the European Communities and their Member States, of the one
part, and the Republic of Latvia, 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 Ne therlands, The Republic of Austria, The
Portuguese Republic, The Republic of Finland, The Kingdom of Sweden, The United Kingdom of
Great Britain and Northern Ireland,
Contracting Parties to the Treaty on European Union, the Treaty establishing the European
Community , the Treaty establishing the European Coal and Steel Community and the Treaty
establishing the European Atomic Energy Community ,
hereinafter referred to as "the Member States", andthe European Community , the European Atomic Energy Community and the European Coal
and Steel Community ,
hereinafter referred to as "the Community",acting within the framework of the European Union,of the one part, andthe Republic of Latvia ,
hereinafter referred to as "Latvia",
of the other part,
                                                     
1 The text of the Agreement together with its Annexes and Protocols is available at
http://europa.eu.int/eur-lex/pri/en/oj/dat/1998/l_026/l_02619980202en00030096.pdf . It is also available at the
Secretariat for consultation by interested Members (Office 1174).WT/REG143/1
Page 2
Recalling the historical links between the parties and the common values they share;
Recognizing that the Community and Latvia wish to reinforce these links, to establish close
and lasting relations on a basis of reciprocity allowing Latvia to participate in the process of European
integration, in reinforcing and further developing the relations previously established, in particular viathe Agreement on Trade and Commercial and Economic Cooperation and the Agreement on Free
Trade and Trade-Related Matters;
Considering the commitment to the intensification of political and economic liberties which
constitute the basis of this Agreement and to further development of Latvia's new economic and
political system which respects - in accordance inte r alia with the undertakings made within the
context of the Conference on Security and Coopera tion in Europe (CSCE) and the Organization for
Security and Cooperation in Europe (OSCE) - the rule of law and human rights, including the rights
of persons belonging to minorities, a multiparty system with free and democratic elections and
liberalization aimed at completion of su stainable transition to market economy;
Sharing  the understanding that Latvia has made considerable and successful reform efforts in
the political and economic fields and that these efforts will be pursued;
Considering  the commitment to the implementation of commitments made in the framework
of the CSCE, in particular those set out in the Helsinki Final Act, the concluding documents of the
Madrid, Vienna and Copenhagen meetings, those of the Charter of Paris for a New Europe, theconclusions of the CSCE's Bonn Conference, the CSCE Helsinki document 1992, the European
Convention on Human Rights, the European Energy Charter Treaty as well as the Ministerial
Declaration of the Lucerne Conference of 30 April 1993;
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 and the OSCE;
Conscious  of the importance of this Agreement in establishing and enhancing in Europe a
system of stability based on cooperation, with the European Union as one of the cornerstones;
Recognizing  that there is a need to continue, with the Community's help, Latvia's political and
economic reform;
Taking account  of the Community's wishes to contribute to the implementation of the reforms
and to assist Latvia in facing the economic and social consequences of structural adjustment;
Recognizing  that full implementation of the Agreement is linked to the implementation of a
coherent programme of economic and political reform by Latvia;
Recognizing  the need for continuing regional cooperation among the Baltic States, taking into
account that closer integration between the European Union and the Baltic States, the Baltic States
among themselves and also in a wider regional context, should proceed in parallel;
Considering  the commitment to liberalize trade based on the General Agreement on Tariffs
and Trade (GATT) and World Trade Organization (WTO) principles;
Expecting  that this Agreement will create a new climate for economic relations between them
and above all for the development of trade and trade-related matters and investment, which are
essential to economic restructuring and the renewal of technology;WT/REG143/1
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Bearing  in mind that political dialogue on matters of mutual interest has been established by
the Joint Declaration of May 1992;
Desirous  of developing and intensifying regular political dialogue within the multilateral
framework established by the Copenhagen European Council of June 1993 and enhanced by thedecision of the Council of the European Union of 7 March 1994 and the conclusions of the Essen
European Council of December 1994;
Recalling  that Latvia has been an associated partner of the Western European Union (WEU)
since May 1994 and that it participates in the North Atlantic Treaty Organization (NATO) Partnership
for Peace Programme;
Recognizing  the contribution which the Pact on Stability in Europe can make to promoting
stability and good-neighbourly relations in the Baltic region, and confirming their determination to
work together for the success of this initiative;
Taking account  of the Community's willingness to employ instruments of cooperation and
economic, technical and financial assistance on a global and multiannual basis;
Bearing  in mind the economic and social disparities between the Community and Latvia and
thus recognizing that the objectives of this association should be reached through appropriate
provisions of the Agreement;
Desirous  of establishing cultural cooperation and developing exchanges of information;
Willing  to set up a framework for cooperation aimed at preventing illegal activities;
Recognizing  the fact that Latvia's ultimate objective is to become a member of the European
Union and that association through this Agreement will, in the view of the Parties, help Latvia to
achieve this objective;
Taking into account  the accession preparation strategy adopted by the Essen European
Council of December 1994, which is being politically implemented by the creation, between the
associated States and the Institutions of the European Union, of structured relations which encouragemutual trust and will provide a framework for addressing topics of common interest,
Have agreed as follows:
Article 1
1. An association is hereby established between the Community and its Member States, of the
one part, and Latvia, of the other part.
2. The objectives of this association are:
− to provide an appropriate framework for th e political dialogue between the Parties
allowing the development of close political relations,
− to establish gradually a free trade area between the Community and Latvia covering
substantially all trade between them,WT/REG143/1
Page 4
− to promote the expansion of trade and the harmonious economic relations between
the Parties and so to foster dynamic economic development and prosperity in Latvia,
− to provide a basis for economic, financial, cultural and social cooperation and
cooperation in the prevention of illegal activities, as well as for the Community'sassistance to Latvia,
− to support Latvia's efforts to develop its economy and to complete the sustainable
transition into a market economy,
− to provide an appropriate framework for the gradual integration of Latvia into the
European Union. Latvia shall work towards fulfilling the necessary requirements inthis respect,
− to set up institutions suitable to make the association effective.
TITLE I
General Principles
Article 2
1. Respect for democratic principles and human rights, established by the Helsinki Final Act and
in the Charter of Paris for a New Europe, as well as the principles of market economy, inspire the
domestic and external policies of the Parties and constitute essential elements of this Agreement.
2. The Parties consider that it is essential for the future prosperity and stability of the region that
the Baltic States should maintain and develop cooperation among themselves and will make every
effort to enhance this process.
Article 3
1. The association includes a transitional period which is referred to in specific Articles
hereinafter and which ends at the latest on 31 December 1999.
2. The Association Council referred to in Article 110, 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 the implementation by Latvia of economic reforms on the basis of
the principles referred to in the preamble.
3. The transitional period envisaged under paragraph 1 shall apply neither to Title II nor to
Title III.
TITLE II
Political Dialogue
Article 4
The political dialogue between the European Union and Latvia shall be developed and
intensified. It shall accompany and consolidate the rapprochement between the European Union andWT/REG143/1
Page 5
Latvia, support the political and economic changes underway in that country or already realized, and
contribute to the establishment of close links of solidarity and new forms of cooperation between the
Parties. The political dialogue is intended to promote in particular:
− Latvia's progressive rapprochement with the European Union,
− an increasing convergence of positions of the Parties on international issues and, in particular,
on those issues likely to have substantial effects on one or the other Party,
− better cooperation in areas covered by the Common Foreign and Security Policy of the
European Union,
− security and stability in Europe.
Article 5
Political dialogue shall take place within the multilateral framework and according to the
forms and practices established with the associated countries of central Europe.
Article 6
1. At Ministerial level, bilateral political dialogue shall take place within the Association
Council, which shall have the general responsibility for any matter which the Parties might wish to
put to it.
2. With the agreement of the Parties, other procedures for political dialogue shall be established,
in particular:
− meetings, where necessary, of senior officials (at the level of political directors)
representing Latvia, on the one hand, and the Presidency of the Council of theEuropean Union and the Commission, on the other,
− taking full advantage of all diplomatic channels between the Parties, including
appropriate contacts in third countries and within the United Nations, the OSCE and
other international fora,
− including Latvia in the group of countries receiving regular information on the
activities managed within the framework of the Common Foreign and Security Policy
as well as exchanging information with a view to achieving the objectives defined in
Article 4,
− any other means which would make a useful contribution to consolidating,
developing and stepping up this dialogue.
Article 7
At parliamentary level, political dialogue shall take place within the framework of the
Parliamentary Committee of the association between the European Communities and their Member
States and the Republic of Latvia (hereinafter referred to as the 'Parliamentary Committee`).WT/REG143/1
Page 6
TITLE III
Free Movement Of Goods
Article 8
1. The Community and Latvia shall gradually establish a free trade area in a transitional period
lasting a maximum of four years starting from the entry into force of the Agreement on Free Trade
and Trade-Related Matters on 1 January 1995, in accordance with the provisions of this Agreement
and in conformity with those of the GATT and the WTO.
2. The combined nomenclature of goods based on the Harmonized System shall be applied to
the classification of goods in trade between the two Parties.
3. For each product the basic duty to which the successive reductions set out in this Agreement
are to be applied shall be that set out in Annexes II to IV and X, or that actually applied erga omnes
on 1 January 1995, whichever is the lower.
4. If, after 1 January 1995, 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 from the date when
such reductions are applied.
5. The Community and Latvia 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
Latvia listed in Chapters 25 to 97 of the combined nomenclature with the exception of the products
listed in Annex I.
2. The provisions of Articles 10 to 14 inclusive do not apply to products mentioned in
Article 16.
3. Trade between the Parties in items covered by the Treaty establishing the European Atomic
Energy Community will be conducted in accordance with the provisions of that Treaty.
Article 10
1. Customs duties on imports applicable in the Community to products originating in Latvia are
abolished on 1 January 1995.
2. Quantitative restrictions on imports into the Community and measures having an equivalent
effect are abolished on 1 January 1995 with regard to products originating in Latvia.WT/REG143/1
Page 7
Article 11
1. Customs duties on imports applicable in Latvia to products originating in the Community
other than those listed in Annexes II  and III are abolishe d on 1 January 1995.
2. Customs duties on imports applicable in Latvia to products originating in the Community
which are listed in Annex II shall be progressively reduced in accordance with the following
timetable:
− on 1 January 1996, each duty shall be reduced to 50 % of the basic duty,
− on 1 January 1997, the remaining duties shall be eliminated.
3. Customs duties on imports applicable in Latvia to products originating in the Community
which are listed in Annex III shall be progressively reduced in accordance with the following
timetable:
− on 1 January 1997, each duty shall be reduced to 50 % of the basic duty,
− on 1 January 1999, the remaining duties shall be eliminated.
4. Quantitative restrictions on imports into Latvia  of products originating in the Community and
measures having an equivalent effect are abolished on 1 January 1995.
Article 12
The provisions concerning the abolition of customs duties on imports shall also apply to
customs duties of a fiscal nature.
Article 13
Any charges having an effect equivalent to customs duties on imports are abolished on
1 January 1995 in trade between the Community and Latvia.
Article 14
1. Customs duties on exports and charges having equivalent effect are abolished by
1 January 1995 between the Community and Latvia, with the exception of those listed in Annex IV,
which shall be abolished by Latvia at the latest at the end of 1998.
2. Quantitative restrictions on exports to Latvia and any measures having equivalent effect are
abolished by the Community on 1 January 1995.
3. Quantitative restrictions on exports to the Community and any measures having equivalent
effect are abolished by Latvia on 1 January 1995.
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 if its general economic situation and the
situation of the economic sector concerned so permit.
The Association Council may make recommendations to this effect.WT/REG143/1
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Article 16
1. The textile products of Latvian origin listed in Annex V to this Agreement shall benefit from
a suspension of customs duties on imports into the Community, under the conditions set out in thatAnnex. The Annex may be revised by decision of the Association Council, in accordance with the
procedures set out in Article 112.
2. Protocol 1 lays down the other arrangements applicable to the textiles products referred to
therein.
Article 17
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 VI in respect of products
originating in Latvia.
2. The provisions of this Chapter do not preclude the introduction of an agricultural component
by Latvia in the duties applicable to the products listed in Annex VI in respect of products originating
in the Community.
CHAPTER II
Agriculture
Article 18
1. The provisions of this Chapter shall apply to  agricultural products originating in the
Community and in Latvia.
2. The term 'agricultural products` means the produc ts listed in Chapters 1 to 24 of the combined
nomenclature and the products listed in Annex I, but excluding fishery products as defined by Article
22 (2).
Article 19
Protocol 2 lays down the trade arrangements for processed agricultural products which are
listed therein.
Article 20
1. As from 1 January 1995 no quantitative restrictions apply to imports into the Community of
agricultural products originating in Latvia nor to imports into Latvia of agricultural products
originating in the Community.
2. The Community and Latvia shall grant each othe r the concessions referred to in Annexes VII
to XI in accordance with the conditions laid down therein.
3. The concessions referred to in paragraph 2 may be subject to revision by agreement between
the Parties within a period lasting until 31 December 1997 and on the basis of the principles and
procedures set out in paragraph 4.WT/REG143/1
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4. 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 Latvia, of the role of agriculture in Latvia's economy, of the production and
export potential of its traditional branches and markets, the Community and Latvia shall examine in
the Association Council, product by product and on an orderly and reciprocal basis, the possibilities ofgranting each other further concessions.
Article 21
Notwithstanding other provisions of this Agreement, and in particular Article 30, if, given the
particular sensitivity of the agricultural markets, imports of products originating in one Party, which
are the subject of concessions granted pursuant to Article 20, cause serious disturbance to the markets
in the other Party, both Parties shall enter into consultations immediately to find an appropriatesolution. Pending such a solution, the Party concerned may take the measures it deems necessary.
CHAPTER III
Fisheries
Article 22
1. The provisions of this Chapter shall apply to  fishery products originating in the Community
and in Latvia.
2. The term 'fishery products` means the products listed in Chapter 3 of the combined
nomenclature and product groups covered by the combined nomenclature codes 0511 91 10,
0511 91 90, 1604, 1605, 1902 20 10 and 2301 20 00.
Article 23
1. The Community and Latvia shall grant each othe r the concessions referred to in Annexes XII
and XIII in accord ance with the conditio ns laid down therein.
2. The provisions of Articles 20 (4) and 21 shall apply mutatis mutandis to fishery products.
CHAPTER IV
Common Provisions
Article 24
The provisions of this Title shall apply to trade in all products originating in both Parties
except where otherwise provided herein or in Protocols 1 and 2.
Article 25
1. In trade between the Community and Latvia from 1 January 1995:
− no new customs duties on imports or exports or charges having equivalent effect shall
be introduced, nor shall those already applied be increased,WT/REG143/1
Page 10
− no new quantitative restrictions on imports or exports or measures having equivalent
effect shall be introduced nor shall those existing be made more restrictive.
2. Without prejudice to the concessions granted pursuant to Article 20, the provisions of
paragraph 1 of this Article shall not restrict in any way the pursuance of the respective agricultural
and fisheries policies of Latvia and the Community or the taking of any measures under such policies.
Article 26
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 like
products 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 indirect taxation in excess of the amount of direct or indirect taxation imposed on them.
Article 27
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 Latvia stated in this Agreement.
Article 28
Exceptional measures of limited duration which derogate from the provisions of Article 11
and Article 25 (1), first indent, may be taken by Latvia 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 Latvia 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 of industrial products from the Community as defined in Chapter I during the
last year for which statistics are available.
These measures shall be applied for a period not exceeding three years unless a longer
duration is authorized by the Association Council. They shall cease to apply at the latest by
31 December 1998.
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/REG143/1
Page 11
Latvia 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
Latvia 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 duties starting atthe latest two years after their introduction at equal annual rates. The Association Council may decide
on a different schedule.
Article 29
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 GATT, it may take appropriate measures against this practice inaccordance with the Agreement relating to the application of Article VI of the GATT, with related
internal legislation and with the conditions and procedures laid down in Article 33.
Article 30
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 Latvia, whichever is concerned, may take appropriate measures under the
conditions and in accordance with the procedures laid down in Article 33.
Article 31
Where compliance with the provisions of Articles 14 and 25 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 referred to above 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 accordance
with the procedures laid down in Article 33. The measures shall be non-discriminatory and beeliminated when conditions no longer justify their maintenance.
Article 32
The Member States of the European Union (hereinafter referred to as 'the Member States`)
and Latvia shall progressively adjust any State monopolies of a commercial character so as to ensure
that, by the end of 1998, no discrimination regarding the conditions under which goods are procured
and marketed exists between nationals of the Member States and of Latvia. The Association Council
will be informed about the measures adopted to implement this objective.WT/REG143/1
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Article 33
1. In the event of the Community or Latvia subjecting imports of products liable to give rise to
the difficulties referred to in Article 30 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 29, 30 and 31, before taking the measures provided for
therein or, in cases in which paragraph 3 (d) applies, as soon as possible, the Community or Latvia, as
the case may be, shall supply the Association Council 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 abolition as soon as circumstances permit.
3. For the implementation of paragraph 2, the following provisions shall apply:
(a) as regards Article 30, 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 30days 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 29, the Association Council shall be informed of the dumping case
as soon as the authorities of the importing Party have initiated an investigation. If noend has been put to the dumping or if 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 31, the difficulties arising 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 requiring immediate action make prior information
or examination, as the case may be, impossible, the Community or Latvia whichever
is concerned may, in the situations specified in Articles 29, 30 and 31, applyforthwith the precautionary measures strictly necessary to deal with the situation.WT/REG143/1
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Article 34
Protocol 3 lays down rules of origin for the application of the tariff preferences provided for
in this Agreement as well as the methods of administrative cooperation therewith.
Article 35
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 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 prohibitions or restrictions shall not, however, constitute a means ofarbitrary discrimination or a disguised restriction on trade between the Parties.
Article 36
Protocol 4 lays down the specific provisions to  apply to trade between Latvia of the one part
and Spain and Portugal of the other part, and it will be valid until 31 December 1995.
TITLE IV
Movement Of Workers, Establishment, Supply Of Services
CHAPTER I
Movement Of Workers
Article 37
1. Subject to the conditions and modalities applicable in each Member State:
− the treatment accorded to workers of Latvian 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 41, 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. Latvia shall, subject to the conditions and modalities 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 their spouse and children who are legally resident in the said
territory.
Article 38
1. With a view to coordinating social security systems for workers of Latvian 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,WT/REG143/1
Page 14
− all periods of insurance, employment or residence completed by such workers in the
various Member States shall be added together for the purpose of pensions andannuities 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. Latvia 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 39
1. The Association Council shall by decision adop t the appropriate provisions to implement the
objective set out in Article 38.
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 40
The provisions adopted by the Association Council in accordance with Article 39 shall not
affect any rights or obligations arising from bilateral agreements linking Latvia and the Member
States where those agreements provide for more favourable treatment of nationals of Latvia or of the
Member States.
Article 41
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 workers of Latvian nationality
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.
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 42
From the end of the transitional period or sooner if socio-economic conditions in Latvia have
been largely aligned on those of the Member States and if the employment situation in theWT/REG143/1
Page 15
Community permits, the Association Council will co nsider ways of further improving the movement
of workers. The Association Council shall make recommendations to such end.
Article 43
In the interest of facilitating the restructuring of labour resources resulting from the economic
restructuring in Latvia, the Community shall provid e technical assistance for the establishment of a
suitable social security system in Latvia as set out in Article 92 of this Agreement.
CHAPTER II
Establishment
Article 44
1. The Community and its Member States shall grant, except for the sectors included in
Annex XIV, from entry into force of this Agreement:
(i) treatment no less favourable than that accorded by Member States to their
own companies or to any third country company, whichever is the better,
with regard to the establishment of Latvian companies;
(ii) to subsidiaries and branches of Latvian companies, established in their
territory, treatment no less favourable than that accorded by Member States
to their own companies and branches or to subsidiaries and branches of any
third country company established in their territory, whichever is the better,
in respect of their operation.
2. Latvia shall facilitate the setting up of operations on its territory by Community companies
and nationals. To that end, it shall:
(i) grant, from entry into force of the Agreement, for the establishment of
Community companies, treatment no less fa vourable than that accorded to its
own companies or to companies of any third country, whichever is the better,
save for the sectors referred to in Annex XV, where national treatment shall
be granted at the latest by the end of the transitional period referred to in
Article 3;
(ii) grant, from entry into force of this Agreement, for the operation of branches
and subsidiaries of Community companie s, established in Latvia, treatment
no less favourable than that accorded to its own companies or to subsidiaries
and branches of any third country company established in its territory,
whichever is the better.
3. Latvia shall, during the transitional period referred to in paragraph 2 (i) not adopt any
measures or actions which introduce discrimination as regards the establishment and operations of
Community companies and nationals in its territory in comparison to its own companies and
nationals.
4. The Association Council shall during the transi tional period referred to in paragraph 2 (i)
examine regularly the possibility of accelerating the granting of national treatment in the sectorsWT/REG143/1
Page 16
referred to in Annex XV. Amendments may be made  to this Annex by decision of the Association
Council.
Following the expiration of the transitional period referred to in Article 3, the Association
Council may exceptionally, upon request of Latvia, and if the necessity arises, decide to prolong the
duration of exclusion of certain areas or matters listed in Annex XV for a limited period of time.
5. The treatment described in paragraphs 1 and 2 shall be applicable for the establishment and
operation of nationals as from the end of the transitional period referred to in Article 3.
Article 45
1. The provisions of this Chapter shall not apply to air transport, inland waterways and maritime
cabotage transport services.
2. The Association Council may make recomme ndations for improving establishment and
operations in the areas covered by paragraph 1.
Article 46
For the purposes of this Agreement:
(a) A 'Community company` or a 'Latvian company` respectively shall mean a company
set up in accordance with the laws of a Member State or of Latvia respectively and
having its registered office or central administration or principal place of business
within the Community or in the territory of Latvia respectively.
However, should the company, set up in accordance with the laws of a Member State
or Latvia respectively, have only its registered office within the Community or in the
territory of Latvia respectively, the company shall be considered a Community or
Latvian company respectively if its operations possess a real and continuous link with
the economy of one of the Member States or Latvia respectively.
(b) 'Subsidiary` of a company shall mean a company which is effectively controlled by
the first company.
(c) 'Branch` of a company shall mean a place of business not having legal personality
which has the appearance of permanency, such as the extension of a parent body, has
a management and is materially equipped to negotiate business with third parties so
that the latter, although knowing that there will if necessary be a legal link with the
parent body, the head office of which is abroad, do not have to deal directly with such
parent body but may transact business at the place of business constituting theextension.
(d) 'Establishment` shall mean:
(i) as regards nationals, the right to take up economic activities as self-employed
persons and to set up undertakings, in particular companies, which they
effectively control. Self-employment and business undertakings by nationalsshall not extend to seeking or taking employment in the labour market or
confer a right of access to the labour market of another Party. The provisions
of this chapter do not apply to those who are not exclusively self-employed;WT/REG143/1
Page 17
(ii) as regards Community or Latvian companies, the right to take up economic
activities by means of the setting up of subsidiaries and branches in Latvia or
in the Community respectively.
(e) 'Operation` shall mean the pursuit of economic activities.
(f) 'Economic activities` shall in principle include activities of an industrial, commercial
and professional character and activities of craftsmen.
(g) 'Community national` and 'Latvian national` shall mean respectively a natural person
who is a national of one of the Member States or of Latvia.
(h) With regard to international maritime tr ansport, including inter-modal operations
involving a sea leg, nationals of the Member States or of Latvia established outside
the Community or Latvia respectively, and shipping companies established outside
the Community or Latvia and controlled by nationals of a Member State or Latviannationals respectively, shall also be beneficiaries of the provisions of Chapter II and
Chapter III, if their vessels are registered in that Member State or in Latvia
respectively in accordance with their respective legislation.
Article 47
1. Subject to the provisions of Article 43, with the exception of financial services described in
Annex XVI, 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 with its own companies and nationals.
2. In respect of financial services, notwithstanding any other provisions of this Agreement, a
Party shall not be prevented from taking measures for prudential reasons, including for the protection
of investors, depositors, policyholders or persons to whom a fiduciary duty is owed by a financial
service supplier, or to ensure the integrity and stability of the financial system. Such measures shall
not be used as a means of avoiding the Party's obligations under the Agreement.
3. Nothing in the Agreement shall be construed to require a Party to disclose information
relating to the affairs and accounts of individual customers or any confidential or proprietary
information in the possession of public entities.
Article 48
1. The provisions of Articles 44 and 47 do not preclude the application by a Party of particular
rules concerning the establishment and operation in its territory of branches of companies of another
Party not incorporated in the territory of the first Party, which are justified by legal or technicaldifferences between such branches as compared with branches of companies incorporated in its
territory or, as regards financial services, for prudential reasons.
2. 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, for prudential reasons.
Article 49
1. A 'Community company` or a 'Latvian company` established in the territory of Latvia or the
Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or
branches, in accordance with the legislation in force in the host country of establishment, in theWT/REG143/1
Page 18
territory of Latvia and the Community respectively, employees who are nationals of Community
Member States and Latvia respectively, provided that such employees are key personnel as defined in
paragraph 2 of this Article, and that they are employed exclusively by companies, subsidiaries or
branches.
The residence and work permits of such employees shall only cover the period of such
employment.
2. Key personnel of the above-mentioned companies herein referred to as 'organizations` are
'intra-corporate transferees` as defined in (c) of this paragraph in the following categories, provided
that the organization is a juridical person and that the persons concerned have been employed by it or
have been partners in it (other than as majority  shareholders), for at least the year immediately
preceding such movement:
(a) Persons working in a senior position with an organization, who primarily direct the
management of the establishment, receiving general supervision or direction
principally from the board of directors or stockholders of the business or their
equivalent, including:
− directing the establishment or a department or sub-division of the
establishment,
− supervising and controlling the work of other supervisory, professional or
managerial employees,
− having the authority personally to recruit and dismiss or recommend
recruiting, dismissing or other personnel actions.
(b) Persons working within an organization who possess uncommon knowledge essential
to the establishment's service, research equipment, techniques or management. The
assessment of such knowledge may reflect, apart from knowledge specific to the
establishment, a high level of qualification referring to a type of work or trade
requiring specific technical knowledge, including membership of an accreditedprofession.
(c) An 'intra-corporate transferee` is defined as a natural person working within an
organization in the territory of a Party, and being temporarily transferred in the
context of pursuit of economic activities in the territory of the other Party; the
organization concerned must have its principal place of business in the territory of aParty and the transfer be to an establishmen t (branch, subsidiary) of that organization,
effectively pursuing like economic activities in the territory of the other Party.
3. The entry into and the temporary presence within  the territory of the Community or Latvia of
Latvian and Community nationals respectively shall be permitted, when these representatives of
companies are persons working in a senior position, as defined in paragraph 2 (a) above, within a
company, and are responsible for the setting up of a Community subsidiary or branch of a Latvian
company or of a Latvian subsidiary or branch of a Community company in a Community MemberState or Latvia respectively, when:
− those representatives are not engaged in making direct sales or supplying services,
andWT/REG143/1
Page 19
− the company has its principal place of business outside the Community or Latvia,
respectively, and has no other representative, office, branch or subsidiary in thatCommunity Member State or Latvia respectively.
Article 50
In order to make it easier for the Community nationals and Latvian nationals to take up and
pursue regulated professional activities in Latvia 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.
Article 51
During the transitional period referred to in Article 3, Latvia 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
Latvia, or
− face the elimination or a drastic reduction of the total market share held by Latvian companies
or nationals in a given sector or industry in Latvia, or
− are newly emerging industries in Latvia.
Such measures:
− shall cease to apply at the latest upon the expiration of the transitional period referred to in
Article 3, and
− shall be reasonable and necessary in order to remedy the situation, and
− shall only relate to establishments in Latvia to be created after the entry into force of such
measures and shall not introduce discrimination concerning the operations of Communitycompanies or nationals already established in Latvia at the time of introduction of a given
measure compared with Latvian companies or nationals.
While devising and applying such measures, Latvia 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, Latvia shall consult the Association Council and
shall not put them into effect before a one-month period following the notification of the Association
Council of the concrete measures to be introduced by Latvia, except where the threat of irreparable
damage requires the taking of urgent measures in which case Latvia shall consult the Association
Council immediately after their introduction.
Upon expiration of the transitional period referred to in Article 3, Latvia may introduce such
measures only with the authoriza tion of the Association Council a nd under conditions determined by
the latter.WT/REG143/1
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CHAPTER III
Supply Of Services
Article 52
1. The Parties undertake in accordance with the following provisions to take the necessary steps
to allow progressively the supply of services by Community or Latvian companies or nationals which
are established in a Party other than that of the person for whom the services are intended.
2. In step with the liberalization process mentione d in paragraph 1, and subject to the provisions
of Article 56, 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 49 (2),including natural persons who are representatives of a Community or Latvian 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 engaged
in making direct sales to the general public or in supplying services themselves.
3. At the latest eight years after the entry into force of this Agreement, the Association Council
shall take the measures necessary to implement progressively the provisions of paragraph 1. Account
shall be taken of the progress achieved by the Parties in the approximation of their laws.
Article 53
1. The Parties shall not take any measures or actions which render the conditions for the supply
of services by Community and Latvian nationals or companies which are established in a Party other
than that of the person for whom the services are intended significantly more restrictive as compared
with the situation existing on the day preceding the day of entry into force of the Agreement.
2. If one Party is of the view that measures introduced by the other Party since the signature of
the Agreement result in a situation which is significantly more restrictive in respect of supply ofservices as compared with the situation existing at the date of signature of the Agreement, such first
Party may request the other Party to enter into consultations.
Article 54
1. With regard to international maritime transport,  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 arising from the
United Nations Code of Conduct for Liner Conferences, as applicable to one or other
Party to the present Agreement. Non-conference lines will be free to operate 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 paragraph 1, the Parties shall:
(a) not apply, as from entry into force of this Agreement, any cargo sharing provisions of
bilateral agreements between any Member State of the Community and the former
Soviet Union;WT/REG143/1
Page 21
(b) not introduce cargo sharing clauses into future bilateral agreements with third
countries, other than in those exceptional circumstances where liner shipping
companies from one or other Party to the present Agreement would not otherwise
have an effective opportunity to ply for trade to and from the third country concerned;
(c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and
liquid bulk trade;
(d) abolish upon entry into force of this Agreement all unilateral measures,
administrative, technical and other obstacles which could have restrictive or
discriminatory effects on the free supply of services in international maritime
transport.
Each Party shall grant, inter alia , no less favourable treatment for the ships operated by
nationals or companies of the other Party than that  accorded to a Party's own ships with regard to
access to ports open to international trade, the use of infrastructure and auxiliary maritime services of
the ports, as well as related fees and charges, customs facilities and the assignment of berths and
facilities for loading and unloading.
3. Nationals and companies of the Community providing international maritime transport
services shall be free to provide international sea-river services in the inland waterways of Latvia and
vice versa.
4. With a view to ensuring the transit of goods through the territory of each Party, the Parties
undertake to conclude an agreement as soon as possible and before the end of 1999 on the transit of
inter-modal traffic through each other's territory.
5. With a view to assuring a coordinated development and progressive liberalization of transport
between the Parties, adapted to their reciprocal commercial needs, the conditions of mutual market
access and provision of services in transport by road, rail and inland waterways and, if applicable, in
air transport shall be dealt with by specific transport agreements where appropriate negotiated
between the Parties after entry into force of this Agreement.
6. Prior to the conclusion of the agreements referred to in paragraph 5, the Parties shall not take
any measures or actions which are more restrictive or discriminatory as compared with the situation
existing on the day preceding the day of entry into force of the Agreement.
7. During the transitional period, Latvia 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 road, rail, inland waterway and air 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.
8. In step with the common progress in the achievem ent of the objectives of this Chapter, the
Association Council shall examine ways of creating the conditions necessary for improving freedom
to provide road, rail, inland waterway and air transport services.WT/REG143/1
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CHAPTER IV
General Provisions
Article 55
1. The provisions of this Title 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 either Party are connected, even
occasionally, with the exercise of official authority.
Article 56
For the purpose of this Title nothing in the Agreement shall prevent the Parties from applying
their laws and regulations regarding entry and stay, work, labour conditions and establishment of
natural 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.
Article 57
Companies which are controlled and exclusively owned by Latvian companies or nationals
and Community companies or nationals jointly shall also be beneficiaries of the provisions ofChapters II, III and IV of this Title.
Article 58
1. The Most Favoured Nation treatment granted in accordance with the provisions of this Title
shall not apply to the tax advantages which the Par ties are providing or will provide in the future on
the basis of agreements to avoid double taxation, or other tax arrangements.
2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties
of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of
agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation.
3. Nothing in this Title shall be construed to prevent Member States or Latvia from
distinguishing, in the application of the relevant provisions of their fiscal legislation, betweentaxpayers who are not in identical situations, in particular as regards their place of residence.
Article 59
The provisions of this Title shall be progressively adjusted by the Parties. In formulating
recommendations to this effect, the Associatio n Council shall take into account the respective
obligations of the Parties under the General Agreement on Trade in Services (GATS), and in
particular of its Article V.
Article 60
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.WT/REG143/1
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TITLE V
Payments, Capital, Competition And Other Economic Provisions, Approximation Of Laws
CHAPTER I
Current Payments And Movement Of Capital
Article 61
The Parties undertake to authorize, in freely convertible currency, in accordance with the
provisions of Article VIII of the Articles of Agreement of the International Monetary Fund, anypayments and transfers on the current account of balance of payments between residents of the
Community and Latvia.
Article 62
1. With regard to transactions on the capital account of balance of payments, from entry into
force of the Agreement, the Member States and Latvia respectively shall ensure the free movement of
capital relating to direct investments made in comp anies formed in accordance with the laws of the
host country and investments made in accordance with  the provisions of Chapter II of Title IV, and
the liquidation or repatriation of these investments and of any profit stemming therefrom.
Without prejudice to Article 44, last paragraph, complete free movement of capital relating to
establishment and operations of self-employed persons, including the liquidation and repatriation of
such investments, shall be ensured from  entry into force of this Agreement.
2. With regard to transactions on the capital account of balance of payments, from entry into
force of this Agreement the Member States and Latvia respectively shall ensure the free movement ofcapital relating to portfolio investment. This shall also apply to the free movement of capital relating
to credits related to commercial transactions or the provision of services in which a resident of one of
the Parties is participating and to financial loans.
3. Without prejudice to paragraph 1, the Member States and Latvia shall not introduce any new
restrictions on the movement of capital and curren t payments connected therewith between residents
of the Community and Latvia and shall not make the existing arrangements more restrictive.
4. The Parties shall consult each other with a view to facilitating the movement of capital
between the Community and Latvia in order to promote the objective of the present Agreement.
Article 63
1. 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. The Association Council shall examine ways of enabling Community rules on the movement
of capital to be applied in full.WT/REG143/1
Page 24
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 Latvia:
(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 Latvia 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 Communityor, for products covered by the ECSC Treaty, on th e basis of corresponding rules of the ECSC Treaty
including secondary legislation.
3. The Association Council shall, by 31 December 1997, adopt by decision the necessary rules
for the implementation of paragraphs 1 and 2.
Until these rules are adopted, the provisions of the Agreement on interpretation and
application of Articles VI, XVI and XXIII of the GATT shall be applied as the rules for the
implementation of paragraph 1 point (iii) and related parts of paragraph 2.
4. (a) For the purposes of applying the provisions of paragraph 1 point (iii), the Parties
recognize that until 31 December 1999, any public aid granted by Latvia shall be
assessed taking into account the fact that Latvia shall be regarded as an area identicalto those areas of the Community described in Article 92 (3) (a) of the Treaty
establishing the European Community. The Association Council shall, taking into
account the economic situation of Latvia, decide whether that period should be
extended by further periods of five years.
(b) Each Party shall ensure transparency 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 oneParty, 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 point (iii) does not apply,
− any practices contrary to paragraph 1 point (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 Community and in particular of those established in
Council Regulation No 26/1962.WT/REG143/1
Page 25
6. If the Community or Latvia considers that a part icular practice is incompatible with the terms
of the first paragraph of this Article, 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 interests of the other Party or material injury to its domestic industry,including its services industry,
it may take appropriate measures after consul tation within the Associ ation Council or after
30 working days following referral for such consultation.
In the case of practices incompatible with paragraph 1 point (iii) of this Article, such
appropriate measures may, where the GATT applies thereto, only be adopted in conformity with the
procedures and under the conditions laid down by the GATT 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.
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, as soon as possible, a time schedule
for their removal.
2. Where one or more Member States or Latvia is in serious balance of payments difficulties, or
under imminent threat thereof, the Community or Latvia, as the case may be, may, in accordance withthe conditions established under the GATT, 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 Latvia, 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 1 January 1998, the principles of
the Treaty establishing the European Community, notably Article 90, and the relevant CSCE
principles, in particular entrepreneurs' freedom of decision, are upheld.
Article 67
1. Pursuant to the provisions of this Article and of Annex XVII, the Parties confirm the
importance that they attach to ensure adequate and effective protection and enforcement ofintellectual, industrial and commercial property rights.WT/REG143/1
Page 26
2. Latvia shall continue to improve the protection of intellectual, industrial and commercial
property rights in order to provide, by the end of the transitional period referred to in Article 3 of this
Agreement, for a level of protection similar to th at existing in the Community, including effective
means of enforcing such rights.
3. By the end of the transition period referred to in Article 3, Latvia shall accede to the
multilateral conventions on intellectual, industrial and commercial property rights referred to in
paragraph 1 of Annex XVII to which Member States of the Community are parties or which are de
facto applied by Member States according to the relevant provisions contained in these conventions.
4. If problems in the area of intellectual, industrial and commercial property affecting trading
conditions were to occur, urgent consultations will be  undertaken, at the request of either Party, with a
view to reaching mutually satisfactory solutions.
Article 68
1. The Parties consider the opening up of the award of public contracts on the basis of non-
discrimination and reciprocity, in particular in the GATT and WTO context, to be a desirable
objective.
2. The Latvian companies as defined in Article 46 of this Agreement, shall be granted access to
contract award procedures in the Community pursuant to Community procurement rules under a
treatment no less favourable than that accorded to Community companies as of the entry into force of
this Agreement.
Community companies in the sense of Article 46 of this Agreement shall be granted access to
contract award procedures in Latvia under a treatment no less favourable than that accorded toLatvian companies at the latest by the end of the transitional period referred to in Article 3.
Community companies established in Latvia under the provisions of Chapter II of Title IV in
the form of subsidiaries as described in Article 46 and in the forms described in Article 57 shall have
upon entry into force of this Agreement access to contract award procedures under a treatment no lessfavourable than that accorded to Latvian compan ies. Community companies established in Latvia in
the form of branches and agencies as described in Article 46 shall be granted such treatment at the
latest by the end of the transitional period referred to in Article 3.
The provisions in this paragraph shall also apply to public contracts covered by Directive
93/38/EEC of 14 June 1993 once Latvia has introduced the appropriate legislation.
The Association Council shall periodically exam ine the possibility for Latvia to introduce
access to contract award procedures in Latvia for all Community companies prior to the end of the
transitional period.
3. As regards establishment, operations, supply of services between the Community and Latvia,
as well as employment and movement of labour linked to the fulfilment of public contracts, the
provisions of Articles 37 to 60 of this Agreement are applicable.WT/REG143/1
Page 27
CHAPTER III
Approximation Of Laws
Article 69
The Parties recognize that an important condition for Latvia's economic integration into the
Community is the approximation of Latvia's existing and future legislation to that of the Community.
Latvia 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 taxation, intellectual property, financial services,
rules on competition, protection of health and life of humans, animals and plants, protection of
workers including health and safety at work, consumer protection, indirect taxation, technical rulesand standards, nuclear law and regulation, transport, telecommunications, environment, public
procurement, statistics, product liability, labour law and entrepreneurial law.
Within these areas rapid progress in the approximation of laws should in particular be made in
the fields of the internal market, competition, pr otection of workers, environmental protection and
consumer protection.
Article 71
The Community shall provide Latvia with technical 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 legislation in the relevant sectors,
− aid for improving customs procedures and statistics,
− aid for legislation in the context of approximation of Latvia's legislation to European Union
laws.WT/REG143/1
Page 28
TITLE VI
Economic Cooperation
Article 72
1. The Community and Latvia shall further develop economic cooperation aimed at contributing
to Latvia's development and growth potential. Such cooperation shall strengthen existing economic
links on the widest possible foundation, to the benefit of both Parties.
2. Policies and other measures shall be designed to bring about the economic and social
development of Latvia and will be guided by the principle of sustainable development. These policies
should ensure that environmental considerations are also fully incorporated from the outset and thatthey 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, investment, agriculture and the agro-industrial sector, energy, transport, regional
development and tourism.
4. Special attention shall be devoted to measures capable of fostering cooperation between the
three Baltic countries, and with the other countries of central and eastern Europe as well as the other
countries bordering the Baltic Sea with a view to an integrated development of the region.
Article 73
Industrial Cooperation
1. Cooperation shall seek to promote the following in particular:
− industrial cooperation between the economic operators of the two Parties, with the
particular aim of strengthening the private sector in Latvia,
− Community participation in Latvia's efforts in both public and private sectors to
modernize and restructure its industry, which will effect the transition to a market
economy under conditions which ensure that the environment is protected,
− the restructuring of individual sectors,
− the establishment of new undertakings in areas offering potential for growth,
particularly in branches of light industry, consumer goods and market services.
2. Industrial cooperation initiatives shall take into account priorities determined by Latvia. The
initiatives should seek in particular to establis h a suitable framework for undertakings, to improve
management know-how and to promote transparency as regards markets and conditions for
undertakings. Technical assistance will be included 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 isWT/REG143/1
Page 29
essential to economic and industrial reconstruction and development in Latvia. The cooperation shall
also aim to encourage and promote foreign investment and privatization in Latvia.
2. The particular aims of cooperation shall be:
− for Latvia to establish a legal framework which favours and protects investment,
− the conclusion, where appropriate, with Member States of bilateral agreements for the
promotion and protection of investment,
− to proceed with deregulation and to improve economic infrastructure,
− to exchange information on investment oppor tunities in the context of trade fairs,
exhibitions, trade weeks and other events.
Assistance from the Community could be granted in the initial stage to agencies which
promote inward investment.
3. Latvia shall honour the rules on Trade-Related Aspects of Investment Measures (TRIMs).
Article 75
Small And Medium-Sized Enterprises
1. The Parties shall aim to develop and strengthen small and medium-sized enterprises (SMEs)
and cooperation between SMEs in the Community and Latvia.
2. They shall encourage the exchange of inform ation and know-how in  the following areas:
− improving, where appropriate, the legal, administrative, technical, tax and financial
conditions necessary fot the setting-up and expansion of SMEs and for cross-border
cooperation,
− 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 via European
business cooperation networks, in order to improve the flow of information to SMEs
and to promote cross-border cooperation.
3. The cooperation shall include the supply of technical assistance, in particular for the
establishment of appropriate institutional back-up for SMEs at both national and regional level,
regarding financial, training, advisory, technological and marketing services.
Article 76
Agricultural And Industrial Sta ndards And Conformity Assessment
1. The cooperation between the Parties shall aim in particular to reduce differences in standards,
technical regulations and conformity assessment procedures, with Community technical assistance
where necessary.WT/REG143/1
Page 30
2. To this end, the cooperation shall seek:
− to promote the use of Community technical regulations and European standards and
conformity assessment procedures, recognizing that, to reach Latvia's objectives of
environmental quality, the country is free to develop and implement special (higher)
standards if necessary,
− where appropriate, to conclude agreements on mutual recognition in these fields,
− to encourage Latvia's active and regular participation in the work of specialized
organizations (CEN, Cenelec, ETSI, EOTC, Euromet).
3. Where appropriate, the Community shall provide Latvia with technical assistance, in
particular in training programmes for Latvian experts in the fields of standardization, metrology,certification and quality systems in European countries.
Article 77
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),
− 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 the intellectual property of results of
research,
− Latvia's participation in Community research 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.WT/REG143/1
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Article 78
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 Latvia, both in the public and private
sectors, taking into consideration the priorities of Latvia. Institutional frameworks and plans of
cooperation will be established under the auspices of the European Training Foundation, the Tempus
programme and the Eurofaculty. Participation of Latvia 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 Latvia,
− 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 bedetermined,
− in-service training for teachers,
− cooperation between universities, cooperation between universities and firms,
mobility for teachers, students, administrators and young people,
− promoting teaching in the field of Eu ropean studies within the appropriate
institutions,
− mutual recognition of periods of studies and diplomas,
− promoting language training in Latvia, in particular for resident persons belonging to
minorities,
− teaching of Community languages, training of translators and interpreters and
promotion of the use of Community standards and terminology,
− development of distance education and new training technologies,
− provision of training materials and equipment.
Article 79
Agriculture And The Agro-Industrial Sector
1. Cooperation in this field shall aim at moderniz ing, restructuring and privatizing agriculture,
fresh water (inland) fisheries and the agro-industrial sector as well as forestry. Such cooperation will
promote the protection and sustainable use of natural landscapes and non-polluted soils.
To this end cooperation shall endeavour notably to:
− develop private farms and distribution channels, methods of storage, marketing etc.,
− modernize the rural infrastructure (transport, water supply, telecommunications),WT/REG143/1
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− improve land-use planning, including construction and town planning,
− develop criteria for areas for extensive and intensive agriculture, forestry and fresh water
(inland) fisheries in accordance with national and regional development plans andprogrammes,
− establish and promote effective cooperation on agricultural information systems,
− improve productivity and quality by using appropriate methods and products; provide training
and monitoring in the use of anti-pollution methods connected with inputs,
− promote development of organic agriculture, processing, marketing of production,
− promote implementation of Community food standards,
− restructure, develop, modernize and decentralize food-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 Latvia,
− develop cooperation on animal and plant health with the aim of bringing about gradual
harmonization with Community standards through assistance for training and the organizationof checks,
− promote exchange of information in respect of agricultural policy and legislation,
− promote joint ventures, particularly for cooperation on the markets of third countries.
2. To these ends, technical assistance shall be provided by the Community as appropriate.
Article 80
Fisheries
1. The Parties shall develop their cooperation on fisheries in accordance with the Agreement on
Fisheries Relations between the European Economic Community and the Republic of Latvia.
2. The cooperation shall in particular take into account:
− the establishment of sustainable fishing in the world's oceans and the Baltic Sea,
− traditional cooperation on fisheries,
− the necessity of developing fishing control systems, catch statistics and information
systems,WT/REG143/1
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− the development of scientific potential for the study of fishery resources in the Baltic
Sea and mutual action for the conservation and renewal of fish stocks (especiallysalmon and cod) and the introduction of modern technologies in this field,
− the gradual modernization of Latvia's fishing fleet and fish-processing industry,
through the establishment of joint ventures,
− the development of private enterprises in this field and the necessity of obtaining EC
experience in marketing techniques,
− the development of industrial cooperation in fisheries and exchange of know-how,
− the introduction in Latvia of EC production quality and health standards for fish
farming (including feed),
− the exchange of information on fisheries policy and legislation and on the
establishment of a market for fishery products,
− cooperation in international fishery organizations.
Article 81
Energy
1. Within the principles of the market economy and of the Treaty on the European Energy
Charter, the Parties shall cooperate to develop the progressive integration of the energy markets in
Europe.
2. The cooperation shall focus on the following in particular:
− formulation and planning of energy policy, including its long term aspects,
− management and training in the energy sector,
− promotion of energy saving and energy efficiency,
− development of energy resources,
− improvement of distribution as well as improvement and diversification of supply,
− environmental impact of energy production and consumption,
− the nuclear energy sector, in particular nuclear safety,
− opening up the energy market to a greater degree, including facilitating transit of gas
and electricity,
− the electricity and gas sectors, including consideration of the possibility of the inter-
connection of European supply networks,
− modernization of energy infrastructures,WT/REG143/1
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− formulation of framework conditions for cooperation between undertakings in this
sector,
− transfer of technology and know-how,
− cooperation on pricing and taxation policies in the energy sector,
− regional cooperation in the energy sector among the Baltic States, particularly as an
important contribution to security of energy supply in the region.
3. Technical assistance shall be provided where appropriate.
Article 82
Nuclear Safety
1. The aim of cooperation is to provide for a safer use of nuclear energy.
2. Cooperation in the nuclear field shall mainly cover the following topics:
− upgrading of staff training,
− upgrading of Latvia's laws and regulations on nuclear safety and strengthening of the
supervisory authorities and their resources,
− nuclear safety, preparation for nuclear emergencies and accident management,
− radiation protection, including environmental radiation monitoring,
− fuel cycle problems, safeguarding and physical protection of nuclear materials,
− radioactive waste management,
− decommissioning and dismantling of nuclear installations,
− decontamination,
− establishment of uniform safety standards to protect the health of workers, the general
public and the environment and ensuring that they are applied.
3. Cooperation will include the exchange of information and experience and R& D activities in
accordance with the provisions on science and technology.
4. The Parties agree on the necessity of making efforts to cooperate, within the framework of
their respective powers and competences, in order to combat nuclear smuggling. Cooperation in this
area should include exchange of information, technical support for analysing and identifying the
material, and administrative and technical assistance for the installation of efficient customs controls.
Further cooperation in this field could be identified as need arises.WT/REG143/1
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Article 83
Environment
1. The Parties shall develop and strengthen their cooperation on environment and human health.
2. Cooperation shall concern in particular:
− effective monitoring of pollution levels,
− combating local, regional and cross-border air and water pollution,
− efficient, sustainable and clean energy production and consumption; safety of
industrial plants (including nuclear power stations),
− classification and safe handling of chemicals,
− water quality, particularly in cross-border waterways (protection of the Baltic Sea
against pollution from ships, artificial islands, platforms and other sources),
− reduction, recycling and safe disposal of waste and implementation of the Basle
Convention,
− sustainable use of non-renewable natural resources,
− the environmental impact of agriculture, soil erosion and pollution by agricultural
chemicals, water eutrophication,
− protection of forests and flora and fauna,
− conservation of biodiversity,
− protected areas,
− land-use planning, including construction and town planning,
− improvement of public transport, especially in cities,
− use of economic and fiscal instruments,
− management of the coastline and prevention of marine pollution,
− global climate change,
− rehabilitation of contaminated areas,
− protecting human health against environmental hazards.
3. Cooperation shall take place notably through:
− exchange of information and experts, especia lly in the field of the transfer of clean
technologies and the safe use of environmentally-friendly biotechnologies,WT/REG143/1
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− institution-building and training programmes,
− transfer of technology and know-how,
− approximation of laws (Community standards),
− cooperation at regional level (including cooperation between the three Baltic States
and in the framework of the European Environment Agency) and at international
level,
− development of strategies, particularly with regard to global and climatic issues,
− education and information on environmental issues,
− environmental impact studies.
Article 84
Transport
1. The Parties shall develop and step up their cooperation in the field of transport in order to
enable Latvia to:
− restructure and modernize transport,
− improve the movement of passengers and goods and the access to transport markets
by removing administrative, technical and other obstacles,
− facilitate Community transit through Latvia by road, rail, inland waterway and
combined transport,
− achieve operating standards comparable to those in the Community.
2. The cooperation shall cover the following in particular:
− economic, legal and technical training programmes and the preparation of the
legislative and institutional framework for policy development and implementation,
including privatization of the transport sector,
− the provision of technical assistance and advice, and the exchange of information
(conferences and seminars),
− support for the development of infrastructure in Latvia.
3. Priority areas of cooperation will be:
− the construction and modernization, on recognized trans-European corridors and
major routes of common interest, of road, rail, inland waterway, port and airportinfrastructures,WT/REG143/1
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− the improvement of conditions, the reduction of waiting times and the easing of
transit at the border crossings on the Latvian stretch of the multimodal Crete corridorno 1, on the basis of norms set by international agreements of the European Union to
secure interoperability,
− the management of railways, ports and ai rports, including cooperation between the
appropriate national authorities,
− land-use planning, including construction and urban planning,
− the upgrading of technical equipment to meet Community standards; particularly in
the fields of road-rail transport, containerization and trans-shipment,
− contributing to the development of transport policies compatible with those in the
Community,
− the promotion of short-sea shipping as an alternative to overland transport and as a
transport mode particularly suited to the Baltic Sea region,
− the promotion of joint research and development programmes,
− concrete projects in a tri- or multilateral (CBSS - Council of the Baltic Sea States)
context of regional cooperation, such as Via Baltica.
Article 85
Telecommunications, Postal Services And Broadcasting
1. The Parties shall endeavour to expand and strengthen cooperation in these areas. This shall
involve:
− exchange of information on telecommunications policies, postal services and
broadcasting policies,
− establishment of a stable and consistent regulatory framework for
telecommunications, postal services and broadcasting,
− exchange of technical and other information and the organization of seminars,
workshops and conferences for experts of both sides,
− training and advisory operations,
− transfer of technology,
− joint execution of projects by competent bodies from both sides,
− promotion of European standards and certification systems,
− promotion of new communication facilities, services and installations, particularly
those with commercial applications.
2. These activities shall focus on the following priority areas:WT/REG143/1
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− development and application of a sectoral market policy in telecommunications,
postal services and broadcasting in Latvia, of legal acts and procedures,
− modernization of Latvia's telecommunications network and its integration into
European and world networks,
− cooperation within European standardization structures,
− integration of trans-European systems,
− legal aspects of telecommunications,
− management of telecommunications in the new European business environment:
organizational structures, strategy and pl anning, purchasing principles, tariffs
structure in voice telephony,
− land-use planning, construction and town planning,
− upgrading of the data network and development of data-based information services,
− modernization of Latvia's postal services and broadcasting.
Article 86
Information Infrastructure
The Parties shall endeavour to expand and strengthen cooperation, with a view to setting up a
global information infrastructure. This shall involve:
− exchange of information on policies and programmes aimed at setting up the information
infrastructure and the corresponding services,
− close cooperation between institutions mana ging current information networks (academic
and/or government agencies),
− exchange of information on technologies, market needs and other information, organization of
seminars, workshops and conferences for experts and industrialists from both sides,
− training and advisory operations,
− joint execution of projects,
− promotion and agreement of standards, certification and testing,
− promotion of an appropriate regulatory framework,
− action to promote the growth of information services and infrastructure.WT/REG143/1
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Article 87
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 Latvia.
2. The cooperation shall focus on:
− the improvement of efficient accounting and audit systems in Latvia based on
international rules and European Community standards,
− the strengthening and restructuring of the banking and financial systems,
− the improvement and harmonization of supervision and regulation systems of banking
and financial services,
− the preparation of glossaries of terminology,
− the exchange of information in particular in respect of laws in force or being drafted,
− the preparation and translation of Community and Latvian legislation.
3. To this end, the cooperation shall include the provision of technical assistance and training.
Article 88
Audit And Financial Control Cooperation
1. The Parties shall cooperate with the aim of developing efficient financial control and audit
systems in the Latvian administration following standard Community methods and proceedings.
2. Cooperation shall focus on:
− the exchange of relevant information on audit systems,
− the uniformization of audit documentation,
− training and advisory operations.
3. To this end, technical assistance shall be provided by the Community as appropriate.
Article 89
Monetary Policy
At the request of the Latvian authorities, the Community shall provide technical assistance
designed to support Latvia's efforts towards the gradual alignment of its policies on those of the
European Monetary System. At the request of Latvia, it will organize informal exchange of
information concerning the principles and the functioning of the European Monetary System.WT/REG143/1
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Article 90
Money Laundering
1. The Parties agree on the necessity of making strenuous efforts and cooperating in order to
prevent the use of their financial systems for the 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 to combat money laundering, equivalent to those adopted by the
Community and other international bodies in this field, in particular the Financial Action Task Force
(FATF).
Article 91
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 taken:
− exchange of information by national, regional or local authorities on regional and
land-use planning policy, and, where appropriate, the provision of assistance toLatvia for the formulation of such policy,
− joint action by regional and local authorities in the field of economic development,
− study of a joint approach towards the development of inter-regional cooperation with
Baltic Sea regions in the Community,
− exchange of visits to explore cooperation and assistance opportunities,
− exchange of civil servants or experts,
− provision of technical assistance with special emphasis on the development of
disadvantaged regions,
− establishment of programmes for the exchange of information and experience, by
methods including seminars.
Article 92
Social cooperation
1. With regard to health and safety at work and public health, the Parties shall develop
cooperation between them with the aim of improving th e level of protection of the health and safety of
workers, taking as a reference the level of protection existing in the Community. Cooperation shall
comprise the following in particular:
− the provision of technical assistance,WT/REG143/1
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− the exchange of experts,
− cooperation between companies,
− information and training operations,
− cooperation on public health.
2. With regard to employment, cooperation between the Parties shall focus in particular on:
− organization of the labour market,
− modernization of job-finding and careers advice services,
− planning and implementation of regional restructuring programmes,
− encouragement of local employment development.
Cooperation in these fields 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, cooperation betw een the Parties shall seek to adapt the Latvian
social security system to the new economic and social situation, primarily by providing the services ofexperts and information and training.
Article 93
Tourism
The Parties shall increase and develop cooperation between them in the field of tourism,
which will be aimed in particular at:
− facilitating the tourist trade,
− strengthening the flow of information throug h international networks, databases, etc.,
− transferring know-how through training, exchanges, seminars,
− enhancing regional cooperation projects,
− studying the opportunities for joint operations (cross-border projects, town twinning, etc.),
− introducing computerized booking and information systems (preferably common to all three
Baltic States) and consumer protection standards for tourists.
Article 94
Information And Communication
1. With regard to information and communication, the Community and Latvia shall take
appropriate steps to stimulate effective mutual exchange of information. Priority shall be given toWT/REG143/1
Page 42
programmes aimed at providing the general public with basic information about the European Union
and specific circles in Latvia with more specializ ed information, including, where possible, access to
Community databases.
2. The Parties shall coordinate and, where appropriate, harmonize their policies regarding the
regulation of cross-border broadcasts, technical standards and the promotion of European audiovisualtechnology.
3. Cooperation may include providing for exchange programmes, scholarships, training facilities
for journalists and experts in the sectors of the media as appropriate.
Article 95
Consumer Protection
1. The Parties shall cooperate with the aim of achieving full compatibility between the systems
of consumer protection in Latvia and the Community. Effective consumer protection is needed to
ensure that the market economy functions properly.
2. To this end, and in view of their common interests, the Parties shall encourage and ensure:
− a policy of active consumer protection, in accordance with Community law and any
relevant UN guidelines on consumer protection,
− the approximation of legislation and the alignment of consumer protection in Latvia
with that of the Community,
− effective legal protection for consumers in order to improve the quality of consumer
goods and maintain appropriate safety standards.
3. Cooperation may include:
− the exchange of information on dangerous products,
− the training of consumer protection specialists for the government and NGOs,
− help with the development of independent organizations intended to increase
consumer awareness, particularly by providing information,
− the establishment of information and advisory centres for the settlement of disputes
and the provision of legal and other advice to consumers; provision will be made for
cooperation between Latvia's centres and those in the Community,
− access to Community data banks,
− the development of exchanges between consumer representatives.
4. Technical assistance shall be provided by the Community as appropriate.WT/REG143/1
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Article 96
Customs
1. The aim of cooperation in the customs field shall be to guarantee compliance with all the
provisions scheduled for adoption in the area of trade and to achieve the approximation of Latvia's
customs system to that of the Community, thereby helping to pave the way for liberalization measures
planned under this Agreement.
2. Cooperation shall include the following in particular:
− the exchange of information including on the methods of investigation,
− the development of cross-border infrastructure,
− the introduction of the single administrative document and the interconnection
between the transit systems of the Community and Latvia,
− the simplification of inspections and formalities in respect of the carriage of goods,
− the organization of seminars and placements,
− 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 100 and Title VII, the mutual assistance between administrative authorities in customs matters
of the Parties shall take place in accordance with the provisions of Protocol 5.
Article 97
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 Latvia.
2. The Parties shall cooperate in particular to:
− strengthen Latvia's statistical apparatus,
− bring about harmonization with international (and particularly Community) methods,
standards and classifications,
− provide the data needed to support and monitor economic reform,
− provide private sector economic operators with the appropriate macroeconomic and
microeconomic data,
− guarantee the confidentiality of data,WT/REG143/1
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− exchange statistical information.
3. Technical assistance shall be provided by the Community as appropriate.
Article 98
Economics
1. The Community and Latvia shall facilitate the process of economic reforms and integration by
cooperating to improve understanding of the fundamentals of their respective economies and the
formulation and implementation of economic policy in market economies.
2. To these ends, the Community and Latvia shall:
− exchange information on macroeconomic 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 between economists and managers in the
Community and Latvia in order to expedite the transfer of know-how for the draftingof economic policies, and provide for wide dissemination of the results of policy-
relevant research.
Article 99
Public Administration
The Parties shall promote cooperation between their public administration authorities,
including the setting up of exchange programmes, in order to improve mutual knowledge of the
structure and functioning of their respective systems.
Article 100
Drugs
1. Within the scope of their respective powers and competences, the Parties shall cooperate in
increasing the effectiveness and efficiency of policies and measures to counter the illicit production,
supply and traffic of narcotic drugs and psychotropic substances, including the prevention of
diversion of precursor chemicals, as well as in promoting drug demand prevention and reduction.
2. The Parties shall agree on the necessary methods of cooperation to attain these objectives,
including the modalities of the implementation of common actions.
3. The cooperation in this area shall be based on mutual consultation and close cooperation
between the Parties over the objectives and measures in the fields targeted in paragraph 1 and shall,
inter alia, include where available technical assistance from the Community.
Cooperation aimed at preventing the illicit traffic of narcotic drugs and psychotropic
substances will comprise technical and administrative assistance including:WT/REG143/1
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− drafting and implementation of national legislation,
− creation or strengthening of institutions and information centres and of social health
centres,
− increasing the efficiency of the institutions engaged in combating illicit drug
trafficking,
− training of personnel and research,
− 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
Cooperation In The Prevention Of Illegal Activities
Article 101
1. The Parties shall cooperate, within the scope of their powers and competences, with the aim
of preventing the following illegal activities in particular:
− illegal immigration and the illegal presence of their nationals on the other's territory,
while taking account of the principles and the practice of readmission,
− corruption,
− illegal transactions involving industrial waste and counterfeit products,
− illegal trafficking in drugs and psychotropic substances,
− illegal trade of radioactive and nuclear materials,
− illegal transfer of motor vehicles,
− organized crime.
2. Cooperation in the matters referred to in paragraph 1 shall be based on mutual consultations
and close coordination between the Parties and should include technical and administrative assistance
for:
− the drafting of national legislation,
− the establishment of information centres,
− enhancing the efficiency of the institutions charged to prevent illegal activities,WT/REG143/1
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− staff training and the development of investigative facilities,
− the formulation of mutually acceptable measures to prevent illegal activities.
The Parties may agree to include other areas.
TITLE VIII
Cultural Cooperation
Article 102
1. The Parties undertake to promote, encourage and facilitate cultural cooperation. Where
appropriate, the Community's cultural cooperation activities or those of one or more Member States
may be extended to Latvia and further activities of interest to both sides developed.
This cooperation may cover in particular:
− literary translations,
− exchange of non-commercial works of art and artists,
− conservation and restoration of monuments and sites (architectural and cultural
heritage),
− training,
− cultural events (e.g. song festivals),
− publicizing significant cultural events,
− cooperation between libraries.
2. The Parties may cooperate in the promotion of the audiovisual industry in Europe. In
particular, the audiovisual sector in Latvia could apply to take part in activities set up by the
Community in the framework of the Media programme, in accordance with the procedures laid downby the bodies responsible for the various activities and the Council Decision of 21 December 1990
setting up that programme.
The Parties shall coordinate and, where appropriate, harmonize their policies on the
regulation of cross-border broadcasting, paying particular attention to matters relating to the
acquisition of intellectual property rights for programmes broadcast by satellite or cable, technicalstandards in the audiovisual field and the promotion of European audiovisual technology.
Cooperation could include inter alia the exchange of programmes, bursaries and facilities for
the training of journalists and other media professionals.WT/REG143/1
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TITLE IX
Financial Cooperation
Article 103
In order to achieve the objectives of this Agreement and in accordance with Articles 104, 105,
106 and 107, without prejudice to Article 107, Latvia shall benefit from temporary financial
assistance from the Community in the form of gr ants and loans, including loans from the European
Investment Bank (EIB) according to the provisions of Article 18 of the Statute of the Bank to
accelerate the economic transformation of Latvia.
Article 104
This financial assistance shall be covered:
− either within the framework of an indicative multiannual programme through Phare
foreseen in Council Regulation EEC No 3906/89, as amended, or within a new
multiannual financial framework established by the Community following
consultations with Latvia and taking into account the considerations set out in
Articles 105 and 106,
− by loan(s) provided by the European Invest ment Bank within a ceiling and during a
period of availability to be established, following consultations with Latvia in
application of the relevant provisions of the Treaty on European Union.
Article 105
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 106
1. The Community shall, in case of special need, taking into account the availability of all
financial resources, on request of Latvia and in coordination with international financial institutions,
in the context of the G24, examine the possibility of granting temporary financial assistance
− to support measures with the aim of maintaining the convertibility of the Latvian
currency,
− to support medium-term stabilization and structural adjustment efforts, including
balance of payments assistance.
2. This financial assistance is subject to Latvia's presentation of IMF supported programmes in
the context of the G24, as appropriate, for convertibi lity and/or for restructuring its economy, to the
Community's acceptance thereof, to Latvia'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 Latvia concerning such assistance.WT/REG143/1
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Article 107
The Community financial assistance shall be evaluated in the light of the needs which arise
and of Latvia's development level, taking into account established priorities and the absorption
capacity of Latvia's economy, the ability to repay loans and the progress towards a market economysystem and restructuring in Latvia.
Article 108
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 the
Member States, other countries, including the G24, and international financial institutions, such as theInternational Monetary Fund, the International Bank for Reconstruction and Development and the
European Bank for Reconstruction and Development.
Article 109
Latvia shall participate in framework programmes, specific programmes, projects or other
actions of the Community in the fields laid down in Annex XVIII. Without prejudice to the existing
participation of Latvia in the activities referred to in Annex XVIII, the Association Council shall
decide the terms and conditions for the participation of Latvia in these activities. The financial
contribution of Latvia to the activities referred to in Annex XVIII shall be based on the principle thatLatvia shall meet the costs resulting from its participation itself. If necessary, the Community may
decide, on a case-by-case basis, and pursuant to the rules applicable to the general budget of the
European Communities, to pay a supplement to Latvia's contribution.
TITLE X
Institutional, General And Final Provisions
Article 110
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 111
1. The Association Council shall consist of the members of the Council of the European Union
and members of the Commission of the European Communities, on the one hand, and of members
appointed by the Government of Latvia, 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 Union and a member of the Government of Latvia, in accordance with the provisions to be
laid down in its rules of procedure.WT/REG143/1
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5. Where appropriate, the EIB will take part, as an observer, in the work of the Association
Council.
Article 112
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 113
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 of this
Article, 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 114
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 Union and of
members of the Commission of the European Comm unities on the one hand and of representatives of
the Government of Latvia 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 112.WT/REG143/1
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Article 115
The Association Council may decide to set up any other special committee or body that can
assist it in carrying out its duties.
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 116
A Parliamentary Committee is hereby established. It shall be a forum for Members of the
Parliament of Latvia and the European Parliament to meet and exchange views. It shall meet atintervals which it shall itself determine.
Article 117
1. The Parliamentary Committee shall consist of members of the European Parliament, on the
one hand, and of members of the Parliament of Latvia, on the other.
2. The Parliamentary Committee shall establish its rules of procedure.
3. The Parliamentary Committee shall be presided in turn by each European Parliament and the
Parliament of Latvia, in accordance with the provisions to be laid down in its rules of procedure.
Article 118
The 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 Parliamentary Committee shall be informed of the decisions of the Association Council.
The Parliamentary Committee may make reco mmendations to the Association Council.
Article 119
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 120
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 products
not intended for specifically military purposes;WT/REG143/1
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(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 serious
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;
(d) which it considers necessary to respect its  international obligations and commitments
on the control of dual use industrial goods and technologies.
Article 121
1. In the fields covered by this Agreement and without prejudice to any special provisions
contained therein:
− the arrangements applied by Latvia in resp ect of the Community shall not give rise to
any discrimination between the Member States, their nationals, or their companies or
branches,
− the arrangements applied by the Community in respect of Latvia shall not give rise to
any discrimination between Latvian nationals or its companies or branches.
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 taxpayers who are not in identical situations as regardstheir place of residence.
Article 122
Products originating in Latvia shall not enjoy more favourable treatment when imported into
the Community than that applied by Member States among themselves.
The treatment granted to Latvia under Title IV and Chapter I of Title V shall not be more
favourable than that accorded by Member States among themselves.
Article 123
1. The Parties shall take any general or specific measures required to fulfil their obligations
under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.
2. If either Party considers that the other Party has failed to fulfil an obligation under this
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 this Agreement. These measures shall 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 124
The present Agreement shall not, until equivalent rights for individuals and economic
operators have been achieved under the present Agreement, affect rights assured to them through
agreements binding one or more Member States, on the one hand, and Latvia, on the other, except forWT/REG143/1
Page 52
sectors of Community competence and without prejudice of Member States' obligations resulting
from this Agreement in sectors of their competence.
Article 125
For the purposes of this Agreement, the term 'Parties` shall mean the Community, or its
Member States, or the Community and its Member States, in accordance with their respective powers,
of the one part, and Latvia, of the other part.
Article 126
Protocols 1 to 5 and Annexes Nos I to XVIII shall form an integral part of this Agreement.
Article 127
This Agreement is concluded for an unlimited period.
Either Party may denounce this Agreement by notifying the other Party. This Agreement will
cease to apply six months after the date of such notification.
Article 128
The General Secretariat of the Council of the European Union shall be the depository of this
Agreement.
Article 129
This Agreement shall apply, on the one hand, to the territories in which the Treaties
establishing the European Community, the European Atomic Energy Community and the European
Coal and Steel Community are applied and under the conditions laid down in those Treaties and, on
the other hand, to the territory of the Republic of Latvia.
Article 130
This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French,
German, Greek, Italian, Portuguese, Spanish, Swedish and Latvian languages, each of these texts
being equally authentic.
Article 131
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 beencompleted.
Upon its entry into force, this Agreement sh all replace the Agreement between the European
Economic Community and the Republic of Latvia on trade and economic and commercial cooperation
signed in Brussels on 11 May 1992.
The present Agreement is partly based on, further develops and incorporates the essential
provisions of the Agreement between the European Community, the European Atomic Energy
Community and the European Coal and Steel Community and the Republic of Latvia on Free TradeWT/REG143/1
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and Trade-Related Matters signed on 18 July 1994. Upon its entry into force, this Agreement shall
replace the Agreement on Free Trade and Trade-Related Matters.
The decisions of the Joint Committee established by the Agreement on trade and economic
and commercial cooperation and which performs also the duties assigned by the Agreement on FreeTrade and Trade-Related Matters shall continue to apply until repealed by decisions of the
Association Council.
The Association Council shall adopt at its first meeting all the modifications to this
Agreement - in particular to the Protocols and Annexes - necessary to align it with changes to the
Agreement on Free Trade and Trade-Related Matters decided by the Joint Committee between the
signature and the entry into force of this Agreement.
Done at Luxembourg on the twelfth day of June  in the year one thousand nine hundred and
ninety-five.
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