WORLD TRADE WT/REG54/1
25March 1998
ORGANIZATION(98-1208)
Original: English Committee onRegional Trade Agreements
FREE TRADE AGREEMENT BETWEEN HUNGARY AND ISRAEL
Thefollowing textreproduces theAgreement between theRepublic ofHungary andtheState
ofIsrael.1
__________
Agreement between theRepublic ofHungary and
theState ofIsrael
Preamble
TheRepublic ofHungary (hereinafter referred toas"Hungary")
and
TheState ofIsrael (hereinafter referred toas"Israel"),
Recalling theirintention toparticipate actively intheprocess ofeconomic integration inEurope,
andexpressing theirreadiness toco-operate inseeking ways andmeans tostrengthen thisprocess,
Reaffirming theircommitment totheprinciples ofmarket economy, which constitute thebasis
fortheireconomic relations, andtheircompliance withtherights andobligations arising outofthe
WorldTradeOrganizationagreementsandtheGeneralAgreementonTariffsandTrade1994(hereinafter
referred toas"WTO/GATT 1994"),
Convinced thatthisAgreement shallcreate anewclimate fortheireconomic relations andin
particular forthedevelopment oftrade investment andeconomic andtechnological co-operation,
Have agreed asfollows :
Article 1
Objectives
1. TheParties tothisAgreement (hereinafter referred toas"theParties") shallgradually establish
afree-trade areainaccordance withtheprovisions ofthepresent Agreement andinconformity with
Article XXIV oftheGATT 1994 inatransitional period ending 1January 2001 atthelatest.
1TheAnnexes andProtocols thereto have been submitted totheSecretariat forconsultation byinterested
Members (Office 3006).WT/REG54/1
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2. Theobjectives ofthisAgreement are:
(a) topromote, through theexpansion ofreciprocal trade, theharmonious development
ofeconomic relations between theParties andthustofoster theadvance oftheir
economicactivity,theimprovementoflivingandemploymentconditions,andincreased
productivity andfinancial stability;
(b) toprovide fairconditions ofcompetition intrade between theParties;
(c) tocontribute, bytheremoval ofbarriers totrade, totheharmonious development and
expansion ofworld trade;
(d) topromote co-operation inareas which areofmutual interest totheParties.
Article 2
Scope
Theprovisions ofthisAgreement shallapply
(a) toindustrial products originating intheParties, where theterm"industrial products" means,
forthepurpose ofthisAgreement, theproducts falling within Chapters 25to97ofthe
Harmonized Commodity Description andCoding System, withtheexception oftheproducts
listed inAnnex 1(a)and1(b)tothisAgreement (hereinafter referred toas"Annex 1")
(b) toagricultural products originating intheParties, where theterm"agricultural products" means
forthepurpose ofthisAgreement theproducts falling within Chapter 1to24oftheHarmonized
Commodity Description andCoding System andtheproducts listed inAnnex 1under theterms
andconditions contained inTitleII.
TITLE I
Industrial Products
Article 3
Customs Duties onImports
1. Nonewcustoms dutyonimports shallbeintroduced intrade between theParties.
2. Customs duties onimports shallbeabolished inaccordance withtheprovisions ofProtocol 1
tothisAgreement (hereinafter referred toas"Protocol 1").
Article 4
Basic Duties
1. Thebasic dutytowhich thesuccessive reductions setoutinthisAgreement aretobeapplied
shall be;forgoods imported intoHungary: themost-favoured-nations rateofdutyinforce on
29February 1992; forgoods imported intoIsrael: themost-favoured-nation rateofdutyinforce
on1September 1996.WT/REG54/1
Page3
2. If,afterentry intoforce ofthisAgreement, anytariff reduction isapplied onanergaomnes
basis, suchreduced duties shallreplace thebasic duties referred toinparagraph 1asfrom thatdate
when suchreductions areapplied.
3. Thereduced duties calculated inaccordance withArticle 3shallbeapplied rounded offtothe
firstdecimal place, orincaseofspecific duties tothesecond decimal place.
Article 5
Charges onImports Equivalent toCustoms Duties
1. Nonewcharge having aneffect equivalent toacustoms dutyonimports shallbeintroduced
intrade between theParties.
2. Allcharges having aneffect equivalent tocustoms duties onimports shallbeabolished onthe
dateoftheentry intoforce ofthisAgreement, except asprovided forinAnnex 2tothisAgreement
(hereinafter referred toas"Annex 2").
Article 6
Customs Duties ofaFiscal Nature
Theprovisions ofArticle 3shallalsoapply tocustoms duties ofafiscal nature. TheParties
mayreplace acustoms dutyofafiscal nature orthefiscal element ofacustoms dutybyaninternal
tax,inaccordance withtheprovisions ofArticle 14.
Article 7
Customs Duties onExports andCharges haveEquivalent Effect
1. Nocustoms dutyonexports orcharge having equivalent effect shallbeintroduced intrade
between theParties.
2. Customs duties onexports andanycharges having equivalent effect shallbeabolished upon
entry intoforce ofthisAgreement.
Article 8
Quantitative Restrictions onImports andMeasures having Equivalent Effect
1. Nonewquantitative restrictions onimports ormeasures having equivalent effect shall be
introduced intrade between theParties.
2. Allquantitative restrictions andmeasures having equivalent effect onimports intoaParty of
products originating intheother Party shallbeabolished onthedateoftheentry intoforce ofthis
Agreement, except asprovided forinAnnexes 3(a),3(b)and3(c)tothisAgreement (hereinafter referred
toas"Annex 3").WT/REG54/1
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Article 9
Quantitative Restrictions onExports andMeasures having Equivalent Effect
1. Nonewquantitative restrictions onexports ormeasures having equivalent effect shall be
introduced intrade between theParties.
2. TheParties shallabolish onthedateoftheentry intoforce ofthisAgreement anyquantitative
restrictions andmeasures having equivalent effect, except those thatmight berequired forthe
administration ofinternational obligations.
TITLE II
Agricultural Products
Article 10
Trade inAgricultural Products
1. ThePartiesdeclaretheirreadinesstofosterinsofarastheiragriculturalpoliciesallow,harmonious
development oftrade inagricultural products andtodiscuss thisissue periodically within the
Joint Committee.
2. ThePartiesshallapplytheirsanitaryandphytosanitarymeasuresinaccordancewiththeprovision
oftheWTO/GATT 1994Agreements. TheParties shallnotapply theirregulations inveterinary, plant
health andhealth matters asanarbitrary orunjustifiable discrimination between theParties, where
thesame conditions prevail orasadisguised restriction ontrade between them.
3. WithoutprejudicetotheconcessionsgrantedpursuanttoArticle11,theprovisionsofparagraph1
ofthisArticle shallnotrestrict inanyway thepursuance oftherespective agricultural policies ofthe
Parties orthetaking ofanymeasures under suchpolicies. EachParty shallpromptly notify theother
about changes initsagricultural policy which mayadversely affect tradeinagricultural products between
theParties. Insuchcases, prompt consultations shallbehelduponrequest oftheotherParty, toexamine
thesituation and,ifnecessary, findamutually acceptable solution.
Article 11
Exchange ofConcessions
1. TheParties shall grant eachother concessions, specified inProtocol 2tothisAgreement
(hereinafter referred toas"Protocol 2"),inaccordance withprovisions ofthisTitleandaslaiddown
inthatProtocol.
2. TheParties shall periodically examine within theframework oftheJoint Committee the
possibilities ofgranting eachother further concessions relating totrade inagricultural products.WT/REG54/1
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TITLE III
General Provisions
Article 12
Rules ofOrigin
Protocol 3tothisAgreement (hereinafter referred toas"Protocol 3")laysdown therulesof
origin andproof oforigin requirements.
Article 13
Customs Co-operation
1. Thecustoms authorities oftheParties shallco-operate andcoordinate inorder toensure that
theprovisions ofProtocol 3andtherelevant Articles ofthisAgreement areeffectively andharmoniously
applied, inaccordance withthelawsofeachParty, toreduce asfaraspossible, theformalities imposed
ontrade, andtoachieve mutually satisfactory solutions toanydifficulties arising fromtheoperation
ofthose provisions.
2. Co-operation between thecustoms authorities oftheParties shallfocus, inparticular, onthe
simplification andcomputerization ofcustoms procedures, ontheconfirmation oftheorigin ofgoods
andontheprevention ofsmuggling, taxevasion andillicit trade indrugs.
3. Tothisend,adetailed andseparate agreement oncustoms co-operation shallbesigned.
Article 14
Internal Taxation
1. TheParties shallrefrain fromanymeasure orpractice ofaninternal fiscal nature establishing,
whether directly orindirectly, discrimination between theproducts originating intheParties.
2. Products exported totheterritory ofoneoftheParties maynotbenefit from repayment of
indirect internal taxation inexcess oftheamount ofindirect taxation imposed onthem.
Article 15
General Exceptions
ThisAgreement shallnotpreclude prohibitions orrestrictions onimports, exports orgoods
intransit justified ongrounds ofpublic morality, public policy orpublic security; oftheprotection
ofhealth andlifeofhumans, animals orplants, including environmental measures necessary toprotect
human, animal orplantlifeorhealth; oftheprotection ofnational treasures possessing artistic, historic
orarchaeological value; ofprotection ofintellectual property; ofrulesrelating togoldorsilver, or
theconservation ofexhaustible natural resources. Suchprohibitions orrestrictions shallnot,however,
constitute ameans ofarbitrary discrimination oradisguised restriction ontrade between theParties.WT/REG54/1
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Article 16
Security Exceptions
Nothing inthisAgreement shallprevent aParty fromtaking anymeasure, inaccordance with
Article XXIoftheGATT 1994, which itconsiders necessary.
Article 17
State Monopolies
1. TheParties shallensure thatanystatemonopoly ofacommercial character beadjusted sothat
nodiscrimination regarding theconditions under which goods areprocured andmarketed exists between
nationals oftheParties.
2. Theprovisions ofthisArticle shallapply toanybody through which thecompetent authorities
oftheParties, inlaworinfact,either directly orindirectly supervise, determine orappreciably influence
imports orexports between theParties orsalesonthedomestic market. These provisions shalllikewise
apply tomonopolies delegated bytheState toothers.
Article 18
Payments
1. Payments infreely convertible currencies relating totrade ingoods between theParties and
thetransfer ofsuchpayments totheterritory ofaParty, where thecreditor resides, shallbefreefrom
anyrestrictions.
2. ThePartiesshallrefrainfromanyexchangeoradministrativerestrictionsonthegrant,repayment
oracceptance ofshortandmedium termcredits concerning commercial transactions inwhich aresident
participates.
3. Anymeasures concerning current payments connected withthemovement ofgoods shallbe
inconformity withtheconditions laiddown under Article VIIIoftheStatutes oftheInternational
Monetary Fund.
Article 19
Rules ofCompetition concerning Undertakings
1. Thefollowing areincompatible withtheproper functioning ofthisAgreement insofar asthey
mayaffect trade between theParties:
(a) allagreements between undertakings, decisions byassociations ofundertakings and
concerted practices between undertakings which have astheir object oreffect the
prevention, restriction ordistortion ofcompetition;
(b) abuse byoneormoreundertakings ofadominant position intheterritories oftheParties
asawhole orinasubstantial partthereof.
2. Theprovisions ofparagraph 1shallapply totheactivities ofallundertakings including public
undertakings andundertakings towhich theParties grant special orexclusive rights.WT/REG54/1
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Undertakings entrusted withtheoperation ofservices ofgeneral economic interest orhaving
thecharacter ofarevenue-producing monopoly, shallbesubject totheprovisions ofparagraph 1insofar
astheapplication ofthese provisions doesnotobstruct theperformance, inlaworinfact,ofthe
particular public tasks assigned tothem.
3. IfaParty considers thatagiven practice isincompatible withthisArticle andifsuchpractice
causes orthreatens tocause serious prejudice totheinterest ofthatParty ormaterial injury toitsdomestic
industry, itmaytakeappropriate measures under theconditions andinaccordance withtheprocedure
laiddown inArticle 29.
4. Subject toitslaws, regulations andpolicies, eachParty shallaccord fairandequitable treatment
totheindividuals, companies, government agencies andother entities oftheother Party engaged in
thepursuit ofactivities under thisAgreement.
Article 20
State Aid
1. Anyaidgranted byaParty orthrough Stateresources inanyformwhich distorts orthreatens
todistort competition byfavouring certain undertakings ortheproduction ofcertain goods shall, insofar
asitmayaffect tradebetween theParties, beincompatible withtheproper functioning ofthisAgreement.
2. Theprovisions ofparagraph 1shallnotapply toproducts referred toinArticle 2(b)andin
TitleII.
3. TheParties shallensure transparency intheareaofstateaid,inaccordance withtheprovisions
oftheAgreement onSubsidies andCountervailing Measures ofWTO/GATT 1994, inter alia,by
reporting annually totheJointCommittee. EachParty, uponrequest oftheother Party, shallprovide
information onaidschemes andonparticular individual usesofstateaid.
4 IfaParty considers thataparticular practice,
- isincompatible withtheterms ofparagraph 1,or
- ifsuchpractice causes orthreatens tocause serious prejudice totheinterest ofthat
Party ormaterial injury toitsdomestic industry, oragriculture,
itmaytakeappropriate measures under theconditions ofandinaccordance withtheprovisions laid
down inArticle 29.
Such appropriate measures mayonlybetaken inconformity withtheprocedures andunder
theconditions laiddown bytheAgreement onSubsidies andCountervailing Measures ofthe
WTO/GATT 1994.
Article 21
Public Procurement
1. TheParties consider theliberalization oftheirrespective public procurement markets asan
objective ofthisAgreement.WT/REG54/1
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2. Asoftheentry intoforce ofthisAgreement, Israel shallgrant Hungarian companies access
tocontract award procedures initsgovernment procurement ofgoods, according totheAgreement
onGovernment Procurement of15April 1994, subject toitsundertakings therein.
3. Asoftheentry intoforce ofthisAgreement, Hungary shallgrant Israeli companies access
tocontract award procedures under atreatment nolessfavourable thanthataccorded tocompanies
ofanyother country.
4. TheJointCommittee, acting inaccordance withArticles 32and33,shalldealwiththepractical
modalities fortheimplementation ofparagraphs 2and3above.
Article 22
Standards
1. Therights andobligations oftheParties relating tostandards ortechnical regulations andrelated
measures shallbegoverned bytheWTO Agreement onTechnical Barriers toTrade.
2. EachParty, uponrequest oftheother Party, shallprovide information onparticular individual
cases ofstandards-related measures.
3. TheParties shallaimtoreduce technical barriers totrade. Tothisend,theParties shallconclude
where appropriate agreements onmutual recognition inthefieldofconformity assessment.
Article 23
Dumping
IfaParty finds thatdumping within themeaning ofArticle VIoftheWTO/GATT 1994 is
taking place intrade relations governed bythisAgreement, itmaytakeappropriate measures against
thatpractice inaccordance withArticle VIoftheWTO/GATT 1994 andagreements related tothat
Article, under theconditions andinaccordance withtheprocedure laiddown inArticle 29.
Article 24
Protection ofIntellectual Property
1. TheParties shallgrant andensure adequate, effective andnon-discriminatory protection of
intellectual property rights, including measures forthegrant andenforcement ofsuchrights. The
protection where necessary, shallbeextended, before theendof1998 toalevelcorresponding tothe
substantive standards ofthemultilateral agreements which arespecified inAnnex 4tothisAgreement
(hereinafter referred toas"Annex 4").
2. Forthepurpose ofthisAgreement "intellectual property protection" includes inparticular
protection ofcopyright, including computer programmes anddatabases, andneighbouring rights, trade
marks, geographical indications, industrial designs, patents, topographies ofintegrated circuits, aswell
asundisclosed information including know-how, andprotection ofnewvarieties ofplants.
3. TheParties shallco-operate inmatters ofintellectual property. They shallhold, uponrequest
ofanyParty, expert consultations onthese matters, inparticular onactivities relating totheexisting
ortofuture international conventions onharmonization, administration andenforcement ofintellectual
property andonactivities ininternational organizations, suchastheWorld Trade Organization, WorldWT/REG54/1
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Intellectual Property Organization, aswellasrelations ofParties withthird countries onmatters
concerning intellectual property.
Article 25
General Safeguards
1. Where anyproduct isbeing imported insuchincreased quantities andunder suchconditions
astocause orthreaten tocause:
(a) serious injury todomestic producers oflikeordirectly competitive products inthe
territory oftheimporting Party, or
(b) serious disturbances inanysector oftheeconomy ordifficulties which could bring
about serious deterioration intheeconomic situation ofaregion,
theParty concerned maytakeappropriate measures under theconditions andinaccordance withthe
procedure laiddown inArticle 29.
2. When inviewoftheimporting Party, theimportation ofaproduct fromtheother Party isnot
asubstantial cause ofserious injury orthreat thereof, theproduct oftheother Party shallbeexempted
fromanyimport relief thatmaybeimposed withrespect toimports ofthatproduct fromthirdcountries.
Article 26
Structural Adjustment
1. Exceptional measures oflimited duration which derogate fromtheprovisions ofArticle 3may
betaken byanyoftheParties intheform ofincreased custom duties.
2. These measures mayonlyconcern infant industries, orcertain sectors undergoing restructuring
orfacing serious difficulties, particularly where these difficulties produce important social problems.
3. Customs duties onimports applicable intheParty concerned toproducts originating inthe
other Party introduced bythese measures maynotexceed 25percentadvalorem andshallmaintain
anelement ofpreference forproducts originating intheParties. Thetotalvalue ofimports ofthe
products which aresubject tothese measures maynotexceed 15percentoftotalimports ofindustrial
products fromtheother Party asdefined inTitleI,during thelastyearforwhich statistics areavailable.
4. These measures maybeapplied foraperiod notexceeding fiveyears unless alonger duration
isauthorized bytheJointCommittee. They shallcease toapply atthelatest attheexpiration ofthe
transitional period.
5. Nosuchmeasures canbeintroduced inrespect ofaproduct ifmore thanthree years elapsed
sincetheeliminationofalldutiesandquantitativerestrictionsorchargesormeasureshavinganequivalent
effect concerning thatproduct.
6. TheParty concerned shallinform theother Party ofanyexceptional measures itintends to
takeand,attherequest oftheother Party consultations shallbeheldwithin theJointCommittee on
suchmeasures andthesectors towhich theyapply prior totheirintroduction. When taking such
measures theParty concerned shallprovide theJoint Committee withaschedule fortheelimination
ofthecustoms duties introduced under thisArticle. Thisschedule shallprovide foraphasing-out ofWT/REG54/1
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these duties starting atthelatest twoyears aftertheirintroduction, atequal annual rates. TheJoint
Committee maydecide onadifferent schedule.
Article 27
Re-export andSerious Shortage
Where compliance withtheprovisions ofArticles 7and9leads to:
(a) re-export towards athirdcountry against which theexporting Party maintains fortheproduct
concernedquantitativeexportrestrictions,exportdutiesormeasuresorchargeshavingequivalent
effect; or
(b) aserious shortage, orthreat thereof, ofaproduct essential totheexporting Party;
andwhere thesituations referred toabove giveriseorarelikely togiverisetomajor difficulties for
theexporting Party, thatParty maytakeappropriate measures under theconditions andinaccordance
withtheprocedureslaiddowninArticle29.Themeasuresshallbenon-discriminatoryandbeeliminated
when conditions nolonger justify theirmaintenance.
Article 28
Fulfilment ofObligations
1. TheParties shalltakeanygeneral orspecific measures required tofulfiltheirobligations under
thisAgreement. They shallseetoitthattheobjectives setoutinthisAgreement areattained.
2. IfaParty considers thattheother Party hasfailed tofulfilanobligation under thisAgreement,
theParty concerned maytakeappropriate measures under theconditions andinaccordance withthe
procedure laiddown inArticle 29.
Article 29
Procedure fortheApplication ofSafeguard Measures
1. Before initiating theprocedure fortheapplication ofsafeguard measures setoutinthefollowing
paragraphs ofthisArticle, theParties shallendeavour tosolve anydifferences between them through
direct consultations.
2. Intheevent ofaParty subjecting imports ofproducts liable togiverisetothesituation referred
toinArticle 25toanadministrative procedure having asitspurpose therapid provision ofinformation
onthetrend oftrade flows, itshallinform theother Party.
3. Without prejudice toparagraph 7ofthisArticle, aParty which considers resorting tosafeguard
measuresshallpromptlynotifytheotherPartythereofandsupplyallrelevantinformation.Consultations
between theParties shalltakeplacewithout delay intheJointCommittee withaviewtofinding asolution
acceptable totheParties.
4. (a) Asregards Article 23,theParty inquestion shallbeinformed ofthedumping case
assoonastheauthorities oftheimporting Party haveinitiated aninvestigation. If
noendhasbeenputtothedumping ornoother satisfactory solution hasbeenreachedWT/REG54/1
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within thirty daysofthenotification being made, theimporting Party mayadopt the
appropriate measures.
(b) Asregards Articles 25,26and27,theJointCommittee shallexamine thecaseorthe
situation andmaytakeanydecision needed toputanendtothedifficulties notified
bytheParty concerned. Intheabsence ofsuchdecision within thirty daysofthematter
being referred totheJointCommittee, orifnoother satisfactory solution isreached
within thirty days, theParty concerned mayadopt themeasures necessary inorder
toremedy thesituation.
(c) Asregards Article 28,theParty concerned maytakeappropriate measures afterthe
consultations havebeenconcluded oraperiod ofthree months haselapsed from the
dateofnotification totheother Party.
(d) Asregards Articles 19and20,theParties concerned shallgivetheJoint Committee
alltheassistance required inorder toexamine thecaseand,where appropriate, eliminate
thepractice objected to.IftheParty inquestion failstoputanendtothepractice
objected towithin theperiod fixed bytheJointCommittee oriftheJointCommittee
failstoreach anagreement within thirty working daysofthematter being referred
toit,theParty concerned mayadopt theappropriate measures todealwiththe
difficulties resulting from thepractice inquestion.
5. Thesafeguard measures taken shallbenotified immediately totheother Party. They shall
berestricted withregard totheirextent andtotheirduration towhatisstrictly necessary inorder to
rectify thesituation giving risetotheirapplication andshallnotbeinexcess oftheinjury caused by
thepractice orthedifficulty inquestion. Priority shallbegiven tosuchmeasures aswillleastdisturb
thefunctioning ofthisAgreement. Themeasures taken byaParty against anaction oranomission
oftheother Party mayonlyaffect thetrade withthatParty.
6. Thesafeguard measures taken shall betheobject ofperiodic consultations within the
Joint Committee withaviewtotheirrelaxation assoonaspossible, orabolition when conditions no
longer justify theirmaintenance.
7. Whereexceptionalcircumstancesrequiringimmediateactionmakepriorexaminationimpossible,
thePartyconcernedmay,inthecasesofArticles23,25and27,applyforthwiththeprovisionalmeasures
strictly necessary toremedy thesituation. Themeasures shallbenotified without delay andconsultations
between theParties shalltakeplace assoonaspossible within theJoint Committee.
Article 30
Balance ofPayments Difficulties
1. TheParties shallendeavour toavoid theimposition ofrestrictive measures including measures
relating toimports forbalance ofpayments purposes.
2. Where oneoftheParties isinserious balance ofpayments difficulties, orunder imminent threat
thereof, theParty concerned may, inaccordance with theconditions established under the
WTO/GATT 1994, adopt restrictive measures, including measures related toimports, which shallbe
oflimiteddurationandmaynotgobeyondwhatisnecessarytoremedythebalanceofpaymentssituation.
Themeasures shallbeprogressively relaxed asbalance ofpayments conditions improve andtheyshall
beeliminated when conditions nolonger justify theirmaintenance. TheParty concerned shallinformWT/REG54/1
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theother Party forthwith oftheirintroduction and,whenever practicable, ofatimeschedule fortheir
removal.
3. Inapplying temporary trade measures, theParty inquestion shallaccord treatment noless
favourable toimports originating intheother Party thantoimports originating inanyother country.
Article 31
Evolutionary Clause
1. Where aParty considers thatitwould beuseful intheinterests oftheeconomies oftheParties
todevelop anddeepen therelations established bytheAgreement byextending themtofields notcovered
thereby, itshallsubmit areasoned request totheother Party. TheJointCommittee shallexamine such
arequest and,where appropriate, maymake recommendations, particularly withaviewtoopening
negotiations.
2. Agreements resulting fromtheprocedure referred toinparagraph 1willbesubject toratification
orapproval bytheParties inaccordance withtheirnational legislation andprocedures.
TITLE IV
Final Provisions
Article 32
TheJoint Committee
1. AJointCommittee ishereby established which shallberesponsible fortheadministration of
thisAgreement andshallensure itsproper implementation. Itshallexamine anymajor issue arising
within theframework ofthisAgreement andanyother trade oreconomic issues ofmutual interest.
TheJointCommittee shallkeepunder review thepossibility offurther removal ofobstacles totrade
between theParties, including quantitative restrictions onimports.
2. Forthepurpose oftheproper implementation ofthisAgreement, theParties shallexchange
information and,attherequest ofanyParty, shallholdconsultations within theJoint Committee.
3. TheJointCommittee shalltakedecisions inthecases provided forinthisAgreement andmake
recommendations onanyother trade andeconomic matter ofmutual interest.
4. TheJoint Committee shallconsist oftherepresentatives oftheParties.
Article 33
Procedures oftheJoint Committee
1. Fortheproper implementation ofthisAgreement, theJointCommittee shallmeetwhenever
necessary butatleastonceayear. Each Party mayrequest thatameeting beheld.
2. TheJoint Committee shallactbycommon agreement.WT/REG54/1
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3. Ifarepresentative ofaParty intheJoint Committee hasaccepted adecision subject tothe
fulfilment oflegislative requirements, thedecision shallenter intoforce, ifnolaterdateiscontained
therein, onthedayofthenotification thatsuchrequirements havebeenfulfilled.
4. Forthepurpose ofthisAgreement, theJointCommittee shalladopt itsrulesofprocedure which
shall, interalia,contain provisions forconvening meetings andforthedesignation oftheChairman
andhistermofoffice.
5. TheJoint Committee maydecide tosetupsuchsub-committees andworking parties asit
considers necessary toassist itinaccomplishing itstasks.
Article 34
Dispute Settlement
1. Each Party mayrefer totheJoint Committee anydispute relating totheapplication orthe
interpretation ofthisAgreement. When inparticular, aParty considers thattheother Party hasfailed
tocarry outitsobligations under thisAgreement, orhastaken measures which severely distort the
balance oftradebenefits orsubstantially undermine fundamental objectives ofthisAgreement, itmay
refertothedispute totheJoint Committee.
2. TheJointCommittee maysettle thedispute bymeans ofadecision. EachParty shallbebound
totakemeasures involved incarrying outthatdecision.
Article 35
Trade Relations Governed bythisandother Agreements
1. ThisAgreementshallnotpreventthemaintenanceorestablishmentofcustomsunions,free-trade
areas orarrangements forfrontier trade which areinaccordance with theprovisions of
WTO/GATT 1994.
2. Consultations between theParties, shalltakeplace, onrequest, within theJoint Committee
concerning agreements establishing suchcustoms unions orfree-trade areas.
Article 36
Annexes andProtocols
TheAnnexes andtheProtocols tothisAgreement areanintegral partofit.TheJointCommittee
maydecide toamend theAnnexes andProtocols inaccordance withtheprovisions ofparagraph 3of
Article 33.
Article 37
Territorial Application
ThisAgreement shallapply tothecustoms territories oftheParties.WT/REG54/1
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Article 38
Amendments
Amendments tothisAgreement other thanthose referred toinparagraph 1ofArticle 32which
areapproved bytheJointCommittee shallbesubmitted totheParties foracceptance andshallenter
intoforce ifaccepted bybothParties.
Article 39
Entry intoForce
1. ThisAgreement shallenter intoforce on1January 1998, provided thattheParties exchange
thenotes confirming thecompletion oftheinternal procedures ofratification priorto1December 1997.
2. IncasethisAgreement cannot enter intoforce onthatdate,theeffective dateshallbethefirst
dayofthesecond month aftertheParties notify eachotherthrough diplomatic channels ofitsratification.
Article 40
Validity andWithdrawal
ThisAgreement isconcluded foranunlimited period.
Either Party maydenounce thisAgreement bywritten notification totheother Party through
diplomatic channels. ThisAgreement shallcease toapply sixmonths afterthedateofsuchnotification.
INWITNESS WHEREOF theundersigned plenipotentiaries, being dulyauthorized thereto,
havesigned thisAgreement.
Done at........, this.......... dayof................ 1997, which corresponds tothe..........
dayof............., 5,757 inthreeoriginals, intheHungarian, Hebrew andEnglish languages, alltexts
being equally authentic. Incaseofanydivergence ofinterpretation theEnglish textshallprevail.
FortheRepublic ofHungary FortheGovernment oftheState ofIsraelWT/REG54/1
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Record ofUnderstanding
1. IncaseHungary agrees withtheEuropean Union toaccelerate thereduction oftariffs orthe
removal ofquantitative restrictions, charges andmeasures having equivalent effect attheentry into
force oftheAgreement establishing anAssociation between Hungary andtheEuropean Union and
itsMemberStates,thePartiesshallconsultaboutthetermsandconditionsofextendingsuchliberalization
toIsrael inconjunction withchanges intheIsraeli reduction schedule forsensitive products. Balance
ofbothsides should bebasically maintained during thewhole transitional period andconcessions
exchange under special conditions should beconsidered intheJoint Committee.
2. Withrespect toArticle 5,theParties shallapply thesame charges equivalent toduties, which
areapplicable intheirtrade withtheEuropean Union.
3. TheParties agree thatmeasures referred toinArticle 15fortheprotection oftheenvironment
maybeapplied totheextent permitted under Article XXoftheGeneral Agreement onTariffs and
Trade 1994, andanyother relevant instruments negotiated under itsauspices which areapplicable
between theParties.
4. Forthepurpose ofinterpreting Article 20,theParties agree thatmeasures aimed atpromoting
therestructuring ofHungary 'seconomy, shallbeconsidered asnotbeing inconsistent withArticle 20(1)
provided thattheyarenotincompatible withthestateaidpractises applied byHungary under the
AgreementestablishinganAssociationbetweenHungaryandtheEuropeanUnionanditsMemberStates.
5. EachParty shallapply anymeasures under Article 26totheextent being applied withrespect
toimports from theEuropean Union.
6. Once theEuropean Union anditsMember States implements thenecessary modifications in
itsAgreement withIsrael, similar amendments shallbeintroduced intheProtocol onrulesoforigin
oftheHungary-Israel FreeTrade Agreement thereby providing thecondition fortriangular cumulation
under therules oforigin.
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