WORLD TRADE  
ORGANIZATION  WT/REG226/2 
28 March 2008 
 (08-1374) 
Committee on Regional Trade Agreements Original:   English 
  
INTERIM AGREEMENT ON TRADE AND TRADE-RELATED MATTERS 
BETWEEN THE EUROPEAN COMMUNITIES AND ALBANIA 
 
Questions and Replies
 
  
 The following communication, dated 17 March 2008, is being circulated at the request of the 
delegations of the European Communities and Albania.   This document reproduces the questions addressed to the Parties and the responses submitted.  
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Questions from the delegation of Switzerland
 
 
1. Para. 41:  Under the Interim Agreement, an importing Party may take bilateral 
safeguard measures not only in case of serious in jury or threat thereof, but also in case of 
"serious disturbances in any sector of the econo my or difficulties which could bring about 
serious deterioration in the economic situation of  a region".  These concepts are not defined in 
the Agreement.  What kind of situations could fall under "serious disturbances"?  
 The Interim Agreement foresees that bilatera l safeguard measures may be taken in case of 
"serious injury" but also in case of "serious di sturbances in any sector of the economy which could 
bring about serious deterioration in the economic situation of a region". 
  While it is true that this last criterion does not appear nor is defined in the WTO Agreement 
on Safeguards, it does appear in many of the regiona l/bilateral trade agreements of the EC, especially 
as far as agricultural products are concerned. In th at contractual context where concessions must be 
made to attain a substantial share of trade, "serious  disturbances" is intended to be a criterion that is 
somehow less stringent than "serious injury", to cater for emergency situation linked to more sensitive 
products and thus help Parties to make these trad e concessions by providing a safety-net.  However, 
the EC being an extremely moderate user of safegua rds, both global and bilateral, there is no case law 
regarding interpretation of "serious disturbances".  
 Although the general idea remains that "serious disturbances" can be proven more easily than 
"serious injury", it is to be underlined that ther e is no separate list of crit eria to be taken into 
consideration when assessing "serious disturbances… " nor specific laxer thresholds as compared to 
serious injury ones.  In addition, the Party intendi ng to take safeguard measures on that basis must still 
show that imports have increased and that they have been made under certain conditions (Art. 25(2) 
1st sentence) that caused the "serious disturbance" .  Furthermore, the Interim Agreement provides for 
a series of quite restrictive conditions attached to these safeguard measures: 
 - They are taken for a very short period of time: one year renewable, w ith a maximum of three 
years. 
- There is a three-year grace period in -between measures on the same product. WT/REG226/2 
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  - Bilateral consultations are provided for to find so lutions to difficult situations and to review 
measures. 
2. Para. 51:  Under the Interim Agreement, Alba nia shall establish within four years an 
independent authority that is competent on St ate-aid.  Did Albania already take measures 
towards the establishment of such authority?   If so, what powers and institutional 
characteristics is the authority likely to have? 
 The Law No. 9374, date 21.04.2005 “On State-aid”, lays down the legal basis for the 
establishment of responsible structures for controllin g State-aid in Albania, State Aid Department in 
the Ministry covering economic affairs and State Aid Commission.  The law entered into force on January 1st 2006. 
 
 State-aid Commission , who has been established by Council of Ministers Decision nr.182 
date 21.03.2006, is the decision taken body for Stat e-aid control.  The Commission is composed of 
five members, who are appointed for a fix term of four years.  The Commission is entrusted with the powers to approve, with or without conditions, State-ai d schemes and individual aids in Albania, or to 
refuse them. Also, it has the compet ence to order the recovery of the aid which unlawfully has been 
granted.  The SAC is operating according to the pr ocedures of the law, its implementing regulations 
and of the Regulation “On the Organization and Functioning of the State Aid Commission”.  
  State-aid Department  has been established upon the Prime Minister Order No. 79, date 
26.03.2004. The general tasks of the Department include drafting the legal framework (any future 
amendments, new regulations, guidelines, etc); id entifying and analyzing economic and legal aspect 
of the State-aid schemes and individual aids, as well as preparing all investigative reports for 
particular cases; providing contribution in deci sion-making by suggesting detailed analyses on the 
compilation and development of regional and sector policies. 
 
 The legal tasks of State Aid Department and the Commission competences, as well as their 
operational reporting line, constitute  an approach that ensures the operational independence required 
in the article 71, point 4 of Stabilization and A ssociation Agreement during the transitory stage 
(art.38, point 4, of Interim Agreement). 
 
Questions from the delegation of Japan
 
 
Import duties  
 
3. Article 6 of the Agreement provides that customs duties on imports of industrial goods 
into Albania originating in the Community, excep t those covered by the Treaty establishing the 
European Atomic Energy Community, will be abo lished at the latest on 1 January of the 
fifth year following the date of entry into fo rce, while Table II.3 of the Factual Presentation 
(WT/REG226/1) shows that several tariff lines regar ding industrial goods will remain subject to 
customs duty.  Could the Parties elaborate on  this?  Could we understand that those that 
remain subject to customs duty are covered by the Treaty establishing the European Atomic 
Energy Community? 
 Table II.3 is not correct and the WTO Secretar iat will issue a corrected version in a revised 
document to be posted on the Website after the meeti ng. The new table reflects that the transitional 
period for Albania expires in 2011, at which all duti es on all industrial products will be eliminated by 
both the EC and Albania.  
 
  WT/REG226/2 
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  Safeguard mechanisms  
 4. With respect to Paragraph 39 of the Factua l Presentation or Article 25.5.(a) of the 
Agreement, we understand that the Parties will preserve the margin of preference granted 
under the Agreement when applying global safegu ard measures.  Does either Party have similar 
provisions in other RTAs? 
 The Interim Agreement foresees that the Party that is taking global safeguard measures must 
ensure that these measures maintain the level of  bilateral preference with the other Party. 
 
 The European Communities already have simila r provisions in various bilateral agreements 
such as: 
- Agreement establishing an association between the EC and its Members States of the one part 
and the Republic of Chile of the other part signed in 2002 (OJ L 352 of 30.12.2002), Article 92(6). 
- Agreement on trade, development and Cooperati on between, the EC and its Member States of 
the one part and the Republic of South Africa of the other part signed in 1999 (OJ L of 
4.12.1999). Article 25(3) foresees that South Africa, who is unilaterally entitled to take 
special transitional safeguard measures (infant industry clause), shall ensure that these 
measures maintain a certain element of pref erence for products originating in the EC. 
- Former Europe Agreements with countries from Central and Eastern Europe that have now 
become Members of the EU contained a provision similar to the one with South Africa. As an 
example: Article 29 of the agreement with Romania (OJ L 357 of 31/12/1994). 
Government Procurement
 
 
5. With respect to Paragraph 55 in Section II.C. 5(d) of the Factual Presentation, could the 
EC elaborate on the “utilities sector” referred to at Article 40.2 of the Agreement?  We are 
particularly interested in the relation between  the “utilities sector” and the drinking water 
sector/electricity sector referred to in EC Annex 3 of Appendix I, the WTO Agreement on Government Procurement.  How are they legally defined?  
 Utilities sector referred to at Article 40.2 refe r to utilities defined and covered under Directive 
2004/17/EC of the European Parliament and of  the Council of 31 March 2004 coordinating the 
procurement procedures of entities operating in th e water, energy, transport and postal services 
sectors.  
6. With respect to Article 40.2 of the Agreement, has the EC examined the introduction of 
the legislation introducing the community rules by  the government of Albania?  If that is the 
case, what was the outcome of the examination? 
 For the time being Albania has not adopted le gislation introducing the Community rules in 
this area. Once Albania informs the EC on the adop tion of such legislation, the EC will examine 
whether it fulfils the criteria set out in Article 40.2 of the SAA. 
 
7. With respect to Article 40.4 of the Agree ment, has the Stabilisation and Association 
Council examined the possibility of Albania intro ducing access to contract award procedures in 
Albania for all Community companies? If that  is the case, what was the outcome of the 
examination? 
 
 No such proposal has been subm itted to the EC for the time being. 
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