WORLD TRADE  
ORGANIZATION  WT/REG194/1 
4 April 2005 
 (05-1367) 
Committee on Regional Trade Agreements Original:   English 
  
FREE TRADE AGREEMENT BETWEEN BULGARIA AND 
BOSNIA AND HERZEGOVINA 
 
  The following communication, dated 2 March 2005, is being circulated at the request of the 
Delegation of Bulgaria.
* 
 
_______________ 
 
 
PREAMBLE  
 
 The Republic of Bulgaria and Bosnia and Herzegovina (hereinafter referred to as "the 
Contracting Parties"),    Desirous to develop and strengthen fri endly relations, especially in the fields of trade and 
economic co-operation, with the aim to contribut e to the development of economic co-operation 
between the two countries and to increase the scope of mutual trade exchange; 
  Reaffirming their commitment to the principles of a market economy, which constitutes the 
basis for their relations;  
 Recalling their intention to participate actively in the process of economic integration in 
Europe as an important dimension of the stabilit y on the European continent and expressing their 
preparedness to co-operate in seeking ways  and means to strengthen this process; 
  Firmly convinced that this Agreement will foster th e intensification of mutually beneficial 
trade relations among them and contribute to the process of integration in Europe; 
 
 Considering the importance of the links between the Contracting Parties, their desire to 
strengthen those links and to further ex tend the relations established previously; 
  Resolved to eliminate progressively the obstacles to s ubstantially all their mutual trade, in 
accordance with the provisions of the General Ag reement on Tariffs and Trade 1994 (hereinafter 
referred to as "GATT 1994") and the Agreemen t establishing the World Trade Organisation 
(hereinafter referred to as "WTO"), Bosnia and He rzegovina having objective to become a member of 
the WTO;  
 Considering that no provision of this Agreement may be interpreted as exempting the 
Contracting Parties from their obligations  under other international agreements; 
  Have agreed as follows: 
                                                     
 
* The associated Annexes have been submitted to  the Secretariat for consultation by interested 
Members (office 1174).   
 WT/REG194/1 
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 Article 1 
 
Objectives
 
 
1. The Contracting Parties shall gradually establish a free trade area on substantially all bilateral 
trade in a transitional period ending on 1 January 2005, in accordance with the provisions of this 
Agreement and in conformity with  the definition, set out in Article XXIV of the GATT 1994, and the 
WTO.   
2. The objectives of this Agreement are: 
(a) to promote through the expansion of mutual trade the harmonious development of 
economic relations be tween the Contracting Parties and thus to foster in the 
Contracting Parties the advance of economic activity, the improvement of living and employment conditions, and financial stability; 
(b) to provide fair conditions of competition fo r trade between the Contracting Parties; 
(c) to contribute by the gradual removal of barriers to trade, to the harmonious 
development and expansion of world trade; 
(d) to enhance co-operation between the Contracting Parties; 
(e) to create conditions for further promotion of investments, particularly for the 
development of joint investment in both countries; 
(f) to promote trade and co-operation of the Contracting Parties on third countries’ 
markets.   
CHAPTER I - INDUSTRIAL PRODUCTS 
 
Article 2 
 
Scope
 
 
 The provisions of this Chapter shall apply to in dustrial products originating in the Contracting 
Parties.  The term “industrial products” means for the purpose of this Agreement the products falling 
within Chapters 25 to 97 of the Harmonized Co mmodity Description and Coding System with the 
exception of the products listed in Annex I to this Agreement.   
Article 3 
 
Basic Duties  
 
1. For the commercial exchange, covered by this Agreement, the Customs Tariff of Bosnia and 
Herzegovina shall be applied to the classificati on of goods, imported in Bosn ia and Herzegovina and 
the Customs Tariff of the Republic of Bulgaria shall be applied to the classification of goods, 
imported in the Republic of Bulgaria.   
2. For each product the basic duty to which the su ccessive reductions set out in this Agreement 
are to be applied shall be the Most Favoured Nation rate of duty in force on the date of entry into 
force of this Agreement.    WT/REG194/1 
 Page 3 
 
 
 3. If, after entry into force of this Agreemen t, any tariff reduction is applied on an erga omnes  
basis, in particular reductions resulting from the ta riff negotiations in the WTO, such reduced duties 
shall replace the basic duty referred to in paragrap h 2 of this Article as from the date when such 
reductions are applied.   
4. The reduced duties calculated in accordance with paragraph 3 of this Article shall be applied 
rounded to the first decimal place.   
5. The Contracting Parties shall communicate to each other their respective basic duties.   
Article 4 
 
Customs Duties On Imports, Charges Having Equivalent  Effect And Import Duties Of A Fiscal Nature  
 
1. The Contracting Parties shall not introduce ne w customs duties on imports, charges having an 
effect equivalent to customs duties on imports and import duties of a fiscal nature in trade between 
them as from the date of entry into force of this Agreement.   
2. Customs duties on imports applicable in the Republic of Bulgaria to industrial products 
originating in Bosnia and Herzegovina shall be a bolished on the date of entry into force of this 
Agreement.   
3. Customs duties on imports, charges having equiva lent effect and import duties of a fiscal 
nature applicable in Bosnia and Herzegovina on th e date of entry into force of this Agreement to 
industrial products originating in  the Republic of Bulgaria shall be progressively reduced in 
accordance with the following timet able, except for the products liste d in Annex II of the Agreement: 
- on the date of entry into force of this Agreement 
- on 1 January 2004 - on 1 January 2005 - to 50% of their value, 
- to 40% of their value, - the remaining duties shall be abolished.   
4. Customs duties on imports, charges having equiva lent effect and import duties of a fiscal 
nature applicable in Bosnia and Herzegovina on th e date of entry into force of this Agreement to 
industrial products originating in the Republic of Bu lgaria, for the products listed in Annex II of the 
Agreement, shall be progressively reduced  in accordance with the following timetable: 
 - on the date of entry into force of this Agreement 
- on 1 January 2004 - to 40% of their value, 
- the remaining duties shall be abolished.   
 
Article 5 
 
Customs Duties On Exports, Charges Having Equivalent  Effect And Export Duti es Of A Fiscal Nature
 
 
1. The Contracting Parties shall not introduce new customs duties on exports, charges having 
equivalent effect and export duties of a fiscal nature in trade between them, as from the date of entry 
into force of this Agreement.   
2. The Contracting Parties shall abolish all cust oms duties on exports, charges having equivalent 
effect and export duties of a fiscal nature on the da te of entry into force of this Agreement.   WT/REG194/1 
Page 4  
 
 Article 6 
 
Quantitative Restrictions On Imports And Ex ports And Measures Having Equivalent Effect
 
 
1. The Contracting Parties shall not introduce new quantitative restrictions on imports and 
exports or measures having equivalent effect in trade between them, as from the date of entry into 
force of this Agreement.   
2. All quantitative restrictions on imports and ex ports and measures having equivalent effect 
shall be abolished on the date of entr y into force of this Agreement.   
Article 7 
 
Elimination Of Technical Barriers To Trade  
 
1. The rights and obligations of the Contracting Parties relating to technical regulations or 
standards and related measures shall be governed by the WTO Agreement on Technical Barriers to 
Trade.   
2. The Contracting Parties shall co-operate and exch ange information in the field of conformity 
assessment, standardisation, metrology and accreditati on with the aim of reducing and/or eliminating 
technical barriers to trade.   
3. Each Contracting Party, upon request of th e other Contracting Party, shall provide 
information on particular individual cases of technical norms, standards and related measures.   
4. To eliminate technical barriers and effectively implement this Agreement, the Contracting 
Parties shall further discuss the possibility to conc lude an agreement on mutual recognition of test 
reports, certificates of conformity and other documents  directly or indirectly related to conformity 
assessment of the products which are the subject of trade between the Contracting Parties.   
CHAPTER II - AGRICULTURAL PRODUCTS 
 
Article 8 
 
Scope  
 
The provisions of this Chapter shall apply to agricultural products originating in the 
Contracting Parties.  The term “agricultural prod ucts” means for the purpose of this Agreement the 
products falling within Chapters 1 to 24 of th e Harmonized Commodity Description and Coding 
System including products listed in Annex I to this Agreement.   
Article 9 
 
Basic Duties  
 
1. For the commercial exchange, covered by this Agreement, the Customs Tariff of Bosnia and 
Herzegovina shall be applied to the classificati on of goods, imported in Bosn ia and Herzegovina and 
the Customs Tariff of the Republic of Bulgaria shall be applied to the classification of goods, 
imported in the Republic of Bulgaria.    WT/REG194/1 
 Page 5 
 
 
 2. For each product the basic duty to which the su ccessive reductions set out in this Agreement 
are to be applied shall be the Most Favoured Nation rate of duty in force on the date of entry into 
force of this Agreement.  Customs duties referred to in this Article include ad valorem and specific 
part of customs duties.   
3. If, after entry into force of this Agreemen t, any tariff reduction is applied on an erga omnes  
basis, in particular reductions resulting from the ta riff negotiations in the WTO, such reduced duties 
shall replace the basic duty referred to in paragrap h 2 of this Article as from the date when such 
reductions are applied.   
If a reduction of duties is effected by way of a susp ension of duties made for a particular period of 
time, such reduced duties shall replace the basic du ties only for the period of such suspension.   
4. The reduced duties calculated in accordance with paragraph 3 of this Article shall be applied 
rounded to the first decimal place.   
5. The Contracting Parties shall communicate to each other their respective basic duties.   
Article 10 
 
Exchange Of Concessions  
 
1. The Contracting Parties shall grant each other the concessions specified in Annex III of the 
Agreement, in accordance with the provisions of this  Chapter and those laid down in that Annex.   
2. Taking into account: 
- the role of agriculture in their economies, 
- the development of trade in agricultural products between the Contracting Parties, 
- the particular sensitivity of the agricultural products, 
- the rules of their agricultural policies, 
- the results of the multilateral trade negotiations under WTO, 
the Contracting Parties shall examine the possibiliti es of granting each other further concessions.   
 
Article 11 
 
Customs Duties On Exports, Charges Having Equivalent  Effect And Export Duti es Of A Fiscal Nature  
 
1. The Contracting Parties shall not introduce new customs duties on exports, charges having 
equivalent effect and export duties of fiscal nature  in trade between them as from the date of entry 
into force of this Agreement.   
2. The Contracting Parties shall abolish all cust oms duties on export, charges having equivalent 
effect and export duties of a fiscal nature on the da te of entry into force of this Agreement.   
Article 12 
 
Quantitative Restrictions On Imports And Ex ports And Measures Having Equivalent Effect  WT/REG194/1 
Page 6  
 
 1. The Contracting Parties shall not introduce new quantitative restrictions on imports and 
exports or measures having equivalent effect in tr ade between them as from the date of entry into 
force of this Agreement.   
2. All quantitative restrictions on imports and ex ports and measures having equivalent effect 
shall be abolished on the date of entr y into force of this Agreement.   
Article 13 
 
Agricultural Policy
 
 
1. Without prejudice to the concessions granted under Article 10 of this Agreement, the 
provisions of this Chapter shall not restrict in any way the pursuance of th e respective agricultural 
policies of the Contracting Parties or the taking of any measures under such policies, including the implementation of the provisions of the WTO Agreement on Agriculture.   
2. The Contracting Parties shall notify to the Joint Committee changes in their respective 
agricultural policies pursued or measures applied which may affect the conditions of trade in 
agricultural products between them.  Upon request of a Contracting Party, prompt consultations shall 
be held to examine the situation.   
Article 14 
 
Specific Safeguards
 
 
Notwithstanding other provisions of this Agreem ent, and in particular Article 28 of this 
Agreement, given the particular sensitivity of th e agricultural products, if imports of products 
originating in one of the Contracting Parties, whic h are the subject of concessions granted under this 
Agreement cause serious disturbance to the market of the other Contracting Party, both Contracting 
Parties shall enter into consultations immediatel y to find an appropriate solution.  Pending such 
solution, the Contracting Party concerned may ta ke appropriate measures it deems necessary.   
 
Article 15 
 
Sanitary And Phytosanitary Measures  
 
1. The Contracting Parties shall apply their regula tions in veterinary, phytosanitary and sanitary 
matters taking into account the WTO Agreement on the Application of Sanitary and Phytosanitary 
Measures.   
2. The Contracting Parties shall apply their regula tions in veterinary, phytosanitary and sanitary 
matters in a non-discriminatory fashion and shall no t introduce any new measures that have the effect 
of unduly obstructing trade.   
3. The measures related to the veterinary and san itary control between the Contracting Parties 
shall be adjusted to the relevant EU legislation.   
4. The Contracting Parties shall exchange the information on sanitary and phytosanitary 
protection of animals, plants and products.   
  WT/REG194/1 
 Page 7 
 
 
 Article 16 
 
Elimination Of Technical Barriers To Trade  
 
1. The rights and obligations of the Contracting Parties relating to technical regulations or 
standards and related measures shall be governed by the WTO Agreement on Technical Barriers to 
Trade.   
2. The Contracting Parties shall co-operate and exch ange information in the field of conformity 
assessment, standardisation, metrology and accreditati on with the aim of reducing and/or eliminating 
technical barriers to trade.   
3. Each Contracting Party, upon request of th e other Contracting Party, shall provide 
information on particular individual cases of technical norms, standards and related measures.   
4. To eliminate technical barriers and effectively implement this Agreement, the Contracting 
Parties shall further discuss the possibility to conc lude an agreement on mutual recognition of test 
reports, certificates of conformity and other documents  directly or indirectly related to conformity 
assessment of the products which are the subject of trade between the Contracting Parties.   
CHAPTER III - GENERAL PROVISIONS 
 
Article 17 
 
Rules Of Origin And Co-Operation In Customs Administration  
 
 
1. The Contracting Parties agree to apply the harmoni zed European preferential rules of origin in 
the mutual trade including all amendments thereto.  In case the European rules of origin are amended, 
the Joint Committee shall make a decisi on on amending rules of origin.   
2. Protocol A to this Agreement (hereinafter refe rred to as "Protocol A") lays down the rules of 
origin and related methods of ad ministrative co-operation.   
3. The Contracting Parties shall take appropriate  measures, including regular reviews by the 
Joint Committee and arrangements for administrative co -operation, to ensure that the provisions of 
Protocol A and Articles 3 to 7, 9 to 13, 18, 28, 29 and 30 of this Agreement are effectively and harmoniously applied, and to reduce, as far as pos sible, the formalities imposed on trade, and to 
achieve mutually satisfactory solutions to an y difficulties arising from the operation of those 
provisions.   
Article 18 
 
Internal Taxation
 
 
 
1. The Contracting Parties shall refrain from any meas ure or practice of an internal fiscal nature 
establishing, whether directly or indirectly, discr imination between the products originating in the 
Contracting Parties.   
2. Products exported to the territory of one of the Contracting Parties may not benefit from 
repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them.   WT/REG194/1 
Page 8  
 
 Article 19 
 
General Exceptions
 
 
This Agreement shall not preclude prohibitions or  restrictions on imports, exports or goods in 
transit justified on grounds of public morality, pub lic policy or public security;  the protection of 
health and life of humans, animals or plants;  the pr otection of national treasures of artistic, historic or 
archaeological value;  the protection of intellectual property;  the rules relating to gold and silver, or 
the protection of environment or the conservation of  exhaustible natural resources, if such measures 
are made effective in conjunction with restricti ons on domestic production or consumption.  Such 
prohibitions or restrictions shall not, however, c onstitute a means of arbitrary discrimination or a 
disguised restriction on trade between the Contracting Parties.   
Article 20 
 
Security Exceptions  
 
Nothing in this Agreement shall prevent a C ontracting Party from taking any appropriate 
measure which it considers necessary: 
(a) to prevent the disclosure of information c ontrary to its essential security interests; 
(b) for the protection of its essential security interests or for the implementation of 
international obligations  or national policies: 
(i) relating to the traffic in arms, ammun ition and implements of war, provided 
that such measures do not impair the c onditions of competition in respect of 
products not intended for specifically military purposes, and to such traffic in other goods, materials and services as is carried on directly or indirectly for 
the purpose of supplying a military establishment;  or 
(ii) relating to the non proliferation of biol ogical and chemical weapons, nuclear 
weapons or other nuclear explosive devices;  or 
(iii) taken in time of war or other serious in ternational tension, constituting threat 
of war.   
Article 21 
 
State Monopolies
 
 
1. The Contracting Parties shall adjust progressively any State monopoly of a commercial 
character so as to ensure that by the end of the transitional period laid down in Article 1 of this 
Agreement, no discrimination regarding the conditio ns under which goods are procured and marketed 
exists between nationals of the Contracting Parties.   The Contracting Parties shall inform each other 
about the measures adopted to implement this objective.   
2. The provisions of this Article shall apply to any body through which the competent 
authorities of the Contracting Parties, in law or in  fact, either directly or indirectly supervise, 
determine or appreciably influence imports or e xports between the Contracting Parties.  These 
provisions shall likewise apply to monopolies delegated by the State to other bodies.  
  WT/REG194/1 
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 Article 22 
 
Payments  
 
1. Payments in freely convertible currencies rela ting to trade in goods between the Contracting 
Parties and the transfer of such payments to the territory of the Contracting Party where the creditor 
resides shall be free from any restrictions.   
2. The Contracting Parties shall refrain from any exchange or administrative restrictions on the 
grant, repayment or acceptance of short and medium te rm credits to trade in goods in which a resident 
of a Contracting Party participates.   
3. Notwithstanding the provisions of paragraph 2 of this Article, any measures concerning 
current payments connected with the movement of goods shall be in conformity with the conditions 
laid down under Article VIII of the Agreement of the International Monetary Fund and shall be 
applied on a non-discriminatory basis.   
Article 23 
 
Rules Of Competition Concerning Undertakings  
 
1. The following are incompatible with the proper functioning of this Agreement insofar as they 
may affect trade between the Contracting Parties: 
(a) all agreements between undertakings, decisi ons by associations of undertakings and 
concerted practices between undertakings which have as their object or effect the 
prevention, restriction or distortion of competition; 
(b) abuse by one or more undertakings of a dominant position in the territories of the 
Contracting Parties as a whole or in a substantial part thereof.   
2. The provisions of paragraph 1 of this Article shall apply to the activities of all undertakings 
including public undertakings and undertakings to which the Contracting Parties grant special or 
exclusive rights.  Undertakings entrusted with the operation of services of general economic interest 
or having the character of a revenue-producing mono poly, shall be subject to provisions of paragraph 
1 of this Article insofar as the application of these provisions does not obstruct the performance, in 
law or in fact, of the particular public tasks assigned to them.   
3. With regard to agricultural products the provisions  of paragraph 1 (a) of this Article shall not 
apply to such agreements, decisions and practices wh ich form an integral part of a national market 
organisation.   
4. If a Contracting Party considers that a given prac tice is incompatible with  paragraphs 1, 2 and 
3 of this Article and if such practice causes or th reatens to cause serious prejudice to the interest of 
that Contracting Party or material injury to its domestic industry, it may ta ke appropriate measures 
under the conditions and in accordance w ith the procedure laid down in Ar ticle 32 of this Agreement.   
Article 24 
 
State Aid  
 
1. Any aid granted by a Contracting Party to this Agreement or through state resources in any 
form whatsoever which distorts or threatens to distort competition by favouring certain undertakings WT/REG194/1 
Page 10  
 
 or the production of certain goods shall, insofar as it may affect trade between the Contracting Parties, 
be incompatible with the proper functioning of this  Agreement, except for agricultural products for 
which state aid may be granted in compliance with the relevant provisions of the WTO Agreements.   
2. The Joint Committee shall, within  three years from the entry into force of this Agreement, 
adopt the criteria on the basis of which the practices contrary to paragraph 1 of this Article shall be 
assessed, as well as the rules for their implementation.  The criteria shall comply with the rules of 
Articles 87 and 88 of the Treaty establishing the European Economic Community taking into account the respective criteria applied between each of the Contracting Parties in their relations with the 
European Union.   
3. The Contracting Parties shall ensure tran sparency in the area of state aid, inter alia  by 
reporting annually to the Joint Committee on the total amount and the distribution of the aid given and 
by providing to the other Contracting Party, upon request, information on aid schemes and on 
particular individual cases of state aid.   
4. If a Contracting Party considers that a particular practice: 
- is incompatible with the terms of paragra ph 1 of this Article, and is not adequately 
dealt with under the implementing rules referre d to in paragraph 2 of this Article, or 
- in the absence of rules, referred to in paragr aph 2 of this Article, causes or threatens to 
cause serious prejudice to the interest of that Contracting Party or material injury to its domestic industry, 
it may take appropriate measures under the conditions  of and in accordance with the provisions laid 
down in Article 32 of this Agreement.   
 
5. Such appropriate measures ma y only be taken in conformity  with the procedures and under 
the conditions laid down by the GATT 1994 and the WTO, and any other relevant instruments negotiated under their auspices, which are applicable  between the Contracting Parties concerned.   
 
Article 25 
 
Public Procurement
 
 
1. The Contracting Parties consider the liberalization of their respective public procurement 
markets as an objective of this Agreement.   
2. The Contracting Parties shall progressively de velop their respective rules, conditions and 
practices with a view to grant suppliers of the other Contracting Party access to contract award procedures on their respective public procurement markets.   
3. The Joint Committee shall examine developments related to the achievement of the objectives 
of this Article and may recommend practical modalit ies of implementing the provisions of paragraph 
2 of this Article so as to ensure free access, transp arency and mutual opening of the respective public 
procurement markets of the Contracting Parties.   
4. The Contracting Parties shall endeavour to  accede to the WTO Agreement on Government 
Procurement.  
  WT/REG194/1 
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 Article 26 
 
Intellectual Property Rights  
 
1. The Contracting Parties shall gran t and ensure adequate  and effective protection of intellectual 
property rights on a non-discriminator y basis, including effective meas ures for enforcing such rights 
against infringements and particularly against counter feiting and piracy.  The Co ntacting Parties agree to 
comply with the substantive standards of the mu ltilateral agreements listed in Annex IV.   
2. For the purpose of this Agreement the term "i ntellectual property" includes in particular 
copyright including the copyright on computer programs and neighbouring rights, patents, 
trademarks, industrial designs, geographical indi cations, topographies of integrated circuits, 
undisclosed information as well as know-how.   
3. In fulfilment of their commitments under interna tional agreements and legislation in the field 
of intellectual property rights, the Contracting Parties to this Agreement shall not grant to nationals of 
the state of the other Party treatment less favourable th an that accorded to nationals of any third state.   
4. The Contracting Parties shall co-operate in matters  of intellectual property.  Upon request of a 
Contracting Party, they shall hold expert consu ltations on these matters, in  particular on activities 
relating to the existing or to future interna tional conventions concerning the harmonization, 
administration and enforcement of intellectua l property and on activities in international 
organizations, such as the WTO, World Intellectua l Property Organization, as well as on the relations 
of the Contracting Parties with any third country on intellectual property matters.   
5. The implementation of this article shall be regularly assessed by the Contracting Parties.  
Upon difficulties in trade in relation with the rights of intellectual property, any of the Contracting Parties may request urgent consultations for finding mutually satisfactory solution.   
Article 27 
 
Anti-Dumping And Countervailing Measures
 
 
Nothing in this Agreement shall prejudice or affect in any way the taking, by either 
Contracting Party of anti-dumping and countervailing measures in accordance with Article VI of the 
GATT 1994, the Agreement on Implementation of  Article VI of the GATT 1944 and the WTO 
Agreement on Subsides and Countervailing Measures under the conditions and in accordance with the 
procedure laid down in Article 32 of this Agreement.   
Article 28 
 
General Safeguards  
 
Where any product is being imported in such increased quantities and under such conditions 
as to cause or threaten to cause: 
(a) serious injury to domestic producers of lik e or directly competitive products in the 
territory of the importing Contracting Party, or 
(b) serious disturbances in any related sector of the economy or difficulties which could 
bring about serious deterioration in the economic situation of a region, WT/REG194/1 
Page 12  
 
 the Contracting Party concerned may take a ppropriate measures under the conditions and in 
accordance with the procedure laid down in  Article 32 of this Agreement.   
Article 29 
 
Structural Adjustment
 
 
1. Exceptional measures of limited duration which de rogate from the provisions of Article 4 of 
this Agreement, may be taken for industrial products by any of the C ontracting Parties in the form of 
increased customs duties.   
2. These measures may only concern infant i ndustries, or certain sectors undergoing 
restructuring or facing serious difficulties, particularly where these difficulties produce important 
social problems.   
3. Customs duties on imports applicable in the Contracting Party concerned to products 
originating in the other Contracti ng Party introduced in accordance with paragraphs 1 and 2 of this 
Article may not exceed 25 % ad valorem and shall maintain an element of preference in customs 
duties for products originating in the other Contrac ting Party.  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 other Contracting Party as defined in  Chapter I of this Agreement, during the last 
year for which statistics are available.   
4. These measures shall be applied for a period not exceeding the transitional period determined 
in paragraph 1 of Article 1 of this Agreement.   
5. The Contracting Party concerned shall inform the other Contracting Party of any exceptional 
measures it intends to take and, at the request of the other Contracting Party, consultations shall be 
held immediately within the Joint Committee on su ch measures and the sectors to which they apply 
prior to their introduction.  When taking such measu res the Contracting Party concerned shall provide 
the Joint Committee 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 at the latest two years 
after their introduction, at equal annual rates.  The Joint Committee may decide on a different 
schedule.   
Article 30 
 
Re-Export And Serious Shortage  
 
1. Where compliance with the provisions of Artic les 5 and 6 of this Agreement leads to: 
(a) re-export towards a third country against which the exporting Contracting Party 
maintains for the product concerned quantita tive export restrictions, export duties or 
measures or charges having equivalent effect;  or 
(b) a serious shortage, or threat thereof,  of a product essential to the exporting 
Contracting Party; 
and where the situations referred to above give rise or are likely to give rise to major difficulties for 
the exporting Contracting Party, that Contracti ng Party may take appropriate measures under the 
conditions and in accordance with the procedures la id down in Article 32 of this Agreement.    WT/REG194/1 
 Page 13 
 
 
 2. Measures, taken as a result of the situation referre d to in paragraph 1 of this Article, shall be 
applied in a non-discriminatory manner and be elim inated when conditions no longer justify their 
maintenance.   
Article 31 
 
Fulfilment Of Obligations  
 
1. The Contracting Parties shall take any measures required to fulfil their obligations under this 
Agreement.  They shall ensure that the objectiv es set out in this Agreement are attained.   
2. If a Contracting Party considers that the other Contracting Part y has failed to fulfil an 
obligation under this Agreement,  the Contracting Party concerned may take appropriate measures 
under the conditions and in acco rdance with the procedure laid down in Article 32 of this 
Agreement.   
Article 32 
 
Procedure For The Application Of Safeguard Measures  
 
1. Before initiating the procedure for the appli cation of safeguard measures set out in the 
following paragraphs, the Contracting Parties shall endeavour to solve any di fferences between them 
through direct consultations.   
2. In the event of a Contracting Party subjecting imports of products liable to give rise to the 
situation referred to in Article 28 of this Agre ement to an administrative procedure having as its 
purpose the rapid provision of information on the tr ade flows, it shall inform the other Contracting 
Party.   
3. Without prejudice to paragraph 7 of this Ar ticle, a Contracting Party which considers 
resorting to safeguard measures shall promptly no tify the other Contracting Party thereof and supply 
all relevant information.  Consu ltations between the Contracting Parties shall take place without delay 
within the Joint Committee with a view to finding a solution acceptable to the Contracting Parties.   
4. (a) With regard to Articles 27, 28 and 30 of  this Agreement, the Joint Committee shall 
examine the case or the situation and may take any decision needed to put an end to the difficulties notified by the Contracting Pa rty concerned.  In the case of the absence 
of such decision within thirty days of  the matter being referred to the Joint 
Committee, the Contracting Party concerne d may adopt the measures necessary in 
order to remedy the situation.   
(b) As regards Article 31 of this Agreement,  the Contracting Party concerned may take 
appropriate measures after the consultations have been concluded or a period of three 
months has elapsed from the date of the notification to the other Contracting Party.   
(c) With regard to Articles 23 and 24 of this  Agreement, the Contracting Party concerned 
shall give the Joint Committee all the assist ance required in order to examine the case 
and, where appropriate, eliminate the practice objected to.  If the Contracting Party in question fails to put an end to the practice objected to within the period fixed by the 
Joint Committee, or if the Joint Committee fa ils to reach an agreement within thirty 
working days of the matter being referred to  it, the Contracting Party concerned may 
adopt the appropriate measures to deal w ith the difficulties resulting from the practice 
in question.   WT/REG194/1 
Page 14  
 
 5. The safeguard measures taken sh all be immediately notified to the other Contracting Party.  
They shall be limited with regard to their extent and to their duration to what is strictly necessary in 
order to rectify the situation giving rise to their a pplication and shall not be in excess of the injury 
caused by the practice or the difficulty in question.  Priority shall be given to such measures which 
will least disturb the functioning of this Agreement.   
6. The safeguard measures taken shall be the subj ect of periodic consultations within the Joint 
Committee with a view to their relaxation as soon as possible, or abolition when conditions no longer 
justify their maintenance.   
7. Where exceptional circumstances requiring immediate action make prior examination 
impossible, the Contracting Party concerned may,  in the cases of Articles 27, 28 and 30 of this 
Agreement, apply forthwith the pr ovisional measures strictly necessary to remedy the situation.  The 
measures taken shall be notified without delay and co nsultations between the Contracting Parties shall 
take place as soon as possible within the Joint Committee.   
Article 33 
 
Balance Of Payments Difficulties
 
 
1. The Contracting Parties shall endeavour to avoid the imposition of restrictive measures 
including measures relating to imports for balance of payments difficulties.   
2. Where one of the Contracting Parties is in ser ious balance of payments difficulties, or under 
imminent threat thereof, the Contracting Party concerned may, in accordance with the conditions 
established under the GATT 1994 and the WTO and Artic le VIII of the Articles of the Agreement of 
International Monetary Fund, adopt restrictive m easures, including measures related to imports, which 
shall be of limited duration and may not go beyond what is necessary to remedy the balance of 
payments situation.  The measures shall be progr essively relaxed as balance of payments conditions 
improve and they shall be eliminated when cond itions no longer justify their maintenance.  The 
Contracting Party concerned shall inform the othe r Contracting Party forthwith of their introduction 
and, whenever practicable, of a time schedule for their removal.   
Article 34 
 
Evolutionary Clause  
 
1. Where a Contracting Party considers that it woul d be useful in the interests of the economies 
of the Contracting Parties to develop and deepen  the relations established by this Agreement by 
extending them to fields not covered thereby, it shall submit a reasoned request to the other 
Contracting Party.  The Joint Committee may exam ine such request and, where appropriate, may 
make recommendations, particularly with  a view to opening negotiations.   
2. Agreements resulting from the pro cedure referred to in paragraph 1 of this Article will be 
subject to ratification by the Contracting Parties in  accordance with their internal legislation.   
Article 35 
 
Joint Committee  
 
1. A Joint Committee is hereby established and shall be composed of the representatives of the 
Contracting Parties.    WT/REG194/1 
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 2. The implementation of this Ag reement shall be supervised a nd administered by the Joint 
Committee.   
3. For the purpose of the proper implementation of this Agreement, the Contracting Parties shall 
exchange information and, at the request of a Contract ing Party, shall hold consultations within the Joint 
Committee.  The Joint Committee shall keep under re view the possibility of further removal of the 
obstacles to trade between th e Contracting Parties.   
4. The Joint Committee may take decisions in the cases provided for in this Agreement.  On other 
matters the Joint Committee may make recommendations.   
Article 36 
 
Procedures Of The Joint Committee  
 
1. For the proper implementation of this Agreem ent the Joint Committee shall meet whenever 
necessary, but at least once a year.  Each Contracting Party may requ est that a meeting be held.   
2. The Joint Committee shall act by consensus.   
3. If the representative of a Contracting Party in the Joint Committee has accepted a decision, subject 
to the fulfilment of internal legal requirements, the decision shall enter into force, if no later date is 
contained therein, on the date of the receipt of  a written notification as to the fulfilment of such 
requirements.   
4. For the purpose of this Agreem ent the Joint Committee shall adop t its rules of procedure which 
shall inter alia  contain provisions for conveying meeting and for the designation of the Chairperson and 
his/her term of office.   
5. The Joint Committee may decide to set up such sub-committees and working groups as it 
considers necessary to assist it in accomplishing its tasks.   
Article 37 
 
Services And Investments  
 
1. The Contracting Parties recognise the growing importance of certain areas, such as services and 
investments.  In their efforts to gradually develop and broaden their co-operation, in particular in the context of the European integration, they will co -operate with the aim of  achieving a progressive 
liberalisation and mutual opening of markets for in vestments and trade in ser vices, taking into account 
relevant provisions of the General Agre ement on Trade in Services (GATS).   
2. The Contracting Parties shall exam ine within the Joint Committee the possibilities to extend their 
relations to the fields of foreign dir ect investment and trade in services.   
Article 38 
 
Customs Unions, Free Trade Areas And Frontier Trade
 
 
1. This Agreement shall not prevent the maintenance or establishment of cu stoms unions, free trade 
areas or arrangements for frontier trade to the extent th at these do not negatively affect the trade regime of 
the Contracting Parties and in particular the provisions concerning rules of origin provided for by this Agreement.   WT/REG194/1 
Page 16  
 
 2. Upon request, the Contracting Parties shall info rm each other of any agreement, establishing 
customs union or free trade areas concluded.   
Article 39 
 
Protocols And Annexes
 
 
Protocols and annexes to this Agreement are an integral part of it.  The Joint Committee may 
decide to amend them in accordance  with the internal legal procedures of the Contracting Parties.   
Article 40 
 
Amendments  
 
Amendments to this Agreement other than those decided upon in accordan ce with paragraph 4 of 
Article 35 of this Agreement, and which are approved  by the Joint Committee, shall enter into force in 
accordance with Article 41 of this Agreement.   
Article 41 
 
Entry Into Force  
 
This Agreement is subject to ratification.  It sh all enter into force on the first day of the second 
month following the date of the rece ipt of the last written notification  by which the Contracting Parties 
inform each other through diplomatic channels that the internal legal procedures fo r the entry into force of 
this Agreement have been fulfilled.   
Article 42 
 
Validity And Denouncement  
 
1. This Agreement is concluded for an indefinite period of time.   
2. Each Contracting Party may denounce it through dipl omatic channels by a written notification to 
the other Contracting Party.  In su ch case the Agreement shall be terminat ed on the first day of the seventh 
month after the date on which the other Contracting Party received the notification.   
3. The Contracting Parties agree, th at in case of accession of one of the Contracting Parties to the 
European Union, the Agreement will be terminated without any compensations for the other Contracting 
Party, on the day before the date of  the accession to the EU.  In that ca se, the Contracting Party acceding to 
the EU shall inform the other Contracting Party of such accession within a reasonable period of time.   
IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized thereto, have 
signed this Agreement.   
DONE at Sofia this 16 day of October 2003 in two originals in English language.   
 
FOR THE REPUBLIC OF BULGARIA FOR BOSNIA AND HERZEGOVINA  
__________