WORLD TRADE  
ORGANIZATION  WT/REG195/1 
4 April 2005 
 
 (05-1360) 
Committee on Regional Trade Agreements Original:   English 
  
 
FREE TRADE AGREEMENT BETWEEN BULGARIA AND 
SERBIA AND MONTENEGRO 
 
  The following communication, dated 2 March 2005, is being circulated at the request of the 
Delegation of Bulgaria.
* 
  
_______________ 
  
PREAMBLE
 
  The Republic of Bulgaria  and Serbia and Montenegro  (hereinafter referred to as “the 
Contracting Parties”),  
 Reaffirming  their firm commitment to the principles of a pluralistic democracy based on the 
human rights and fundamental freedoms,   Recalling  their intention to participate actively in the process of economic integration in 
Europe and expressing their preparedness to co-opera te in seeking ways and means to strengthen this 
process, 
  Reaffirming  their firm commitment to the principles of a market economy, which constitutes 
the basis for their relations,   Recalling  their firm commitment to the Final Act of the Conference on Security and Co-
operation in Europe, the Paris Charter, and in partic ular the principles contained in the final document 
of the Bonn Conference on Economic Co-operation in Europe,   Resolved  to this end to eliminate progressively the obstacles to substantially all their mutual 
trade, in accordance with the provisions of the General Agreement on Tariffs and Trade 1994 
(hereinafter referred to as “GATT 1994”) and the Agreement establishing the World Trade 
Organization (hereinafter referred to as “WTO”),   Firmly  convinced that this Agreement will foster the intensification of mutually beneficial 
trade relations among them and contribute to the process of integration in Europe, 
 
 Considering  that no provision of this Agreemen t may be interpreted as exempting the 
Contracting Parties from their obliga tions under international agreements, 
  Have agreed  as follows: 
                                                     
 
* The associated Annexes have been submitted to  the Secretariat for consultation by interested 
Members (office 1174). WT/REG195/1 
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 Article 1 
 
Objectives
 
 
1. The Contracting Parties shall gradually estab lish during a transitional period, ending on 
January 1, 2007, a free trade area in accordance with the provisions of this Agreement and in 
conformity with Article XXIV of the GATT 1994, th e Understanding on the Interpretation of Article 
XXIV of the GATT 1994 and the Agreement establishing the WTO.   
2. The objectives of this Agreement are: 
(a) to promote through the expansion of trade, the harmonious development of economic 
relations between the Contracting Parties and to strengthen their economic activity; 
(b) to provide fair conditions of competition in  trade between the Contracting Parties; 
(c) to contribute by the removal of barriers to  trade, to the harmonious development and 
expansion of the world trade; 
(d) to enhance co-operation between the Contracting Parties.   
CHAPTER I - INDUSTRIAL PRODUCTS 
 
Article 2 
 
Scope  
 
1. The provisions of this Chapter sh all apply to industrial products originating in the Contracting 
Parties.   
2. For the purpose of this Agreement the term “industrial products” means 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 exchanges covered by this Agreement, the customs tariffs which are in 
force in the contracting Parties, will be a pplied to the classification of imported goods.   
2. For each product the basic duty to which the reduc tions set out in this Agreement are to be 
applied shall be the Most Favoured Nation rate of du ty in force on date of entry into force of this 
Agreement.   
3. If, after this date, any tariff reduction is applied on an erga omnes  basis, in particular, 
reductions resulting from trade negotiations under th e WTO, such reduced duties shall replace the 
basic duties referred to in paragraph 2 as from th e date when such reductions are applied.   
4. The reduced duties, calculated in  accordance with paragraph 2,  shall be applied rounded to 
the first decimal place.   
5. The Contracting Parties shall communicate to each other their respective basic duties.    WT/REG195/1 
 Page 3 
 
 
 Article 4 
 
Customs Duties On Imports  
 
1. No new customs duties on imports shall be in troduced, nor shall those already applied be 
increased in trade between the Contracting Parties as from the date of entry into force of this 
Agreement.   
2. Customs duties on imports, applicable in the Republ ic of Bulgaria to products originating in 
Serbia and Montenegro, which are not  listed in Annex II, shall be abo lished on the date of entry into 
force of this Agreement.   
3. Customs duties on imports, applicable in the Republ ic of Bulgaria to products originating in 
Serbia and Montenegro, listed in Annex II shall be  gradually reduced in accordance with the schedule 
set out in this Annex.   
4. Customs duties on imports, applicable in Serbia  and Montenegro to products originating in 
the Republic of Bulgaria, which are not listed in Anne x III, shall be abolished on the date of entry into 
force of this Agreement.   
5. Customs duties on imports, applicable in Serbia  and Montenegro to products originating in 
the Republic of Bulgaria listed in Annex III shal l be gradually reduced in accordance with the 
schedule set out in this Annex.   
Article 5 
 
Charges Having An Effect Equivalent To Customs Duties On Imports  
 
1. No new charges having an effect equivalent to customs duties on imports shall be introduced 
in trade between the Contracting Parties, as from the date of entry into force of this Agreement.   
2. All charges having an effect equivalent to cu stoms duties on imports shall be abolished on the 
date of entry into force of this Agreement.   
Article 6 
 
Fiscal Duties  
 
The provisions of Article 4 shall also apply to customs duties of a fiscal nature.   
Article 7 
 
Customs Duties On Exports And Charges Having An E ffect Equivalent To Cu stoms Duties On Exports  
 
1. No new customs duties on exports or charges havi ng equivalent effect shall be introduced in 
trade between the Contracting Parties, as from the da te of entry into force of this Agreement.   
2. All customs duties on exports and charges having  equivalent effect shall be abolished on the 
date of entry into force of this Agreement.   
Article 8 
 
Quantitative Restrictions On Imports And Measures Having Equivalent Effect  WT/REG195/1 
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1. No new quantitative restrictions on imports or measures having equivalent effect shall be 
introduced in trade between the Contracting Parties,  as from the date of entry into force of this 
Agreement.   
2. All quantitative restrictions on imports and measures having equivalent effect shall be 
abolished on the date of entry into force of this Agreement, except those which might be required for 
the administration of international obliga tions and those listed in Annex IV.   
Article 9 
 
Quantitative Restrictions On Exports And Measures Having Equivalent Effect
 
 
1. No new quantitative restrictions on exports or measures having equivalent effect shall be 
introduced in trade between the Contracting Parties,  as from the date of entry into force of this 
Agreement.   
2. All quantitative restrictions on exports or measures having equivalent effect shall be 
abolished on the date of entry into force of this Agreement.   
Article 10 
 
Elimination Of Technical Barriers To Trade  
 
1. The rights and obligations of the Contracting Parties relating to technical barriers to trade 
shall be governed by the WTO Agreement on Technical Barriers to Trade.   
2. The Contracting Parties shall cooperate a nd exchange information in the field of 
standardization, metrology, conformity assessment and accreditation with the aim of reducing technical barriers to trade.   
CHAPTER II - AGRICULTURAL PRODUCTS 
 
Article 11 
 
Scope
 
 
1. The provisions of this Chapter shall apply to agricultural products originating in the 
Contracting Parties.   
2. For the purpose of this Agreement the term “a gricultural products” means the products falling 
within Chapters 1 to 24 of the Harmonized Commodity Description and Coding System, including the products listed in Annex I to this Agreement.   
Article 12 
 
Exchange Of Concessions
 
 
1. The Contracting Parties shall grant each other th e concessions specified in Protocol 1 to this 
Agreement (hereinafter referred to as “Protocol 1” ) as laid down in that Protocol and in accordance 
with the provisions of this Chapter.   
2. Taking account of:  WT/REG195/1 
 Page 5 
 
 
 - 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 ne gotiations under the GATT 1994 and the WTO, 
the Contracting Parties shall examine within the framework of the Joint Co mmittee the possibilities of 
granting each other further concessions in  trade in agricultural products.   
Article 13 
 
Concessions And Agricultural Policies  
 
1. Without prejudice to the concessions granted under Article 12 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 Agreement on Agriculture within the framework of the GATT 
1994 and the Agreement establishing WTO.   
2. The Contracting Parties shall notify to the Joint Committee changes in their agricultural 
policies pursued or measures applied, which may aff ect the conditions of trade in agricultural products 
between them as provided for in this Agreement.  On the request of any Contracting Party, prompt 
consultations shall be held in the Join t Committee to examine the situation.   
Article 14 
 
Specific Safeguards
 
 
Notwithstanding other provisions of this Agreemen t, and in particular Article 27, if, given the 
particular sensitivity of the agricultural products, imports of products originating in a Contracting 
Party, which are subject to concessions granted under this Agreement, cause serious disturbance to the 
market of the other Contracting Party, the Contr acting Party concerned shall immediately enter into 
consultations to find an appropriate  solution.  Pending such solution, the Contracting Party concerned 
may take the measures it deems necessary.   
Article 15 
 
Veterinary, Sanitary And Phytosanitary Measures  
 
1. The Contracting Parties shall apply their regula tions in veterinary, sanitary and phytosanitary 
matters in non-discriminatory fashion and shall not introduce any measures that have the effect of unduly obstructing trade.   
2. The veterinary and sanitary measures and the work of the veterinary services will be in 
accordance with the Office International des Epizoodies Codex and other international conventions in 
this field.   WT/REG195/1 
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 3. The phytosanitary measures and the work of  the plant protection services will be in 
accordance with the International Plant Protection C onvention and other intern ational conventions in 
this field.   
CHAPTER III - GENERAL PROVISIONS 
 
Article 16 
 
Rules Of Origin And Co-Operation Between Customs Administrations
 
 
1. Protocol 2 to this Agreement (hereinafter refe rred to as “Protocol 2”) lays down the rules of 
origin and related methods of ad ministrative co-operation.   
2. 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 2 and Articles 3 - 9, 12, 17 and 28 of this Agreement are effectively and harmoniously 
applied, and to reduce, as far as po ssible, the formalities imposed on trade, and to achieve mutually 
satisfactory solutions to any difficulties arising from the operation of those provisions.   
Article 17 
 
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.   
Article 18 
 
General Exceptions  
 
This Agreement shall not preclude prohibitions or  restrictions on imports, exports or goods in 
transit justified on grounds of pub lic morality, public policy or public  security;  of the protection of 
health and life of humans, animals or plants;  of the protection of national treasures possessing artistic, 
historic or archaeological value;  of the protection of intellectual property or of the rules relating to 
gold or silver or to the conservation of exhaustib le natural resources, if such measures are made 
effective in conjunction with restrictions on domest ic production or consumpti on.  Such prohibitions 
or restrictions shall not, however, constitute a means of arbitrary discrimination or disguised 
restriction on trade between the Contracting Parties.   
Article 19 
 
Security Exceptions  
 
Nothing in this Agreement shall prevent a C ontracting Party from taking any appropriate 
measure it considers necessary: 
(a) to prevent the disclosure of information c ontrary to its essential security interests;  WT/REG195/1 
 Page 7 
 
 
 (b) for the protection of its essential security interests or for the implementation of 
national obligation 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 ca rried 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 and other nuclear explosive devices;  or 
(iii) taken in time of war or other ser ious international tension.   
Article 20 
 
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 specified in Article 1 of this 
Agreement no discrimination regarding the conditi ons under which goods are produced 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 delegate d by a Contracting Party to other bodies.   
Article 21 
 
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 te rritory of the Contracting Party, where the creditor 
resides, shall be free from any restrictions.   
2. The Contracting Parties shall refrain from exch ange or administrative restrictions on the 
grant, repayment and acceptance of short and medium term credits related to trade in goods in which a 
resident of a Contracting Party participates.   
3. Notwithstanding the provisions of paragraph 2, 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 th e International Monetary Fund.   
Article 22 
 
Rules Of Competition Concerning Undertakings  
 
1. The following are incompatible with the proper functioning of this Agreement in so far as 
they may affect trade between the Contracting Parties: WT/REG195/1 
Page 8  
 
 (a) all agreements between undertakings, decisi ons by associations of undertakings and 
concerned 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 substantial part thereof.   
2. The provisions of paragraph 1 shall apply to the activities of all undertakings including public 
undertakings or undertakings to which the Contracting Parties grant special or exclusive rights.  Undertakings entrusted with the operation of ser vices of general economic interest or having the 
character of revenue-producing monopoly, shall be s ubject to provisions of paragraph 1 insofar as the 
application of these provisions does not obstruct the pe rformance, in law or in fact, of the particular 
public tasks assigned to them.   
3. With regard to the products referred to in  Chapter II of this Agreement the provisions 
stipulated in paragraph 1 a) shall not apply to such  agreements, decisions and practices which form an 
integral part of a national market organization.   
4. If a Contracting Party considers that a given prac tice is incompatible with  paragraphs 1, 2 and 
3 of this Article or if such practice causes or threat ens to cause serious prejudice to the interests of that 
Contracting Party or material injury to its domest ic industry, the Contracting Party concerned may 
take appropriate measures under th e conditions and in accordance w ith the procedure laid down in 
Article 31.   
Article 23 
 
State Aid
 
 
1. Any aid granted by a state which is a party to this Agreement or through state resources in 
any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the productions of certain goods sh all, in so far as it may affect trade between the 
Contracting Parties, be incompatible with th e proper functioning of this Agreement.   
2. The provisions of paragraph 1 of this Article sha ll not apply to products covered by Chapter II 
to this Agreement.   
3. The Joint Committee shall adopt the criteria on th e basis of which the practices contrary to 
paragraph 1 shall be assessed, as well as the rules for their implementation.   
4. The Contracting Parties shall ensure tr ansparency 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.   
5. If a Contracting Party considers that a particular practice: 
- is incompatible with the terms of paragr aph 1 and is not adequa tely dealt with under 
the implementing rules referred to in paragraph 3, or 
- in the absence of such rul es referred to in paragraph 3 causes or threatens to cause 
serious prejudice to the interests of that Contracting Party or material injury to its domestic industry,  WT/REG195/1 
 Page 9 
 
 
 it may take appropriate measures  under the conditions and in accordance with the provisions laid 
down in Article 31 оf this Agreement.  Such appropriate me asures may only be taken in conformity 
with the procedures and under the conditions laid down by the GATT 1994 and the Agreement 
establishing WTO and all relevant instruments nego tiated under their auspices, which are applicable 
between the Contracting Parties.   
Article 24 
 
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 concerning public procurement.  The Cont racting Parties aim at opening up of the award of 
public procurement contracts on the basis of  non-discrimination and reciprocity.   
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 so as to ensure free access, transparency and mu tual opening of public procurement markets of the 
Contracting Parties.   
4. During the examination referred to in para graph 3, the Joint Committee may consider, 
especially in the light of international developments  and regulations in this area, the possibility of 
extending the coverage and/or the degree of the ma rket opening provided for in paragraph 1.   
5. The Contracting Parties shall endeavor as soon as possible to define the necessary scope and 
rules in the field of public procurement on the markets of both Contracting Parties.   
6. The Contracting Parties shall endeavor to jo in the Agreement on Government Procurement 
under the WTO.   
Article 25 
 
Protection Of Intellectual Property  
 
1. The Contracting Parties confirm their will to respect the obligations arising from the WTO 
Agreement on Trade-Related Aspects of Intellectua l Property Rights, constituting Annex Ic to the 
Marrakesh Agreement establishing the WTO, as well as other conventions on intellectual property 
protection, signed by both Contracting Parties a nd listed in Annex V to this Agreement.   
2. For the purpose of this Agreement the term “i ntellectual property protection” refers to 
protection of copyright and related rights, including computer  software and databases, trade and 
service marks, geographical indications including ap pellations of origin, pate nts, industrial designs, 
new plant varieties, topographies of integrated  circuits, as well as protection against unfair 
competition mentioned in Article 10 bis of the Pari s Convention for the Protection of the Industrial 
Property, including protection of undisclosed information including “know-how”.   
3. The Contracting Parties shall co-operate in matte rs of intellectual property.  They shall hold, 
upon request of any Contracting Party, expert cons ultations on these matters, in particular, on 
activities relating to the existing or to future  international conven tions on harmonization, 
administration and enforcement of the intellect ual property and on activities in international WT/REG195/1 
Page 10  
 
 organizations, such as the WTO, the World Intellect ual Property Organization, as well as relations of 
the Contracting Parties with any third country on matters concerning intellectual property.   
4. The implementation of this Article shall be regularly assessed by the Contracting Parties.  
Upon difficulties in trade in relation to the rights of intellectual property, any of the Contracting 
Parties may request urgent consultations for finding mutually acceptable solutions.   
Article 26 
 
Dumping
 
 
If a Contracting Party finds that dumping within the meaning of Article VI of the GATT 1994 
is taking place in trade relations governed by this  Agreement, it may take appropriate measures 
against that practice in accordance with the Artic le VI of the GATT 1994 under the conditions and in 
accordance with the procedure laid down in  Article 31 to this Agreement.   
Article 27 
 
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, 
the Contracting Party concerned may take a ppropriate measures under the conditions and in 
accordance with the procedure laid down in  Article 31 of this Agreement.   
Article 28 
 
Structural Adjustment  
 
1. Exceptional measures of limited duration, which de rogate from the provisions of Article 4 to 
this Agreement, may be taken by any of the Cont racting 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 respective Contracting Party to products 
originating in the other Contracting Party intro duced by these exceptional measures may not exceed 
25% ad valorem and shall maintain an element of prefer ence for products originating in the other 
Contracting Party.  The total value of imports of 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, during the last year for which statistics are available.    WT/REG195/1 
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 4. These measures shall be applied for a period not exceeding three years.  Their operation shall 
cease by the end of the transitional period, specified in paragraph 1 of Article 1 of this Agreement at 
the latest.   
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 in the Joint Committee on such measures a nd the sectors to which they apply prior their 
introduction.  When taking such measures the Cont racting Party concerned shall provide the Joint 
Committee with a schedule for the elimination of the custom 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 29 
 
Re-Export And Serious Shortage  
 
1. Where compliance with the provisions of Artic les 7 and 9 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 procedure la id down in Article 31 of this Agreement.   
2. Measures taken as a result of the situation referred to in paragraph 1 shall be applied in a non-
discriminatory manner and shall be eliminated  when the conditions no longer justify their 
maintenance.   
Article 30 
 
Fulfilment Of Obligations  
 
1. The Contracting Parties shall take any genera l and specific measures required to fulfil their 
obligations under this Agreement.  They shall ensure  to it that the objectives set out in this Agreement 
are achieved.   
2. If a Contracting Party considers that the othe r Contracting Party has failed to fulfil an 
obligation under this Agreement, the Contracting Party concerned may take appropriate measures 
under the conditions and in accordance w ith the procedure laid down in Ar ticle 31 of this Agreement.   
Article 31 
 
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 of this Article , the Contracting Parties shall endeavor to solve any differences 
between them through direct consultations.   WT/REG195/1 
Page 12  
 
 2. In the event of a Contracting Party subjecting imports of products liable to give rise to the 
situation referred to in Article 27 to this Agreem ent to an administrative procedure having as its 
purpose the rapid provision of information on the tr end of trade 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 
in the Joint Committee with a view to fi nding a mutually acceptable solution.   
4. With regard to: 
(a) Articles 26, 27 and 29 to this Agreement,  the Joint Committee shall examine the case 
or situation and may take any decision needed  to put an end to the difficulties notified 
by the Contracting Party concerned.  In case of absence of such decision within thirty 
days of the matter being referred to th e Joint Committee, the Contracting Party 
concerned may adopt the measures necessary in  order to remedy the situation.   
(b) Article 30 to this Agreement, the Contrac ting 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 first written notification to the other Contracting Party.   
(c) Articles 22 and 23 to this Agreement, the Contracting Party concerned shall give the 
Joint Committee all the assistance required in order to examine the case and, where 
appropriate to eliminate the practice objected to.  If the other Contracting Party fails 
to put an end to the practice objected to within the period fixed by the Joint 
Committee or if the Joint Committee fails to r each an agreement within thirty days of 
the matter being referred to it, the Contrac ting Party concerned may adopt appropriate 
measures to deal with the difficulties resulting from the practice in question.   
5. The safeguard measures taken shall be notified immediately 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 object  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. When exceptional circumstances requiring immediate action make prior examination 
impossible, the Contracting Party concerned may,  in the cases of Articles 26, 27 and 29 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 32 
 
Balance Of Payments Difficulties
 
 
1. The Contracting Parties shall endeavor to avoid the imposition of restrictive measures 
including measures relating to imports for balance of payments purposes.    WT/REG195/1 
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 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 adopt  restrictive measures, 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 progressively relaxed as balance of 
payments conditions improve and they shall be el iminated when conditions no longer justify their 
maintenance.  The Contracting Party concerned sha ll inform the other Contracting Party forthwith of 
their introduction and, whenever practicable , of a time schedule for their removal.   
Article 33 
 
Evolutionary Clause  
 
1. Where a Contracting Party considers that it would be useful in the interest 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 Contracting Parties may authorize the Joint Comm ittee to examine such a 
request and, where appropriate, to make recommenda tions with a view to opening negotiations.   
2. Agreements resulting from the procedure referre d to in paragraph 1 will be subject to 
ratification or approval by the Contracting Parties in accordance with their internal legislation.   
CHAPTER IV - INSTITUTIONAL AND FINAL PROVISIONS 
 
Article 34 
 
The Joint Committee  
 
1. A Joint Committee is hereby established in which each Contracting Party shall be 
represented.   
2. The implementation of this Agreement shall be supervised by the Joint Committee.   
3. For the purpose of the proper implementation of this Agreement, the Contracting Parties shall 
exchange information and, upon the request of any C ontracting Party shall hold consultations within 
the Joint Committee.  The Joint Co mmittee shall keep under review the possibility of further removal 
of the obstacles to trade between the Contracting Parties.   
4. The Joint Committee may take decisions in cases pr ovided for in this Agreement.  On other 
matters the Joint Committee may make recommendations.   
5. The decisions taken by the Joint Committee will be subject to approval by the Contracting 
Parties in accordance with their internal legislation.   
Article 35 
 
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 request that a meeting be held.   
2. The Joint Committee shall act by common agreement.   WT/REG195/1 
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 3. If a representative of a Contracting Party in the Joint Committee has accepted a decision 
subject to the fulfilment of internal legal requirement s, the decision shall enter into force, if no later 
date is contained therein, on the date of the recei pt of the written notification about the fulfilment of 
such requirements.   
4. For the purpose of this Agreement the Joint Co mmittee shall adopt its rules of procedure, 
which shall, inter alia  contain provisions for convening mee tings and for the designation of the 
Chairman and his/her term of office.   
5. The Joint Committee may decide to set up such subcommittees and working groups, as it 
considers necessary to assist it in accomplishing its tasks.   
Article 36 
 
Services And Investment
 
 
1. The Contracting Parties reaffirm the growing importance of certain areas, such as services 
and investments.  In their efforts to gradually deve lop and broaden their co-ope ration, in particular in 
the context of the European integra tion, they will co-ope rate with the aim of achieving a progressive 
liberalization and mutual opening of their markets for investments and trade in services, taking into 
account relevant provisions of the General Agreement on Trade in Services.   
2. The Contracting Parties will discuss in the Jo int Committee the possibilities to expand their 
trade relations in the field of foreign direct investment and trade in services.   
Article 37 
 
Customs Unions, Free Trade Areas And Frontier Trade  
 
This Agreement shall not prevent the mainte nance or establishment of customs unions, free 
trade areas or arrangements for frontier trade to the extent that these do not negatively affect the trade 
between the Contracting Parties and in particular the provisions concerning rules of origin provided 
for by this Agreement.   
Article 38 
 
Annexes, Protocols And Amendments  
 
1. The Annexes and the Protocols to this Agre ement are an integral part of it.   
2. The Joint Committee may decide to amend the Anne xes and Protocols to this Agreement.  In 
this case the amendments shall enter into force on the first day of the second month following the 
receipt of the last diplomatic note confirming that the internal legal requirements for the entry into 
force of the amendments have been fulfilled.   
3. Amendments to this Agreement other than t hose decided upon in accordance with paragraph 
3 of Article 35 and which are approved by the Join t Committee shall enter into force on the first day 
of the second month following the receipt of the second of the diplomatic notes with which the Contracting Parties notify each other the internal legal requirements for the entry into force of the 
amendments have been fulfilled.   
  WT/REG195/1 
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 Article 39 
 
Entry Into Force  
 
This Agreement is subject to ratification.  It  shall enter into force on the first day of the 
second month following the date on which the Contr acting Parties have notified each other through 
diplomatic channels that their internal legal requi rements for the entry into force of this Agreement 
have been fulfilled.   
Article 40 
 
Validity And Den оunciation  
 
1. This Agreement is concluded for an  indefinite period of time.   
2. Each Contracting Party may denounce this Ag reement through diplom atic channels by a 
written notification to the other Contracting Party.  The Agreement shall be denounced on the first day 
of the seventh month following the date on whic h the notification was received by the other 
Contracting Party.   
3. Both Contracting Parties agree that in the ev ent of any Contracting Party becoming a member 
of the European Union, that Contracting Party will withdraw from this Agreement at the latest the day 
before membership takes effect, and without any compensation to the other Contracting Party.   
IN WITNESS WHEREOF the undersigned plenipot entiaries, being duly au thorized thereto, 
have signed the present Agreement.   
 
DONE at Rome this 13 day of November 2003 in two originals each in the Bulgarian, 
Serbian and English languages, all texts being equally authentic.  In case of divergence in 
interpretation of this Agreement th e English text shall prevail.   
 
 FOR THE REPUBLIC OF BULGARIA FOR SERBIA AND MONTENEGRO  
__________