# EUR-Lex - 52014PC0149 - EN

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# 52014PC0149

**Proposal for a COUNCIL DECISION on the conclusion of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part /* COM/2014/0149 final - 2014/0086 (NLE) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT
OF THE PROPOSAL/BACKGROUND

The attached proposal
constitutes the legal instrument for authorising the conclusion of the
Association Agreement between the European Union and its Member States, of the one part, and Georgia, of the other part (hereinafter referred to as "the
Agreement").

A Commission Decision
on the conclusion of the Association Agreement on behalf of the European Atomic
Energy Community is being made separately.

Relations between the European Union (EU) and
Georgia are currently based on the Partnership and Cooperation Agreement which
entered into force in July 1999. On 10 May 2010, the
Council authorised the Commission to open negotiations for a new comprehensive
and ambitious Association Agreement, including its Deep and Comprehensive Free
Trade Area (DCFTA) part.

Negotiations of this
comprehensive and ambitious Agreement between the EU and Georgia were launched
in July 2010. Negotiations on the DCFTA part of the Agreement were launched in
February 2012. On 29 November 2013 the European Union and Georgia initialled
the text of the Agreement.

The Association
Agreement aims to accelerate the deepening of political and economic relations
between Georgia and the EU, as well as to advance Georgia's gradual economic
integration with the EU Internal Market in selected areas, notably through
establishing a DCFTA.

In line with Article
429 of the Association Agreement, it is foreseen to provisionally apply parts
of the Agreement. The provisional application is foreseen in view of keeping
mutual economic interests and shared values in equilibrium, and the common will
of the EU and Georgia to start implementing and enforcing the eligible parts of
the Agreement in order to advance an early reform impact on sector specific
issues before the conclusion of the Agreement.

2.           RESULTS
OF THE NEGOTIATIONS

The Council has been
regularly informed and consulted in the relevant Council Working Groups,
notably in COEST and the Trade Policy Committee (TPC), at all stages of the
negotiations. The Commission considers that the objectives set by the Council
in its negotiating directives were attained and that the draft Association
Agreement is acceptable to the Union.

The final content of
the Association Agreement can be summarised as follows:

The Agreement establishes
an association between the Union and the European Atomic Energy Community and
their Member States, of the one part, and Georgia, of the other part. This constitutes
a new stage in the development of EU-Georgia contractual relations, aiming at
political association and economic integration and leaving open the way for
further progressive developments.

The overall aims of the
association focus on promoting a gradual rapprochement between the parties on
the basis of common values; strengthening the framework for enhanced political
dialogue; promoting, preserving and strengthening peace and stability in both
the regional and international dimensions; promoting cooperation on peaceful
conflict resolution, establishing conditions for enhanced economic and trade
relations leading towards Georgia's gradual economic integration with the EU internal
market in selected areas; enhancing justice, freedom and security cooperation
with the aim of reinforcing the rule of law and respect for human rights and
fundamental freedoms, and establishing conditions for increasingly close
cooperation in other areas of mutual interest.

The Association
Agreement also foresees a wide range of sector cooperation, focusing on support
to core reforms, economic recovery and growth, governance and sector
cooperation in 28 areas, such as; energy, transport, environment protection and
promotion, industrial and small and medium enterprise cooperation, agriculture
and rural development, social policies, justice, civil society cooperation, consumer
policy, public administration reform, education, training and youth as well as
cultural cooperation. In all of these areas, enhanced cooperation starts from
the basis of current frameworks, both bilateral and multilateral, with the aim
of more systematic dialogue and exchange of information and good practice. Key
to the sectoral cooperation chapters is a comprehensive menu of gradual
approximation with the EU acquis set out in annexes to the Agreement.
Specific schedules for approximation and implementation by Georgia of selected parts of the EU acquis will provide a focus for on-going cooperation, and
will form the core of Georgia's domestic reform and modernisation agenda.

The Agreement includes
an updated institutional framework encompassing cooperation and dialogue fora.
Specific decision-making roles are foreseen for an Association Council, and by
delegation for an Association Committee, which may also meet in a specific
configuration to address trade issues. Fora for civil society and parliamentary
cooperation are also foreseen. The Agreement also includes provisions on
monitoring, fulfilment of obligations and dispute settlement (including
separate provisions for trade-related issues).

Closer economic integration through the DCFTA
will be a powerful stimulant to the country's economic growth. Approximation of
  Georgia with EU legislation, norms and standards, will be the method. As a
core element of the Association Agreement, the DCFTA will create business
opportunities in both the EU and Georgia and will promote real economic
modernization and gradual integration with the EU. Higher standards of
products, better services to citizens, and above all Georgia's ability to
compete effectively in international markets should be the result of this
process.

3.           LEGAL
ELEMENTS OF THE PROPOSAL

On the part of the Union, the legal basis for the
conclusion of this Agreement is Article 217, in conjunction with Article 218(6)(a) and the second
subparagraph of Article 218(8), as well as Article 218(7) of TFEU.

The attached proposal constitutes the legal instrument for
the conclusion of the Association Agreement on behalf of the Union. A separate
legal instrument applies to the European Atomic Energy Community.

In light of the above-mentioned results of negotiations, the
European Commission proposes that the Council conclude the Agreement on behalf
of the European Union after having received the consent of the European
Parliament.

The fact that the European
Commission has submitted its proposal as an agreement of the Union and the
European Atomic Energy Community and its Member States and Georgia is related to the genesis of this agreement under the rules of the Treaty before
the entry into force of the Treaty of Lisbon.

2014/0086 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Association
Agreement between the European Union and the European Atomic Energy Community
and their Member States, of the one part, and Georgia, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the
Treaty on the Functioning of the European Union, and in particular Article(s)
217, in conjunction with Article 218(6)(a) and the second subparagraph of
Article 218(8) thereof, as well as Article 218(7) thereof,

Having regard to the
proposal from the European Commission[1],

Having regard to the
consent of the European Parliament[2],

Whereas:

(1)       On
10 May 2010 the Council authorised the
Commission to open negotiations with Georgia for
the conclusion of a new Agreement between the European Union and Georgia to
replace the Partnership and Cooperation Agreement.[3]

(2)       These negotiations were
successfully finalised and the Association Agreement between the European Union
and the European Atomic Energy Community and their Member States and Georgia (hereinafter referred to as "the Agreement”) was initialled on 29 November 2013.

(3)       In accordance with Council
Decision [number of Decision] of [date][4], the
Agreement was signed at [place] on [date], subject to its conclusion at a later
date.

(4)       Pursuant to Article 218(7)
of the Treaty on the Functioning of the European Union, it is appropriate for
the Council to authorise the Commission to approve modifications to be adopted
by the Sub-Committee on Geographical Indications pursuant to Article 179 of the
Agreement.

(5)       It is appropriate to set
out the relevant procedures for the protection of geographical indications
which are given protection pursuant to the Agreement.

(6)       The Agreement shall not be
construed as conferring rights or imposing obligations which can be directly
invoked before Union or Member State courts and tribunals.

The Agreement should be
approved on behalf of the Union.

HAS ADOPTED THIS DECISION:

Article 1

The Association Agreement between the European Union
and the European Atomic Energy Community and their Member States, of the one
part, and Georgia, of the other part, together with the Annexes and Protocols
attached thereto (hereinafter referred to as "the Agreement"), is hereby approved on behalf of the Union.[5]

Article 2

The President of the
Council shall, on behalf of the Union, give the notification provided for in Article
429(1) of the Agreement, in order to express the consent of the Union to be bound by the Agreement.[6]

Article 3

For the purposes of
Article 179 of the Agreement, modifications of the Agreement through decisions of
the Sub-Committee on Geographical Indications shall be approved by the
Commission on behalf of the European Union. Where interested parties cannot
reach agreement following objections relating to a geographical indication, the
Commission shall adopt such a position on the basis of the procedure laid down
in Article 57(2) of Regulation (EU) No 1151/2012 of the European Parliament and
of the Council of 21 November 2012 on quality schemes for agricultural products
and foodstuffs[7].

Article 4

1. A name protected
under Sub-Section 3 “Geographical Indications” of Chapter 9 of Title IV of the
Agreement may be used by any operator marketing agricultural products,
foodstuffs, wines, aromatised wines or spirits conforming to the corresponding
specification.

2. In accordance with
Article 175 of the Agreement, the Member States and the institutions of the
European Union shall enforce the protection provided for in Articles 170 to 174
of the Agreement, including at the request of an interested party.

Article 5

The Agreement shall not be construed as
conferring rights or imposing obligations which can be directly invoked before
Union or Member State courts and tribunals.

Article 6

This Decision shall enter into force on the day following
its adoption.

Done at Brussels,

For
the Council

The
President

[1]               OJ L , , p. .

[2]               OJ L , , p. .

[3]               OJ L 205, 4.8.1999, p.1-52

[4]               OJ L , , p. .

[5]  The text of the Agreement is attached to the Decision of the
Council on the signing, on behalf of the European Union, and provisional
application of the Association Agreement between the European Union and the
European Atomic Energy Community and their Member States, of the one part, and Georgia, of the other part (OJ ...)

[6]  The date of the entry into force of the Agreement will be
published in the Official Journal of the European Union by the General
Secretariat of the Council.

[7]  OJ L 343 14.12.2012, p.1

ANNEX XXXIV

ANTI-FRAUD AND CONTROL PROVISIONS

Georgia undertakes to gradually approximate its
legislation to the following EU legislation and international instruments
within the stipulated timeframes.

EU Convention of
26 July 1995 on the protection of the European Communities' financial
interests; the following provisions of that Convention shall apply:

–        Article
1 – General provisions, definitions;

–        Article 2(1) by taking the necessary measures
to ensure that the conduct referred to in Article 1, and participating in,
instigating, or attempting the conduct referred to in Article 1(1), are
punishable by effective, proportionate and dissuasive criminal penalties;

–        Article
3 – Criminal liability of heads of businesses

Timetable: those provisions of that Convention shall be implemented within four years of the entry into force of this Agreement.

Protocol to the
Convention on the protection of the European Communities' financial interests;
the following provisions of that Protocol shall apply:

–        Article
1(1)(c) and Article 1(2) – Relevant definitions;

–        Article
2 – Passive corruption;

–        Article
3 – Active corruption;

–        Article 5(1) by taking the necessary measures
to ensure that the conduct referred to in Articles 2 and 3, and
participating in and instigating the conduct in question, are punishable by
effective, proportionate and dissuasive criminal penalties;

–        Article
7 as far as it refers to Article 3 of that Convention

Timetable: those provisions of that Protocol shall be implemented within four years of the entry into force of this Agreement.

Second Protocol
to the Convention on the protection of the European Communities' financial
interests; the following provisions of that Protocol shall apply:

–        Article
1 – Definition;

–        Article
2 – Money laundering;

–        Article
3 – Liability of legal persons;

–        Article
4 – Sanctions for legal persons;

–        Article
12 as far as it refers to Article 3 of that Convention

Timetable: those provisions of that Protocol shall be implemented within four years of the entry into force of this Agreement.

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