# EUR-Lex - 52011PC0724 - EN

*|*

# 52011PC0724

**Proposal for a COUNCIL DECISION on the conclusion, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the Russian Federation regarding the preservation of commitments on trade in services contained in the current EU-Russia Partnership and Co-operation Agreement /* COM/2011/0724 final - 2011/0328 (NLE) */**

			*

			*

EXPLANATORY MEMORANDUM

Upon accession to the WTO, the Russian
Federation will accede to the General Agreement on Trade in Services (GATS),
thus undertaking comprehensive multilateral commitments relating to trade in
services with all WTO Members. These commitments largely replicate or exceed
their existing commitments regarding trade in services with the EU, which are
defined in the current Partnership and Co-operation Agreement between the European Communities, and their
Member States, of the one part, and the Russian Federation, of the other part,
of 24 July 1994 (PCA). Nonetheless, there remain certain commitments,
notably with regard to international maritime transport services and the
temporary movement of natural persons for business purposes, where the Russian
Federation has undertaken more substantial commitments through the existing PCA
as compared to multilateral commitments upon WTO accession. In order to ensure
that the existing market access commitments of the Russian Federation will not
be made more restrictive for EU service suppliers than those currently in
force, it has been agreed between the Parties that Russia would take an
appropriate Most Favoured Nation (MFN) exemption from its GATS schedule and
preserve these commitments exclusively with the EU.

The preservation of these commitments would
take the form of a bilateral agreement, (hereinafter referred to as the
"Agreement"), negotiated between the EU and the Government of the
Russian Federation through an exchange of letters with the Russian Federation.
The Agreement does not require the EU to undertake any commitments.

In order to ensure these commitments will
continue to apply from the time that the Russian Federation accedes to the WTO,
the Agreement should be applied provisionally from the date of such accession.

2011/0328 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion, on behalf of the
European Union, of the Agreement in the form of an Exchange of Letters between
the European Union and the Government of the Russian Federation regarding the
preservation of commitments on trade in services contained in the current
EU-Russia Partnership and Co-operation Agreement

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 91 and 100(2) and
Article 207(4) first subparagraph, in conjunction with Article 218(6)(a)
thereof,

Having regard to the proposal from the European
Commission,

Having regard to the consent of the
European Parliament,

Whereas:

(1)       In accordance with Council
Decision XXX of [...][1], the Agreement in the
form of an Exchange of Letters between the European Union and the Government of
the Russian Federation regarding the preservation of commitments on trade in
services contained in the current EU-Russia Partnership and Co-operation
(hereinafter referred to as "the Agreement") was signed on [...],
subject to their conclusion at a later date.

(2)       The Agreement was
negotiated and signed in view of the economic importance for the European Union
of the access of European service providers to the market of the Russian
Federation.

(3)       The Agreement should be
approved on behalf of the European Union,

HAS ADOPTED THIS DECISION:

Article 1

The Agreement in the form of an Exchange of
Letters between the European Union and the Government of the Russian Federation
regarding the preservation of commitments on trade in services contained in the
current EU-Russia Partnership and Co-operation is hereby approved on behalf of
the Union.

The text of the Agreement is attached to
this Decision.

Article 2

The President of the Council shall
designate the person empowered to proceed, on behalf of the European Union, to
make the notification provided for in the Agreement and in order to express the
consent of the European Union to be bound by the Agreement.

Article 3

This Decision shall enter into force on the
date of its adoption.

Done at Brussels,

For
the Council

The
President

AGREEMENT

in
the form of an exchange of letters between the European Union and the
Government of the Russian Federation relating to the preservation of
commitments on trade in services contained in the current EU-Russia Partnership
and Co-operation Agreement (PCA)

Letter No 1

[Letter from the Government of the
Russian Federation]

............, ...........

Sir,

Following negotiations between the European
Union and the Government of the Russian Federation, with
regard to trade in services, the two Parties have reached the following understanding:

I. Notwithstanding the provisions of
Article 51 of the Agreement on Partnership and Co-operation Establishing a
Partnership Between the European Communities and Their Member States, of One
Part, and the Russian Federation, of the Other Part, of 24 June 1994
(hereinafter referred to as "PCA"), after the accession of the
Russian Federation to the WTO, Articles 35 and paragraphs 1 and 2 of Article
39, in conjunction with Article 30 (h), of the PCA will continue to apply
between the Parties.

II. Notwithstanding the provisions of
Article 51 of the PCA, after the accession of the Russian Federation to the
WTO, the Parties shall extend the benefits of their GATS commitments on
intra-corporate transferees being transferred to commercial presences (as
defined hereunder) other than representative offices in their respective
territories to any person fulfilling the conditions set out in items (a) and
(b) of paragraph 2 of Article 32 of the PCA. For the purpose of this article,
the words “organizations” used in Article 32 of the PCA shall be deemed to
cover the commercial presence as defined in the respective GATS schedules of
the Parties.

III. 1.      Intra-corporate
transferees of Russian juridical persons being transferred to their
representative offices in the European Union shall be accorded treatment no
less favorable than that accorded by the European Union to like intra-corporate
transferees of any juridical person of a third country.

III. 2.      Treatment granted under
other agreements than the PCA concluded by the European Union with a
third Party which are notified under Article V of the GATS or which benefit
from the coverage of the EC GATS list of MFN exemptions shall be excluded from
paragraph III.1. Treatment deriving from the harmonization of regulations based
on agreements concluded by the European Union providing for mutual recognition
in accordance with Article VII of the GATS, shall also be excluded from
paragraph III.1.

III. 3.      Treatment accorded by the
Russian Federation to intra-corporate transferees of juridical persons of the
European Union being transferred to their representative offices in the Russian
Federation shall be no less favourable than that accorded to like intra-corporate transferees by the
European Union in accordance with this provision. The Russian Federation might
however limit the number of such intra-corporate transferees to a maximum of
five per representative office (two for banking).

IV. 1.     For
the purpose of paragraph IV:

(a)     A final consumer of a Party is a
juridical person, established in accordance with the legislation of this Party
on its territory.

(b)     A natural person is a citizen of a
Party (in the case of the European Union, a citizen of one of its Member
States) residing on the territory of this Party, who temporarily enters the
other Party as an employee of the contractual service supplier with the purpose
of provision of services, as provided by the contract to provide services.

(c)     A contractual
service supplier is a juridical person of one Party established in accordance
with the legislation of this Party on its territory which has no commercial
presence in the form of subsidiary, dependent company or branch constituted in
the territory of the other Party and which has concluded a contract to supply
services with a final consumer in the latter Party requiring the presence on a
temporary basis of natural persons in that Party in order to fulfil the
contract to provide services.

IV. 2.     Treatment
accorded by the European Union to contractual service suppliers of the Russian
Federation shall be no less favorable than that accorded to contractual service
suppliers of any third country.

IV. 3.     Treatment
granted under other agreements concluded by the European Union with a third
Party which have been notified under Article V of the GATS or which benefit
from the coverage of the EC GATS list of MFN exemptions shall be excluded from
this provision. Treatment deriving from the harmonization of regulations based
on agreements concluded by the European Union providing for mutual recognition
in accordance with Article VII of the GATS, shall also be excluded from this
provision.

IV. 4.     The
Russian Federation shall allow the supply of services into its territory by
contractual service suppliers of the European Union through presence of natural
persons subject to the following conditions:

(a)     The contract to provide services:

i.        has been concluded directly between the contractual service supplier and the final
consumer:

ii.       requires the temporary presence on the
territory of the Russian Federation of natural persons of the European Union to
provide the service and

iii.      complies with the laws, regulations
and requirements of the Russian Federation.

(b)     The temporary entry and stay of
natural persons within the Russian Federation pursuant to the fulfillment of
this contract shall be for a period of not more than six successive months in
any twelve month period or for the duration of the contract, whichever is less.

(c)     The natural persons entering the
Russian Federation must possess (i) a university degree or a technical
qualification demonstrating knowledge of an equivalent level and (ii)
professional qualifications where this is required to exercise an activity in
the sector concerned pursuant to the law, regulations or requirements of the
Russian Federation.

(d)     The natural person shall not receive
remuneration for the provision of services other than the remuneration paid by
the contractual service supplier during its stay in the Russian Federation.

(e)     The natural persons entering the
Russian Federation must have been employed by the contractual service supplier
for at least the year preceding the date of submission of an application for
entry into the Russian Federation. In addition, the natural person must
possess, at the date of submission of an application for entry into the Russian
Federation, at least three years professional experience in the sector of
activity which is the subject of the contract.

(f)      The contract to provide services has
to be obtained in one of the following sectors of activity which are included
and defined in Russia’s GATS schedule of commitments:

1.          Legal services

2.          Accounting and bookkeeping services

3.          Taxation services

4.          Architectural services

5.          Engineering services

6.          Integrated Engineering services

7.          Urban planning and landscape
architecture services

8.          Computer and related services

9.          Advertising services

10.        Market research services

11.        Management consulting services

12.        Services related to management
consulting

13.        Technical testing and analysis
services

14.        Advisory and consulting services
incidental to mining

15.        Related scientific and technical
consulting services

16.        Translation and Interpretation
services

17.        Maintenance and repair of equipment,
including transportation equipment

18.        Environmental services

(g)     The subject of the contract shall not
be “placement and supply services of personnel” as defined in CPC 872.

Access accorded under the provisions of
paragraph IV.4 relates only to the service activity which is the subject of the
contract; it does not confer entitlement to exercise the professional title of
the Russian Federation.

The Russian Federation might establish an
annual quota of work permits reserved to European Union natural persons gaining
access to the Russian services market under the provisions of paragraph IV.4.
In the first year in which the provisions of paragraph IV.4 enter into force,
this annual quota shall be no lower than 16000. In the following years, the
annual quota shall be no lower than the quota of the preceding year.

IV. 5.     Upon
entry into effect of the results of the current multilateral round of trade
negotiations in the field of services, the Parties will review the provisions
of paragraph IV.3 with a view to its extension to self-employed persons being
contractual service suppliers.

V. 1.       This
understanding shall not apply to measures affecting natural persons seeking
access to the employment market of a Party, nor shall it apply to measures
regarding citizenship, residence or employment on a permanent basis

V. 2.       This
understanding shall not prevent a Party from applying measures to regulate the
entry of natural persons into, or their temporary stay in, its territory,
including those measures necessary to protect the integrity of, and to ensure
the orderly movement of natural persons across its borders, provided that such
measures are not applied in such a manner as to nullify or impair the benefits
accruing to the other Party under the terms of paragraphs II, III and IV.

In case the European Union confirms its
agreement with the set forth in this letter, I propose that this letter and the
reply letter of the European Union will establish the Agreement between the
Government of the Russian Federation and the European Union relating to the preservation of commitments on trade in services contained in the
PCA, and this Agreement shall
enter into force on the date in which the Parties
exchange written notifications certifying that they have completed their
respective internal procedures. This Agreement shall be applied provisionally from the date of the
Russian Federation’s accession to the World Trade Organization.

Please accept, Sir, the assurance of my
highest consideration.

[On behalf
of the Government of the Russian Federation]

Letter No 2

[Letter from the European Union]

.............., ........

Sir,

I have the honour to acknowledge receipt of
your letter of today’s date, worded as follows:

"Following negotiations between the
European Union and the Government of the Russian Federation, with regard to trade in services, the two
Parties have reached the following understanding:

I. Notwithstanding the provisions of
Article 51 of the Agreement on Partnership and Co-operation Establishing a
Partnership Between the European Communities and Their Member States, of One
Part, and the Russian Federation, of the Other Part, of 24 June 1994
(hereinafter referred to as "PCA"), after the accession of the
Russian Federation to the WTO, Articles 35 and paragraphs 1 and 2 of Article
39, in conjunction with Article 30 (h), of the PCA will continue to apply
between the Parties.

II. Notwithstanding the provisions of
Article 51 of the PCA, after the accession of the Russian Federation to the
WTO, the Parties shall extend the benefits of their GATS commitments on
intra-corporate transferees being transferred to commercial presences (as
defined hereunder) other than representative offices in their respective
territories to any person fulfilling the conditions set out in items (a) and
(b) of paragraph 2 of Article 32 of the PCA. For the purpose of this article,
the words “organizations” used in Article 32 of the PCA shall be deemed to
cover the commercial presence as defined in the respective GATS schedules of
the Parties.

III. 1.      Intra-corporate
transferees of Russian juridical persons being transferred to their
representative offices in the European Union shall be accorded treatment no
less favorable than that accorded by the European Union to like intra-corporate
transferees of any juridical person of a third country.

III. 2.      Treatment granted under
other agreements than the PCA concluded by the European Union with a
third Party which are notified under Article V of the GATS or which benefit
from the coverage of the EC GATS list of MFN exemptions shall be excluded from
paragraph III.1. Treatment deriving from the harmonization of regulations based
on agreements concluded by the European Union providing for mutual recognition
in accordance with Article VII of the GATS, shall also be excluded from
paragraph III.1.

III. 3.      Treatment accorded by the
Russian Federation to intra-corporate transferees of juridical persons of the
European Union being transferred to their representative offices in the Russian
Federation shall be no less favourable than that accorded to like intra-corporate transferees by the
European Union in accordance with this provision. The Russian Federation might
however limit the number of such intra-corporate transferees to a maximum of
five per representative office (two for banking).

IV. 1.     For
the purpose of paragraph IV:

(a)     A final consumer of a Party is a
juridical person, established in accordance with the legislation of this Party
on its territory.

(b)     A natural person is a citizen of a
Party (in the case of the European Union, a citizen of one of its Member
States) residing on the territory of this Party, who temporarily enters the
other Party as an employee of the contractual service supplier with the purpose
of provision of services, as provided by the contract to provide services.

(c)     A contractual
service supplier is a juridical person of one Party established in accordance
with the legislation of this Party on its territory which has no commercial
presence in the form of subsidiary, dependent company or branch constituted in
the territory of the other Party and which has concluded a contract to supply
services with a final consumer in the latter Party requiring the presence on a
temporary basis of natural persons in that Party in order to fulfil the
contract to provide services.

IV. 2.     Treatment
accorded by the European Union to contractual service suppliers of the Russian
Federation shall be no less favorable than that accorded to contractual service
suppliers of any third country.

IV. 3.     Treatment
granted under other agreements concluded by the European Union with a third
Party which have been notified under Article V of the GATS or which benefit
from the coverage of the EC GATS list of MFN exemptions shall be excluded from
this provision. Treatment deriving from the harmonization of regulations based
on agreements concluded by the European Union providing for mutual recognition
in accordance with Article VII of the GATS, shall also be excluded from this
provision.

IV. 4.     The
Russian Federation shall allow the supply of services into its territory by
contractual service suppliers of the European Union through presence of natural
persons subject to the following conditions:

(a)     The contract to provide services:

i.        has been concluded directly between the contractual service supplier and the final
consumer:

ii.       requires the temporary presence on the
territory of the Russian Federation of natural persons of the European Union to
provide the service and

iii.      complies with the laws, regulations
and requirements of the Russian Federation.

(b)     The temporary entry and stay of
natural persons within the Russian Federation pursuant to the fulfillment of
this contract shall be for a period of not more than six successive months in
any twelve month period or for the duration of the contract, whichever is less.

(c)     The natural persons entering the
Russian Federation must possess (i) a university degree or a technical
qualification demonstrating knowledge of an equivalent level and (ii)
professional qualifications where this is required to exercise an activity in
the sector concerned pursuant to the law, regulations or requirements of the
Russian Federation.

(d)     The natural person shall not receive
remuneration for the provision of services other than the remuneration paid by
the contractual service supplier during its stay in the Russian Federation.

(e)     The natural persons entering the
Russian Federation must have been employed by the contractual service supplier
for at least the year preceding the date of submission of an application for
entry into the Russian Federation. In addition, the natural person must
possess, at the date of submission of an application for entry into the Russian
Federation, at least three years professional experience in the sector of
activity which is the subject of the contract.

(f)      The contract to provide services has
to be obtained in one of the following sectors of activity which are included
and defined in Russia’s GATS schedule of commitments:

1.          Legal services

2.          Accounting and bookkeeping services

3.          Taxation services

4.          Architectural services

5.          Engineering services

6.          Integrated Engineering services

7.          Urban planning and landscape
architecture services

8.          Computer and related services

9.          Advertising services

10.        Market research services

11.        Management consulting services

12.        Services related to management
consulting

13.        Technical testing and analysis
services

14.        Advisory and consulting services
incidental to mining

15.        Related scientific and technical
consulting services

16.        Translation and Interpretation
services

17.        Maintenance and repair of equipment,
including transportation equipment

18.        Environmental services

(g)     The subject of the contract shall not
be “placement and supply services of personnel” as defined in CPC 872.

Access accorded under the provisions of
paragraph IV.4 relates only to the service activity which is the subject of the
contract; it does not confer entitlement to exercise the professional title of
the Russian Federation.

The Russian Federation might establish an
annual quota of work permits reserved to European Union natural persons gaining
access to the Russian services market under the provisions of paragraph IV.4.
In the first year in which the provisions of paragraph IV.4 enter into force,
this annual quota shall be no lower than 16000. In the following years, the
annual quota shall be no lower than the quota of the preceding year.

IV. 5.     Upon
entry into effect of the results of the current multilateral round of trade
negotiations in the field of services, the Parties will review the provisions
of paragraph IV.3 with a view to its extension to self-employed persons being
contractual service suppliers.

V. 1.       This
understanding shall not apply to measures affecting natural persons seeking
access to the employment market of a Party, nor shall it apply to measures
regarding citizenship, residence or employment on a permanent basis

V. 2.       This
understanding shall not prevent a Party from applying measures to regulate the
entry of natural persons into, or their temporary stay in, its territory,
including those measures necessary to protect the integrity of, and to ensure
the orderly movement of natural persons across its borders, provided that such
measures are not applied in such a manner as to nullify or impair the benefits
accruing to the other Party under the terms of paragraphs II, III and IV.

In case the European Union confirms its
agreement with the set forth in this letter, I propose that this letter and the
reply letter of the European Union will establish the Agreement between the
Government of the Russian Federation and the European Union relating to the preservation of commitments on trade in services contained in the
PCA, and this Agreement shall
enter into force on the date in which the Parties
exchange written notifications certifying that they have completed their
respective internal procedures. This Agreement shall be applied provisionally from the date of the
Russian Federation’s accession to the World Trade Organization."

The European Union has the honour of
confirming its agreement with the contents of this letter.

Please accept, Sir, the assurance of my
highest consideration.

[On behalf of the European Union]

[1]               OJ L [...], [...], p. [...]