AGREEMENT IN THE FORM OF AN EXCHANGE OF LETTERS

between the European Community and the Republic of Azerbaijan amending the Agreement between the European Economic Community and the Republic of Azerbaijan on trade in textile products initialled at Brussels on 20 September 1993, as last amended by an Agreement in the form of an Exchange of Letters initialled on 18 December 1995

A. Letter from the Council of the European Union

Sir,

1. I have the honour to refer to the Agreement between the European Economic Community and the Republic of Azerbaijan on trade in textile products initialled on 20 September 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 18 December 1995 (hereafter referred to as the "Agreement").

2. In view of the expiry of the Agreement on 31 December 1999 and in accordance with Article 20(4) of the Agreement, the European Community proposes to extend the duration of the Agreement, for a further period of at least three years, subject to the following amendments and conditions:

2.1. Annex I which sets out the products referred to in Article 1 of the Agreement is replaced by Appendix 1 to this letter.

2.2. The text of Article 20(1), second and third sentences, of the Agreement shall be replaced by the following: "It shall be applicable until 31 December 2002. Thereafter, the application of all of the provisions of this Agreement shall be extended automatically for a period of one more year up to 31 December 2003, unless either Party notifies the other at least six months before 31 December 2002 that it does not agree with this extension."

2.3. Textile categories 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, 20 and 136 are exempted from the double-checking system referred to in Article 2(3) of the Agreement and specified in Protocol A. If, in a given year, the levels of imports of products of these textile categories exceed the rates specified in Article 5(2) of the Agreement, the double-checking system will be automatically reintroduced for these categories.

3. Should the Republic of Azerbaijan become a member of the World Trade Organisation before the date of expiry of the Agreement, the provisions of Articles 2(2) to (6), 3, 6, 7, 8, 9, 11 to 19, Protocol A, Protocol B, Protocol C, Agreed Minutes No 1, Agreed Minutes No 2, Agreed Minutes No 3 and Agreed Minutes No 4 shall continue to be applicable as administrative arrangements within the meaning of Article 2(17) of the WTO Agreement on Textiles and Clothing.

4. I should be obliged if you could kindly confirm your Government's acceptance of the foregoing. Should this be the case, this letter together with its appendix and your letter of acceptance will constitute an Agreement in the form of an Exchange of Letters which shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on conditions of reciprocity.

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

For the Council of the European Union

Appendix 1

Annex I to the Agreement between the European Community and Azerbaijan on trade in textile products initialled on 20 September 1993, containing the category and goods descriptions for textile products, is replaced by Annex I to Regulation (EEC) No 3030/93(1). It is understood that, without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within that Annex by CN codes. Where there is an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

(1) In 1999 this Annex was amended by Commission Regulation (EC) No 1072/1999 (OJ L 134, 28.5.1999, p. 1).

Appendix 2

Exchange of Notes

The Directorate-General for Trade of the Commission of the European Union presents its compliments to the Mission of the Republic of Azerbaijan and has the honour to refer to the Agreement between the European Community and the Republic of Azerbaijan on Trade in Textile Products initialled on 20 September 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on ... 1999.

The Directorate-General for Trade wishes to inform the Mission of the Republic of Azerbaijan that, whilst awaiting the completion of the necessary procedures for the conclusion and coming into force of the Agreement in the form of an Exchange of Letters, the European Community is prepared to allow the provisions of the Agreement to apply de facto from 1 January 2000. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement in the form of an Exchange of Letters provided that four months notice is given.

The Directorate-General for Trade would be grateful if the Mission of the Republic of Azerbaijan would confirm its agreement to the foregoing.

The Directorate-General for Trade of the Commission of the European Union avails itself of this opportunity to renew to the Ministry of Foreign Affairs of the Republic of Azerbaijan the assurance of its highest consideration.

B. Letter from the Government of the Republic of Azerbaijan

Sir,

I have the honour to acknowledge receipt of your letter of today's date which reads as follows: "Sir,

1. I have the honour to refer to the Agreement between the European Economic Community and the Republic of Azerbaijan on trade in textile products initialled on 20 September 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled on 18 December 1995 (hereafter referred to as the 'Agreement').

2. In view of the expiry of the Agreement on 31 December 1999 and in accordance with Article 20(4) of the Agreement, the European Community proposes to extend the duration of the Agreement, for a further period of at least three years, subject to the following amendments and conditions:

2.1. Annex I which sets out the products referred to in Article 1 of the Agreement is replaced by Appendix 1 to this letter.

2.2. The text of Article 20(1), second and third sentences, of the Agreement shall be replaced by the following: 'It shall be applicable until 31 December 2002. Thereafter, the application of all of the provisions of this Agreement shall be extended automatically for a period of one more year up to 31 December 2003, unless either Party notifies the other at least six months before 31 December 2002 that it does not agree with this extension.'

2.3. Textile categories 1, 2, 3, 4, 5, 6, 7, 8, 12, 13, 20 and 136 are exempted from the double-checking system referred to in Article 2(3) of the Agreement and specified in Protocol A. If, in a given year, the levels of imports of products of these textile categories exceed the rates specified in Article 5(2) of the Agreement, the double-checking system will be automatically reintroduced for these categories.

3. Should the Republic of Azerbaijan become a member of the World Trade Organisation before the date of expiry of the Agreement, the provisions of Articles 2(2) to (6), 3, 6, 7, 8, 9, 11 to 19, Protocol A, Protocol B, Protocol C, Agreed Minutes No 1, Agreed Minutes No 2, Agreed Minutes No 3 and Agreed Minutes No 4 shall continue to be applicable as administrative arrangements within the meaning of Article 2(17) of the WTO Agreement on Textiles and Clothing.

4. I should be obliged if you could kindly confirm your Government's acceptance of the foregoing. Should this be the case, this letter together with its appendix and your letter of acceptance will constitute an Agreement in the form of an Exchange of Letters which shall enter into force on the first day of the month following the day on which the Parties have notified each other that the legal procedures necessary to this end have been completed. In the meantime, it shall be applied provisionally from 1 January 2000 on conditions of reciprocity.

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

I have the honour to confirm that my Government is in agreement with the content of your letter.

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

For the Government of the Republic of Azerbaijan

Appendix 1

Annex I to the Agreement between the European Community and Azerbaijan on trade in textile products initialled on 20 September 1993, containing the category and goods descriptions for textile products, is replaced by Annex I to Regulation (EEC) No 3030/93(1). It is understood that without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within that Annex by CN codes. Where there is an "ex" symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

(1) In 1999 this Annex was amended by Commission Regulation (EC) No 1072/1999 (OJ L 134, 28.5.1999, p. 1).

Appendix 2

Exchange of Notes

The Mission of the Republic of Azerbaijan presents its compliments to the Directorate-General for Trade of the Commission of the European Union and has the honour to refer to the Note of the Directorate-General (date of Note Verbale) regarding the Agreement on trade in textile products initialled on 20 September 1993, as last amended by the Agreement in the form of an Exchange of Letters initialled ... 1999.

The Mission of the Republic of Azerbaijan wishes to confirm to the Directorate-General for Trade that, whilst awaiting the completion of the necessary procedures for the conclusion and coming into force of the Agreement in the form of an Exchange of Letters, the Government of the Republic of Azerbaijan is prepared to allow the provisions of the Agreement to be applied de facto from 1 January 2000. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement in the form of an Exchange of Letters provided that four months notice is given.

The Mission of the Republic of Azerbaijan avails itself of this opportunity to renew to the Directorate-General for Trade of the Commission of the European Union the assurance of its highest consideration.