EN Official Journal of the European Union L 204/20

PARTNERSHIP AND COOPERATION AGREEMENT

between the European Union and its Member States, of the one part, and the Republic of Iraq, of the other part

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

THE REPUBLIC OF HUNGARY,

MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,

Contracting Parties to the Treaty on European Union and the Treaty on the Functioning of the European Union, hereinafter referred to as the ‘Member States’ and

THE EUROPEAN UNION, hereinafter referred to as ‘the Union’

of the one part, and

THE REPUBLIC OF IRAQ, hereinafter referred to as ‘Iraq’

of the other part,

hereinafter jointly referred to as ‘the Parties’,

CONSIDERING the links between the Union, its Member States and Iraq and the common values that they share,

RECOGNISING that the Union, its Member States and Iraq wish to strengthen those links and to establish trade and cooperation, supported by a political dialogue,

CONSIDERING the importance which the Parties attach to the purposes and principles of the Charter of the United Nations, the observance of human rights, democratic principles and political and economic freedoms, which form the very basis of the Partnership,

REAFFIRMING their attachment to the democratic principles and human rights and fundamental freedoms as laid down in the United Nations Universal Declaration on Human Rights and other relevant international human rights instruments,

ACKNOWLEDGING the great importance of sustainable and social development which should go hand in hand with economic development,

RECOGNISING the importance of enhancing cooperation between them, and their common will to consolidate, deepen and diversify their relations in areas of mutual interest on the basis of respect for sovereignty, equality, non-discrimination, the rule of law and good governance, respect for the natural environment and mutual benefit,

RECOGNISING the need to support Iraq’s efforts to continue political reforms and economic rehabilitation and reforms, as well as in improving the living conditions of the poor and disadvantaged sections of the population,

RECOGNISING the need to strengthen women’s role in political, civil, social, economic and cultural spheres, as well as to fight discrimination,

DESIROUS of creating favourable conditions for a substantial development and diversification of trade between the Union and Iraq and enhancing cooperation in economic, commercial, investment, science and technology and cultural fields,

AIMING to promote trade and investment and harmonious economic relations between the Parties based on the principles of market economy,

HAVING REGARD to the need to create favourable conditions for improving business and investment,

CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements,

TAKING into account the Parties’ right to regulate the provision of services within their territories and to guarantee the achievement of legitimate public policy objectives,

TAKING into account their commitment to conduct trade in accordance with the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994 (hereinafter referred to as the ‘WTO Agreement’), and in that respect their mutual interest in Iraq’s accession to that Agreement,

RECOGNISING the specific needs of developing countries under the WTO,

RECOGNISING the fact that terrorism, organised crime, money laundering and drug trafficking represent serious threats to international stability and security as well as to the fulfilment of the objectives of their cooperation,

NOTING the importance of fostering and strengthening regional cooperation,

CONFIRMING that the provisions of this Agreement which fall within the scope of Title V of Part Three of the Treaty on the Functioning of the European Union, bind the United Kingdom and Ireland, as separate contracting parties, and not as part of the European Union, unless the European Union notifies Iraq that either State has become bound on these matters as part of the European Union in accordance with Protocol (No 21) on the position of the United Kingdom and Ireland in Respect of the Area of Freedom, Security and Justice annexed to the Treaty on European Union and the Treaty on the Functioning of the European Union. The same applies to Denmark, in accordance with Protocol (No 22) on the position of Denmark annexed to the Treaty on European Union and the Treaty on the Functioning of the European Union,

HAVE AGREED AS FOLLOWS:

Article 1

Establishment of Partnership

1. A partnership is hereby established between the Union and its Member States of the one part, and Iraq, of the other part.

2. The objectives of this Partnership are:

(a) to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations;

(b) to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development; and

(c) to provide a basis for legislative, economic, social, financial and cultural cooperation.

Article 2

Basis

Respect for democratic principles and human rights, as laid down in the Universal Declaration of Human Rights and other relevant international human rights instruments, as well as for the principle of the rule of law, underpins the internal and international policies of both Parties and constitutes an essential element of this Agreement.

TITLE I

POLITICAL DIALOGUE AND COOPERATION IN THE FIELD OF FOREIGN AND SECURITY POLICY

Article 3

Political dialogue

1. A regular political dialogue shall be established between the Parties. It shall strengthen their relations, contribute to the development of a partnership and increase mutual understanding and solidarity.

2. The political dialogue shall cover all subjects of common interest, and in particular peace, foreign and security policy, national dialogue and reconciliation, democracy, the rule of law, human rights, good governance and regional stability and integration.

3. The political dialogue shall take place on an annual basis at ministerial and at senior official level.

Article 4

Combating terrorism

The Parties reaffirm the importance of the fight against terrorism and, in accordance with international conventions, international human rights, humanitarian and refugee law and with their respective legislation and regulations, agree to cooperate in the prevention and suppression of terrorist acts. They shall do so in particular:

(a) in the framework of the full implementation of the UN Security Council Resolution 1373 (2001) and other relevant UN resolutions, the UN Counter-Terrorism Strategy, international conventions and instruments;

(b) by exchange of information on terrorist groups and their support networks in accordance with international and national law; and

(c) by exchanges of view on means and methods used to counter terrorism, including in technical fields and training, and by exchange of experiences in respect of terrorism prevention.

The Parties continue to be committed to reaching an agreement on the UN Comprehensive Convention on International Terrorism as soon as possible.

The Parties are deeply concerned about incitement of terrorist acts and emphasise their commitment to take all necessary and appropriate measures in accordance with international and national law, to reduce the threat posed by such incitement.

Article 5

Countering proliferation of weapons of mass destruction

The Parties consider that the proliferation of weapons of mass destruction (WMD) and their means of delivery, both to state and non-state actors, represents one of the most serious threats to international stability and security. The Parties therefore agree to cooperate and to contribute to countering the proliferation of WMD and their means of delivery through full compliance with and national implementation of their existing obligations under international disarmament and non-proliferation treaties and agreements and other relevant international obligations. The Parties agree that this provision constitutes an essential element of this agreement.

The Parties furthermore agree to cooperate and to contribute to countering the proliferation of WMD and their means of delivery by:

(a) taking steps to sign, ratify, or accede to, as appropriate, and fully implement all other relevant international instruments;

(b) the establishment of an effective system of national export controls, controlling the export as well as transit of WMD related goods, including a WMD end-use control on dual-use technologies and containing effective sanctions for breaches of export controls.

The Parties agree to establish a regular political dialogue that will accompany and consolidate these elements.

Article 6

Small arms and light weapons

1. The Parties recognise that the illicit manufacture, transfer and circulation of small arms and light weapons (SALW), including their ammunition, and their excessive accumulation, poor management, inadequately secured stockpiles and uncontrolled spread continue to pose a serious threat to peace and international security.

2. The Parties agree to observe and fully implement their respective obligations to deal with the illicit trade in SALW, including their ammunition, under existing international agreements and UN Security Council resolutions, as well as their commitments within the framework of other international instruments applicable in this area, such as the UN Programme of Action to prevent, combat and eradicate the illicit trade in SALW in all its aspects.

3. The Parties undertake to cooperate and to ensure coordination, complementarity and synergy in their efforts to deal with the illicit trade in SALW, including their ammunition, at global, regional, sub-regional and national levels and agree to establish regular political dialogue that will accompany and consolidate this undertaking.

Article 7

International Criminal Court

1. The Parties reaffirm that the most serious crimes of concern to the international community as a whole should not go unpunished and that their prosecution should be ensured by measures at either the domestic or international level.

2. The Parties recognise that Iraq is not yet a State Party to the Rome Statute of the International Criminal Court, but that Iraq is considering the possibility of acceding to it in the future. In so doing, Iraq will take steps to accede to, ratify and implement the Rome Statute and related instruments.

3. The Parties reaffirm their determination to cooperate on this issue, including by sharing experience in the adoption of legal adjustments required by the relevant international law.

TITLE II

TRADE AND INVESTMENTS

SECTION I

Trade in goods

Chapter I

General provisions

Article 8

Scope and Coverage

This Chapter shall apply to trade in goods between the Parties.

Article 9

Customs Duties

For the purpose of this Chapter, a ‘customs duty’ includes any duty or charge of any kind imposed on or in connection with the importation or exportation of a good, including any form of surtax or surcharge imposed on or in connection with such importation or exportation. A ‘customs duty’ does not include any:

(a) charge equivalent to an internal tax imposed consistently with Article 11;

(b) duty imposed consistently with Chapter II of Section 1 of Title II of this Agreement;

(c) duty applied consistently with Articles VI, XVI and XIX of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the ‘GATT 1994’), the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, the WTO Agreement on Subsidies and Countervailing Measures, the WTO Agreement on Safeguards, Article 5 of the WTO Agreement on Agriculture or the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter referred to as the ‘DSU’);

(d) fee or other charge imposed pursuant to a Party’s domestic law and consistently with Article VIII of the GATT 1994 and its Notes and Supplementary Provisions.

Article 10

MFN treatment

1. The Parties shall accord to one another most-favoured-nation treatment in accordance with Article I.1 of the GATT 1994 and its Notes and Supplementary Provisions.

2. The provisions of paragraph 1 shall not apply to:

(a) advantages granted with the object of establishing a customs union or a free-trade area according to the GATT 1994 or pursuant to the establishment of such customs union or free-trade area;

(b) advantages granted to particular countries in accordance with the GATT 1994 and with other international arrangements in favour of developing countries.

Article 11

National treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its Notes and Supplementary Provisions. To this end, Article III of the GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.

Article 12

Tariff policy

1. Products originating in Iraq and imported into the Union shall be subject to the Union MFN tariff. No customs duties exceeding those applied to imports from WTO Members in accordance with Article I of the GATT 1994 shall be applied to products originating in Iraq and imported into the Union.

2. Products originating in the Union shall, on their importation into Iraq, not be subject to customs duties exceeding the current 8 % Reconstruction Levy on imported goods.

3. The Parties agree that until Iraq accedes to the WTO, the Parties may amend the level of customs duties on imports after mutual consultation between the Parties.

4. If, after the signature of this Agreement, any tariff reduction is applied by Iraq to imports on an erga omnes basis, in particular reductions resulting from the tariff negotiations in the WTO, such reduced customs duties shall be applied to imports originating in the Union and replace the basic duty or Reconstruction Levy as from the date when such reductions are applied.

Article 13

Application of relevant provisions of the GATT 1994

The following Articles of the GATT 1994 shall be incorporated into and made part of this Agreement and shall apply between the Parties, mutatis mutandis:

(a) Article V including its Notes and Supplementary Provisions;

(b) Article VII, paragraphs 1, 2, 3, 4(a), 4(b), 4(d) and 5 including its Notes and Supplementary provisions and the WTO Agreement on Implementation of Article VII of the GATT 1994;

(c) Article VIII including its Notes and Supplementary Provisions;

(d) Article IX;

(e) Article X.

Article 14

Harmonised Commodity Description

The classification of goods in trade between the Parties shall be that set out in each Party’s respective tariff nomenclature interpreted in conformity with the Harmonised System of the International Convention on the Harmonised Commodity Description and Coding System, done at Brussels on 14 June 1983 (hereinafter referred to as the ‘HS’).

Article 15

Temporary admission of goods

Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall grant the other Party exemption from import charges and duties on goods admitted temporarily. The temporary admission procedure shall be applied taking account of the conditions under which the obligations stemming from such conventions have been accepted by the Parties in question.

Article 16

Prohibition of quantitative restrictions

The Union and Iraq shall, upon the entry into force of this Agreement, abolish and shall not adopt or maintain in trade between themselves any restrictions on imports or exports or any measures having equivalent effect in accordance with Article XI of the GATT 1994 and its Notes and Supplementary Provisions. To this end Article XI of the GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.

Article 17

Export duties

Neither party may maintain or institute any customs duties, taxes or other fees and charges imposed on or in connection with the exportation of goods to the other Party. Neither Party may maintain or institute any internal taxes, fees, and charges on goods exported to the other party that are in excess of those imposed on like products destined for internal sale.

Chapter II

Trade remedies instruments

Article 18

Anti-dumping

1. Nothing in this Agreement shall prevent the Parties from adopting anti-dumping or countervailing measures in accordance with Article VI of the GATT 1994, including its Notes and Supplementary Provisions, and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and with the WTO Agreement on Subsidies and Countervailing Measures.

2. This article shall not be subject to the provisions of Section VI of Title II of this Agreement.

Article 19

Safeguard measures

1. Nothing in this Agreement shall prevent the Parties from adopting measures in accordance with Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.

2. This article shall not be subject to the provisions of Section VI of Title II of this Agreement.

Chapter III

Exceptions

Article 20

General exceptions

The provisions of Article XX of the GATT 1994, including its Notes and Supplementary Provisions, and of Article XXI of the GATT 1994, which are incorporated into and made part of this Agreement, shall apply between the Parties, mutatis mutandis.

Chapter IV

Non-tariff issues

Article 21

Industrial standards and conformity assessment, technical regulations

1. Relationship with the WTO Agreement on Technical Barriers to Trade

The provisions of the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as the ‘TBT Agreement’), which is incorporated into and made part of this Agreement, shall apply between the Parties, mutatis mutandis.

2. Scope and coverage

The provisions of this Chapter shall apply to the preparation, adoption and application of technical regulations, standards and conformity assessment procedures, as defined in the TBT Agreement.

3. Objectives

The objectives of cooperation in the areas of technical regulations, standards and conformity assessment procedures between the Parties shall be:

(a) to avoid or reduce technical barriers to trade, in order to facilitate trade between the Parties;

(b) to enhance access for products to each other’s markets through improvements in safety, quality and competitiveness of products;

(c) to promote a greater use of international technical regulations, standards and conformity assessment procedures, including sector specific measures, and the use of international best practices for drawing them up;

(d) to ensure that the preparation, adoption and application of standards and technical regulations are transparent and do not create unnecessary obstacles to trade between the Parties, in accordance with the provisions of the TBT Agreement;

(e) to develop the infrastructure for technical regulation, standardisation, conformity assessment, accreditation, metrology and market surveillance in Iraq;

(f) to develop functional links between standardisation, conformity assessment and regulatory institutions of Iraq and of the Union;

(g) to promote effective participation of Iraqi institutions in international standards setting bodies and the TBT Committee.

4. Technical regulations, standards and conformity assessment procedures

(a) The Parties shall ensure that technical regulations, standards and conformity assessment procedures, are not prepared, adopted or applied with a view to, or with an effect of, creating unnecessary obstacles to trade between the Parties, subject to the provisions of the TBT Agreement.

(b) The Parties shall endeavour where possible to harmonise their standards, technical regulations and conformity assessment procedures.

5. Transparency and notification

(a) Obligations concerning the sharing of information on technical regulations, standards and conformity assessment procedures provided for by the TBT Agreement shall apply between the Parties.

(b) The Parties agree to exchange information on issues of potential relevance to their trade relations, including rapid alerts, scientific opinions and events through contact points.

(c) The Parties may cooperate in the establishment and maintenance of contact points, and in the setting up and maintenance of common data bases.

Chapter V

Sanitary and phytosanitary measures

Article 22

Sanitary and phytosanitary measures

1. The Parties shall cooperate in the area of Sanitary and Phytosanitary measures with the objective of facilitating trade while protecting human, animal or plant life or health. The provisions of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (hereinafter referred to as the ‘SPS Agreement’), which is incorporated into and made part of this Agreement, shall apply between the Parties, mutatis mutandis.

2. On request the Parties may identify and address problems arising from the application of specific SPS-measures with a view to reaching mutually acceptable solutions.

SECTION II

Trade in services and establishment

Article 23

Coverage

1. This Section hereby lays down the necessary arrangements for the progressive liberalisation of trade in services and establishment between the Parties.

2. This Section applies to measures affecting trade in services and establishment in all economic activities, with the exception of:

(a) mining, manufacturing and processing of nuclear materials;

(b) production of or trade in arms, munitions and war material;

(c) audio-visual services and cultural services;

(d) education services;

(e) health and social services;

(f) national maritime cabotage;

(g) air transport services and services auxiliary to air transport other than: (i) aircraft repair and maintenance services during which an aircraft is withdrawn from service; (ii) the selling and marketing of air transport services; (iii) computer reservation system services; (iv) ground handling services; (v) rental services of aircraft with crew; (vi) airport operation services; and

(h) space transport services.

3. Nothing in this Section shall be construed to impose any obligation with respect to government procurement.

4. The provisions of this Section shall not apply to subsidies granted by the Parties.

5. Consistent with the provisions of this Section, each Party retains the right to regulate and to introduce new regulations to meet legitimate policy objectives.

Article 24

Definitions

For the purposes of this Section:

(a) a ‘natural person of the Union’ means a national of one of the Member States of the Union according to its legislation and a ‘natural person of Iraq’ means a national of Iraq according to its legislation;

(b) a ‘juridical person’ means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(c) a ‘juridical person of the Union’ or a ‘juridical person of Iraq’ means a juridical person set up in accordance with the laws of a Member State of the Union or of Iraq, respectively, and having its registered office, central administration, or principal place of business in the territory to which the Treaty on European Union and the Treaty on the Functioning of the European Union apply or in the territory of Iraq, respectively. Should the juridical person have only its registered office, central administration, or principal place of business in the territory to which the Treaty on European Union and the Treaty on the Functioning of the European Union apply or in the territory of Iraq, respectively, it shall not be considered as a juridical person of the Union or a juridical person of Iraq, respectively, unless its operations possess a real and continuous link with the economy of the Union or of Iraq, respectively;

(d) notwithstanding point (c), shipping companies established outside the Union or Iraq and controlled by nationals of a Member State of the Union or of Iraq, respectively, shall also be beneficiaries of the provisions of this Agreement, if their vessels are registered in accordance with their respective legislation, in that Member State of the Union or in Iraq, and carry the flag of a Member State of the Union or of Iraq;

(e) ‘economic activity’ does not include activities carried out in the exercise of governmental authority, which means activities carried out neither on a commercial basis nor in competition with one or more economic operators;

(f) ‘subsidiary’ means a juridical person which is effectively controlled by another juridical person;

(g) ‘branch’ of a juridical person means a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;

(h) ‘service suppliers’ of a Party means any natural or juridical person of a Party that seeks to supply or supplies a service;

(i) ‘trade in services’ is defined as the supply of a service through the following modes: (i) from the territory of a Party into the territory of the other Party; (ii) in the territory of a Party to the service consumer of the other Party; (iii) by a service supplier of a Party, through establishment in the territory of the other Party; (iv) by a service supplier of a Party, through presence of natural persons in the territory of the other Party;

(j) ‘measure’ means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(k) ‘measures adopted or maintained by a Party’ means measures taken by: (i) central, regional or local governments and authorities; and (ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

(l) ‘services’ includes any service in any sector except services supplied in the exercise of governmental authority;

(m) ‘establishment’ means any type of business or professional establishment through: (i) the constitution, acquisition or maintenance of a juridical person; or (ii) the creation or maintenance of a branch or representative office; within the territory of a Party for the purpose of performing an economic activity;

(n) ‘investor’ of a Party means any natural or juridical person that seeks to perform or performs an economic activity through setting up an establishment;

(o) a ‘service supplied in the exercise of governmental authority’ means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.

Article 25

1. From the entry into force of this Agreement the Union shall extend to services or service suppliers of the Iraq the treatment resulting from the schedule of specific commitments of the Union and its Member States on national treatment and market access under the General Agreement on Trade in Services (hereinafter referred to as the ‘GATS’).

2. From the entry into force of this Agreement, and subject to paragraph 3, the Iraq shall grant to services, service suppliers, establishments and investors of the Union in the services and non-services sector, treatment no less favourable than that granted to like services, services suppliers, establishments and investors of Iraq or to like services, service suppliers, establishments and investors of any third country, whichever is the better.

3. Iraq may modify the treatment granted to services, service suppliers, establishments and investors of the Union by subjecting it to conditions and qualifications which result in treatment less favourable than that granted to its own like services, service suppliers, establishments and investors. Such modification shall respect the following conditions:

(a) The treatment granted to services, services suppliers, establishments and investors of the Union shall remain no less favourable than that granted by Iraq to like services, service suppliers, establishments and investors of any third country.

(b) Iraq shall notify such intention to the Commission of the European Union (hereinafter referred to as ‘the Commission’) four months before the intended date of implementation of such conditions. At the request of the Commission, the Iraq shall provide detailed information on the reasons that justify the intended imposition of conditions and qualifications. These conditions and qualifications shall be deemed accepted by the Union if no communication is sent to Iraq within eight weeks.

(c) At the request of any Party, the proposed conditions and qualifications shall be referred to the Cooperation Committee for examination and approval.

4. Without prejudice to the benefits arising from the treatment granted to services, service suppliers, establishments and investors of the Union pursuant to paragraph 2 of this article, following its accession to the WTO, Iraq shall also extend to services or service suppliers of the Union the treatment resulting from its schedule of specific commitments under the GATS.

Article 26

1. The most-favoured-nation treatment granted in accordance with the provisions of this Section shall not apply to tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements.

2. Nothing in this Section shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance of taxes pursuant to the tax provisions of agreements to avoid the double taxation and other tax arrangements, or domestic fiscal legislation.

3. Nothing in this Section shall be construed to prevent the Member States or Iraq from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in identical situations, in particular as regards their place or residence.

Article 27

Other agreements

Nothing in this Section shall limit the rights of investors of the Parties to benefit from any more favourable treatment provided for in any existing or future international agreement relating to investment to which a Member State of the Union and Iraq are Parties.

Article 28

Transparency

Each Party shall respond promptly to all requests by the other Party for specific information on any of its measures of general application or international agreements which pertain to or affect this Agreement. Each Party shall also establish one or more enquiry points to provide specific information to services providers of the other Party, upon request, on all such matters. Such enquiry points are listed in ANNEX 3. Enquiry points need not be depositories of laws and regulations.

Article 29

Exceptions

1. The provisions of this Section are subject to the exceptions contained in this Article. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in this Section shall be construed to prevent the adoption or enforcement by any Party of measures:

(a) necessary to protect public security or public morals or to maintain public order;

(b) necessary to protect human, animal or plant life or health;

(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Section including those relating to: (i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts; (ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; (iii) safety;

(d) inconsistent with the objectives of Article 25, provided that the difference in treatment is aimed at ensuring the effective or equitable imposition or collection of direct taxes in respect of services or service suppliers of the other Party;

(e) inconsistent with the objectives of Article 25, provided that the difference in treatment is aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation or other tax arrangements or domestic fiscal legislation.

2. The provisions of this Section shall not apply to the Parties’ respective social security systems or to activities in the territory of each Party, which are connected, even occasionally, with the exercise of official authority.

3. The provisions of this Section 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.

4. Nothing in this Section shall 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, in so doing, it does not apply them in a manner as to nullify or impair the benefits accruing to the other Party under Article 25.

5. Nothing in this Section applies to activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies.

6. Nothing in this Section shall be construed to prevent a Party, including its public entities, from exclusively conducting or providing in its territory activities or services for the account or with the guarantee or using the financial resources of the Party, or its public entities.

7. The provisions of this Section shall not prejudice the application by each Party of any measures necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement.

Article 30

Security Exceptions

Nothing in this Section shall be construed:

(a) to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or

(b) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests: (i) relating to economic activities carried out directly or indirectly for the purpose of provisioning a military establishment; (ii) relating to fissionable and fusionable materials or the materials from which they are derived; (iii) connected with the production of or trade in arms, munitions and war materials and related to traffic in other goods and materials; (iv) relating to government procurement indispensable for national security or for national defence purposes; (v) taken in time of war or other emergency in international relations; or

(c) to prevent any Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

Article 31

Progressive liberalisation of trade in services and establishment

As circumstances allow, including the situation arising from the accession of Iraq to the WTO, the Cooperation Council may make recommendations to the Parties to expand progressively trade in services and establishment between them and ensure full consistency with the provisions of the GATS, notably Article V. Where accepted, those recommendations could be put into effect by virtue of agreements between the Parties.

SECTION III

Provisions affecting business and investment

Article 32

Encouragement of investment

The Parties shall encourage an increase in mutually beneficial investment by establishing a more favourable climate for private investment.

Article 33

Contact points and exchange of information

In order to facilitate the communication between the Parties on any trade matter related to private investment, each Party shall designate a contact point. On the request of either Party, the contact point of the other Party shall indicate the office or official responsible for the matter and provide the required support to facilitate communication with the requesting Party.

SECTION IV

Current payments and capital

Article 34

Objective and scope

1. The Parties shall aim at the liberalisation of current payments and capital movements between them, in conformity with the commitments undertaken in the framework of the international financial institutions.

2. This Section applies to all current payments and capital movements between the Parties.

Article 35

Current account

The Parties shall allow, in freely convertible currency and in accordance with the Articles of Agreement of the International Monetary Fund, any payments and transfers of the current account between the Parties.

Article 36

Capital Account

From the entry into force of the Agreement, the Parties shall allow the free movements of capital relating to direct investments made in accordance with the laws of the host country and investments made in accordance with the provisions of this Agreement, and the liquidation or repatriation of these capitals and of any profit stemming there from.

Article 37

Standstill

The Parties shall not introduce any new restrictions on current payments and movements of capital between their residents and shall not make the existing arrangements more restrictive.

Article 38

Safeguard measures

1. Where, in exceptional circumstances, movements of capital between the Union and Iraq cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Union or Iraq, the Union and Iraq, respectively, may take safeguard measures with regard to movements of capital between the Union and Iraq for a period not exceeding six months if such measures are strictly necessary.

2. The Party adopting the safeguard measures shall inform the other Party as soon as possible, of a time schedule for their removal.

Article 39

Final provisions

1. Nothing in this Section shall limit the rights of economic operators of the Parties from benefiting from any more favourable treatment that may be provided for in any existing bilateral or multilateral agreement to which they are parties.

2. The Parties shall consult each other with a view to facilitating the movement of capital between them in order to promote the objectives of this Agreement.

SECTION V

Trade-related issues

Chapter I

State trading enterprises

Article 40

1. The Parties aim to comply with the provisions of Article XVII of the GATT 1994, its Notes and Supplementary Provisions and the WTO Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994, which are incorporated into and made part of this Agreement, mutatis mutandis.

2. If one of the Parties requests information from the other Party on individual cases of state trading enterprises, the manner of their operation and the effect of their operations on bilateral trade, the requested Party shall ensure maximum transparency possible without prejudice to Article XVII.4(d) of the GATT 1994 on confidential information.

3. Each party shall ensure that any state trading enterprise supplier of a good or service shall comply with that Party’s obligation under this Agreement.

Chapter II

Public procurement

Article 41

Introduction

1. The Parties recognise the contribution of transparent, competitive and open tendering to sustainable economic development and set as their objective the effective, reciprocal and gradual opening of their respective procurement markets.

2. For the purposes of this Chapter:

(a) ‘commercial goods or services’ means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes;

(b) ‘construction service’ means a service that has as its objective the realization by whatever means of civil or building works, based on Division 51 of the United Nations Provisional Central Product Classification (hereinafter referred to as the ‘CPC’);

(c) ‘days’ means calendar days;

(d) ‘electronic auction’ means an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting in a ranking or re-ranking of tenders;

(e) ‘in writing or written’ means any worded or numbered expression that can be read, reproduced and later communicated. It may include electronically transmitted and stored information;

(f) ‘limited tendering’ means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;

(g) ‘measure’ means any law, regulation, procedure, administrative guidance or practice, or any action of a procuring entity relating to a covered procurement;

(h) ‘multi-use list’ means a list of suppliers that a procuring entity has determined satisfy the conditions for participation in that list, and that the procuring entity intends to use more than once;

(i) ‘notice of intended procurement’ means a notice published by a procuring entity inviting interested suppliers to submit a request for participation, a tender, or both;

(j) ‘offset’ means any condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter-trade and similar action or requirement;

(k) ‘open tendering’ means a procurement method whereby all interested suppliers may submit a tender;

(l) ‘person’ means a natural person or a juridical person;

(m) ‘procuring entity’ means an entity covered under a Party’s Appendix I of ANNEX 1 to this Agreement;

(n) ‘qualified supplier’ means a supplier that a procuring entity recognises as having satisfied the conditions for participation;

(o) ‘selective tendering’ means a procurement method whereby only qualified suppliers are invited by the procuring entity to submit a tender;

(p) ‘services’ includes construction services, unless otherwise specified;

(q) ‘standard’ means a document approved by a recognised body that provides for common and repeated use, rules, guidelines or characteristics for goods or services, or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a good, service, process or production method;

(r) ‘supplier’ means a person or group of persons that provides or could provide goods or services; and

(s) ‘technical specification’ means a tendering requirement that: (i) lays down the characteristics of goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or (ii) addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.

Article 42

Scope and Coverage

1. This Chapter applies to any measure regarding covered procurement. For the purposes of this Chapter, covered procurement means procurement for governmental purposes:

(a) of goods, services, or any combination thereof: (i) as specified in each Party’s Sub-Annexes of Appendix I of ANNEX 1 to this Agreement; and (ii) not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;

(b) by any contractual means, including purchase, lease, and rental or hire purchase, with or without an option to buy;

(c) for which the value equals or exceeds the relevant threshold specified in each Party’s Sub-Annexes of Appendix I of ANNEX 1 to this Agreement, at the time of publication of a notice in accordance with Article 45;

(d) by a procuring entity; and

(e) that is not otherwise excluded from coverage.

2. Except where provided, this Chapter does not apply to:

(a) the acquisition or rental of land, existing buildings or other immovable property or the rights thereon;

(b) non-contractual agreements or any form of assistance that a Party provides, including cooperative agreements, grants, loans, equity infusions, guarantees and fiscal incentives;

(c) the procurement or acquisition of fiscal agency or depositary services, liquidation and management services for regulated financial institutions or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities;

(d) public employment contracts;

(e) procurement conducted: (i) for the specific purpose of providing international assistance, including development aid; (ii) under the particular procedure or condition of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project; (iii) under the particular procedure or condition of an international organisation, or funded by international grants, loans or other assistance where the applicable procedure or condition would be inconsistent with this Chapter.

3. Each Party shall define and specify the following information in its Sub-Annexes of Appendix I of ANNEX 1 to this Agreement:

(a) in Sub-Annex 1, the central government entities whose procurement is covered by this Chapter;

(b) in Sub-Annex 2, all other entities whose procurement is covered by this Chapter;

(c) in Sub-Annex 3, the services, other than construction services, covered by this Chapter;

(d) in Sub-Annex 4, the construction services covered by this Chapter;

(e) in Sub-Annex 5, any General Notes.

4. Where a procuring entity, in the context of covered procurement, requires persons not covered under a Party’s Sub-Annexes of Appendix I of ANNEX 1 to this Agreement to procure in accordance with particular requirements, Article 43 shall apply mutatis mutandis to such requirements.

5. In estimating the value of a procurement for the purpose of ascertaining whether it is a covered procurement, a procuring entity shall neither divide a procurement into separate procurements nor select or use a particular valuation method for estimating the value of a procurement with the intention of totally or partially excluding it from the application of this Chapter.

6. Nothing in this Chapter shall be construed to prevent any Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.

7. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on international trade, nothing in this Chapter shall be construed to prevent any Party from imposing or enforcing measures:

(a) necessary to protect public morals, order or safety;

(b) necessary to protect human, animal or plant life or health;

(c) necessary to protect intellectual property; or

(d) relating to goods or services of persons with disabilities, philanthropic institutions or prison labour.

Article 43

General Principles

1. With respect to any measure and any covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and to the suppliers of the other Party offering the goods or services, treatment no less favourable than the treatment the Party, including its procuring entities, accords to domestic goods, services and suppliers.

2. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:

(a) treat a locally established supplier less favourably than another locally established supplier on the basis of degree of foreign affiliation or ownership; nor

(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of the other Party.

3. With respect to any laws, regulations, procedures and practices regarding government procurement, as well as in respect of specific procurements by public authorities at all levels, opened to goods, services and suppliers of third countries, Iraq shall provide to the goods, services and suppliers of the Union treatment no less favourable than that accorded to goods, services and suppliers of any third country.

4. When conducting covered procurement by electronic means, a procuring entity shall:

(a) ensure that the procurement is conducted using information technology systems and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available information technology systems and software; and

(b) maintain mechanisms that ensure the integrity of requests for participation and tenders, including establishment of the time and receipt and the prevention of inappropriate access.

5. A procuring entity shall conduct covered procurement in a transparent and impartial manner that avoids conflicts of interest and prevents corruptive practices and that is consistent with this Chapter.

6. For purposes of covered procurement, no Party may apply rules of origin to goods or services imported from or supplied by the other Party that are different from the rules of origin the Party applies at the same time in the normal course of trade to imports or supplies of the same goods or services from the same Party.

Article 44

Publication of procurement information

1. Each Party shall:

(a) promptly publish any law, regulation, judicial decision, administrative ruling of general application, standard contract clauses that is mandated by a law or regulation and is incorporated by reference in notices and tender documentation and procedure regarding covered procurement, and any modifications thereof, in officially designated electronic or paper medium that is widely disseminated and remains readily accessible to the public;

(b) provide an explanation thereof to any Party, on request;

(c) list in Appendix II of ANNEX 1 to this Agreement, the electronic or paper media in which the Party publishes the information described in point (a);

(d) list in Appendix III of ANNEX 1 to this Agreement, the electronic media in which the Party publishes the notices required by Articles 45, 47(4) and 55(2).

2. Each Party shall promptly notify the other Party of any modification to the Party’s information listed in Appendix II or III of ANNEX 1 to this Agreement.

Article 45

Publication of Notices

1. For each covered procurement, except in the circumstances described in Article 52, a procuring entity shall publish a notice of intended procurement in the appropriate media listed in Appendix III of ANNEX 1 to this Agreement. Each such notice shall include the information set out in Appendix IV of ANNEX 1 to this Agreement. These notices shall be accessible by electronic means free of charge through a single point of access.

2. For each case of intended procurement, a procuring entity shall publish a summary notice that is readily accessible, at the same time as the publication of the notice of intended procurement, in one of the WTO languages. The summary notice shall contain at least the following information:

(a) the subject-matter of the procurement;

(b) the final date for the submission of tenders or, where applicable, any final date for the submission of requests for participation in the procurement or for inclusion on a multi-use list; and

(c) the address from which documents relating to the procurement may be requested.

3. Procuring entities are encouraged to publish as early as possible in each fiscal year a notice regarding their future procurement plans (hereinafter referred to as a ‘notice of planned procurement’). The notice should include the subject-matter of the procurement and the planned date of the publication of the notice of intended procurement.

4. A procuring entity listed in Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement may use a notice of planned procurement as a notice of intended procurement provided that it includes as much of the information in Appendix IV of ANNEX 1 to this Agreement as is available and a statement that interested suppliers should express their interest in the procurement to the procuring entity.

Article 46

Conditions for Participation

1. A procuring entity shall limit the conditions for participation in a procurement to those that are essential to ensure that a supplier has the legal and financial capacities and the commercial and technical abilities to undertake the relevant procurement.

2. In assessing whether a supplier satisfies the conditions for participation, a procuring entity:

(a) shall evaluate the financial, commercial and technical abilities of a supplier on the basis of that supplier’s business activities both inside and outside the territory of the Party of the procuring entity;

(b) shall not impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by a procuring entity of a given Party or that the supplier has prior work experience in the territory of a given Party; and

(c) may require relevant prior experience where essential to meet the requirements of the procurement.

3. In making this assessment, the procuring entity shall base its evaluation on the conditions that it has specified in advance in notices or tender documentation.

4. A procuring entity must exclude a supplier on grounds such as bankruptcy, false declarations, significant deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts, judgments in respect of serious crimes or other judgments in respect of serious public offences, professional misconduct or failure to pay taxes.

Article 47

Qualification of Suppliers

1. Where a procuring entity intends to use selective tendering, the entity shall:

(a) include in the notice of intended procurement at least the information specified in points 1, 2, 6, 7, 10, and 11 of Appendix IV of ANNEX 1 to this Agreement and invite suppliers to submit a request for participation; and

(b) provide by the commencement of the time-period for tendering, at least the information in points 3, 4, 5, 8 and 9 of Appendix IV of ANNEX 1 to this Agreement to the qualified suppliers that it notifies as specified in paragraph 2, point (b) of Appendix VI of ANNEX 1 to this Agreement.

2. A procuring entity shall recognise as qualified suppliers any domestic suppliers and any suppliers of the other Party that meets the conditions for participation in a particular procurement, unless the procuring entity states in the notice of intended procurement any limitation on the number of suppliers that will be permitted to tender and the criteria for selecting the limited number of suppliers.

3. Where the tender documentation is not made publicly available from the date of publication of the notice referred to in paragraph 1, a procuring entity shall ensure that those documents are made available at the same time to all qualified suppliers selected in accordance with paragraph 2.

4. A procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement may maintain a multi-use list of suppliers, provided that a notice inviting interested suppliers to apply for inclusion in the list is published annually, and where published by electronic means, made available continuously in the appropriate medium listed in Appendix III of ANNEX 1 to this Agreement. Such a notice shall include the information set out in Appendix V of ANNEX 1 to this Agreement.

5. Notwithstanding paragraph 4, where a multi-use list will be valid for three years or less, a procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement may publish a notice referred to in that paragraph only once, at the beginning of the period of validity of the list, provided that the notice states the period of validity and that further notices will not be published.

6. A procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement shall allow suppliers to apply at any time for inclusion on a multi-use list and shall include on the list all qualified suppliers within a reasonable short time.

A procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement may use a notice inviting suppliers to apply for inclusion in a multi-use list as a notice of intended procurement, provided that:

(a) the notice is published in accordance with paragraph 4 and includes the information required by Appendix V of ANNEX 1 to this Agreement and as much of the information required by Appendix IV of ANNEX 1 to this Agreement as is available and contains a statement that it constitutes a notice of intended procurement;

(b) the entity promptly provides to suppliers that have expressed an interest to the entity in a given procurement, sufficient information to permit them to assess their interest in the procurement, including all remaining information required by Appendix IV of ANNEX 1 to this Agreement, to the extent that such information is available.

7. A procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement may allow a supplier that has applied for inclusion on a multi-use list in accordance with paragraph 6 to tender in a given procurement, where there is sufficient time for the procuring entity to examine whether the supplier satisfies the conditions for participation.

8. A procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement shall promptly inform any supplier that submits a request for participation or application for inclusion on a multi-use list of the procuring entity’s decision with respect to the request.

9. Where a procuring entity covered under Sub-Annex 2 of Appendix I of ANNEX 1 to this Agreement rejects a supplier’s request to qualify or application for inclusion on a multi-use list, ceases to recognise a supplier as qualified, or removes a supplier from a multi-use list, the entity shall promptly inform the supplier and, on request of the supplier, promptly provide the supplier with a written explanation of the reasons for its decision.

Article 48

Technical Specifications

1. A procuring entity shall not prepare, adopt or apply any technical specification or prescribe any conformity assessment procedure with the purpose or the effect of creating unnecessary obstacles to international trade.

2. In prescribing the technical specifications for the goods or services being procured, a procuring entity shall, where appropriate:

(a) set out the technical specifications in terms of performance and functional requirements, rather than design or descriptive characteristics; and

(b) base the technical specifications on international or European standards, where these exist; otherwise, on national technical regulations, recognised national standards or building codes.

3. Where design or descriptive characteristics are used in the technical specifications, a procuring entity shall indicate, where appropriate, that it will consider tenders of equivalent goods or services that demonstrably fulfil the requirements of the procurement by including such words as ‘or equivalent’ in the tender documentation.

4. A procuring entity shall not prescribe technical specifications that require or refer to a particular trademark or trade name, patent, copyright, design, type, specific origin, producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement requirements and provided that, in such cases, the entity includes words such as ‘or equivalent’ in the tender documentation.

5. A procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation of adoption of any technical specification for a specific procurement from a person that may have a commercial interest in the procurement.

6. Each Party, including its procuring entities, may, in accordance with this Article, prepare, adopt or apply technical specifications to promote the conservation of natural resources or protect the environment.

Article 49

Tender Documentation

1. A procuring entity shall provide to suppliers tender documentation that includes all information necessary to permit suppliers to prepare and submit responsive tenders. Unless already provided in the notice of intended procurement, such documentation shall include a complete description of the issues set out in Appendix VIII of ANNEX 1 to this Agreement.

2. A procuring entity shall promptly provide, on request, the tender documentation to any supplier participating in the procurement and shall reply to any reasonable request for relevant information by a supplier participating in the procurement, provided that such information does not give that supplier an advantage over its competitors in the procurement.

3. Where, prior to the award of a contract, a procuring entity modifies the criteria or requirements set out in the notice of intended procurement or tender documentation provided to participating suppliers, or amends a notice or tender documentation, it shall transmit in writing all such modifications or amended or re-issued notice or tender documentation:

(a) to all suppliers that are participating at the time the information is amended, if known, and in all other cases, in the same manner as the original information; and

(b) in adequate time to allow such suppliers to modify and re-submit amended tenders, as appropriate.

Article 50

Time Periods

A procuring entity shall, consistent with its own reasonable needs, provide sufficient time for suppliers to prepare and submit requests for participation and responsive tenders, taking into account such factors as the nature and complexity of the procurement, the extent of subcontracting anticipated, and the time for transmitting tenders from foreign as well as domestic points where electronic means are not used. Such time-periods, including any extension of the time-periods, shall be the same for all interested or participating suppliers. The applicable time periods are set out in Appendix VI of ANNEX 1 to this Agreement.

Article 51

Negotiations

1. A Party may provide for its procuring entities to conduct negotiations:

(a) in the context of procurements in which they have indicated such intent in the notice of intended procurement; or

(b) where it appears from the evaluation that no one tender is obviously the most advantageous in terms of the specific evaluation criteria set forth in the notices or tender documentation.

2. A procuring entity shall:

(a) ensure that any elimination of suppliers participating in negotiations is carried out in accordance with the evaluation criteria set out in the notices or tender documentation; and

(b) where negotiations are concluded, provide a common deadline for the remaining suppliers to submit any new or revised tenders.

Article 52

Limited Tendering

A procuring entity may use limited tendering and may choose not to apply Articles 45 to 47, 49 to 51, 53 and 54 only under the following conditions:

(a) where (i) no tenders were submitted, or no suppliers requested participation; (ii) no tenders that conform to the essential requirements of the tender documentation were submitted; (iii) no suppliers satisfied the conditions for participation; or (iv) the tenders submitted have been collusive; provided that the requirements of the tender documentation are not substantially modified;

(b) where the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist because the requirement is a work of art; due to the protection of patents, copyrights or other exclusive rights; or due to the absence of competition for technical reasons;

(c) for additional deliveries by the original supplier of goods and services that were not included in the initial procurement where a change of supplier for such additional goods or services: (i) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement; and (ii) would cause significant inconvenience or substantial duplication of costs for the procuring entity;

(d) in so far as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering or selective tendering;

(e) for goods purchased on a commodity market;

(f) where a procuring entity procures a prototype or a first good or service that is developed at its request in the course of, and for, a particular contract for research, experiment, study or original development;

(g) for purchases made under exceptionally advantageous conditions which only arise in the very short term in the case of unusual disposals such as arising from liquidation, receivership or bankruptcy and not for routine purchases from regular suppliers; and

(h) where a contract is awarded to a winner of a design contest provided that the contest has been organised in a manner that is consistent with the principles of this Chapter, and the participants are judged by an independent jury with a view to a design contract being awarded to a winner.

Article 53

Electronic Auctions

Where a procuring entity intends to conduct a covered procurement using an electronic auction, the entity shall provide each participant, before commencing the electronic auction, with:

(a) the automatic evaluation method, including the mathematical formula, that is based on the evaluation criteria set out in the tender documentation and that will be used in the automatic ranking or re-ranking during the auction;

(b) the results of any initial evaluation of the elements of its tender where the contract is to be awarded on the basis of the most advantageous tender; and

(c) any other relevant information relating to the conduct of the auction.

Article 54

Treatment of Tenders and Award of Contracts

1. A procuring entity shall receive, open and treat all tenders under procedures that guarantee the fairness and impartiality of the procurement process, and the confidentiality of tenders.

2. A procuring entity shall not penalise any supplier whose tender is received after the time specified for receiving tenders if the delay is due solely to mishandling on the part of the procuring entity.

3. Where a procuring entity provides a supplier with an opportunity to correct unintentional errors of form between the opening of tenders and the awarding of the contract, the procuring entity shall provide the same opportunity to all participating suppliers.

4. To be considered for an award, a tender shall be in writing and shall, at the time of opening, comply with the essential requirements set out in the notices and tender documentation and be from a supplier that satisfies the conditions for participation.

5. Unless a procuring entity determines that it is not in the public interest to award a contract, the entity shall award the contract to the supplier that the entity has determined to be capable of fulfilling the terms of the contract and that, based solely on the evaluation criteria specified in the notices and tender documentation, has submitted the most advantageous tender or where price is the sole criterion, the lowest price.

6. Where a procuring entity receives a tender with a price that is abnormally lower than the prices in other tenders submitted, it may verify with the supplier that it satisfies the conditions for participation and is capable of fulfilling the terms of the contract.

7. A procuring entity shall not use options, cancel a procurement or modify awarded contracts in a manner that circumvents the obligations under this Agreement.

Article 55

Transparency of Procurement Information

1. A procuring entity shall promptly inform participating suppliers of the entity’s contract award decisions and, on request, shall do so in writing. Subject to paragraphs 2 and 3 of Article 56, a procuring entity shall, on request, provide an unsuccessful supplier with an explanation of the reasons why the entity did not select its tender and the relative advantages of the successful supplier’s tender.

2. Not later than 72 days after the award of each contract covered by this Chapter, a procuring entity shall publish a notice in the appropriate paper or electronic medium listed in Appendix III. Where only an electronic medium is used, the information shall remain readily available for a reasonable period of time. The notice shall include at least the information set out in Appendix VII of ANNEX 1 to this Agreement.

Article 56

Disclosure of Information

1. On request of the other Party, the Party shall provide promptly any information necessary to determine whether the procurement was conducted fairly, impartially and in accordance with the Chapter, including information on the characteristics and relative advantages of the successful tender. In cases where release of this information would prejudice competition in future tenders, the Party that receives that information shall not disclose it to any supplier, except after consultation with, and agreement of, the Party that provided the information.

2. Notwithstanding any other provision of this Chapter, a Party, including its procuring entities, shall not provide to any supplier information that might prejudice fair competition between suppliers.

3. Nothing in this Chapter shall be construed to require a Party, including its procuring entities, authorities and review bodies, to disclose confidential information where disclosure would impede law enforcement; might prejudice fair competition between suppliers; would prejudice the legitimate commercial interests of particular persons, including the protection of intellectual property; or would otherwise be contrary to the public interest.

Article 57

Domestic Review Procedures

1. Each Party shall provide a timely, effective, transparent and non-discriminatory administrative or judicial review procedure through which a supplier may challenge:

(a) a breach of this Chapter; or

(b) where the supplier does not have a right to challenge directly a breach of the Chapter under the domestic law of the Party, a failure to comply with a Party’s measures implementing this Chapter;

arising in the context of a covered procurement, in which the supplier has, or has had, an interest. The procedural rules for all challenges shall be in writing and made generally available.

2. In the event of a complaint by a supplier, arising in the context of covered procurement in which the supplier has, or has had, an interest, that there has been a breach or a failure as set out in paragraph 1, the Party concerned shall encourage its procuring entity and the supplier to seek resolution of the complaint through consultation. The procuring entity shall accord impartial and timely consideration to any such complaint in a manner that is not prejudicial to the supplier’s participation in ongoing or future procurement or right to seek corrective measures under the administrative or judicial review procedure.

3. Each supplier shall be allowed a sufficient period of time to prepare and submit a challenge, which in no case be less than 10 days from the time when the basis of the challenge became known or reasonably should have become known to the supplier.

4. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge by a supplier arising in the context of a covered procurement.

5. Where a body other than an authority referred to in paragraph 4 initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement is the subject of the challenge. A review body that is not a court shall either be subject to judicial review or have procedural guarantees that provide for:

(a) the procuring entity shall respond in writing to the challenge and disclose all relevant documents to the review body;

(b) the participants to the proceedings (hereinafter referred to as ‘participants’) shall have the right to be heard prior to a decision of the review body being made on the challenge;

(c) the participants shall have the right to be represented and accompanied;

(d) the participants shall have access to all proceedings;

(e) the participants shall have the right to request that the proceedings take place in public and that witnesses may be present; and

(f) decisions or recommendations relating to challenges by suppliers shall be provided, in a timely fashion, in writing, with an explanation of the basis for each decision or recommendation.

6. Each Party shall adopt or maintain procedures that provide for:

(a) prompt interim measures to preserve the supplier’s opportunity to participate in the procurement. Such interim measures may result in suspension of the procurement process. The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. The case for not acting shall be provided in writing; and

(b) where a review body had determined that there has been a breach or a failure as set out in paragraph 1, corrective action or compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs relating to the challenge, or both.

Article 58

Further negotiations

1. The Parties will review annually the effective operation of this Chapter and the mutual opening of procurement markets. In no later than one year from the entry into force of this Agreement the Parties will enter into negotiations for the extension of the list(s) of covered entities in Sub-Annex 1 and Sub-Annex 2 of Appendix 1 of ANNEX 1 to this Agreement.

2. Iraq will in the context of the WTO accession negotiations acknowledge its commitment for accession to the plurilateral Agreement on Government Procurement (hereinafter referred to as the ‘GPA’).

Article 59

Asymmetrical regime and transitional measures

Taking into account the development, financial and trade needs, Iraq will benefit from the following transitional measure: Iraq may provide for a temporary price preference programme consisting of a price differential of 5 % for goods and services and 10 % for works, applicable to supplies and services from purely Iraqis suppliers.

The price preference programme will be phased-out within 10 years from the entry into force of this Agreement.

Chapter III

Intellectual property protection

Article 60

Nature and scope of obligations

1. Pursuant to the provisions of this Article and of ANNEX 2 to this Agreement, Iraq shall adopt, within five years of the entry into force of the Agreement, legislation in order to ensure adequate and effective protection of intellectual, industrial and commercial property rights according to the highest international standards including the rules set by the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement (hereinafter referred to as the ‘TRIPS Agreement’), as well as effective means of enforcing such rights.

2. Within three years of the entry into force of the Agreement, Iraq shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 2 of ANNEX 2 to this Agreement to which Member States are parties or which are de facto applied by Member States according to the relevant provisions contained in these conventions.

3. Within three years of the entry into force of the Agreement, Iraq shall comply with the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 3 of ANNEX 2 to this Agreement to which one or several Member States are parties or which are de facto applied by one or several Member States according to the relevant provisions contained in these conventions.

4. The implementation of this Article and of ANNEX 2 to this Agreement shall be regularly reviewed by the Parties. In preparing its legislation or if problems in the area of intellectual, industrial and commercial property affecting trading conditions were to occur, urgent consultations will be undertaken, at the request of either Party, with a view to reaching mutually satisfactory solutions. In no later than three years from the entry into force of this Agreement, the Parties will enter into negotiations for more detailed IPR provisions.

5. Each Party shall accord to the national of the other Party treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property rights, subject to the exceptions already provided for in the international instruments which are included or may be included from time to time in ANNEX 2 to this Agreement and as of the moment in which they are ratified by that Party.

6. From the entry into force of this Agreement, Iraq shall grant to companies and national of the Union, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by it to any third country under bilateral agreements.

SECTION VI

Dispute settlement

Chapter I

Objective and scope

Article 61

Objective

The objective of this Section is to avoid and settle any dispute between the Parties with a view to arrive at, where possible, a mutually agreed solution.

Article 62

Scope

This Section applies with respect to any dispute concerning the interpretation and application of the provisions of Title II of this Agreement, except as otherwise expressly provided.

Chapter II

Consultations

Article 63

Consultations

1. The Parties shall endeavour to resolve any dispute regarding the interpretation and application of the provisions referred to in Article 62 by entering into consultations in good faith with the aim of reaching a prompt, equitable and mutually agreed solution.

2. A Party shall seek consultations by means of a written request to the other Party, copied to the Cooperation Committee, identifying any measure at issue and the provisions referred to in Article 62 that it considers applicable.

3. Consultations shall be held within 30 days of the date of the submission of the request and take place, unless the Parties agree otherwise, on the territory of the Party complained against. The consultations shall be deemed concluded within 30 days of the date of the submission of the request, unless both Parties agree to continue consultations. All information disclosed during the consultations shall remain confidential.

4. Consultations on matters of urgency, including those regarding perishable or seasonal goods shall be held within 15 days of the date of the submission of the request, and shall be deemed concluded within 15 days of the date of the submission of the request.

5. If consultations are not held within the timeframes laid down in paragraph 3 or in paragraph 4 respectively, or if consultations have been concluded and no agreement has been reached on a mutually agreed solution, the complaining Party may request the establishment of an arbitration panel in accordance with Article 64.

Chapter III

Dispute settlement procedures

Article 64

Initiation of the arbitration procedure

1. Where the Parties have failed to resolve the dispute by recourse to consultations as provided for in Article 63, the complaining Party may request the establishment of an arbitration panel.

2. The request for the establishment of an arbitration panel shall be made in writing to the Party complained against and the Cooperation Committee. The complaining Party shall identify in its request the specific measure at issue, and it shall explain how such measure constitutes a breach of the provisions referred to in Article 62 in a manner sufficient to present the legal basis for the complaint.

Article 65

Establishment of the arbitration panel

1. An arbitration panel shall be composed of three arbitrators.

2. Within 10 days of the date of the submission of the request for the establishment of an arbitration panel to the Cooperation Committee, the Parties shall consult in order to reach an agreement on the composition of the arbitration panel.

3. In the event that the Parties are unable to agree on its composition within the time frame laid down in paragraph 2, either party may request the chair of the Cooperation Committee, or the chair’s delegate, to select all three members by lot from the list established under Article 78, one among the individuals proposed by the complaining Party, one among the individuals proposed by the Party complained against and one among the individuals selected by the Parties to act as chairperson. Where the Parties agree on one or more of the members of the arbitration panel, any remaining members shall be selected by the same procedure in the applicable list of panellists.

4. The chair of the Cooperation Committee, or the chair’s delegate, shall select the arbitrators within five days of the request referred to in paragraph 3 by either Party and in the presence of a representative of each Party.

5. The date of establishment of the arbitration panel shall be the date on which the three arbitrators are selected.

6. Should any of the lists provided for in Article 78 not be established at the time a request is made pursuant to paragraph 3 the three arbitrators shall be drawn by lot from the individuals which have been formally proposed by one or both of the Parties.

Article 66

Interim panel report

The arbitration panel shall issue an interim report to the Parties setting out its findings of the facts, the applicability of relevant provisions and the basic rationale behind any findings and recommendations that it makes, not later than 90 days from the date of establishment of the arbitration panel. Any Party may submit a written request for the arbitration panel to review precise aspects of the interim report within 15 days of its notification. The findings of the final panel ruling shall include a sufficient motivation of the arguments made at the interim review stage, and shall answer clearly to the questions and observations of the two Parties.

Article 67

Arbitration panel ruling

1. The arbitration panel shall notify its ruling to the Parties and to the Cooperation Committee within 120 days from the date of the establishment of the arbitration panel. Where it considers that this deadline cannot be met, the chairperson of the arbitration panel must notify the Parties and the Cooperation Committee in writing, stating the reasons for the delay and the date on which the panel plans to conclude its work. Under no circumstances should the ruling be notified later than 150 days from the date of the establishment of the arbitration panel.

2. In cases of urgency, including those involving perishable or seasonal goods, the arbitration panel shall make every effort to notify its ruling within 60 days from the date of its establishment. Under no circumstances should it take longer than 75 days from its establishment. The arbitration panel may give a preliminary ruling within 10 days of its establishment on whether it deems the case to be urgent.

Article 68

Compliance with the arbitration panel ruling

Each Party shall take any measure necessary to comply in good faith with the arbitration panel ruling, and the Parties shall endeavour to agree on the period of time to comply with the ruling.

Article 69

The reasonable period of time for compliance

1. No later than 30 days after the notification of the arbitration panel ruling to the Parties, the Party complained against shall notify the complaining Party and the Cooperation Committee of the time it will require for compliance (hereinafter referred to as ‘reasonable period of time’) if immediate compliance is not possible.

2. If there is disagreement between the Parties on the reasonable period of time to comply with the arbitration panel ruling, the complaining Party shall, within 20 days of the notification made under paragraph 1 by the Party complained against, request in writing the original arbitration panel to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the other Party and to the Cooperation Committee. The arbitration panel shall notify its ruling to the Parties and to the Cooperation Committee within 20 days from the date of the submission of the request.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures set out in Article 65 shall apply. The time limit for notifying the ruling shall be 35 days from the date of the submission of the request referred to in paragraph 2.

4. The reasonable period of time may be extended by mutual agreement of the Parties.

Article 70

Review of any measure taken to comply with the arbitration panel ruling

1. The Party complained against shall notify the complaining Party and the Cooperation Committee before the end of the reasonable period of time of any measure that it has taken to comply with the arbitration panel ruling.

2. In the event that there is disagreement between the Parties concerning the existence or the consistency of any measure notified under paragraph 1, with the provisions referred to in Article 62, the complaining Party may request in writing the original arbitration panel to rule on the matter. Such request shall identify the specific measure at issue and it shall explain how such measure is incompatible with the provisions referred to in Article 62. The arbitration panel shall notify its ruling within 45 days of the date of the submission of the request.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures set out in Article 65 shall apply. The time limit for notifying the ruling shall be 60 days from the date of the submission of the request referred to in paragraph 2.

Article 71

Temporary remedies in case of non-compliance

1. If the Party complained against fails to notify any measure taken to comply with the arbitration panel ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that the measure notified under paragraph 1 of Article 70 is inconsistent with that Party’s obligations under the provisions referred to in Article 62, the Party complained against shall, if so requested by the complaining Party, present an offer for temporary compensation.

2. If no agreement on compensation is reached within 30 days of the end of the reasonable period of time or of the arbitration panel ruling under Article 70 that a measure taken to comply is inconsistent with the provisions referred to in Article 62, the complaining Party shall be entitled, upon notification to the Party complained against and to the Cooperation Committee, to suspend obligations arising from any provision referred to in Article 62 at a level equivalent to the nullification or impairment caused by the violation. The complaining Party may implement the suspension 10 days after the date of the notification, unless the Party complained against has requested arbitration under paragraph 3.

3. If the Party complained against considers that the level of suspension is not equivalent to the nullification or impairment caused by the violation, it may request in writing the original arbitration panel to rule on the matter. Such request shall be notified to the complaining Party and to Cooperation Committee before the expiry of the 10 day period referred to in paragraph 2. The original arbitration panel shall notify its ruling on the level of the suspension of obligations to the Parties and to the Cooperation Committee within 30 days of the date of the submission of the request. Obligations shall not be suspended until the original arbitration panel has notified its ruling, and any suspension shall be consistent with the arbitration panel ruling.

4. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures laid down in Article 65 shall apply. The period for notifying the ruling shall be 45 days from the date of the submission of the request referred to in paragraph 3.

5. The suspension of obligations shall be temporary and shall be applied only until any measure found to be inconsistent with the provisions referred to in Article 62 has been withdrawn or amended so as to bring it into conformity with those provisions, as established under Article 72, or until the Parties have agreed to settle the dispute.

Article 72

Review of any measure taken to comply after the suspension of obligations

1. The Party complained against shall notify the complaining Party and the Cooperation Committee of any measure it has taken to comply with the ruling of the arbitration panel and of its request for an end to the suspension of obligations applied by the complaining Party.

2. If the Parties do not reach an agreement on the compatibility of the notified measure with the provisions referred to in Article 62 within 30 days of the date of the submission of the notification, the complaining Party shall request in writing the original arbitration panel to rule on the matter. Such request shall be notified simultaneously to the Party complained against and to the Cooperation Committee. The arbitration panel ruling shall be notified to the Parties and to the Cooperation Committee within 45 days of the date of the submission of the request. If the arbitration panel rules that any measure taken to comply is in conformity with the provisions referred to in Article 62, the suspension of obligations shall be terminated.

3. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures laid down in Article 65 shall apply. The period for notifying the ruling shall be 60 days from the date of the submission of the request referred to in paragraph 2.

Article 73

Mutually Agreed Solution

The Parties may reach a mutually agreed solution to a dispute under this Section at any time. They shall notify the Cooperation Committee and the arbitration panel of any such solution. Upon notification of the mutually agreed solution, the panel shall terminate its work and the procedure shall be terminated.

Article 74

Rules of Procedure

1. Dispute settlement procedures under this Section shall be governed by the Rules of Procedure and the Code of Conduct which shall be adopted by the Cooperation Committee.

2. The Parties may decide to modify the Rules of Procedure and the Code of Conduct.

3. Any hearing of the arbitration panel shall be open to the public in accordance with the Rules of Procedure.

Article 75

Information and technical advice

At the request of a Party, or upon its own initiative, the arbitration panel may obtain information from any source, including the Parties involved in the dispute, it deems appropriate for the arbitration panel proceeding. The arbitration panel also has the right to seek the relevant opinion of experts as it deems appropriate. Any information obtained in this manner must be disclosed to each of the Parties and submitted for their comments. Interested natural or legal persons established in the Parties’ territories are authorised to submit amicus curiae briefs to the arbitration panel in accordance with the Rules of Procedure.

Article 76

Rules of interpretation

Any arbitration panel shall interpret the provisions referred to in Article 62 in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties. The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided in the provisions referred to in Article 62.

Article 77

Arbitration panel decisions and rulings

1. The arbitration panel shall make every effort to take any decision by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote. However, in no case dissenting opinions of arbitrators shall be published.

2. Any ruling of the arbitration panel shall be binding on the Parties and shall not create any rights or obligations for natural or legal persons. The ruling shall set out the findings of fact, the applicability of the relevant provisions of the Agreement and the basic rationale behind any findings and conclusions that it makes. The Cooperation Committee shall make the arbitration panel rulings publicly available in its entirety unless it decides not to do so in order to ensure the confidentiality of business confidential information.

Chapter IV

General provisions

Article 78

List of arbitrators

1. The Cooperation Committee shall, no later than six months after the entry into force of the Agreement, establish a list of 15 individuals who are willing and able to serve as arbitrators. Each of the Parties shall propose five individuals to serve as arbitrators. The two Parties shall also select five individuals that are not nationals of either Party and who shall act as chairperson to the arbitration panel. The Cooperation Committee shall ensure that the list is always maintained at this level.

2. Arbitrators shall have specialised knowledge or experience of law and international trade. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government, or be affiliated with the government of any of the Parties, and shall comply with the Code of Conduct.

Article 79

Relation with WTO obligations

1. Until Iraq accedes to the WTO, arbitration panels shall adopt an interpretation that is fully consistent with the relevant decisions of the Dispute Settlement Body of the World Trade Organisation when ruling on an alleged violation of a provision of the provisions referred to in Article 62 that incorporates or refers to a provision under the WTO Agreement.

2. Upon the accession of Iraq to the WTO, paragraphs 3 to 6 shall apply.

3. Recourse to the dispute settlement provisions of this Section shall be without prejudice to any action in the WTO framework, including dispute settlement action.

4. However, where a Party has, with regard to a particular measure, instituted a dispute settlement proceeding, either under paragraph 1 of Article 64 of this Agreement or under the WTO Agreement, it may not institute a dispute settlement proceeding regarding the same measure in the other forum until the first proceeding has ended. In addition, a Party shall not seek redress for the breach of an obligation which is identical under the Agreement and under the WTO Agreement in the two fora. In such case, once a dispute settlement proceeding has been initiated, the Party shall not bring a claim seeking redress for the breach of the identical obligation under the other agreement to the other forum, unless the forum selected fails for procedural or jurisdictional reasons to make findings on the claim seeking redress of that obligation.

5. For the purposes of paragraph 4:

(a) dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party’s request for the establishment of a panel under Article 6 of the DSU and are deemed to be ended when the Dispute Settlement Body adopts the Panel’s report, and the Appellate Body’s report as the case may be, under Articles 16 and 17(14) of the DSU;

(b) dispute settlement proceedings under this Section are deemed to be initiated by a Party’s request for the establishment of an arbitration panel under paragraph 1 of Article 64 and are deemed to be ended when the arbitration panel notifies its ruling to the Parties and to the Cooperation Committee under Article 67.

6. Nothing in this Section shall preclude a Party from implementing the suspension of obligations authorised by the Dispute Settlement Body of the WTO. The WTO Agreement shall not be invoked to preclude a Party from suspending obligations under Title II of this Agreement.

Article 80

Time limits

1. All time limits laid down in this Section, including the limits for the arbitration panels to notify their rulings, shall be counted in calendar days, the first day being the day following the act or fact to which they refer.

2. Any time limit referred to in this Section may be extended by mutual agreement of the Parties.

TITLE III

AREAS OF COOPERATION

Article 81

Financial and technical assistance

1. In order to achieve the objectives of this Agreement Iraq shall benefit from financial and technical assistance from the Union in the form of grants to accelerate the economic and political transformation of Iraq.

2. This assistance shall be covered within the framework of the Union’s development cooperation provided for in the relevant regulations of the European Parliament and of the Council.

The objectives and the areas of the Union’s assistance shall be laid down in an indicative programme reflecting established priorities to be agreed between the two parties taking into account Iraq’s development needs and strategies, sectoral absorption capacities and progress with reform.

3. The Parties shall ensure that technical assistance contributions from t