AGREEMENT on free trade and trade-related matters between the European Community, the European Atomic Energy Community and the European Coal and Steel Community, of the one part, and the Republic of Estonia, of the other part

The EUROPEAN COMMUNITY, the EUROPEAN ATOMIC ENERGY COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY,

hereinafter referred to as 'the Community', of the one part,

and the REPUBLIC OF ESTONIA,

hereinafter referred to as 'Estonia'; of the other part,

WHEREAS the Parties recall the historical links between them and the common values they share; whereas they wish to reinforce these links, to establish close and lasting relations on a basis of reciprocity allowing Estonia to participate in the process of European integration, in reinforcing and further developing the relations previously established, in particular via the Agreement on Trade and Commercial and Economic Cooperation;

WHEREAS this Agreement contributes to the attainment of association;

WHEREAS the Parties are committed to the intensification of political and economic liberties which constitute the basis of this Agreement and to further development of Estonia's new economic and political system which respects - in accordance inter alia with the undertakings made within the context of the Conference on Security and Cooperation in Europe (CSCE) - the rule of law and human rights, including the rights of persons belonging to minorities, a multiparty system with free and democratic elections and liberalization aimed at setting up a market economy;

WHEREAS the Parties share the understanding that Estonia has made considerable and successful reform efforts in the political and economic fields and that these efforts will be pursued;

WHEREAS the Parties are committed to the implementation of commitments made in the framework of the CSCE, in particular those set out in the Helsinki Final Act, the concluding documents of the Madrid, Vienna and Copenhagen meetings, those of the Charter of Paris for a New Europe; the conclusions of the CSCE's Bonn Conference, the CSCE Helsinki document 1992, the European Convention on Human Rights as well as the European Energy Charter when ratified;

WHEREAS trade and trade liberalization are important for stability in Europe on the basis of cooperation, of which one of the pillars is the European Community;

WHEREAS there is a need to continue, with the Community's help, Estonia's political and economic reform;

WHEREAS the Community wishes to contribute to the implementation of the reform and to assist Estonia in facing the economic and social consequences of structural adjustment;

WHEREAS full implementation of the Agreement is linked to the implementation of a coherent programme of economic and political reform by Estonia;

WHEREAS the Parties recognize the need for continuing regional cooperation among the Baltic States, taking into account that closer integration between the European Union (EU) and the Baltic States, and the Baltic States among themselves should proceed in parallel;

WHEREAS the Parties are committed to liberalize trade based on GATT principles;

WHEREAS the Parties expect that this Agreement will create a new climate for economic relations between them and above all for the development of trade and investment, which are essential to economic restructuring and the renewal of technology;

WHEREAS it is important that political dialogue between the Parties should be enhanced;

WHEREAS the Parties recognize the fact that Estonia's ultimate objective is to become a member of the EU and that the step towards association through this Agreement, in the view of the Parties, will help Estonia to achieve this objective;

HAVE DECIDED to conclude this Agreement and to this end have designated as their Plenipotentiaries,

THE EUROPEAN COMMUNITY and THE EUROPEAN ATOMIC ENERGY COMMUNITY:

Klaus KINKEL,

Federal Minister for Foreign Affairs and Deputy Federal Chancellor of the Federal Republic of Germany, President-in-Office of the Council of the European Union,

Sir Leon BRITTAN,

Member of the Commission of the European Communities,

THE EUROPEAN COAL AND STEEL COMMUNITY:

THE REPUBLIC OF ESTONIA:

Jüri LUIK,

Minister for Foreign Affairs,

WHO, having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS:

TITLE I GENERAL PRINCIPLES

Article 1

1. Respect for democratic principles and human rights, established by the Helsinki Final Act and in the Charter of Paris for a New Europe, as well as the principles of market economy, inspire the domestic and external policies of the Parties and constitute essential elements of this Agreement.

2. The Parties consider that it is essential for the future prosperity and stability of the region that the Baltic States should maintain and develop cooperation among themselves and will make every effort to enhance this process.

3. The Parties regard the implementation of this Agreement as a decisive step towards the early conclusion of a Europe Agreement between Estonia and the Community.

TITLE II FREE MOVEMENT OF GOODS

Article 2

1. The Community and Estonia shall establish a free area upon entry into force of this Agreement, in accordance with the provisions of this Agreement and in conformity with those of the General Agreement on Tariffs and Trade (GATT).

2. The combined nomenclature of goods shall be applied to the classification of goods in trade between the two Parties.

3. For each product covered by this Agreement the basic duty shall be that actually applied erga omnes on 1 January 1994.

The successive reductions set out in this Agreement are to be applied to these basic duties.

4. If, after the entry into force of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular, reductions resulting from the tariff agreement concluded as a result of the GATT Uruguay Round, such reduced duties shall replace the basic duties referred to in paragraph 3 as from the date when such reductions are applied.

5. The Community and Estonia shall communicate to each other their respective basic duties.

CHAPTER I Industrial products

Article 3

1. The provisions of this chapter shall apply to products originating in the Community and in Estonia listed in Chapters 25 to 97 of the combined nomenclature with the exception of the products listed in Annex I.

2. Trade between the Parties in items covered by the Treaty establishing the European Atomic Energy Community will be conducted in accordance with the provisions of that Treaty.

Article 4

Customs duties and quantitative restrictions on imports into the Community and measures having equivalent effect shall be abolished on the entry into force of this Agreement with regard to products originating in Estonia.

Article 5

Customs duties and quantitative restrictions on imports into Estonia and measures having an equivalent effect shall be abolished on the entry into force of this Agreement with regard to products originating in the Community.

Article 6

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

Article 7

The Community and Estonia shall abolish upon entry into force of this Agreement in trade between themselves any charges having an effect equivalent to customs duties on imports.

Article 8

1. The Community and Estonia shall abolish upon entry into force of this Agreement in trade between themselves any customs duties on exports and charges having equivalent effect.

2. The Community and Estonia shall abolish upon entry into force of this Agreement in trade between themselves quantitative restrictions on exports and any measures having equivalent effect.

Article 9

Specific arrangements applicable to the trade in textile and clothing products originating in Estonia are covered in Protocol 1.

Article 10

The provisions of this chapter do not preclude an agricultural component in the duties applicable to products listed in Annex II.

CHAPTER II Agriculture

Article 11

1. The provisions of this chapter shall apply to agricultural products originating in the Community and in Estonia.

2. The term 'agricultural products' means the products listed in Chapter 1 to 24 of the combined nomenclature and the products listed in Annex I, but excluding fishery products as defined by Regulation (EEC) No 3759/92.

Article 12

Protocol 2 lays down the trade arrangements for processed agricultural products which are listed therein.

Article 13

1. As from the date of entry into force of this Agreement no quantitative restrictions shall apply to imports into the Community of agricultural products originating in the Community.

2. The concessions granted under this Agreement are referred to in Annexes III, IV and V.

3. The concessions referred to in paragraph 2 may be subject to revision by agreement between the Parties within three years after entry into force of this Agreement and on the basis of the principles and procedures set out in paragraph 4.

4. Taking account of the volume of trade in agricultural products between them, of their particular sensitivity, of the rules of the common agricultrual policy of the Community, of the rules of the agricultural policy in Estonia, of the role of agriculture in Estonia's economy, the Community and Estonia shall examine in the Joint Committee, product by product and on an orderly and reciprocal basis, the possibilities of granting each other further concessions.

Article 14

Notwithstanding other provisions of this Agreement, and in particular Article 23, if, given the particular sensitivity of the agricultural markets, imports of products originating in one Party, which are the subject of concessions granted pursuant to Article 13, cause serious disturbance to the markets in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such a solution, the Party concerned may take the measures it deems necessary.

CHAPTER III Fisheries

Article 15

The provisions of this chapter shall apply to fishery products originating in the Community and in Estonia, which are covered by Regulation (EEC) No 3759/92.

Article 16

1. The concessions granted under this Agreement are referred to in Annex VI.

2. The provisions of Articles 13 (4), 14 and Articles 18 (2) and (3) shall apply mutatis mutandis to fishery products.

CHAPTER IV Common provisions

Article 17

The provisions of this title shall apply to trade in all products except where otherwise provided herein or in Protocols 1 and 2.

Article 18

1. In trade between the Community and Estonia from the date of entry into force of this Agreement:

- no new customs duties on imports or exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased,

- no new quantitative restrictions on imports or exports or measures having equivalent effect shall be introduced nor shall those existing be made more restrictive.

2. Without prejudice to the concessions granted pursuant to Article 13, the provisions of paragraph 1 of this Article shall not restrict in any way the pursuance of the respective agricultural policies of Estonia and the Community or the taking of any measures under such policies.

3. Taking account of the Estonian tariff structure at the time of the entry into force of this Agreement, where no tariff duties are provided for agricultural products, in the event that a new tariff regime for the import of agricultural products is established, Estonia may, by way of derogation from paragraph 1 and pursuant to the implementation of its agricultural policy for its domestic production, introduce duties on a limited number of agricultural products originating in the Community. Such duties may only be introduced during the first two years following the entry into force of this Agreement, and after consultation in the Joint Committee. In all such cases, Estonia shall ensure a sizeable margin of preference for products originating in the Community. If necessary, the period of two years may be prolonged by one year by decision of the Joint Committee.

Article 19

1. The two Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

2. Products exported to the territory of one of the two Parties may not benefit from repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them.

Article 20

1. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.

2. Consultations between the Parties shall take place within the Joint Committee concerning agreements establishing such customs unions or free trade areas and, where requested, on other major issues related to their respective trade policies with third countries. In particular in the event of a third country acceding to the Community, such consultations shall take place so as to ensure that account can be taken of the mutual interests of the Community and Estonia stated in this Agreement.

Article 21

Exceptional measures of limited duration which derogate from the provisions of Article 5 and Article 18 (1), first indent, may be taken by Estonia in the form of increased customs duties.

These measures may only concern infant industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly where these difficulties produce important social problems.

Customs duties on imports applicable in Estonia to products originating in the Community introduced by these measures may not exceed 25 % ad valorem and shall maintain an element of preference for products originating in the Community.

The total value of imports of the products which are subject to these measures may not exceed 15 % of total imports of industrial products from the Community as defined in Chapter I during the last year for which statistics are available.

These measures shall be applied for a period not exceeding two years unless a longer duration is authorized by the Joint Committee. They shall cease to apply at the latest three years after entry into force of this Agreement.

No such measures can be introduced in respect of a product if more than three years have elapsed since the elimination of all duties and quantitative restrictions or charges or measures having an equivalent effect concerning that product.

Estonia shall inform the Joint Committee of any exceptional measures it intends to take and, at the request of the Community, consultations shall be held in the Joint Committee on such measures and the sectors to which they apply before they are applied. When taking such measures Estonia shall provide the Joint Committee with a schedule for the elimination of the customs duties introduced under this Article. The Joint Committee may decide on a different schedule.

Article 22

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the General Agreement on Tarifs and Trade, it may take appropriate measures against this practice in accordance with the Agreement relating to the application of Article VI of the General Agreement on Tariffs and Trade, with related internal legislation and with the conditions and procedures laid down in Article 26.

Article 23

Where any product is being imported in such increased quantities and under such conditions as to cause or threaten to cause:

- serious injury to domestic producers of like or directly competitive products in the territory of one of the Parties, or

- serious disturbances in any sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region,

the Community or Estonia, whichever is concerned, may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 26.

Article 24

Where compliance with the provisions of Articles 8 and 18 leads to:

(i) re-export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties or measures having equivalent effect; or

(ii) a serious shortage, or threat thereof, of a product essential to the exporting Party;

and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 26. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.

Article 25

The Member States of the European Union (hereinafter referred to as 'the Member States') and Estonia shall progressively adjust any State monopolies of a commercial character so as to ensure that, by the end of the fifth year following the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of Estonia. The Joint Committee will be informed about the measures adopted to implement this objective.

Article 26

1. In the event of the Community or Estonia subjecting imports of products liable to give rise to the difficulties referred to in Article 23 to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.

2. In the cases specified in Articles 22, 23 and 24, before taking the measures provided for therein or, in cases to which paragraph 3(d) applies, as soon as possible, the Community or Estonia, as the case may be, shall supply the Joint Committee with all relevant information with a view to seeking a solution acceptable to the two Parties.

In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement.

The safeguard measures shall be notified immediately to the Joint Committee and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their abolition as soon as circumstances permit.

3. For the implementation of paragraph 2, the following provisions shall apply:

(a) as regards Article 23, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Joint Committee, which may take any decision needed to put an end to such difficulties.

If the Joint Committee or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures must not exceed the scope of what is necessary to remedy the difficulties which have arisen;

(b) as regards Article 22, the Joint Committee shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. If no end has been put to the dumping or if no other satisfactory solution has been reached within 30 days of the matter being referred to the Joint Committee, the importing Party may adopt the appropriate measures;

(c) as regards Article 24, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Joint Committee.

The Joint Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within 30 days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned;

(d) where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Estonia whichever is concerned may, in the situations specified in Articles 22, 23 and 24, apply forthwith the precautionary measures strictly necessary to deal with the situation.

Article 27

Protocol 3 lays down rules of origin for the application of the tariff preferences provided for in this Agreement as well as the methods of administrative cooperation therewith.

Article 28

This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 29

Protocol 4 lays down the specific provisions to apply to trade between Estonia of the one part and Spain and Portugal of the other part, and it will be valid until 31 December 1995.

TITLE III PAYMENTS, COMPETITION AND OTHER ECONOMIC PROVISIONS

Article 30

The Parties undertake to authorize, in freely convertible currency, any payments on the current account of balance of payments to the extent that the transaction underlying the payments concerns movements of goods between the Parties which have been liberalized pursuant to this Agreement.

Article 31

With reference to the provisions of this chapter, and notwithstanding the provisions of Article 32, until a full convertibility of the Estonian currency in the meaning of Article VIII of the Articles of Agreement on the International Monetary Fund (IMF) is introduced, Estonia may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term credits to the extent that such restrictions are imposed on Estonia for the granting of such credits and are permitted according to Estonia's status under the IMF.

Estonia shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. Estonia shall inform the Joint Committee promptly of the introduction of such measures and of any changes therein.

Article 32

1. The following are incompatible with the proper functioning of this Agreement, in so far as they may affect trade between the Community and Estonia:

(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;

(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or of Estonia as a whole or in a substantial part thereof;

(iii) any public aid, which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 85, 86 and 92 of the Treaty establishing the European Community or, for products covered by the ECSC Treaty, on the basis of corresponding rules of the ECSC Treaty including secondary legislation.

3. The Joint Committee shall, within three years of the entry into force of this Agreement, adopt by decision the necessary rules for the implementation of paragraphs 1 and 2.

Until these rules are adopted, the provisions of this Agreement on interpretation and application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade shall be applied as the rules for the implementation of paragraphs 1 point (iii) and related parts of paragraph 2.

4. (a) For the purposes of applying the provisions of paragraph 1 point (iii), the Parties recognize that during the first five years after the entry into force of this Agreement, any public aid granted by Estonia shall be assessed taking into account the fact that Estonia shall be regarded as an area identical to those areas of the Community described in Article 92 (3) (a) of the Treaty establishing the European Community. The Joint Committee shall, taking into account the economic situation of Estonia, decide whether that period should be extended by further periods of three years.

(b) Each Party shall ensure transparency in the area of public aid, inter alia by reporting annually to the other Party on the total amount and the distribution of the aid given and by providing, upon request, information on aid schemes. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.

5. With regard to products referred to in Chapters II and III of Title II:

- the provision of paragraph 1 point (iii) does not apply,

- any practices contrary to paragraph 1 point (i) should be assessed according to the criteria established by the Community on the basis of Articles 42 and 43 of the Treaty establishing the European Community and in particular of those established in Council Regulation No 26.

6. If the Community or Estonia considers that a particular practice is incompatible with the terms of the first paragraph of this Article, and

- is not adequately dealt with under the implementing rules referred to in paragraph 3, or

- in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to the interests of the other Party or material injury to its domestic industry, including its services industry,

it may take appropriate measures after consultation within the Joint Committee or after 30 working days following referral for such consultation.

In the case of practices incompatible with paragraph 1 point (iii) of this Article, such appropriate measures may, where the General Agreement on Tariffs and Trade applies thereto, only be adopted in conformity with the procedures and under the conditions laid down by the General Agreement on Tariffs and Trade and any other relevant instrument negotiated under its auspices which are applicable between the Parties.

7. Notwithstanding any provisions to the contrary adopted in conformity with paragraph 3, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.

Article 33

1. The Parties shall endeavour to avoid the imposition of restrictive measures including measures relating to imports for balance of payments purposes. In the event of their introduction, the Party having introduced the same shall present to the other Party as soon as possible, a time schedule for their removal.

2. Where one or more Member States or Estonia is in serious balance of payments difficulties, or under imminent threat thereof, the Community or Estonia, as the case may be, may, in accordance with the conditions established under the General Agreement on Tariffs and Trade, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is necessary to remedy the balance of payments situation. The Community or Estonia, as the case may be, shall inform the other Party forthwith.

Article 34

With regard to public undertakings, and undertakings to which special or exclusive rights have been granted, the Joint Committee shall ensure that as from the fourth year following the date of entry into force of this Agreement, the principles of the Treaty establishing the European Community, notably Article 90, and the principles of the concluding document of the April 1990 Bonn meeting of the Conference on Security and Cooperation in Europe, notably entrepreneurs' freedom of decision, are upheld.

Article 35

1. The Parties commit themselves to developing customs cooperation in order to achieve the approximation of Estonis's customs system to that of the Community.

2. Cooperation shall include the following in particular:

- the exchange of information, including on the methods of investigation,

- the organization of seminars and placements,

- the introduction of the single administrative document and the interconnection between the transit system of the Community and that of Estonia,

- the simplification of the inspections and formalities in respect of the carriage of goods.

Technical assistance shall be provided where appropriate.

3. The Parties will provide mutual administrative assistance in accordance with the provisions of Protocol 5.

Article 36

1. The Parties recognize that an important condition for the establishment of free trade between Estonia and the Community and the further economic integration of the former into the Community is the approximation of Estonia's existing and future legislation to that of the Community. Estonia shall endeavour to ensure that its trade and trade-related legislation will be gradually made compatible with that of the Community.

2. The approximation of laws shall extend to the following areas in particular: dumping, rules on competition, customs legislation, technical rules and standards.

3. The Community shall provide Estonia with technical assistance for the implementation of these measures, which may include inter alia:

- the exchange of experts,

- the provision of early information especially on relevant legislation,

- organization of seminars,

- training activities,

- aid for the translation of Community legislation in the relevant sectors.

TITLE IV INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 37

The Joint Committee set up by the Agreement on Trade and Commercial and Economic Cooperation signed between the European Economic Community and Estonia on 11 May 1992 shall perform the duties assigned to it by this Agreement.

Article 38

The Joint Committee shall, for the purpose of attaining the objectives of this Agreement, have the power to take decisions in the cases provided for therein. The decisions taken shall be binding on the Parties which shall take the measures necessary to implement the decisions taken. The Joint Committee may also make appropriate recommendations.

It shall draw up its decisions and recommendations by agreement between the two Parties.

Article 39

1. Each of the two Parties may refer to the Joint Committee any dispute relating to the application or interpretation of this Agreement.

2. The Joint Committee may settle the dispute by means of a decision.

3. Each Party shall be bound to take the measures involved in carrying out the decision referred to in paragraph 2.

4. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within two months.

The Joint Committee shall appoint a third arbitrator.

The arbitrator's decisions shall be taken by majority vote.

Each Party to the dispute must take the steps required to implement the decision of the arbitrators.

Article 40

Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights, including those concerning intellectual, industrial and commercial property.

Article 41

Nothing in this Agreement shall prevent a Party from taking any measures:

(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;

(b) which relate to the production of, or trade in, arms, ammunition or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes;

(c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security;

(d) which it considers necessary to respect its international obligations and commitments on the control of dual use industrial goods and technologies.

Article 42

In the fields covered by this Agreement and without prejudice to any special provisions contained therein:

- the arrangements applied by Estonia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals, or their companies or firms,

- the arrangements applied by the Community in respect of Estonia shall not give rise to any discrimination between Estonia nationals or its companies or firms.

Article 43

Products originating in Estonia shall not enjoy more favourable treatment when imported into the Community than that applied by Member States among themselves.

Article 44

1. The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.

2. If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. These measures shall be notified immediately to the Joint Committee and shall be the subject of the consultations within the Joint Committee if the other Party so requests.

Article 45

Protocols 1, 2, 3, 4, 5 and 6 and Annexes I to VI shall form an integral part of this Agreement.

Article 46

This Agreement is concluded for an unlimited period.

Either Party may denounce this Agreement by notifying the other Party. This Agreement shall cease to apply six months after the date of such notification.

Article 47

This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, the European Atomic Energy Community and the European Coal and Steel Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of the Republic of Estonia.

Article 48

This Agreement is drawn up in duplicate in the Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Estonian languages, each of these texts being equally authentic.

Article 49

This Agreement will be approved by the Parties in accordance with their own procedures.

This Agreement shall enter into force after approval by the Parties on 1 January 1995.

Should this Agreement not be approved in due time before 1 January 1995, it shall enter into force on the first day of the month following approval by both Parties.

The Parties shall forthwith notify each other the completion of their approval procedures.

Upon its entry into force, the Agreement on Trade and Economic and Commercial Cooperation signed between the European Economic Community and Estonia in Brussels on 11 May 1992 shall be modified as follows:

- Articles 3 and 5 to 12 inclusive as well as Article 13 (1) and (4) are rescinded,

- in Article 4 the words 'trade and other' are rescinded,

- in Article 13 (2) the words 'In furtherance of the aims of this Article and' are rescinded.

Article 50

1. In the event that this Agreement enters into force after 1 January but on 31 December 1995 at the latest for the purposes of Titles II and III of this Agreement and Protocols 1, 2, 3, 4, 5 and 6 hereto, the terms 'date of entry into force of this Agreement' shall mean:

- the date of entry into force in relation to obligations taking effect on that date, and

- 1 January 1995 in relation to obligations taking effect after the date of entry into force by reference to the date of entry into force.

2. In the case of entry into force after 1 January 1995, the provisions of Protocol 6 shall apply.

Hecho en Bruselas, el dieciocho de julio de mil novecientos noventa y cuatro.

Udfærdiget i Bruxelles, den attende juli nitten hundrede og fireoghalvfems.

Geschehen zu Brüssel am achtzehnten Juli neunzehnhundertvierundneunzig.

¸ãéíå óôéò ÂñõîÝëëåò, óôéò äÝêá ïêôþ Éïõëßïõ ÷ßëéá åííéáêüóéá åíåíÞíôá ôÝóóåñá.

Done at Brussels on the eighteenth day of July in the year one thousand nine hundred and ninety-four.

Fait à Bruxelles, le dix-huit juillet mil neuf cent quatre-vingt-quatorze.

Fatto a Bruxelles, addì diciotto luglio millenovecentonovantaquattro.

Gedaan te Brussel, de achttiende juli negentienhonderd vierennegentig.

Feito em Bruxelas, em dezoito de Julho de mil novecentos e noventa e quatro.

Allakirjutatud Brüsselis juulikuu kaheksateistkümnendal päeval tuhande üheksasaja üheksakümne neljandal aastal.

Por las Comunidades Europeas

For De Europæiske Fællesskaber

Für die Europäischen Gemeinschaften

Ãéá ôéò ÅõñùðáúêÝò Êïéíüôçôåò

For the European Communities

Pour les Communautés européennes

Per le Comunità europee

Voor de Europese Gemeenschappen

Pelas Comunidades Europeias

Euroopa Ühenduste nimel

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Por la República de Estonia

For Republikken Estland

Für die Republik Estland

Ãéá ôç Äçìïêñáôßá ôçò Åóèïíßáò

For the Republic of Estonia

Pour la république d'Estonie

Per la Repubblica di Estonia

Voor de Republiek Estland

Pela República da Estónia

Eesti Vabariigi nimel

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ANNEX I

List of products referred to in Articles 3 and 11 of the Agreement

>TABLE>

ANNEX II

Goods referred to in Article 10 Goods for which the Community retains an agricultural component in the duties

>TABLE>

ANNEX III

List of products referred to in Article 13 (2)

>TABLE>

Annex to Annex III

Maximum import price arrangement for certain soft fruit for processing

1. Minimum import prices are fixed for each marketing year for the following products:

0810 30 10 Blackcurrants

0810 40 30 Bilberries

0810 40 50 Fruit of species Vaccinium macrocarpon and Vaccinium corymbosum

The minimum import prices are fixed by the Community in consultation with Estonia taking into consideration the price evolution, imported quantities and market development in the Community.

2. The minimum import prices shall be respected in accordance with the following criteria:

- during each three-month period of the marketing year the average unit value for each product listed in paragraph 1, imported into the Community, shall not be lower than the minimum import price for that product,

- during any period of two weeks the average unit value for each product listed in paragraph 1, imported in the Community shall not be lower than 90 % of the minimum import price for that product, in so far as the quantities imported during this period are not less than 4 % of the normal annual import.

3. In case of non-respect of one of these criteria the Community may introduce measures ensuring that the minimum import price is respected for each consignment of the product concerned imported from Estonia.

ANNEX IV

Products referred to in Article 13 (2)

Arrangements for imports of live bovine animals, bovine meat, sheep and goatmeat into the Community

1. Independently of the balance sheet arrangements foreseen in Regulation (EEC) No 805/68, a global tariff quota of 3 500 heads of live bovine animals for fattening or for slaughter, with a live weight of not less than 160 kg and not more than 300 kg, falling within CN code 0102, shall be opened to imports from Latvia, Lithuania and Estonia.

The reduced levy or specific duty rate applicable to animals under this quota shall be fixed at 25 % of the full amount of the levy or the specific duty rate.

2. In case forecasts show that imports into the Community may exceed 425 000 head for any given year, the Community may take safeguard measures in accordance with Regulation (EEC) No 805/68, not withstanding any other rights given under this Agreement.

3. A global tariff quota of 1 500 tonnes of meat of bovine animals, fresh, chilled or frozen, falling within CN codes 0201 and 0202, shall be opened to imports from Latvia, Lithuania and Estonia.

The reduced duty-rate and levy or specific duty rate applicable under this quota shall be fixed at 40 % of their full amount.

4. Within the framework of the autonomous import arrangements provided for in Regulation (EEC) No 3643/85, a global quota of 100 tonnes of meat of sheep or goats, fresh, chilled or frozen, falling within CN code 0204, shall be reserved for Latvia, Lithuania and Estonia.

ANNEX V

Products referred to in Article 13 (2)

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ANNEX VI

List of products referred to in Article 16 (1)

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PROTOCOL 1 on trade in textiles and clothing products

Article 1

Imports into the Community of textile products listed in Annex I and originating in Estonia shall not be subject for the duration of this Protocol in quantitative limits or measures of equivalent effect, unless otherwise provided for in this Protocol.

Article 2

1. Should quantitative limits be introduced, exports to the Community of the textile products of Estonian origin made subject to quantitative limits shall be subject to a double-checking system as specified in Appendix A.

2. At the time of entry into force of this Protocol, exports to the Community of products of Estonian origin, listed in Annex II not subject to quantitative limits shall be subject to surveillance through the double-checking system referred to in paragraph 1 above.

3. Following consultations in accordance with the procedures set out in Article 15, exports to the Community of products of Estonian origin covered by Annex I other than those listed in Annex II, may be made subject by the Community to surveillance through the double-checking system referred to in paragraph 1 or to a prior surveillance system.

Article 3

1. Imports into the Community of textile products covered by this Protocol shall not be subject to the quantitative limits established under this Protocol, provided that they are declared to be for re-export outside the Community in the same state or after processing, within the framework of the administrative system of control which exists within the Community.

However, the release for home use of products imported into the Community under the conditions referred to above shall be subject to the production of an export licence issued by the authorities of Estonia, and to proof of origin in accordance with the provisions of Appendix A.

2. Where the Community authorities ascertain that imports of textile products have been set off against a quantitative limit established under this Protocol, but that the products have subsequently been re-exported outside the Community, the authorities shall inform the Estonian authorities within four weeks of the quantities involved and authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established under this Protocol for the current or the following year, as appropriate.

3. The Community and Estonia recognize the special and differential character of reimports of textile products into the Community after processing in Estonia as a specific form of industrial and trade cooperation.

Should quantitative limits be established under Article 5, provided that they are effected in accordance with the regulations on economic outward processing in force in the Community, these reimports shall not be subject to these quantitative limits if they are subject to the specific arrangements laid down in Appendix C.

Article 4

Should quantitative limits be introduced under Article 5, the following provisions shall apply:

1. In any Protocol year advance use of a portion of the quantitative limit established for the following Protocol year is authorized for each category of products up to 5 % of the quantitative limit for the current Protocol year.

Amounts delivered in advance shall be deducted from the corresponding quantitative limits established for the following Protocol year.

2. Carryover to the corresponding quantitative limit for the following Protocol year of the amounts not used during any Protocol year is authorized for each category of products up to 7 % of the quantitative limit for the current Protocol year.

3. Transfers in respect of categories in Group I shall not be made from any category except as follows:

- transfers between categories 2 and 3 and from category 1 to categories 2 and 3 may be made up to 4 % of the quantitative limits for the category to which the transfer is made,

- transfers between categories 4, 5, 6, 7 and 8 may be made up to 4 % of the quantitative limit for the category to which the transfer is made.

Transfers into any category in Groups II, III, IV and V may be made from any category or categories in Groups I, II, III, IV and V up to 5 % of the quantitative limit for the category to which the transfer is made.

4. The table of equivalence applicable to the transfers referred to above is given in Annex I to this Protocol.

5. The increase in any category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3 above during a Protocol year shall not exceed the following limits:

- 13 % for categories of products in Group I,

- 13,5 % for categories of products in Groups II, III, IV and V.

6. Prior notification shall be given by the Estonian authorities in the event of recourse to the provisions of paragraphs 1, 2 and 3 above, at least 15 days in advance.

Article 5

1. Exports of textile products listed in Annex I to this Protocol may be made subject to quantitative limits on the conditions laid down in the following paragraphs.

2. Should imports of textile products originating in Estonia and covered by this Protocol take place in such increased quantities, or under such conditions, so as to cause serious damage or actual threat thereof to the Community's production of like or directly competitive products, the Community may request consultations under Article 15 of this Protocol with a view to reaching agreement or an appropriate quantitative limit for the textile category in question.

3. Pending a mutually satisfactory solution, Estonia undertakes, from the date of notification of the request for consultations, to suspend or limit at the level indicated by the Community, exports of the category of products in question to the Community or the region or regions of the Community market specified by the Community.

The Community shall authorize the importation of products of the said category shipped from Estonia before the date on which the request for consultations was submitted.

4. Should the Parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 15, the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than 106 % of the level of imports reached during the calendar year preceding that in which the imports gave rise to the request for consultations.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 15, should the trend of total imports into the Community of the product in question make this necessary.

5. The annual growth rate for the quantitative limits introduced under this Article shall be fixed by agreement between the Parties in accordance with the consultation procedures established in Article 15.

6. In the event of the provisions of paragraphs 2, 3 or 4 being applied, Estonia undertakes to issue export licences for products covered by contracts concluded before the introduction of the quantitative limit, up to the volume of the quantitative limit fixed.

7. Up to the date of communication of the statistics referred to in Article 12 (6), the provisions of paragraph 2 of this Article shall apply on the basis of the annual statistics previously communicated by the Community.

Article 6

1. In view of ensuring the effective functioning of this Protocol, the Community and Estonia agreed to cooperate fully in order to prevent, to investigate and to take any necessary legal and/or administrative action against circumvention by transhipment, re-routing, false declaration concerning the country or place of origin, falsification of documents, false declaration concerning fibre content, quantities description or classification of merchandise and by whatever other means. Accordingly, the Community and Estonia agree to establish the necessary legal provisions and administrative procedures permitting effective action to be taken against such circumvention, which shall include the adoption of legally binding corrective measures against exporters and/or importers involved.

2. Should the Community believe on the basis of information available that the present Protocol is being circumvented, the Community will consult with Estonia with a view to reaching a mutually satisfactory solution. These consultations will be held as early as possible and at the latest within 30 days from the date of request.

3. Pending the results of the consultations referred to in paragraph 2, Estonia shall, as a precautionary measure, if so requested by the Community, take all necessary measures to ensure that, where sufficient evidence of circumvention is provided, adjustments of quantitative limits established under Article 5 liable to be agreed following the consultations referred to in paragraph 2 may be carried out for the quota year in which the request to open consultations in accordance with paragraph 2 was made, or for the following year if the quota for the current year is exhausted.

4. Should the Parties be unable, in the course of the consultation referred to in paragraph 2 to reach a mutually satisfactory solution, the Community shall have the right:

(a) Where there is sufficient evidence that products originating in Estonia have been imported in circumvention of the present Protocol, to set off the relevant quantities against the quantitative limits established under Article 5;

(b) Where sufficient evidence shows that a false declaration concerning fibre content, quantities, description or classification of products originating in Estonia has occurred, to refuse to import the products in question;

(c) Should it appear that the territory of Estonia is involved in transhipment or re-routing of products not originating in Estonia, to introduce quantitative limits against the same products originating in Estonia if they are not already subject to quantitative limits, or to take any other appropriate measures.

5. The Parties agree to establish a system of administrative cooperation to prevent and to address effectively all problems arising from circumvention in accordance with the provisions of Appendix A of this Protocol.

Article 7

1. The quantitative limits established under this Protocol on imports into the Community of textile products of Estonian origin will not be broken down by the Community into regional shares.

2. The Parties shall cooperate in order to prevent sudden and prejudicial changes in traditional trade flows resulting in regional concentration of direct imports into the Community.

3. Estonia shall monitor its exports of products under restraint or surveillance into the Community. Should a sudden and prejudicial change in traditional trade flows arise, the Community will be entitled to request consultations in order to find a satisfactory solution to those problems. Such consultations must be held within 15 working days of their being requested by the Community.

4. Estonia shall endeavour to ensure that exports of textile products subject to quantitative limits into the Community are spaced out as evenly as possible over the year, due account being taken in particular of seasonal factors.

Article 8

In the event of denunciation of this Protocol as provided for in Article 18 (1), the quantitative limits established pursuant to this Protocol shall be reduced on a pro rata temporis basis unless the Parties decide otherwise by common agreement.

Article 9

Estonian exports of cottage-industry fabrics woven on hand or foot-operated looms, garments or other made-up articles obtained manually from such fabrics and of traditional folklore handicraft products shall not be subject to quantitative limits, provided that these products originating in Estonia meet the conditions laid down in Appendix B.

Article 10

1. Should the Community consider that a textile product covered by this Protocol is being imported into the Community from Estonia at a price abnormally lower than the normal competitive level and is for this reason causing or threatening to cause serious injury to Community producers of like or directly competitive products, it may request consultations under Article 15, and in that event the following specific provisions shall be applicable.

2. If following such consultations it is acknowledged by common accord that the situation described in paragraph 1 exists, Estonia shall take, within the limits of its powers, the necessary steps, notably as regards the price at which the product in question will be sold, to remedy the situation.

3. In order to determine whether the price of a textile product is abnormally lower than the normal competitive level, it may be compared with:

- the prices generally charged for like products sold under the ordinary conditions by other exporting countries on the market of the importing country,

- the prices of like national products at a comparable marketing stage on the market of the importing country,

- the lowest prices charged by a third country for the same product in the course of ordinary commercial dealings in the three months preceding the request for consultations, and not having led to the adoption of any measure by the Community.

4. Should the consultations referred to in paragraph 2 above fail to lead to agreement within 30 days of the Community's request for consultations, the Community may, until these consultations have produced a mutually satisfactory solution, temporarily refuse consignments of the product in question at prices under the conditions referred to in paragraph 1 above.

5. In totally exceptional and critical circumstances, where consignments of products are being imported from Estonia into the Community at prices abnormally lower than the normal competitive level, such as to cause injury which it would be difficult to repair, the Community may temporarily suspend imports of the products concerned pending agreement on a solution in the course of consultations, which shall be opened immediately. The Parties shall do their utmost to reach a mutually acceptable solution within 10 working days' notice of the opening of such consultations.

6. Should the Community have recourse to the measures referred to in paragraphs 4 and 5 above, Estonia may at any time request the opening of consultations to examine the possibility of eliminating or modifying these measures where the causes which made them necessary no longer exist.

Article 11

1. The classification of the products covered by this Protocol is based on the tariff and statistical nomenclature of the Community (hereinafter called the 'combined nomenclature', or in abbreviated form 'CN') and any amendments thereof.

Where any decision on classification results in a change of classification practice or a change of category of any product subject to this Protocol, the affected products shall follow the trade regime applicable to the practice or category they fall into after such changes.

Any amendment to the combined nomenclature (CN) made in accordance with the procedures in force in the Community concerning categories of products covered by this Protocol or any decision relating to the classification of goods shall not have the effect of reducing quantitative limits introduced pursuant to this Protocol.

2. The origin of the products covered by this Protocol shall be determined in accordance with the rules in force in the Community.

Any amendment to these rules of origin shall be communicated to Estonia and shall not have the effect of reducing any quantitative limit established pursuant to this Protocol.

The procedures for control of the origin of the products referred to above are laid down in Appendix A.

Article 12

1. Estonia shall supply the Commission of the European Communities with precise statistical information on all export licences issued for categories of textile products subject to the quantitative limits established under this Protocol, or to a double-checking system expressed in quantities and in terms of value and broken down by Member States of the Community, as well as on all certificates, issued by the competent Estonian authorities for products referred to in Article 9 and subject to the provisions of Appendix B.

2. The Community shall likewise transmit to the Estonian authorities precise statistical information on import authorizations issued by the Community authorities and import statistics for products covered by the system referred to in Article 5 (2).

3. The information referred to above shall, for all categories of products, be forwarded before the end of the month following the month to which the statistics relate.

4. Upon request by the Community, Estonia shall supply import statistics for all products covered by Annex I.

5. Should it be found on analysis of the information exchanged that there are significant discrepancies between the returns for exports and those for imports, consultations may be initiated in accordance with the procedure specified in Article 15 of this Protocol.

6. For the purpose of applying the provisions of Article 5, the Community undertakes to provide the Estonian authorities before 15 April of each year with the preceding year's statistics on imports of all textile products covered by this Protocol, broken down by supplying country and Community Member State.

Article 13

Estonia shall refrain from discrimination in the allocation of the export licences or documents referred to in Appendices A and B.

Article 14

The Parties agree to examine the trend of trade in textile and clothing products each year, in the framework of the consultations provided for in Article 15 and on the basis of the statistics referred to in Article 12.

Article 15

1. Save where it is otherwise provided for in this Protocol, the consultation procedure referred to in this Protocol shall be governed by the following provisions:

- as far as possible consultations shall be held periodically. Specific additional consultations may also be held,

- any request for consultations shall be notified in writing to the other Party,

- where appropriate, the request for consultations shall be followed within a reasonable period and in any case not later than 15 days following the notification by a report setting out the circumstances which, in the opinion of the requesting Party, justify the submission of such a request,

- the Parties shall enter into consultations within one month of notification of the request at the latest, with a view to reaching agreement or a mutually acceptable conclusion within one further month at the latest,

- the period of one month referred to above for the purpose of reaching agreement or a mutually acceptable conclusion may be extended by common accord.

2. The Community may request consultations in accordance with paragraph 1 when it ascertains that during a particular year of application of the Protocol difficulties arise in the Community or one of its regions due to a sharp and substantial increase, by comparison to the preceding year, in imports of a given category of Group I subject to the quantitative limits established pursuant to this Protocol.

3. At the request of either Party, consultations shall be held on any problems arising from the application of this Protocol. Any consultations held under this Article shall take place in a spirit of cooperation and with a desire to reconcile the differences between the Parties.

Article 16

The Parties undertake to promote the exchange of visits by persons, groups and delegations from business, trade and industry, to facilitate contacts in the industrial, commercial and technical fields connected with trade and cooperation in the textile industry and textile and clothing products, and to assist in the organization of fairs and exhibitions of mutual interest.

Article 17

As regards intellectual property, at the request of either Party, consultations shall be held in accordance with the procedure laid down in Article 15 with a view to finding an equitable solution to problems relating to the protection of marks, designs or models of articles of textile and clothing products.

Article 18

1. Either Party may at any time propose modifications to this Protocol or denounce it, provided that at least six months' notice is given. In that event, the Protocol shall come to an end on the expiry of the period of notice.

2. The Annexes, Appendices and Agreed Minutes attached to this Protocol, shall form an integral part thereof.

ANNEX I

PRODUCTS REFERRED TO IN ARTICLE 1

1. Without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within this Annex, by CN codes. Where there is an 'ex' symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

2. Garments which are not recognizable as being garments for men or boys or as being garments for women or girls are classified with the latter.

3. Where the expression 'babies' garments' is used, this is meant to cover garments up to and including commercial size 86.

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ANNEX II

Products without quantitative limits subject to the double-checking system referred to in Article 2 (2) of this Protocol

(The full product descriptions of the categories listed in this Annex are to be found in Annex I of this Protocol.)

Categories

1

2

3

4

5

6

7

8

9

13

20

39

117

118

Appendix A

TITLE I CLASSIFICATION

Article 1

1. The competent authorities of the Community undertake to inform Estonia of any changes in the combined nomenclature (CN) before the date of their entry into force in the Community.

2. The competent authorities of the Community undertake to inform the competent authorities of Estonia of any decisions relating to the classification of products subject to the present Protocol, within one month of their adoption at the latest. Such communication shall include:

(a) a description of the products concerned;

(b) the relevant category and the related CN codes;

(c) the reasons which have led to the decision.

3. Where a decision on classification results in a change of classification practice or a change of category of any product subject to the Protocol, the competent authorities of the Community shall provide 30 days' notice, from the date of the Community's communication, before the decision is put into effect. Products shipped before the date of entry into effect of the decision shall remain subject to the earlier classification practice, provided that the goods in question are presented for importation into the Community within 60 days of that date.

4. Where a Community decision on classification resulting in a change of classification practice or a change of categorization of any product subject to the Protocol affects a category subject to quantitative limits, the Parties agree to enter into consultation in accordance with the procedures described in Article 15 of the Protocol with a view to honouring the obligation under the second subparagraph of Article 11 (1) of the Protocol.

5. In case of divergent opinions between the competent Community and Estonian authorities at the point of entry into the Community on the classification of products covered by the present Protocol, classification shall provisionally be based on indications provided by the Community, pending consultations in accordance with Article 15 with a view to reaching agreement on definitive classification of the products concerned.

TITLE II ORIGIN

Article 2

1. Products originating in Estonia for export to the Community in accordance with the arrangements established by this Protocol shall be accompanied by a certificate of Estonian origin conforming to the model annexed to this Appendix.

2. The certificate of origin shall be certified by the competent Estonian organizations authorized under the Estonian legislation if the products in question can be considered products originating in that country within the meaning of the relevant Community rules.

3. However, the products in Groups III, IV and V may be imported into the Community in accordance with the arrangements established by this Protocol on production of a declaration by the exporter on the invoice or other commercial document relating to the products to the effect that the products in question originate in Estonia within the meaning of the relevant Community rules.

4. The certificate of origin referred to in paragraph 1 shall not be required for import of goods covered by a movement certificate EUR. 1 or Form EUR. 2 completed in accordance with the relevant Community rules.

Article 3

The certificate of origin shall be issued only on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorized representative. The competent Estonian organizations authorized under Estonian legislation shall ensure that the certificate of origin is properly completed and for this purpose they shall call for any necessary documentary evidence or carry out any check which they consider appropiate.

Article 4

Where different criteria for determining origin are laid down for products falling within the same category, the certificates or declarations of origin must contain a sufficiently detailed description of the goods so as to enable the criterion to be determined, on the basis of which the certificate was issued or the declaration drawn up.

Article 5

The discovery of slight discrepancies between the statements made in the certificate of origin and those made in the documents produced to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto cast doubt upon the statements in the certificate.

TITLE III DOUBLE-CHECKING SYSTEM

Section I Exportation

Article 6

The competent authorities of Estonia shall issue an export licence in respect of all consignments from Estonia of textile products subject to any definitive or provisional quantitative limits established pursuant to Article 5 of the Protocol, up to the relevant quantitative limits as may be modified by Articles 4, 6 and 8 of the Protocol, as well as of all consignments of textile products subject to a double-checking system without quantitative limits as provided for in Article 2(2) and (3) of the Protocol.

Article 7

1. For products subject to quantitative limits under this Protocol the export licence shall conform to the model 1 annexed to this Appendix and it shall be valid for exports throughout the customs territory to which the Treaty establishing the European Community applies. However, where the Community has made recourse to the provisions of Articles 5 and 7 of the Protocol in accordance with the provision of the Agreed Minute No 1, or to the Agreed Minute No 2, the textile products covered by the export licences can only be put into free circulation in the region(s) of the Community indicated in those licences.

2. Where quantitative limits have been introduced pursuant to this Protocol, each export licence must certify inter alia that the quantity of the product in question has been set off against the quantitative limit established for the category of the products concerned and shall only cover one category of products subject to quantitative limits. It may be used for one or more consignments of the products in question.

3. For products subject to a double-checking system without quantitative limits the export licence shall conform to the model 2 annexed to this Appendix. It shall only cover one category of products and may be used for one or more consignments of the products in question.

Article 8

The competent authorities of the Community must be informed immediately of the withdrawal or modification of any export licence already issued.

Article 9

1. Exports of textile products subject to quantitative limits pursuant to this Protocol shall be set off against the quantitative limits established for the year in which the shipment of the goods has been effected, even if the export licence is issued after such shipment.

2. For the purpose of applying paragraph 1, shipment of the goods is considered to have taken place on the date of their loading onto the exporting aircraft, vehicle or vessel.

Article 10

The presentation of an export licence, in application of Article 12 hereafter, shall be effected not later than 31 March of the year following that in which the goods covered by the licence have been shipped.

Section II Importation

Article 11

Importation into the Community of textile products subject to quantitative limits or to a double-checking system pursuant to this Protocol shall be subject to the presentation of an import authorization.

Article 12

1. The competent authorities of the Community shall issue the import authorization referred to in Article 11 above, within five working days of the presentation by the importer of the original of the corresponding export licence.

2. The import authorizations concerning products subject to quantitative limits under this Protocol shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Community is applied. However, where the Community has recourse to the provisions af Articles 5 and 7 of the Protocol in accordance with the provisions of the Agreed Minute No 1, or to the Agreed Minute No 2, the products covered by the import licences can only be put into free circulation in the region(s) of the Community indicated in those licences.

3. The import authorizations for products subject to a double-checking system without quantitative limits shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Community is applicable.

4. The competent authorities of the Community shall cancel the import authorization already issued whenever the corresponding export licence has been withdrawn.

However, if the competent authorities of the Community are notified of the withdrawal or the cancellation of the export licence only after the importation of the products into the Community, the relevant quantities shall be set off against the quantitative limits established for the category and the quota year concerned.

Article 13

1. If the competent authorities of the Community find that the total quantities covered by export licences issued by the competent authorities of Estonia for a particular category in any year exceed the quantitative limit established in accordance with Article 5 of the Protocol for that category, as may be modified by Articles 4, 6 and 8 of the Protocol, the said authorities may suspend the further issue of import authorizations. In this event, the competent authorities of the Community shall immediately inform the authorities of Estonia and the special consultation procedure set out in Article 15 of the Protocol shall be initiated forthwith.

2. Exports of products of Estonian origin subject to quantitative limits or double-checking system and not covered by Estonian export licences issued in accordance with the provisions of this Appendix may be refused an import authorization by the competent Community authorities.

However, without prejudice to Article 6 of the Protocol, if the import of such products is allowed into the Community by the competent authorities of the Community, the quantities involved shall not be set off against the appropiate quantitative limits established pursuant to this Protocol, without the express agreement of the competent authorities of Estonia.

TITLE IV FORM AND PRODUCTION OF EXPORT LICENCES AND CERTIFICATES OF ORIGIN, AND COMMON PROVISIONS CONCERNING EXPORTS TO THE COMMUNITY

Article 14

1. The export licence and the certificate of origin may comprise additional copies duly indicated as such. They shall be made out in English or French. If they are completed by hand, entries must be in ink and in printed script. These documents shall measure 210 x 297 mm. The paper used shall be white writing paper, sized, not containing mechanical pulp, and weighing not less than 25 g/m². If the documents have several copies only the top copy, which is the original, shall be printed with the guilloche pattern background. This copy shall be clearly marked as 'original' and the other copies as 'copies'. Only the original shall be accepted by the competent authorities of the Community as being valid for the purpose of export to the Community in accordance with the provisions of the Protocol.

2. Each document shall bear a standardized serial number, whether or not printed, by which it can be identified.

This number shall be composed of the following elements:

- two letters identifying the exporting country as follows: EE,

- two letters identifying the intended Member State of customs clearance as follows:

BL = Benelux,

DE = Federal Republic of Germany

DK = Denmark

EL = Greece

ES = Spain

FR = France

GB = United Kingdom

IE = Ireland

IT = Italy

PT = Portugal

- a one-digit number identifying quota year or export year where applicable, corresponding to the last figure in the respective year, e.g. 4 for 1994,

- a two-digit number from 01 to 99, identitying the particular issuing office concerned in the exporting country,

- a five-digit number running consecutively from 00001 to 99999 allocated to the intended Member State of customs clearance.

Article 15

The export licence and the certificate of origin may be issued after the shipment of the products to which they relate. In such cases they must bear the endorsement 'delivré a posteriori' or the endorsement 'issued retrospectively'.

Article 16

1. In the event of a theft, loss or destruction of an export licence or a certificate of origin, the exporter may apply to the competent Estonian authorities which issued the document for a duplicate to be made out on the basis of the export documents in his possession. The duplicate of any such certificate or licence so issued shall bear the endorsement 'duplicata' or 'duplicate'.

2. The duplicate shall bear the date of the original export licence or certificate of origin.

TITLE V ADMINISTRATIVE COOPERATION

Article 17

The Community and Estonia shall cooperate closely in the implementation of the provisions of this Appendix. To this end, contacts and exchange of views, including on technical matters, shall be facilitated by both Parties.

Article 18

In order to ensure the correct application of this Appendix, the Community and Estonia offer mutual assistance for the checking of the authenticity and the accuracy of export licences and certificates of origin issued or of any declarations made within the terms of this Appendix.

Article 19

Estonia shall transmit to the Commission of the European Communities the names and addresses of the authorities competent to issue and verify the export licences and the certificates of origin, together with specimens of the stamps used by these authorities and specimen signatures of officials responsible for signing the export licences and the certificates of origin. Estonia shall also notify the Community of any change in this information.

Article 20

1. Subsequent verification of certificates of origin or export licences shall be carried out at random, or whenever the competent Community authorities have reasonable doubt as to the authenticity of the certificate or licence or as to the accuracy of the information regarding the true origin of the products in question.

2. In such cases, the competent authorities in the Community shall return the certificate of origin or the export licence or a copy thereof to the competent Estonian authorities, giving, where appropriate, the reasons of form or substance which justify an enquiry. If the invoice has been submitted, such invoice or a copy thereof shall be attached to the certificate or to the licence or their copies. The authorities shall also forward any information that has been obtained suggesting that the particulars given on the said certificate or licence are inaccurate.

3. The provisions of paragraph 1 above shall also apply to subsequent verifications of the declarations of origin provided for in Article 2 of this Appendix.

4. The results of the sebsequent verifications carried out in accordance with paragraphs 1 and 2 above shall be communicated to the competent authorities of the Community within three months at the latest. The information communicated shall indicate whether the disputed certificate, licence or declaration, applies to the goods actually exported and whether these goods are eligible for export under the arrangements established by the Protocol. The information shall also include, at the request of the Community, copies of all documentation necessary to fully determine the facts, and in particular, the true origin of the goods.

Should such verifications reveal systematic irregularities in the use of declarations of origin, the Community may subject imports of the products in question to the provisions of Article 2(1) of this Appendix.

5. For the purpose of subsequent verification of certificates of origin, copies of the certificates as well as any export documents referring to them shall be kept for at least two years by the competent Estonian authorities.

6. Recourse to the random verification procedure specified in this Article must not constitute an obstacle to the release for home use of the products in question.

Article 21

1. Where the verification procedure referred to in Article 20 or where information available to the competent authorities of the Community or of Estonia indicates or appears to indicate that the provisions of this Protocol are being circumvented or infringed, the Parties shall cooperate closely and with the appropriate urgency in order to prevent any such circumvention or infringement.

2. To this end, the competent authorities of Estonia shall, on their own initiative or at the request of the Community, carry out appropriate inquiries, or arrange for such inquiries to be carried out, concerning operations which are, or appear to the Community to be, in circumvention or infringement of this Appendix. Estonia shall communicate the results of these inquiries to the Community, including any other pertinent information enabling the cause of the circumvention or infringement, including the true origin of the goods, to be determined.

3. By agreement between the Community and Estonia, officials designated by the Community may be present at the inquiries referred to in paragraph 2 above.

4. Pursuant to the cooperation referred to in parapraph 1 above, the competent authorities of the Community and Estonia shall exchange any information considered by either Party to be of use in preventing circumvention or infringement of the provisions of this Protocol. These exchanges may include information on the production of textile products in Estonia and on the trade in the type of products covered by this Protocol between Estonia and third countries, particularly where the Community has reasonable grounds to consider that the products in question may be in transit across the territory of Estonia prior to their importation into the Community. This information may include at the request of the Community, copies of all available relevant documentation.

5. Where sufficient evidence shows that the provisions of this Appendix have been circumvented or infringed, the competent authorities of the Community and Estonia may agree to take the measures set out in Article 6(4) of the Protocol, and any other measures as are necessary to prevent a recurrence of such circumvention or infringement.

Annex to Appendix A, Article 2 (1)

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Annex to Appendix A, Article 7 (1): Model 1

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Annex to Appendix A, Article 7 (3): Model 2

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Appendix B Referred to in Article 9

Cottage industry and FOLKLORE products originating in Estonia

1. The exemption provided for in Article 9 in respect of cottage industry products shall apply to the following types of products only:

(a) fabrics woven on looms operated solely by hand or foot, being fabrics of a kind traditionally made in the cottage industry of Estonia;

(b) garments or other textile articles of a kind traditionally made in the cottage industry of Estonia obtained manually from the fabrics referred to above and sewn exclusively by hand without the aid of any machine;

(c) traditional folklore products of Estonia made by hand, in a list to be agreed between the Community and Estonia.

Exemption shall be granted in respect only of products covered by a certificate conforming to the specimen attached to this Appendix and issued by the competent authorities in Estonia. These certificates must indicate the reasons justifying their issuance; the competent authorities of the Community will accept them after having checked that the products concerned have fulfilled the conditions established in this Appendix. The certificate concerning the products envisaged in indent (c) above must bear a stamp 'FOLKLORE' marked clearly. In the case of a difference of opinion between the Parties concerning the nature of these products, consultations shall be held within one month in order to resolve these differences.

Should imports of any product covered by this Appendix reach proportions liable to cause problems within the Community, consultations with Estonia shall be initiated as soon as possible, with a view to resolving the situation by the adoption if necessary of a quantitative limit, in accordance with the procedure laid down in Article 15 of this Protocol.

2. The provisions of Titles IV and V of Appendix A shall apply mutatis mutandis to the products covered by paragraph 1 of this Appendix.

Annex to Appendix B

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Appendix C

Reimports into the Community, within the meaning of Article 3 (3) of this Protocol, of products listed in the Annex to this Appendix shall be subject to the provisions of this Protocol, unless the special provisions below provide otherwise:

1. Subject to paragraph 2, only reimports into the Community of products affected by the specific quantitative limits laid down in the Annex to this Appendix shall be considered reimports within the meaning of Article 3 (3) of the Protocol.

2. Reimports not covered by the Annex to this Appendix may be made subject to specific quantitative limits following consultations in accordance with the procedures set out in Article 15 of the Protocol, provided the products concerned are subject to quantitative limits pursuant to the Protocol, to a double-checking system or to surveillance measures.

3. Having regard to the interests of both Parties, the Community may at its discretion, or in response to a request pursuant to Article 15 of the Protocol:

(a) examine the possibility of transferring from one category to another, using in advance or carrying over from one year to the next, portions of specific quantitative limits;

(b) consider the possibility of increasing specific quantitative limits.

4. However, the Community may apply automatically the flexibility rules set out in paragraph 3 above within the following limits:

(a) transfers between categories may not exceed 20 % of the quantity for the category to which the transfer is made;

(b) carry-over of a specific quantitative limit from one year to the next may not exceed 10,5 % of the quantity set for the year of actual utilization;

(c) advance use of specific quantitative limits from one year to another may not exceed 7,5 % of the quantity set for the year of actual utilization.

5. The Community shall inform Estonia of any measures taken pursuant to the preceding paragraphs.

6. The competent authorities in the Community shall debit the specific quantitative limits referred to in paragraph 1 at the time of issue of the prior authorization required by Council Regulation (EEC) No 636/82 which governs economic outward processing arrangements. A specific quantitative limit shall be debited for the year in which a prior authorization is issued.

7. A certificate of origin made out by the organizations authorized to do so under Estonian law shall be issued, in accordance with Appendix A to the Protocol, for all products covered by this Appendix. This certificate shall bear a reference to the prior authorization mentioned in paragraph 6 above as evidence that the processing operation it describes has been carried out in Estonia.

8. The Community shall provide Estonia with the names and addresses of, and specimens of the stamps used by, the competent authorities of the Community which issue the prior authorizations referred to in paragraph 6 above.

9. Without prejudice to the provisions of paragraphs 1 to 8 above, the Community and Estonia shall continue consultations with a view to seeking a mutually acceptable solution enabling both Parties to benefit from the Protocol's provisions on outward processing traffic and so ensure the effective development of trade in textile products between Estonia and the Community.

Annex to Appendix C

(The product descriptions of the categories listed in this Annex are to be found in Annex I of this Protocol)

OPT QUOTAS COMMUNITY QUANTITATIVE LIMITS

Category (p.m.) Unit (p.m.) Year(s) (p.m.)

Agreed minute No 1

In the context of Protocol 1 on trade in textile and clothing products, the Parties agreed that Article 5 of the Protocol does not preclude the Community, if the conditions are fulfilled, from applying the safeguard measures for one or more of its regions in conformity with the principles of the internal market.

In such an event, Estonia shall be informed in advance of the relevant provisions of Appendix A of the Protocol to be applied, as appropriate.

Agreed minute No 2

Notwithstanding Article 7 (1) of Protocol 1 on trade in textile and clothing products, for imperative technical or administrative reasons or to find a solution to economic problems resulting from regional concentration of imports, or in order to combat circumvention and fraud of the provisions of this Protocol, the Community will establish for a limited period of time a specific management system in conformity with the principles of the Internal Market.

However, if the Parties are unable to reach a satisfactory solution during the consultations provided for in Article 7 (3), Estonia undertakes, if so requested by the Community, to respect temporary export limits for one or more regions of the Community. In such a case, these limits shall not preclude the importation into the region(s) concerned of products which were shipped from Estonia on the basis of export licences obtained before the date of formal notification to Estonia by the Community about the introduction of the above limits.

The Community shall inform Estonia of the technical and administrative measures that need to be introduced by both Parties in order to implement the above paragraphs in conformity with the principles of the internal market.

Agreed minute No 3

In the context of Protocol 1 on trade in textile and clothing products, the Parties agreed that Estonia shall endeavour not to deprive certain regions of the Community which have traditionally had relatively small shares of the Community quotas of import of products serving as inputs for their processing industry.

The Community and Estonia further agreed to hold consultations, should the need arise, in order to avert any problems which might occur in this respect.

Agreed minute No 4

In the context of Protocol 1 on trade in textile and clothing products, Estonia agreed that, from the date of request for and pending the consultations referred to in Article 7 (3), it shall cooperate by not issuing export licences that would further aggravate the problems resulting from the regional concentration of direct imports into the Community.

Agreed minute No 5

In the context of Protocol 1 on trade in textile and clothing products, the Parties agreed that, not later than the beginning of the third year of the application of this Protocol, specific consultations shall be held with the aim of reviewing the application of the double-checking system including, in particular, an examination of the list of products subject to double-checking surveillance.

PROTOCOL 2 on trade between the Community and Estonia in processed agricultural products

Article 1

1. The Community shall grant tariff concessions referred to in Annex 1 for processed agricultural products originating in Estonia. In the case of the goods referred to in Annex II, however, reductions of the agricultural component shall be granted within the quantity limits referred to therein.

2. The Joint Committee may:

- add to the list of processed agricultural products referred to in this Protocol,

- increase the quantities of processed agricultural products eligible for the tariff concessions established by this Protocol.

3. The Joint Committee may replace the concessions with a system of compensatory amounts with no quantity limits, established on the basis of the differences found between the prices on the Community and Estonian markets of the agricultural products actually used to produce the processed agricultural products covered by this Protocol. The Joint Committee shall draw up a list of products to which the compensatory amounts are applicable and a list of basic products. It shall adopt general implementing rules to that end.

Article 2

For the purpose of this Protocol, the following definitions shall apply:

- 'goods' means the processed agricultural products referred to in this Protocol,

- 'agricultural component' means the part of the charge corresponding to the difference between the prices on the internal market of the Parties of the agricultural products considered to have been used for the production of the goods and the prices of those agricultural products incorporated in imports from third countries,

- 'non-agricultural component' means the part of the charge remaining when the agricultural component is deducted from the total charge,

- 'basic products' means the agricultural products considered as having been used in the production of goods within the meaning of Regulation (EC) No 3448/93,

- 'base quantity' means the quantity of a basic product calculated in the manner stipulated in Article 3 of Regulation (EC) No 3448/93 and which is used to determine the agricultural component applicable to goods of a given type, in accordance with the terms of the same Regulation.

Article 3

1. The Community grants to Estonia the following concessions:

- the non-agricultural component of the charge shall be reduced as per Annex I,

- for the goods for which Annex I stipulates a reduced agricultural component (MOBR) the level of the latter shall be calculated by reducing the base quantities of the basic products for which a levy reduction is granted by 20 % in 1995, 40 % in 1996 and 60 % from 1997. For the other basic products of those goods, the corresponding reductions, for the same years, shall be 10 %, 20 % and 30 %. These reductions shall be granted within the limits of tariff quotas stipulated in Annex II. For quantities in excess of those quotas the agricultural component applicable to third countries shall apply.

2. The agricultural components shall be replaced by reduced agricultural components in the case of goods added in accordance with the procedure described in Article 1 (2).

Article 4

Estonia shall apply the duties applicable on 1 January 1995 to imports of processed agricultural products originating in the Community and falling within Regulation (EC) No 3448/93. However, if Estonia wishes to apply duties in accordance with Article 18 (2) and (3) of this Agreement, Estonia shall refer them to the Joint Committee. Estonia shall distinguish between the agricultural component and the non-agricultural component of the duties within two years of the entry into force of this Agreement. Estonia shall remove the non-agricultural component of the duties so distinguished within three years of the date of distinguishing between the duties components, in three equal annual steps. The agricultural component of the duty shall be reduced by the Joint Committee along the same principles indicated in Article 3 (1) second indent of this Protocol.

ANNEX I

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ANNEX II

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PROTOCOL 3 concerning the definition of originating products and methods of administrative cooperation

TITLE I GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Protocol:

(a) 'manufacture' means any kind of working or processing including assembly or specific operations;

(b) 'material' means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(c) 'product' means the product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) 'goods' means both materials and products;

(e) 'customs value' means the value as determined in accordance with the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade, done at Geneva on 12 April 1979;

(f) 'ex-works price' means the price paid for the product ex-works to the manufacturer in whose undertaking the last working or processing is carried out provided the price includes the value of all the materials used, minus all internal taxes which are, or may be, repaid when the product obtained is exported;

(g) 'value of materials' means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territories concerned;

(h) 'value of originating materials' means the customs value of such materials as defined in subparagraph (g) applied mutatis mutandis;

(i) 'added value' shall be taken to be the ex-works price minus the customs value of each of the products incorporated which did not originate in the country in which those products were obtained;

(j) 'chapters' and 'headings' means the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonized Commodity Description and Coding System, referred to in this Protocol as 'the Harmonized System' or 'HS';

(k) 'classified' refers to the classification of a product or material under a particular heading;

(l) 'consignment' means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice.

TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS'

Article 2

Origin Criteria

For the purpose of implementing this Agreement, and without prejudice to the provisions of Articles 3 and 4 of this Protocol, the following products shall be considered as:

1. products originating in the Community:

(a) products wholly obtained in the Community, within the meaning of Article 5 of this Protocol;

(b) products obtained in the Community which contain materials not wholly obtained there, provided that the said materials have undergone sufficient working and processing in the Community within the meaning of Article 6, of this Protocol;

2. products originating in Estonia:

(a) products wholly obtained in Estonia, within the meaning of Article 5 of this Protocol;

(b) products obtained in Estonia which contain materials not wholly obtained there, provided that the said materials have undergone sufficient working or processing in Estonia within the meaning of Article 6 of this Protocol.

Article 3

Bilateral cumulation

1. Notwithstanding Article 2 (1) (b), materials originating in Estonia within the meaning of this Protocol shall be considered as materials originating in the Community and it shall not be necessary that such materials have undergone sufficient working or processing there, provided however that they have undergone working or processing going beyond that referred to in Article 7 of this Protocol.

2. Notwithstanding Article 2 (2) (b), materials originating in the Community within the meaning of this Protocol shall be considered as materials originating in Estonia and it shall not be necessary that such materials have undergone working or processing there, provided however that they have undergone working or processing going beyond that referred to in Article 7 of this Protocol.

Article 4

Cumulation with materials originating in Latvia and Lithuania

1. (a) Notwithstanding Article 2 (1) (b) and subject to the provisions of paragraphs 2 and 3, materials originating in Latvia or Lithuania within the meaning of Protocol 3 annexed to the Agreements between the Community and these countries shall be considered as originating in the Community and it shall not be necessary that such materials have undergone sufficient working or processing, on condition however that they have undergone working or processing beyond that referred to in Article 7 of this Protocol.

(b) Notwithstanding Article 2 (2) (b) and subject to the provisions of paragraphs 2 and 3, materials originating in Latvia or Lithuania within the meaning of Protocol 3 annexed to the Agreements between the Community and these countries shall be considered as originating in Estonia and it shall not be necessary that such materials have undergone sufficient working or processing, on condition however that they have undergone working or processing beyond that referred to in Article 7 of this Protocol.

2. Products which have acquired originating status by virtue of paragraph 1 shall only continue to be considered as originating in the Community or in Estonia, when the value added there exceeds the value of the materials used originating in Latvia or Lithuania.

If this is not so, the products concerned shall be considered for the purposes of implementing this Agreement or of the Agreement between the Community and Latvia and Lithuania as originating in Latvia or Lithuania accordi