EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL/BACKGROUND

The attached proposal constitutes the legal instrument for authorising the conclusion of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part .

The Commission proposal for the Council approval of the parts of the Agreement which fall under the Treaty establishing the European Atomic Energy Community will be made separately.

Relations between the EU and Ukraine are currently based on the Partnership and Co-operation Agreement which entered into force in 1998. At the 13th EU-Ukraine Summit in Paris in 2008, the leaders of the EU and Ukraine agreed that the Partnership and Co-operation Agreement should be succeeded by an Association Agreement.

The EU-Ukraine Association Agreement is the first of a new generation of Association Agreements with Eastern Partnership countries. Negotiations of this comprehensive and ambitious Agreement between the EU and Ukraine were launched in March 2007. In February 2008, following the decision of accession of Ukraine to the WTO, the EU and Ukraine launched negotiations on a Deep and Comprehensive Free Trade Area (DCFTA) as a core element of the Association Agreement.

The Association Agreement aims to accelerate the deepening of political and economic relations between Ukraine and the EU, as well as Ukraine's gradual access to parts of the EU Internal Market including by setting up a DCFTA. It is a concrete way to exploit the dynamics in EU-Ukraine relations, focusing on support to core reforms, on economic recovery and growth, governance and sector co-operation. The Agreement also constitutes a reform agenda for Ukraine, based on a comprehensive programme of approximation of Ukraine’s legislation to EU norms, around which all partners of Ukraine can align themselves and focus their assistance. EU assistance to Ukraine is linked with the reform agenda as it emerges from the Agreement. The Comprehensive Institutional Building Programme is particularly important in this regard.

At the 15th Ukraine-EU Summit of 19 December 2011, the EU and the President of Ukraine noted that a common understanding on the text of the Association Agreement was reached. On 30 March 2012, the chief negotiators of the European Union and Ukraine initialled the text of the Association Agreement. The trade negotiators from both sides initialled the DCFTA part of the Agreement on 19 July 2012.

On 10 December 2012, the Foreign Affairs Council adopted Conclusions on Ukraine, expressing the EU's commitment to the signing of the Association Agreement, including a DCFTA, as soon as the Ukrainian authorities demonstrate determined action and tangible progress in the three areas (Elections, selective justice, and overall reforms as set out in the Association Agenda), possibly by the time of the Eastern Partnership Summit in Vilnius in November 2013. The Council also indicated that the signature of the Agreement could be accompanied by opening for provisional application of parts of the Agreement. The provisional application is foreseen in view of keeping mutual economic interests and shared values in equilibrium, and the common will of the EU and Ukraine to start implementing and enforcing various parts of the Agreement in order to advance an early reform impact on sector specific issues before the conclusion of the Agreement.

As requested by the 10 December Council Conclusions, the High Representative and the Commission are monitoring and keeping the Council informed about progress achieved by Ukraine in meeting the requirements set out by the Council conclusions, including in the context of the preparations of the June 2013 EU-Ukraine Cooperation Council and November 2013 Eastern Partnership Summit in Vilnius.

2. RESULTS OF THE NEGOTIATIONS

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

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

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

The overall aims of the association focus on promoting a gradual rapprochement between the parties on the basis of common values; providing enhanced political dialogue; promoting, preserving and strengthening peace and stability in both the regional and international dimensions; establishing conditions for enhanced economic and trade relations leading towards Ukraine's gradual access to parts of the EU Internal Market; enhancing Justice, Freedom and Security (JFS) cooperation with the aim of reinforcing the rule of law and respect for human rights and fundamental freedoms, and establishing conditions for increasingly close co-operation in other areas of mutual interest.

General Principles of the Agreement include a specific set of "essential elements", the violation of which by one of the Parties could give rise to specific measures under the Agreement, including the suspension of rights and obligations. These elements are respect for democratic principles, human rights and fundamental freedoms as defined in relevant international instruments; respect for the rule of law; promotion of respect for sovereignty and territorial integrity, inviolability and independence; and countering the proliferation of weapons of mass destruction, related materials and means of delivery.

Other General Principles of the Agreement relate to the principles of a free market economy, good governance, the fight against corruption, the fight against trans-national organized crime and terrorism, the promotion of sustainable development and effective multilateralism.

The Agreement sets out the aims of an enhanced and strengthened political dialogue promoting gradual convergence on foreign and security matters with the aim of Ukraine's ever deeper involvement in the European security area. The Agreement establishes a number of fora for the conduct of political dialogue, and provides for dialogue and co-operation on domestic reform based on the common principles set out by the Parties. There are also provisions for intensified dialogue on foreign and security policy, including CSDP, for the promotion of peace and international justice by ratifying and implementing the Rome Statute of the International Criminal Court, and for joint efforts on regional stability, conflict prevention, crisis management, military/technological co-operation, anti-terrorism, anti-proliferation and disarmament and arms control.

In the field of JFS, the Agreement pays particular attention to the rule of law and to the reinforcement of judicial institutions and practices. The Agreement sets out the framework for co-operation on migration, asylum and border management, on personal data protection, money laundering and terrorism financing and on anti-drugs policy. This Title contains provisions on movement of persons, including on readmission, on visa facilitation and on the gradual steps towards a visa-free regime in due course (provided that relevant conditions for well-managed and secure mobility are in place). Treatment and mobility of workers are also covered, as is a commitment to further development of judicial co-operation in civil and criminal matters - making full use of relevant international and bilateral instruments.

The Association Agreement foresees a wide range of sector cooperation, focusing on support to core reforms, economic recovery and growth, governance and sector co-operation in more than 30 areas, such as: energy, transport, environment protection, industrial and small and medium enterprise cooperation, social development and protection, equal rights, consumer protection, education, training and youth as well as cultural cooperation. In all of these areas, enhanced co-operation starts from the basis of current frameworks, both bilateral and multilateral, with the aim of more systematic dialogue and exchange of information and good practice. Key to the sectoral co-operation chapters is a comprehensive menu of regulatory approximation set out in annexes to the Agreement. Specific schedules for transposition and implementation by Ukraine of selected parts of the EU acquis will provide a focus for on-going co-operation, and will form the core of Ukraine's domestic reform and modernization agenda.

The Agreement includes an updated institutional framework encompassing co-operation and dialogue fora from the Summit level down the level of technical subcommittees. Specific decision-making roles are foreseen for an Association Council, and by delegation for an Association Committee, which may also meet in a specific configuration to address trade issues. Fora for civil society, notably the representative organisations for social partners, trade-unions and employers, and parliamentary co-operation are also foreseen. The Agreement also includes provisions on monitoring, fulfilment of obligations and dispute settlement (including separate provisions for trade-related issues).

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

3. LEGAL ELEMENTS OF THE PROPOSAL

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

The attached proposal constitutes the legal instrument for the conclusion of the Association Agreement.

In light of the above-mentioned results - and provided that the Ukrainian authorities demonstrate determined action and tangible progress in the three areas identified by the 10 December 2012 Council Conclusions on Ukraine – the Commission proposes that the Council conclude the Agreement on behalf of the European Union after having received the consent of the European Parliament.

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

2013/0151 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

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

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

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

Whereas:

(1) On 22 January 2007 the Council authorised the Commission to open negotiations with Ukraine for the conclusion of a new Agreement between the European Union and Ukraine to replace the Partnership and Cooperation Agreement.

(2) These negotiations were successfully finalised and the Association Agreement between the European Union and its Member States and Ukraine (hereinafter referred to as the “Agreement”) was initialled in 2012.

(3) In accordance with Council Decision [number of Decision] of [date][3], the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part was signed at [place] on [date], subject to its conclusion at a later date.

(4) Pursuant to Article 218(7) of the Treaty on the Functioning of the European Union, it is appropriate for the Council to authorise the Commission to approve modifications to be adopted by the Association Committee in its Trade configuration pursuant to Article 465(4) of the Agreement, as proposed by the Sub-Committee on Geographical Indications pursuant to Article 211 of the Agreement.

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

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

(7) The Association Agreement should be approved on behalf of the European Union.

HAS ADOPTED THIS DECISION:

Article 1

The Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, together with the Annexes and Protocols attached thereto, is hereby approved.

Article 2

The President of the Council shall designate the person empowered to proceed, on behalf of the European Union, to notify the Depository of the Agreement provided in Article 486(2) of the Agreement, in order to express the consent of the European Union to be bound by the Agreement.

Article 3

For the purposes of Article 211of the Agreement, modifications of the Agreement through decisions of the Sub-Committee on Geographical Indications shall be approved by the Commission on behalf of the European Union. Where interested parties cannot reach agreement following objections relating to a geographical indication, the Commission shall adopt such a position on the basis of the procedure laid down in Article 57(2) of Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs[4].

Article 4

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

2. In accordance with Article 207 of the Agreement, the Member States and the institutions of the European Union shall enforce the protection provided for in Articles 204 to 206 of the Agreement, including at the request of an interested party.

Article 5

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

Article 6

This Decision shall enter into force on [date][5].

Done at Brussels,

For the Council

The President

[1] OJ L , , p. .

[2] OJ L , , p. .

[3] OJ L , , p. .

[4] OJ L 343 14.12.2012, p.1

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

ANNEX

Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part ANNEX I to the PROPOSAL FOR A COUNCIL DECISION on the conclusion of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part

ASSOCIATION AGREEMENT

BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES, OF THE ONE PART, AND UKRAINE, OF THE OTHER PART

PREAMBLE

PREAMBLE

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

HUNGARY,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,

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

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

THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as ‘the EURATOM’

on the one part, and

UKRAINE

on the other part,

Hereafter jointly referred to as ‘the Parties’,

– Taking account of the close historical relationship and progressively closer links between the Parties as well as their desire to strengthen and widen relations in an ambitious and innovative way;

– Committed to a close and lasting relationship that is based on common values, namely respect for democratic principles, rule of law, good governance, human rights and fundamental freedoms, including the rights of persons belonging to national minorities, non-discrimination of persons belonging to minorities and respect for diversity, human dignity and commitment to the principles of a free market economy, which would facilitate the participation of Ukraine in European policies;

– RECOGNISING that Ukraine as a European country shares a common history and common values with the Member States of the European Union (EU) and is committed to promoting those values;

– NOTING the importance Ukraine attaches to its European identity;

– TAKING INTO ACCOUNT the strong public support in Ukraine for the country’s European choice;

– CONFIRMING that the European Union acknowledges the European aspirations of Ukraine and welcomes its European choice, including its commitment to build deep and sustainable democracy and a market economy;

– RECOGNISING that the common values on which the European Union is built – namely democracy, respect for human rights and fundamental freedoms, and rule of law – are also essential elements of this Agreement;

– ACKNOWLEDGING that the political association and economic integration of Ukraine with the European Union will depend on progress in the implementation of the current Agreement as well as Ukraine’s track record in ensuring respect for common values, and progress in achieving convergence with the EU in political, economic and legal areas;

– Committed to implementing all the principles and provisions of the United Nations Charter, the Organization for Security and Cooperation in Europe (OSCE), in particular the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe, the concluding documents of the Madrid and Vienna Conferences of 1991 and 1992 respectively, the Charter of Paris for a New Europe of 1990, the United Nations Universal Declaration on Human Rights of 1948 and the Council of Europe Convention for the Protection of Human Rights and Fundamental Freedoms of 1950;

– Desirous of strengthening international peace and security as well as engaging in effective multilateralism and the peaceful settlement of disputes, notably by closely cooperating to that end within the framework of the United Nations (UN), the OSCE and the Council of Europe (CoE);

– committed to promoting the independence, sovereignty, territorial integrity and inviolability of borders;

– desirous of achieving an ever closer convergence of positions on bilateral, regional and international issues of mutual interest, taking into account the Common Foreign and Security Policy (CFSP) of the European Union, including the Common Security and Defence Policy (CSDP);

– Committed to reaffirming the international obligations of the Parties, to fighting against the proliferation of weapons of mass destruction and their means of delivery, and to cooperating on disarmament and arms control;

– Desirous of moving forward the reform and approximation process in Ukraine, thus contributing to gradual economic integration and deepening of political association;

– coNVINCED of the need for Ukraine to implement the political, socio-economic, legal and institutional reforms necessary to effectively implement this Agreement and committed to decisively supporting those reforms in Ukraine;

– desirous of achieving economic integration, inter alia through a Deep and Comprehensive Free Trade Area (DCFTA) as an integral part of this Agreement, in compliance with rights and obligations arising out of the World Trade Organisation (WTO) membership of the Parties, including through extensive regulatory approximation;

– RECOGNISING that such a Deep and Comprehensive Free Trade Area, linked to the broader process of legislative approximation, shall contribute to further economic integration with the European Union Internal Market as envisaged in this Agreement;

– committed to developing a new climate conducive to economic relations between the Parties, and above all for the development of trade and investment and stimulating competition, factors which are crucial to economic restructuring and modernisation;

– COMMITTED to enhancing energy cooperation, building on the commitment of the Parties to implement the Energy Community Treaty;

– COMMITTED to enhancing energy security, facilitating the development of appropriate infrastructure and increasing market integration and regulatory approximation towards key elements of the EU acquis, promoting energy efficiency and the use of renewable energy sources as well as achieving a high level of nuclear safety and security;

– COMMITTED to increasing dialogue – based on the fundamental principles of solidarity, mutual trust, joint responsibility and partnership – and cooperation on migration, asylum and border management, with a comprehensive approach paying attention to legal migration and to cooperating in tackling illegal immigration, and trafficking in human beings, and ensuring the efficient implementation of the readmission agreement;

– RECOGNISING the importance of the introduction of a visa-free travel regime for the citizens of Ukraine in due course, provided that the conditions for well-managed and secure mobility are in place;

– COMMITTED to combating organised crime and money laundering, to reducing the supply of and demand for illicit drugs and to stepping up cooperation in the fight against terrorism;

– COMMITTED to enhancing cooperation in the field of environmental protection and to the principles of sustainable development and green economy;

– DESIROUS of enhancing people-to-people contacts;

– COMMITTED to promoting cross-border and inter-regional cooperation;

– COMMITTED to gradually approximating Ukraine’s legislation with that of the Union along the lines set out in this Agreement and to effectively implementing it;

– TAKING INTO ACCOUNT that this Agreement shall not prejudice and leaves open future developments in EU-Ukraine relations;

– CONFIRMING that the provisions of this Agreement that fall within the scope of Part III, Title V of the Treaty on the Functioning of the European Union bind the United Kingdom and Ireland as separate Contracting Parties, and not as part of the European Union, unless the European Union together with the United Kingdom and/or Ireland jointly notify Ukraine that the United Kingdom or Ireland is bound as part of the European Union in accordance with Protocol No. 21 on the position of the United Kingdom and Ireland in respect of the area of Freedom, Security and Justice annexed to the Treaty on the Functioning of the European Union. If the United Kingdom and/or Ireland ceases to be bound as part of the European Union in accordance with Article 4a of Protocol No. 21 or in accordance with Article 10 of Protocol No. 36 on transitional provisions annexed to the Treaties, the European Union together with the United Kingdom and/or Ireland shall immediately inform Ukraine of any change in their position, in which case they shall remain bound by the provisions of the Agreement in their own right. The same applies to Denmark, in accordance with Protocol No. 22 on the position of Denmark, annexed to the Treaties.

HAVE AGREED AS FOLLOWS

Article 1

Objectives

1. An Association between the Union and its Member States of the one part and Ukraine of the other part is hereby established.

2. The aims of this Association are:

(a) to promote gradual rapprochement between the Parties based on common values and close and privileged links, and increasing Ukraine's association with EU policies and participation in programmes and agencies;

(b) to provide an appropriate framework for enhanced political dialogue in all areas of mutual interest;

(c) to promote, preserve and strengthen peace and stability in the regional and international dimensions in accordance with the principles of the United Nations Charter, and of the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe and the objectives of the Charter of Paris for a New Europe of 1990;

(d) to establish conditions for enhanced economic and trade relations leading towards Ukraine's gradual integration in the EU Internal Market, including by setting up a Deep and Comprehensive Free Trade Area as stipulated in Title IV (Trade and Trade-related Matters) of this Agreement, and to support Ukrainian efforts to complete the transition into a functioning market economy also through the progressive approximation of its legislation to that of the Union;

(e) to enhance cooperation in the field of Justice, Freedom and Security with the aim of reinforcing the rule of law and respect for human rights and fundamental freedoms;

(f) to establish conditions for increasingly close cooperation in other areas of mutual interest.

TITLE I

GENERAL PRINCIPLES

TITLE I

GENERAL PRINCIPLES

Article 2

Respect for democratic principles, human rights and fundamental freedoms, as defined in particular in the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe and the Charter of Paris for a New Europe of 1990, and other relevant human rights instruments, among them the UN Universal Declaration of Human Rights and the European Convention on Human Rights and Fundamental Freedoms, and respect for the principle of the rule of law shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement. Promotion of respect for the principles of sovereignty and territorial integrity, inviolability of borders and independence, as well as countering the proliferation of weapons of mass destruction, related materials and their means of delivery also constitute essential elements of this Agreement.

Article 3

The Parties recognise that the principles of a free market economy underpin their relationship. Rule of law, good governance, the fight against corruption, the fight against the different forms of trans-national organised crime and terrorism, the promotion of sustainable development and effective multilateralism are central to enhancing the relationship between the Parties.

TITLE II

POLITICAL DIALOGUE AND REFORM, POLITICAL ASSOCIATION, COOPERATION AND CONVERGENCE IN THE FIELD OF FOREIGN AND SECURITY POLICY

TITLE II

POLITICAL DIALOGUE AND REFORM, POLITICAL ASSOCIATION, COOPERATION AND CONVERGENCE IN THE FIELD OF FOREIGN AND SECURITY POLICY

Article 4

Aims of political dialogue

1. Political dialogue in all areas of mutual interest shall be further developed and strengthened between the Parties. This will promote gradual convergence on foreign and security matters with the aim of Ukraine’s ever deeper involvement in the European security area.

2. The aims of political dialogue shall be:

(a) to deepen political association and increase political and security policy convergence and effectiveness;

(b) to promote international stability and security based on effective multilateralism;

(c) to strengthen cooperation and dialogue between the Parties on international security and crisis management, notably in order to address global and regional challenges and key threats;

(d) to foster result-oriented and practical cooperation between the Parties for achieving peace, security and stability on the European continent;

(e) to strengthen respect for democratic principles, the rule of law and good governance, human rights and fundamental freedoms, including the rights of persons belonging to national minorities, non-discrimination of persons belonging to minorities and respect for diversity, and to contribute to consolidating domestic political reforms;

(f) to develop dialogue and to deepen cooperation between the Parties in the field of security and defence;

(g) to promote the principles of independence, sovereignty, territorial integrity and inviolability of borders.

Article 5

Fora for the conduct of political dialogue

1. The Parties shall hold regular political dialogue meetings at Summit level.

2. At ministerial level, political dialogue shall take place within the Association Council referred to in Article 460 of this Agreement and within the framework of regular meetings between representatives of the Parties at Foreign Minister level by mutual agreement.

3. Political dialogue shall also take place in the following formats:

(a) regular meetings at Political Directors, Political and Security Committee and expert level, including on specific regions and issues, between representatives of the European Union on the one hand, and representatives of Ukraine on the other;

(b) taking full and timely advantage of all diplomatic and military channels between the Parties, including appropriate contacts in third countries and within the United Nations, the OSCE and other international fora;

(c) regular meetings both at the level of high officials and of experts of the military institutions of the Parties;

(d) any other means, including expert-level meetings, which would contribute to improving and consolidating this dialogue.

4. Other procedures and mechanisms for political dialogue, including extraordinary consultations shall be set up by the Parties by mutual agreement.

5. Political dialogue at parliamentary level shall take place within the framework of the Parliamentary Association Committee referred to in Article 467 of this Agreement.

Article 6

Dialogue and cooperation on domestic reform

The Parties shall cooperate in order to ensure that their internal policies are based on principles common to the Parties, in particular stability and effectiveness of democratic institutions and the rule of law, and on respect for human rights and fundamental freedoms, in particular as referred to in Article 14 of this Agreement.

Article 7

Foreign and security policy

1. The Parties shall intensify their dialogue and cooperation and promote gradual convergence in the area of foreign and security policy, including the Common Security and Defence Policy (CSDP), and shall address in particular issues of conflict prevention and crisis management, regional stability, disarmament, non-proliferation, arms control and arms export control as well as enhanced mutually beneficial dialogue in the field of space. Cooperation will be based on common values and mutual interests, and shall aim at increasing policy convergence and effectiveness, and promoting joint policy planning. To this end, the Parties shall make use of bilateral, international and regional fora.

2. Ukraine, the EU and the Member States reaffirm their commitment to the principles of respect for independence, sovereignty, territorial integrity and inviolability of borders, as established in the UN Charter and the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe, and to promoting these principles in bilateral and multilateral relations.

3. The Parties shall address in a timely and coherent manner the challenges to these principles at all appropriate levels of the political dialogue envisaged by this Agreement, including ministerial level.

Article 8

International Criminal Court

The Parties shall cooperate in promoting peace and international justice by ratifying and implementing the Rome Statute of the International Criminal Court (ICC) of 1998 and its related instruments.

Article 9

Regional stability

1. The Parties shall intensify their joint efforts to promote stability, security and democratic development in their common neighbourhood, and in particular to work together for the peaceful settlement of regional conflicts.

2. These efforts shall follow commonly shared principles for maintaining international peace and security as established by the UN Charter, the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe and other relevant multilateral documents.

Article 10

Conflict prevention, crisis management and military-technological cooperation

1. The Parties shall enhance practical cooperation in conflict prevention and crisis management, in particular with a view to increased participation of Ukraine in EU-led civilian and military crisis management operations as well as relevant exercises and training activities, including those carried out in the framework of the Common Security and Defence Policy (CSDP).

2. Cooperation in this field will be based on modalities and arrangements between the EU and Ukraine on consultation and cooperation on crisis management.

3. The Parties shall explore the potential of military-technological cooperation. Ukraine and the European Defence Agency (EDA) will establish close contacts to discuss military capability improvement, including technological issues.

Article 11

Non-proliferation of weapons of mass destruction

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

2. The Parties furthermore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction, related materials and their means of delivery by:

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

(b) further improving the system of national export controls, in order to control effectively the export as well as transit of goods related to weapons of mass destruction, including an end-use control on dual use technologies and goods, as well as effective sanctions for violations of export controls.

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

Article 12

Disarmament, arms controls, arms export control and fight against illicit trafficking of arms

The Parties shall develop further cooperation on disarmament, including in the reduction of their stockpiles of redundant small arms, and light weapons as well as dealing with the impact on the population and the environment caused by abandoned and unexploded ordnance as referred to in Chapter 6 (Environment) of this Agreement. Cooperation on disarmament shall also include arms controls, arms export controls and the fight against illicit trafficking of arms, including small arms and light weapons. The Parties shall promote universal adherence to and compliance with relevant international instruments and shall aim to ensure their effectiveness, including through implementation of the relevant United Nations Security Council Resolutions.

Article 13

Combating terrorism

The Parties agree to work together at bilateral, regional and international levels to prevent and combat terrorism in accordance with international law, international human rights standards, and refugee and humanitarian law.

TITLE III

JUSTICE, FREEDOM AND SECURITY

TITLE III

JUSTICE, FREEDOM AND SECURITY

Article 14

Rule of law and respect for human rights and fundamental freedoms

In their cooperation on justice, freedom and security, the Parties shall attach particular importance to the consolidation of the rule of law and the reinforcement of institutions at all levels in the areas of administration in general and law enforcement and the administration of justice in particular. Cooperation will notably aim at strengthening the judiciary, improving its efficiency, safeguarding its independence and impartiality, and combating corruption. Respect for human rights and fundamental freedoms will guide all cooperation on justice, freedom and security.

Article 15

Protection of personal data

The Parties agree to cooperate in order to ensure an adequate level of protection of personal data in accordance with the highest European and international standards, including the relevant Council of Europe instruments. Cooperation on personal data protection may include, inter alia, exchange of information and experts.

Article 16

Cooperation on migration, asylum and border management

1. The Parties reaffirm the importance of joint management of migration flows between their territories and shall further develop the comprehensive dialogue on all migration-related issues, including illegal migration, legal migration, smuggling of and trafficking in human beings, as well as the inclusion of migration concerns in the national strategies for economic and social development of the areas from which migrants originate. This dialogue is based on the fundamental principles of solidarity, mutual trust, joint responsibility and partnership.

2. In accordance with the relevant Union and national legislation in force, cooperation will, in particular, focus on:

(a) tackling the root causes of migration, pursuing actively the possibilities of cooperation in this field with third countries and in international fora;

(b) establishing together an effective and preventive policy against illegal migration, smuggling of migrants and trafficking in human beings including how to combat networks of smugglers and traffickers and how to protect the victims of such trafficking;

(c) establishing a comprehensive dialogue on asylum issues and in particular on matters related to the practical implementation of the UN Convention of 1951 relating to the Status of Refugees and the Protocol relating to the Status of Refugees of 1967 and other relevant international instruments, as well as ensuring the respect of the principle of ‘non-refoulement’;

(d) admission rules, and rights and status of persons admitted, fair treatment and integration of lawfully residing non-nationals;

(e) further developing operational measures in the field of border management;

(i) Cooperation on border management may include, inter alia, training, exchange of best practices including technological aspects, exchange of information in line with applicable rules and, where appropriate, exchange of liaison officers.

(ii) Efforts of the Parties in this field will aim at the effective implementation of the principle of integrated border management.

(f) enhancing of document security;

(g) developing an effective return policy, including in its regional dimension;

(h) exchanging views on informal employment of migrants.

Article 17

Treatment of workers

1. Subject to the laws, conditions and procedures applicable in each Member State and the EU, treatment accorded to workers who are Ukrainian nationals and who are legally employed in the territory of a Member State shall be free of any discrimination based on nationality, as regards working conditions, remuneration or dismissal, compared to the nationals of that Member State.

2. Ukraine shall, subject to the laws, conditions and procedures in Ukraine, accord the treatment referred to in paragraph 1 of this Article to workers who are nationals of a Member State and who are legally employed in its territory.

Article 18

Mobility of workers

1. Taking into account the labour market situation in the Member States, subject to the legislation and in compliance with the rules in force in the Member States and the EU in the area of mobility of workers:

(a) the existing facilities of access to employment for Ukrainian workers accorded by Member States under bilateral agreements should be preserved and if possible improved;

(b) other Member States shall examine the possibility of concluding similar agreements.

2. The Association Council shall examine the granting of other more favourable provisions in additional areas, including facilities for access to professional training, in accordance with laws, conditions and procedures in force in the Member States and in the EU, and taking into account the labour market situation in the Member States and in the EU.

Article 19

Movement of persons

1. The Parties will ensure the full implementation of:

(a) the Agreement between the European Community and Ukraine on the Readmission of Persons of 18 June 2007, (through the joint readmission committee set up by its Article 15);

(b) the Agreement between the European Community and Ukraine on the Facilitation of the Issuance of Visas of 18 June 2007, (through the joint committee for management of the agreement set up by its Article 12).

2. The Parties shall also endeavour to enhance mobility of citizens and to make further progress on the visa dialogue.

3. The Parties shall take gradual steps towards a visa-free regime in due course provided that the conditions for well-managed and secure mobility, set out in the two-phase Action Plan on Visa Liberalization presented at the EU-Ukraine Summit of 22 November 2010, are in place.

Article 20

Money laundering and terrorism financing

The Parties shall work together in order to prevent and combat money laundering and terrorism financing. To this end the Parties shall enhance bilateral and international cooperation in this field, including at operational level. The Parties shall ensure implementation of relevant international standards, in particular those of the Financial Action Task Force (FATF) and standards equivalent to those adopted by the Union.

Article 21

Cooperation on the fight against illicit drugs, and on precursors and psychotropic substances

1. The Parties shall cooperate on issues related to illicit drugs, on the basis of commonly agreed principles along the lines of the relevant international conventions, and taking into account the Political Declaration and the Special Declaration on the guiding principles of drug demand reduction, approved by the Twentieth United Nations General Assembly Special Session on Drugs in June 1998.

2. This cooperation shall be aimed at combating illicit drugs, reducing the supply of, trafficking in and demand for illicit drugs, and coping with the health and social consequences of drug abuse as well as at a more effective prevention of diversion of chemical precursors used for the illicit manufacture of narcotic drugs and psychotropic substances.

3. The Parties shall use the necessary methods of cooperation to attain these objectives, ensuring a balanced and integrated approach towards the issues at stake.

Article 22

Fight against crime and corruption

1. The Parties shall cooperate on combating and preventing criminal and illegal activities, organised or otherwise.

2. This cooperation shall address, inter alia:

(a) smuggling of and trafficking in human beings as well as firearms and illicit drugs;

(b) trafficking in goods;

(c) economic crimes including in the field of taxation;

(d) corruption, both in the private and public sector;

(e) forgery of documents;

(f) cyber crime.

3. The Parties shall enhance bilateral, regional and international cooperation in this field, including cooperation that involves Europol. The Parties shall further develop their cooperation as regards, inter alia,

(a) exchange of best practices, including on investigation techniques and crime research;

(b) exchange of information in line with applicable rules;

(c) capacity building, including training and where appropriate staff exchanges;

(d) issues relating to the protection of witnesses and victims.

4. The Parties are committed to implementing effectively the UN Convention against Transnational Organised Crime of 2000 and its three Protocols, the UN Convention against Corruption of 2003 and other relevant international instruments.

Article 23

Cooperation in fighting terrorism

1. The Parties agree to cooperate in the prevention and suppression of acts of terrorism in accordance with international law, international human rights law, refugee law and humanitarian law, and the respective laws and regulations of the Parties. In particular the Parties agree to cooperate on the basis of the full implementation of Resolution No. 1373 of the UN Security Council of 2001, the United Nations Global Counter- Terrorism Strategy of 2006 and other relevant UN instruments, and applicable international conventions and instruments.

2. They shall do so in particular:

(a) by exchanging information on terrorist groups and their support networks;

(b) by exchanging experiences and information on terrorism trends and with regard to means and methods of combating terrorism including in technical areas and training, and

(c) by exchanging experience in respect of terrorism prevention.

All exchanges of information will take place in accordance with international and national law.

Article 24

Legal cooperation

1. The Parties agree to further develop judicial cooperation in civil and criminal matters, making full use of the relevant international and bilateral instruments and based on the principles of legal certainty and the right to a fair trial.

2. The Parties agree to facilitate further EU-Ukraine judicial cooperation in civil matters on the basis of the applicable multilateral legal instruments, especially the Conventions of the Hague Conference on Private International Law in the field of international Legal Cooperation and Litigation as well as the Protection of Children.

3. As regards judicial cooperation in criminal matters, the Parties will seek to enhance arrangements on mutual legal assistance and extradition. This would include, where appropriate, accession to, and implementation of, the relevant international instruments of the United Nations and the Council of Europe, as well as the Rome Statute of the International Criminal Court of 1998 as referred to in Article 8 of this Agreement, and closer cooperation with Eurojust.

TITLE IV

TRADE AND TRADE-RELATED MATTERS

TITLE IV TRADE AND TRADE-RELATED MATTERS

CHAPTER 1

National Treatment and Market Access for Goods

Section 1

Common Provisions

Article 25

Objective

The Parties shall progressively establish a free trade area over a transitional period of 10 years maximum starting from the entry into force of this Agreement[1], in accordance with the provisions of this Agreement and in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as "GATT 1994").

Article 26

Scope and coverage

1. The provisions of this Chapter shall apply to trade in goods[2] originating in the territories of the Parties.

2. For the purposes of this Chapter, ‘originating’ means qualifying under the rules of origin set out in Protocol 1 to this Agreement (Concerning the Definition of the Concept ‘Originating Products’ and Methods of Administrative Cooperation).

Section 2

Elimination of Customs Duties, Fees and Other Charges

Article 27

Definition of customs duties

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

(a) charge equivalent to an internal tax imposed consistently with Article 32 of this Agreement;

(b) duties imposed consistently with Chapter 2 (Trade Remedies) of Title IV of this Agreement;

(c) fees or other charges imposed consistently with Article 33 of this Agreement.

Article 28

Classification of goods

The classification of goods in trade between the Parties shall be that set out in each Party's respective tariff nomenclature in conformity with the Harmonised System of the International Convention on the Harmonised Commodity Description and Coding System of 1983 (hereinafter referred to as the “HS”) and subsequent amendments.

Article 29

Elimination of customs duties on imports

1. Each Party shall reduce or eliminate customs duties on originating goods of the other Party in accordance with the Schedules set out in Annex I-A to this Agreement (hereinafter referred to as the ‘Schedules’).

For worn clothing and other worn articles falling within the Ukrainian customs code 6309 00 00 Ukraine will eliminate customs duties on imports in accordance with the conditions set out in Annex I-B to this Agreement.

2. For each good, the base rate of customs duties to which the successive reductions are to be applied under paragraph 1 of this Article, shall be that specified in Annex I to this Agreement.

3. If, at any moment following the date of entry into force of this Agreement, a Party reduces its applied most-favoured-nation (hereinafter referred to as ‘MFN’) customs duty rate, such duty rate shall apply as base rate if and for as long as it is lower than the customs duty rate calculated in accordance with that Party’s Schedule.

4. Five years after the entry into force of this Agreement, at the request of either Party, the Parties shall consult to consider accelerating and broadening the scope of the elimination of customs duties on trade between the Parties. A decision of the Association Committee meeting in Trade configuration as set out in Article 465 of this Agreement (hereinafter referred to also as the "Trade Committee") on the acceleration or elimination of a customs duty on a good shall supersede any duty rate or staging category determined pursuant to their Schedules for that good.

Article 30

Standstill

Neither Party may increase any existing customs duty, or adopt any new customs duty, on a good originating in the territory of the other Party. This shall not preclude that either Party may:

(a) raise a customs duty to the level established in its Schedule following a unilateral reduction; or

(b) maintain or increasing a customs duty as authorised by the Dispute Settlement Body (hereinafter referred to as the "DSB") of the World Trade Organization (hereinafter referred to as the "WTO").

Article 31

Customs duties on exports

1. Parties shall not institute or maintain any customs duties, taxes or other measures having an equivalent effect imposed on, or in connection with, the exportation of goods to the territory of each other.

2. Existing customs duties or measures having equivalent effect applied by Ukraine, as listed in Annex I-D to this Agreement, shall be phased out over a transitional period in accordance with the Schedule included in Annex I-D to this Agreement. In the case of an update to the Ukrainian customs code, commitments made under the Schedule in Annex I-D to this Agreement shall remain in force based on correspondence of description of the goods. Ukraine may introduce safeguard measures for export duties as set out in Annex I-D to this Agreement. Such safeguard measures shall expire at the end of the period specified for that good in Annex I-D to this Agreement.

Article 32

Export subsidies and measures of equivalent effect

1. For the purposes of this Article, “export subsidies” shall have the meaning assigned to that term in Article 1(e) of the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Agreement on Agriculture"), including any amendment of that Article of that Agreement on Agriculture.

2. Upon entry into force of this Agreement, no Party shall maintain, introduce or reintroduce export subsidies or other measures with equivalent effect on agricultural goods destined for the territory of the other Party.

Article 33

Fees and other charges

Each Party shall ensure, in accordance with Article VIII of GATT 1994 and its interpretative notes, that all fees and charges of whatever nature other than customs duties or other measures referred to in Article 27 of this Agreement, imposed on or in connection with the importation or exportation of goods are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or taxation of imports or exports for fiscal purposes.

Section 3

Non-Tariff Measures

Article 34

National treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes. To this end, Article III of GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement.

Article 35

Import and export restrictions

No Party shall adopt or maintain any prohibition or restriction or any measure having an equivalent effect on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except as otherwise provided in this Agreement or in accordance with Article XI of GATT 1994 and its interpretative notes. To this end, Article XI of GATT 1994 and its interpretative notes are incorporated into and made an integral part of this Agreement.

Section 4

Specific Provisions Related to Goods

Article 36

General exceptions

Nothing in this Agreement shall be construed in such a way as to prevent the adoption or enforcement by any Party of measures in accordance with Articles XX and XXI of GATT 1994 and its interpretative notes, which are hereby incorporated into and made an integral part of this Agreement.

Section 5

Administrative Cooperation and Coordination with Other Countries

Article 37

Special provisions on administrative cooperation

1. The Parties agree that administrative cooperation is essential for the implementation and control of the preferential treatment granted under this Chapter and underline their commitment to combating irregularities and fraud in customs matters related to the import, export, and transit of goods and their placement under any other customs regime or procedure, including measures of prohibition, restriction and control.

2. Where a Party, on the basis of objective documented information, experiences a failure by the other Party to provide administrative cooperation and/or verify the existence of irregularities or fraud under this Chapter, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.

3. For the purposes of this Article failure to provide administrative cooperation in investigating customs irregularities or fraud shall mean, inter alia:

(a) repeated failure to respect the obligations to verify the originating status of the product(s) concerned;

(b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin;

(c) a repeated refusal or undue delay in obtaining authorisation to conduct administrative co-operation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

For the purposes of this Article, a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.

4. The application of a temporary suspension shall be subject to the following conditions:

(a) The Party which has, on the basis of objective information, made a finding of failure to provide administrative cooperation and/or of irregularities or fraud stemming from the other Party shall without undue delay notify the Trade Committee of its finding together with the objective information and enter into consultations within the Trade Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties. During the period of consultations referred to above the product(s) concerned shall enjoy the preferential treatment.

(b) Where the Parties have entered into consultations within the Trade Committee as mentioned above and have failed to agree on an acceptable solution within three months after the first meeting of the Trade Committee, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. Such temporary suspension shall be notified to the Trade Committee without undue delay.

(c) Temporary suspensions under this Article shall be limited to what is necessary to protect the financial interests of the Party concerned. They shall not exceed a period of six months, which may be renewed. Temporary suspensions shall be notified immediately after their adoption to the Trade Committee. They shall be subject to periodic consultations within the Trade Committee in particular with a view to their termination as soon as the conditions for their application are no longer given.

5. At the same time as the notification to the Trade Committee under paragraph 4(a) of this Article, the Party concerned should publish a notice to importers in its sources of official information. The notice to importers should indicate for the product concerned that there is a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud.

Article 38

Management of administrative errors

In the event of error by the competent authorities in the proper management of the preferential system at export, and in particular in the application of the provisions of the Protocol to this Agreement concerning the definition of originating products and methods of administrative cooperation, where this error leads to consequences in terms of import duties, the Party facing such consequences may request the Trade Committee to examine the possibilities of adopting all appropriate measures with a view to resolving the situation.

Article 39

Agreements with other countries

1. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier traffic except insofar as they conflict with trade arrangements provided for in this Agreement.

2. Consultations between the Parties shall take place within the Trade Committee concerning agreements establishing customs unions, free trade areas or arrangements for frontier traffic 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 European Union, such consultations shall take place in order to ensure that account will be taken of the mutual interests of the EU Party and Ukraine as stated in this Agreement.

CHAPTER 2

Trade Remedies

Section 1

Global Safeguard Measures

Article 40

General provisions

1. The Parties confirm their rights and obligations under Article XIX of GATT 1994 and the Agreement on Safeguards contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Agreement on Safeguards").The EU Party retains its rights and obligations under Article 5 of the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Agreement on Agriculture"), except for agricultural trade subject to preferential treatment under this Agreement.

2. The preferential rules of origin established under Chapter 1 (National Treatment and Market Access for Goods) of Title IV of this Agreement shall not apply to this Section.

Article 41

Transparency

1. The Party initiating a safeguard investigation shall notify the other Party of such initiation by sending an official notification to the other Party, if the latter has a substantial economic interest.

2. Notwithstanding Article 40 of this Agreement, at the request of the other Party, the Party initiating a safeguard investigation and intending to apply safeguard measures shall provide immediately ad hoc written notification of all the pertinent information leading to the initiation of a safeguard investigation and imposition of safeguard measures, including where relevant, on the provisional findings and on the final findings of the investigation as well as offer the possibility for consultations to the other Party. This is without prejudice to Article 3.2 of the Agreement on Safeguards.

3. For the purposes of this Article, a Party shall be considered as having a substantial economic interest when it is among the five largest suppliers of the imported product during the most recent three-year period of time, measured in terms of either absolute volume or value.

Article 42

Application of measures

1. When imposing safeguard measures, the Parties shall endeavour to impose them in a way that least affects their bilateral trade.

2. For the purposes of paragraph 1 of this Article, if one Party considers that the legal requirements for the imposition of definitive safeguard measures are met, the Party intending to apply such measures shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within 30 days of the notification, the importing Party may adopt the appropriate measures to remedy the problem.

Article 43

Developing country

To the extent that Ukraine qualifies as a developing country[3] for the purposes of Article 9 of the Agreement on Safeguards, it will not be subject to any safeguard measures applied by the EU Party, in so far as the conditions provided in that Article of the Agreement on Safeguards are fulfilled.

Section 2

Safeguard Measures on Passenger Cars

Article 44

Safeguard measures on passenger cars

1. Ukraine may apply a safeguard measure in the form of a higher import duty on passenger cars originating[4] in the EU Party under tariff heading 8703 (hereinafter referred to as the "product"), as defined in Article 45 of this Agreement, consistent with the provisions of this Section, if each of the following conditions is met:

(a) if, as a result of the reduction or elimination of a customs duty under this Agreement, the product is being imported into the territory of Ukraine in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause serious injury to a domestic industry producing a like product;

(b) if the aggregate volume (in units)[5] of imports of the product in any year exceeds the trigger level set out in its Schedule included in Annex II to this Agreement; and

(c) if the aggregate volume of imports of the product into Ukraine (in units)[6] for the last 12-month period ending not earlier than the penultimate month before Ukraine invites the EU Party for consultations in line with paragraph 5 of this Article below exceeds the trigger percentage set out in the Schedule of Ukraine in Annex II of all new registrations[7] of passenger cars in Ukraine for the same period.

2. The duty under paragraph 1 of this Article shall not exceed the lesser of the prevailing MFN applied rate, or the MFN applied rate of duty in effect on the day immediately preceding the date this Agreement enters into force, or the tariff rate set out in the Schedule of Ukraine in Annex II to this Agreement. The duty can only be applied for the remainder of that year as defined in Annex II to this Agreement.

3. Without prejudice to paragraph 2 of this Article, the duties Ukraine applies under paragraph 1 of this Article shall be set according to the Schedule of Ukraine in Annex II to this Agreement.

4. Any supplies of the product in question which were en route on the basis of a contract entered into before the additional duty is imposed under paragraphs 1 to 3 of this Article shall be exempt from any such additional duty. However, such supplies will be counted in the volume of imports of the product in question during the following year for the purpose of meeting the conditions set out in paragraph 1 of this Article for that year.

5. Ukraine shall apply any safeguard measure in a transparent manner. To this end, Ukraine shall, as soon as possible, provide written notification to the EU Party of its intention to apply such a measure and provide all the pertinent information, including the volume (in units) of imports of the product, the total volume (in units) of imports of passenger cars of any source and the new registrations of passenger cars in Ukraine for the period referred to in paragraph 1 of this Article. Ukraine shall invite the EU Party for consultations as far in advance of taking such measure as practicable in order to discuss this information. No measure shall be adopted for 30 days following the invitation for consultations.

6. Ukraine may apply a safeguard measure only following an investigation by its competent authorities in accordance with Articles 3 and 4(2)(c) of the Agreement on Safeguards and to this end, Articles 3 and 4(2)(c) of the Agreement on Safeguards are incorporated into and made part of this Agreement, mutatis mutandis. Such investigation must prove that as a result of the reduction or elimination of a customs duty under this Agreement, the product is being imported into the territory of Ukraine in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause serious injury to a domestic industry producing a like product.

7. Ukraine shall immediately notify the EU Party in writing of the initiation of an investigation as described in paragraph 6 of this Article.

8. During the investigation Ukraine shall comply with the requirements of Article 4.2(a) and (b) of the Agreement on Safeguards and to this end, Article 4.2(a) and (b) of the Agreement on Safeguards is incorporated into and made part of this Agreement, mutatis mutandis.

9. The relevant factors related to the injury determination in Article 4.2(a) of the Agreement on Safeguards shall be evaluated for at least three consecutive periods of 12 months, i.e. a minimum of three years in total.

10. The investigation shall also evaluate all known factors, other than increased preferential imports under this Agreement, that at the same time may be causing injury to the domestic industry. Increased imports of a product originating in the EU Party shall not be considered to be the result of the elimination or reduction of a customs duty, if imports of the same product from other sources have increased to a comparable extent.

11. Ukraine shall inform the EU Party and all other interested parties in writing of the findings and reasoned conclusions of the investigation well in advance of the consultations referred to in paragraph 5 of this Article with a view to reviewing the information arising from the investigation and exchanging views on the proposed measures during the consultations.

12. Ukraine shall ensure that the statistics on passenger cars that are used as evidence for such measures are reliable, adequate and publicly accessible in a timely manner. Ukraine shall provide without delay monthly statistics on the volume (in units) of imports of the product, the total volume (in units) of imports of passenger cars of any source and the new registrations of passenger cars in Ukraine.

13. Notwithstanding paragraph 1 of this Article during the transition period, the provisions of paragraphs 1(a) and 6 to 11 of this Article shall not apply.

14. Ukraine shall not apply a safeguard measure under this Section during year one. Ukraine shall not apply or maintain any safeguard measure under this Section or continue any investigation to that effect after year 15.

15. The implementation and operation of this Article may be the subject of discussion and review in the Trade Committee.

Article 45

Definitions

For the purposes of this Section and Annex II to this Agreement:

1. "the product" means only passenger cars originating in the EU Party and falling under tariff heading 8703 in accordance with the rules of origin established in Protocol 1 to this Agreement concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation;

2. “serious injury” shall be understood in accordance with Article 4.1(a) of the Agreement on Safeguards. To this end, Article 4.1(a) is incorporated into and made part of this Agreement, mutatis mutandis;

3. "like product" shall be understood to mean a product which is identical, i.e. alike in all respects to the product under consideration, or in the absence of such a product, another product which although not alike in all respects, has characteristics closely resembling those of the product under consideration;

4. “transition period” means a 10-year period beginning on the date this Agreement enters into force. The transition period will be extended for three more years, if before the end of the year 10, Ukraine has presented a reasoned request to the Trade Committee referred to in Article 465 of this Agreement and the Trade Committee has discussed it;

5. "year one" means the 12-month period beginning on the date this Agreement enters into force;

6. "year two" means the 12-month period beginning on the first anniversary of the entry into force of this Agreement;

7. "year three" means the 12-month period beginning on the second anniversary of the entry into force of this Agreement;

8. "year four" means the 12-month period beginning on the third anniversary of the entry into force of this Agreement;

9. "year five" means the 12-month period beginning on the fourth anniversary of the entry into force of this Agreement;

10. "year six" means the 12-month period beginning on the fifth anniversary of the entry into force of this Agreement;

11. "year seven" means the 12-month period beginning on the sixth anniversary of the entry into force of this Agreement;

12. "year eight" means the 12-month period beginning on the seventh anniversary of the entry into force of this Agreement;

13. "year nine" means the 12-month period beginning on the eighth anniversary of the entry into force of this Agreement;

14. "year ten" means the 12-month period beginning on the ninth anniversary of the entry into force of this Agreement;

15. "year eleven" means the 12-month period beginning on the tenth anniversary of the entry into force of this Agreement;

16. "year twelve" means the 12-month period beginning on the eleventh anniversary of the entry into force of this Agreement;

17. "year thirteen" means the 12-month period beginning on the twelfth anniversary of the entry into force of this Agreement;

18. "year fourteen" means the 12-month period beginning on the thirteenth anniversary of the entry into force of this Agreement;

19. "year fifteen" means the 12-month period beginning on the fourteenth anniversary of the entry into force of this Agreement.

Section 3

Article 45 bis

Non-cumulation

Neither Party may apply, with respect to the same product, at the same time:

(a) a safeguard measure in accordance with Section 2 (Safeguard Measures on Passenger Cars) of this Chapter; and

(b) a measure under Article XIX of GATT 1994 and the Agreement on Safeguards.

Section 4

Anti-dumping and Countervailing Measures

Article 46

General provisions

1. The Parties confirm their rights and obligations under Article VI of GATT 1994, the Agreement on Implementation of Article VI of GATT 1994, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "Anti-Dumping Agreement") and the Agreement on Subsidies and Countervailing Measures, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "SCM Agreement").

2. The preferential rules of origin established under Chapter 1 (National Treatment and Market Access for Goods) of Title IV of this Agreement shall not apply to this Section.

Article 47

Transparency

1. The Parties agree that anti-dumping and countervailing measures should be used in full compliance with the requirements under the Anti-Dumping Agreement and the SCM Agreement respectively and should be based on a fair and transparent system.

2. After receipt by a Party's competent authorities of a properly documented anti-dumping complaint with respect to imports from the other Party, and no later than 15 days before initiating an investigation, the Party shall provide written notification to the other Party of receipt of the application.

3. The Parties shall ensure, immediately after the imposition of provisional measures, if any, and before final determination is made, full and meaningful disclosure of all essential facts and considerations which form the basis for the decision to apply measures, without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Disclosure shall be made in writing, and allow interested parties sufficient time to make their comments. After final disclosure, interested parties shall be given at least 10 days to make their comments.

4. Provided it does not unnecessarily delay the conduct of the investigation and in accordance with the internal legislation concerning investigation procedures, each interested party shall be granted the possibility to be heard in order to express their views during anti-dumping and anti-subsidy investigations.

Article 48

Consideration of public interest

Anti-dumping or countervailing measures may not be applied by a Party where, on the basis of the information made available during the investigation, it can clearly be concluded that it is not in the public interest to apply such measures. The public interest determination shall be based on an appreciation of all the various interests taken as a whole, including the interests of the domestic industry and of users, consumers and importers to the extent that they have provided relevant information to the investigating authorities.

Article 49

Lesser duty rule

Should a Party decide to impose a provisional or definitive anti-dumping or countervailing duty, the amount of such duty shall not exceed the margin of dumping or countervailable subsidies, but it should be less than the margin if such a lesser duty would be adequate to remove the injury to the domestic industry.

Article 50

Application of measures and reviews

1. Provisional anti-dumping or countervailing measures may be applied by the Parties only if a preliminary determination has shown the existence of dumping or subsidy causing injury to a domestic industry.

2. Before imposing a definitive anti-dumping or countervailing duty, the Parties shall explore the possibility of applying constructive remedies, due consideration being given to the special circumstances of each case. Without prejudice to the relevant provisions of each Party’s internal legislation, the Parties should give preference to price undertakings, to the extent that they have received adequate offers by exporters and that the acceptance of these offers is not considered impractical.

3. Upon receiving a duly substantiated request made by an exporter for a review of anti-dumping or countervailing measures in force, the Party that has imposed the measure shall examine such a request in an objective and expeditious manner and inform the exporter of the results of the examination as soon as possible.

Section 5

Article 50 bis

Consultations

1. A Party shall afford opportunity for consultation at the request of the other Party concerning specific issues that may arise regarding the application of trade remedies. Those issues may concern, but are not limited to, the methodology followed to calculate margins of dumping, including various adjustments, the use of statistics, the development of imports, the determination of injury and the application of the lesser duty rule.

2. Consultations shall take place as soon as possible and normally within 21 days of the request.

3. Consultations under this Section shall be held without prejudice to and in full compliance with the provisions of Article 41 and Article 47 of this Agreement.

Section 6

Institutional Provisions

Article 51

Dialogue on trade remedies

1. Parties have agreed to establish an expert-level Dialogue on Trade Remedies as a forum for cooperation in trade remedies matters.

2. The Dialogue shall be conducted with the aim to:

(a) enhance a Party's knowledge and understanding of the other Party's trade remedy laws, policies and practices;

(b) examine the implementation of this Chapter;

(c) improve cooperation between the Parties' authorities having responsibility for trade remedies matters;

(d) discuss international developments in the area of trade defence;

(e) cooperate on any other trade remedies matter.

3. The Dialogue meetings shall be held on ad hoc basis upon a request from either Party. The agenda of each such meeting shall be jointly agreed in advance.

Section 7

Provisions on Dispute Settlement

Article 52

Provisions on dispute settlement

1. The provisions of Sections 1, 4, 5, 6 and 7 of this Chapter shall not be subject to the Dispute Settlement provisions of this Agreement.

2. The provisions of Sections 2 and 3 of this Chapter shall be subject to the Dispute Settlement provisions of this Agreement.

CHAPTER 3

Technical Barriers to Trade

Article 53

Scope and definitions

1. This Chapter applies to the preparation, adoption and application of technical regulations, standards, and conformity assessment procedures as defined in the Agreement on Technical Barriers to Trade, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the “TBT Agreement”) that may affect trade in goods between the Parties.

2. Notwithstanding paragraph 1 of this Article, this Chapter does not apply to sanitary and phytosanitary measures as defined in Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement (hereinafter referred to as the "SPS Agreement"), nor to purchasing specifications prepared by public authorities for their own production or consumption requirements.

3. For the purposes of this Chapter, the definitions of Annex I to the TBT Agreement shall apply.

Article 54

Affirmation of the TBT Agreement

The Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement, which is hereby incorporated into and made part of this Agreement.

Article 55

Technical cooperation

1. The Parties shall strengthen their cooperation in the field of technical regulations, standards, metrology, market surveillance, accreditation and conformity assessment procedures with a view to increasing mutual understanding of their respective systems and facilitating access to their respective markets. To this end, they may establish regulatory dialogues at both horizontal and sectoral levels.

2. In their cooperation, the Parties shall seek to identify, develop and promote trade-facilitating initiatives which may include, but are not limited to:

(a) reinforcing regulatory cooperation through the exchange of information, experiences and data, and scientific and technical cooperation, with a view to improving the quality of their technical regulations, standards, testing, market surveillance, certification, and accreditation, and making efficient use of regulatory resources;

(b) promoting and encouraging cooperation between their respective organisations, public or private, responsible for metrology, standardization, testing, market surveillance, certification and accreditation;

(c) fostering the development of the quality infrastructure for standardisation, metrology, accreditation, conformity assessment and the market surveillance system in Ukraine;

(d) promoting Ukrainian participation in the work of related European organisations;

(e) seeking solutions to trade barriers that may arise;

(f) coordinating their positions in international trade and regulatory organisations such as the WTO and the United Nations Economic Commission for Europe (hereinafter referred to as "UN-ECE").

Article 56

Approximation of technical regulations, standards, and conformity assessment

1. Ukraine shall take the necessary measures in order to gradually achieve conformity with EU technical regulations and EU standardisation, metrology, accreditation, conformity assessment procedures and the market surveillance system, and undertakes to follow the principles and practices laid down in relevant EU Decisions and Regulations[8].

2. With a view to reaching these objectives, Ukraine shall, in line with the timetable in Annex III to this Agreement:

(i) incorporate the relevant EU acquis into the legislation of Ukraine;

(ii) make the administrative and institutional reforms, that are necessary to implement this Agreement and the Agreement on Conformity Assessment and Acceptance of Industrial Products (hereinafter referred to as the "ACAA") mentioned in Article 57 of this Agreement below;

(iii) provide the effective and transparent administrative system required for the implementation of this Chapter.

3. The timetable in Annex III to this Agreement shall be agreed and maintained by the Parties.

4. After this Agreement comes into force, Ukraine shall provide the EU Party once a year with reports on the measures taken in accordance with this Article. Where actions listed in the timetable in Annex III to this Agreement have not been implemented within the applicable time frame, Ukraine shall indicate a new timetable for the completion of such actions.

5. Ukraine shall refrain from amending its horizontal and sectoral legislation listed in Annex III to this Agreement, except in order to align such legislation progressively with the corresponding EU acquis, and to maintain such alignment.

6. Ukraine shall notify the EU Party of any such changes in its national legislation.

7. Ukraine shall ensure that its relevant national bodies participate fully in the European and international organisations for standardisation, legal and fundamental metrology, and conformity assessment including accreditation in accordance with its area of activity and the membership status available to it.

8. Ukraine shall progressively transpose the corpus of European standards (EN) as national standards, including the harmonised European standards, the voluntary use of which shall be presumed to be in conformity with legislation listed in Annex III to this Agreement. Simultaneously with such transposition, Ukraine shall withdraw conflicting national standards, including its application of interstate standards in Ukraine (GOST/ГОСТ), developed before 1992. In addition, Ukraine shall progressively fulfil the other conditions for membership, in line with the requirements applicable to full members of the European Standardization Organizations.

Article 57

Agreement on Conformity Assessment and Acceptance of Industrial Products

1. The Parties agree to add an ACAA as a Protocol to this Agreement, covering one or more sectors listed in Annex III to this Agreement once they have agreed that the relevant Ukrainian sectoral and horizontal legislation, institutions and standards have been fully aligned with those of the EU.

2. The ACAA will provide that trade between the Parties in goods in the sectors that it covers shall take place under the same conditions as those applying to trade in such goods between the Member States of the European Union.

3. Following a check by the EU Party and agreement on the state of alignment of relevant Ukrainian technical legislation, standards and infrastructure, the ACAA shall be added as a Protocol to this Agreement by agreement between the Parties according to the procedure for amending this Agreement, covering such sectors from the list in Annex III to this Agreement as are considered to be aligned. It is intended that the ACAA will ultimately be extended to cover all the sectors listed in Annex III to this Agreement, in accordance with the aforementioned procedure.

4. Once the sectors on the list have been covered by the ACAA, the Parties undertake to consider extending its scope to cover other industrial sectors by agreement between the Parties according to the procedure for amending this Agreement.

5. Until a product is covered under the ACAA, the relevant existing legislation of the Parties shall apply to it, taking into account the provisions of the TBT Agreement.

Article 58

Marking and labelling

1. Without prejudice to the provisions of Article 56 and Article 57 of this Agreement, with respect to technical regulations relating to labelling or marking requirements, the Parties reaffirm the principles of Article 2.2 of the TBT Agreement whereby such requirements are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, such labelling or marking requirements shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks that non-fulfilment would create.

2. In particular, regarding mandatory marking or labelling, the Parties agree:

(a) that they will endeavour to minimise their requirements for marking or labelling, except as required for the adoption of the EU acquis in this area and for marking and labelling for the protection of health, safety, or the environment, or for other reasonable public policy purposes;

(b) that a Party may determine the form of labelling or marking, but shall not require the approval, registration or certification of labels;

(c) that the Parties retain the right to require the information on a label or marks to be in a specified language.

CHAPTER 4

SANITARY AND PHYTOSANITARY MEASURES

Article 59

Objective

1. The objective of this Agreement is to facilitate trade in commodities covered by sanitary and phytosanitary measures between the Parties, whilst safeguarding human, animal and plant life or health, by:

(a) ensuring full transparency as regards sanitary and phytosanitary measures applicable to trade;

(b) approximating the Ukrainian legislative system to that of the EU;

(c) recognising the animal and plant health status of the Parties and applying the principle of regionalisation;

(d) establishing a mechanism for the recognition of equivalence of sanitary or phytosanitary measures maintained by a Party;

(e) further implementing the principles of the SPS Agreement;

(f) establishing mechanisms and procedures for trade facilitation; and

(g) improving communication and cooperation between the Parties on sanitary and phytosanitary measures.

2. Furthermore, this Chapter aims at reaching a common understanding between the Parties concerning animal welfare standards.

Article 60

Multilateral obligations

The Parties re-affirm their rights and obligations under the SPS Agreement.

Article 61

Scope

This Chapter shall apply to all sanitary and phytosanitary measures of a Party that may, directly or indirectly, affect trade between the Parties, including the measures listed in Annex IV to this Agreement.

Article 62

Definitions

For the purposes of this Chapter, the following definitions shall apply:

1. "sanitary and phytosanitary measures " means measures as defined in paragraph 1 of Annex A to the SPS Agreement, falling within the scope of this Chapter;

2. "animals" means terrestrial and aquatic animals as defined in the Terrestrial Animal Health Code or the Aquatic Animal Health Code of the World Organisation for Animal Health (hereinafter referred to as the "OIE") accordingly;

3. "animal products" means products of animal origin including aquatic animal products, as defined in the Terrestrial Animal Health Code and the Aquatic Animal Health Code of the OIE;

4. "animal by-products not intended for human consumption" means animal products as listed in Annex IV-A, Part 2 (II) to this Agreement;

5. "plants" means living plants and specified living parts thereof, including seeds:

(a) fruits, in the botanical sense, other than those preserved by deep freezing;

(b) vegetables, other than those preserved by deep freezing;

(c) tubers, corms, bulbs, rhizomes;

(d) cut flowers;

(e) branches with foliage;

(f) cut trees retaining foliage;

(g) plant tissue cultures;

(h) leaves, foliage;

(i) live pollen; and

(j) bud-wood, cuttings, scions.

6. "plant products" means products of plant origin, unprocessed or having undergone simple preparation in so far as these are not plants, set out in Annex IV-A, Part 3 to this Agreement;

7. "seeds" means seeds in the botanical sense, intended for planting;

8. "pests (harmful organisms)" means any species, strain or biotype of plant, animal or pathogenic agent injurious to plants or plant products;

9. "protected zones" mean, in the case of the EU Party, zones within meaning of Article 2(1)(h) of Council Directive 2000/29/EC of 8 May 2000 on protective measures against the introduction into Community of organisms harmful to plants or plant products and against their spread within the Community or any successor provision (hereinafter referred to as "Directive 2000/29/EC");

10. "animal disease" means a clinical or pathological manifestation of an infection in animals;

11. "aquaculture disease" means clinical or non-clinical infection with one or more of the aetiological agents of the diseases referred to in the Aquatic Animal Health Code of the OIE;

12. "infection in animals" means the situation where animals maintain an infectious agent with or without presence of clinical or pathological manifestation of an infection;

13. "animal welfare standards" means standards for the protection of animals as developed and applied by the Parties and, as appropriate, in line with the OIE standards and falling within the scope of this Agreement;

14. "appropriate level of sanitary and phytosanitary protection” means the appropriate level of sanitary and phytosanitary protection as defined in paragraph 5 of Annex A to the SPS Agreement;

15. "region" means, as regards animal health, zones or regions as defined in the Terrestrial Animal Health Code of the OIE, and for aquaculture as defined in the International Aquatic and Animal Health Code of the OIE, on the understanding that as regards the territory of the EU Party its specificity shall be taken into account, recognising the EU Party as an entity;

16. "pest-free area" means an area in which a specific pest does not occur as demonstrated by scientific evidence and in which, where appropriate, this condition is being officially maintained;

17. "regionalisation" means the concept of regionalisation as described in Article 6 of the SPS Agreement;

18. "consignment" means a quantity of animal products of the same type, covered by the same certificate or document, conveyed by the same means of transport, consigned by a single consignor and originating in the same exporting country or part of such country. A consignment may be composed of one or more lots;

19. "consignment of plants or plant products" means a quantity of plants, plant products and/or other articles being moved from one country to another and covered, when required, by a single phytosanitary certificate (a consignment may be composed of one or more commodities or lots);

20. "lot" means a number or units of a single commodity, identifiable by its homogeneity of composition and origin, and forming part of a consignment;

21. "equivalence for trade purposes" (hereinafter referred to as "equivalence") means the situation where the importing Party shall accept the sanitary or phytosanitary measures of the exporting Party as equivalent, even if these measures differ from its own, if the exporting Party objectively demonstrates to the importing Party that its measures achieve the importing Party's appropriate level of sanitary or phytosanitary protection;

22. "sector" means the production and trade structure for a product or category of products in a Party;

23. "sub-sector" means a well-defined and controlled part of a sector;

24. "commodities" means animals and plants, or categories thereof, or specific products and other objects being moved for trade or other purposes, including those referred to in points 2 to 7 of this Article;

25. "specific import authorisation" means a formal prior authorisation by the competent authorities of the importing Party addressed to an individual importer as a condition for import of a single consignment or multiple consignments of a commodity from the exporting Party, within the scope of this Agreement;

26. "working days" means week days except Sunday, Saturday and public holidays in one of the Parties;

27. "inspection" means the examination of any aspect of feed, food, animal health and animal welfare in order to verify that such aspect(s) comply with the legal requirements of feed and food law and animal health and animal welfare rules;

28. "plant health inspection" means official visual examination of plants, plant products or other regulated objects to determine if pests are present and/or to determine compliance with phytosanitary regulations;

29. "verification" means checking, by examination and the consideration of objective evidence, whether specified requirements have been fulfilled.

Article 63

Competent authorities

The Parties shall inform each other about the structure, organisation, and division of competences of their competent authorities during the first meeting of the Sanitary and Phytosanitary Management Sub-Committee (hereinafter referred to as the "SPS Sub-Committee") referred to in Article 74 of this Agreement. The Parties shall inform each other of any change concerning such competent authorities, including contact points.

Article 64

Regulatory approximation

1. Ukraine shall approximate its sanitary and phytosanitary and animal welfare legislation to that of the EU as set out in Annex V to this Agreement.

2. The Parties shall cooperate on legislative approximation and capacity building.

3. The SPS Sub-Committee shall regularly monitor implementation of the approximation process, set out in Annex V to this Agreement, in order to provide the necessary recommendations on approximation measures.

4. Not later than three months after the entry into force of this Agreement Ukraine shall submit to the SPS Sub-Committee a comprehensive strategy for the implementation of this Chapter, divided into priority areas that relate to measures, as defined in Annex IV-A, Annex IV-B and Annex IV-C to this Agreement, facilitating trade in one specific commodity or group of commodities. The strategy shall serve as the reference document for the implementation of this Chapter and it will be added to Annex V to this Agreement.[9]

Article 65

Recognition for trade purposes of animal health and pest status and regional conditions

A. Recognition of status for animal diseases, infections in animals or pests

1. As regards animal diseases and infections in animals (including zoonosis), the following shall apply:

(a) The importing Party shall recognise for trade purposes the animal health status of the exporting Party or its regions as determined by the exporting Party in accordance with Annex VII Part A to this Agreement, with respect to animal diseases specified in Annex VI-A to this Agreement;

(b) Where a Party considers that it has, for its territory or a region, a special status with respect to a specific animal disease, other than those listed in Annex VI-A to this Agreement, it may request recognition of this status in accordance with the criteria laid down in Annex VII Part C to this Agreement. The importing Party may request guarantees in respect of imports of live animals and animal products, which are appropriate to the agreed status of the Parties;

(c) The status of the territories or regions, or the status in a sector or sub-sector of the Parties related to the prevalence or incidence of an animal disease other than listed in Annex VI-A to this Agreement, or infections in animals, and/or the associated risk, as appropriate, as defined by OIE, is recognised by the Parties as the basis for trade between them. The importing Party may request guarantees in respect of imports of live animals and animal products which are appropriate to the defined status in accordance with the recommendations of OIE, as appropriate.

(d) Without prejudice to Articles 67, 69 and 73 of this Agreement, and unless the importing Party raises an explicit objection and requests supporting or additional information or consultations and/or verification, each Party shall take without undue delay the necessary legislative and administrative measures to allow trade on the basis of the provisions of subparagraphs (a), (b) and (c) of this paragraph.

2. As regards pests, the following shall apply:

(a) The Parties recognise for trade purposes their pest status in respect of pests specified in Annex VI-B to this Agreement;

(b) Without prejudice to Articles 67, 69 and 73 of this Agreement, and unless the importing Party raises an explicit objection and requests supporting or additional information or consultations and/or verification, each Party shall take without undue delay the necessary legislative and administrative measures to allow trade on the basis of the provision of subparagraph (a) of this paragraph.

B. Recognition of regionalisation/zoning, pest-free areas (hereinafter referred to as "PFAs") and protected zones (hereinafter referred to as the "PZs")

3. The Parties recognise the concept of regionalisation and PFAs as specified in the relevant Food and Agriculture Organization/International Plant Protection Convention of 1997 and International Standards for Phytosanitary Measures (hereinafter referred to as "ISPM") of the Food and Agriculture Organization, and of protected zones according to Directive 2000/29/EC, which they agree to apply to trade between them.

4. The Parties agree that regionalisation decisions for animal and fish diseases listed in Annex VI-A, and for pests listed in Annex VI-B to this Agreement, shall be taken in accordance with the provisions of Annex VII Part A and B to this Agreement.

5. (a) As regards animal diseases and in accordance with the provisions of Article 67 of this Agreement, the exporting Party seeking recognition of its regionalisation decision by the importing Party shall notify its measures with full explanations and supporting data for its determinations and decisions. Without prejudice to Article 68 of this Agreement, and unless the importing Party raises an explicit objection and requests additional information or consultations an