COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(92) 176 final 
Brussels, 4 May 1992 
Proposal for a 
COUNCIL DECISION 
on the conclusion by the European Economic Community of an 
Agreement between the European Economic Community and Latvia 
on trade and commercial and economic cooperation 
(presented by the Commission) 
E. 
EXPLANATORY MEMORANDUM 
1. The attached proposal for a Council Decision is the legal 
instrument for the conclusion of the Agreement on Trade and Commercial 
and Economic Cooperation between the European Economic Community and 
the European Atomic Energy Community and the Republic of Latvia. 
2. Exploratory talks between Commission and Latvian experts took place 
between November 1991 and February this year in Brussels. 
3. On the basis of directives adopted by the Council on 11 November 
1991 there were a number of informal meetings between Community and 
Latvian representatives, which resulted in a formal negotiating session 
in Brussels on 4 February this year, at which the Agreement was 
initialled. 
Regarding the initialled text, which is attached to the proposal for a 
Decision, the following should be noted: 
(a) it contains no financial protocol or financial undertakings; 
(b) the respect for democratic principles and human rights is an 
essential aspect of the Agreement (Article 1); 
(c) ECSC products and textile and clothing products falling within 
Section XI of the Harmonized System are not covered by the 
Agreement (Article 3); 
(d) the Community and Latvia reaffirm their undertaking to accord each 
other most-favoured-nation treatment under the GATT, and the 
Community also undertakes to abolish quantitative restrictions 
specific to Latvia (Article 8); 
(e) as regards commercial cooperation, Latvia also undertakes to 
guarantee effective, suitable protection of intellectual and 
commercial property and to accede to the relevant international 
conventions (Article 13(3)); 
(f) economic cooperation is focused on the sectors listed non-
exhaustively in Article 15 with a view to establishing economic 
links and increasing trade between the two parties: it is also 
designed to support structural changes in the Latvian economy; 
(g) the Community undertakes to support Latvia's applications to accede 
to international organizations and conventions (Article 17); 
(h) Article 18 sets up a Joint Committee and lays down its 
responsibilities: the Committee will monitor the proper working of 
the Agreement and recommend measures that it deems appropriate to 
achieve the aims of the Agreement. 
-2," 
(i) the Agreement is concluded for an initial period of ten 
years, tacitly renewable each year: it may be denounced by 
means of the usual procedure, and suspended with immediate 
effect, totally or partially, should there be serious 
infringement of essential provisions of theiAgreement. 
i 
4. Since Articles 113 and 235 of the Treaty provide the legal basis 
for the Agreement, the opinion of Parliament is required. 
5. It is proposed to sign a joint declaration on political dialogue 
when the Agreement is signed. i 
6. The Council is asked to adopt the attached proposal for a Council 
Decision on the conclusion of an Agreement on Trade and Commercial and 
Economic Cooperation between the Community and Latvia. 
-h 
PROPOSAL FOR 
A COUNCIL DECISION 
of . 
on the conclusion by the European Economic Community of an 
Agreement between the European Economic Community and Latvia 
on trade and commercial and economic cooperation 
THE COUNCIL OF THE EUROPEAN COMMUNITIES 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Articles 113 and 235 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Whereas the conclusion of the Agreement between the European Economic 
Community and on trade and commercial and economic cooperation is 
necessary for the achievement of the Community's objectives in the field 
of external economic relations; whereas this Agreement should be 
approved on behalf of the European Economic Community; 
Whereas it appears that certain measures of economic cooperation 
provided for by the Agreement exceed the powers of action provided for 
in the Treaty, and in particular those specified in the field of the 
common commercial policy, 
HAD DECIDED AS FOLLOWS: 
Article 1 
The Agreement between the European Economic Community and Latvia on 
trade and commercial and economic cooperation is hereby approved on 
behalf of the European Economic Community. 
The text of that Agreement is attached to this decision. 
Article 2 
The President of the Council shall give the notification, provided for 
in Article 21 of the Agreement. 
v-
Article 3 
The Commission assisted by representatives of the Member States, shall 
represent the Community in the joint committee set up by Article 18 of 
the Agreement. 
Done at Brussels, 
For the Council 
The President 
~6-
GROUPE 
EUROPE ORIENTALE 
DOC. SEANCE iU 1/24/92 EN 
Brussels, 4 February 1992 
DRAFT AGREEMENT 
between the European Economic Community and the Republic of Latvia on trade 
and commercial and economic cooperation 
THE EUROPEAN ECONOMIC COMMUNITY, 
hereinafter called the "Community", of the one part, and 
THE REPUBLIC OF LATVIA, 
hereinafter called "Latvia", of the other part, 
CONSIDERING the importance of establishing and expanding trade links 
between the Community and Latvia, 
DESIROUS of creating favourable conditions for a substantial and harmonious 
development and diversification of trade and the promotion of commercial 
and economic cooperation in areas of mutual interest on the basis of 
equality, non-discrimination, mutual benefit and reciprocity, 
AWARE of the particular importance of foreign trade and other forms of 
international economic cooperation for the economic and social development 
of each of the Contracting Parties, 
AWARE of the importance of giving full effect to all the provisions and 
principles of the CSCE process, and in particular those set out in the 
Helsinki Final Act, the concluding documents of the Madrid, Vienna and 
Copenhagen meetings, and those of the Charter of Paris for a new Europe, 
particularly with regard to the rule of law, democracy and human rights, as 
well as those of the Bonn CSCE Conference on Economic Co-operation, 
RECOGNIZING the importance of guaranteeing the rights of ethnic and 
national groups and minorities, in accordance with the undertakings made 
within the context of the CSCE, 
AWARE of the importance of strengthening their democratic institutions and 
of supporting the process of economic reform in Latvia, 
BELIEVING that a further impetus should be given to the trading and 
economic relationship between the Community and Latvia by establishing 
contractual links which will contribute to progress towards the objective 
of an association agreement in due course, when conditions are met, and to 
further development of relations between them, 
TAKING INTO ACCOUNT the favourable implications for trade and economic 
cooperation between the Contracting Parties of reform under way in Latvia, 
+ 
HAVE DECIDED to conclude this Agreement and to this end have designated as 
their Plenipotentiaries: 
THE EUROPEAN ECONOMIC COMMUNITY: 
THE REPUBLIC OF LATVIA: 
WHO, having exchanged their full powers, found in good and due form, 
HAVE AGREED AS FOLLOWS: 
TITLE I 
General 
Article 1 
Respect for the democratic principles and human rights established by the 
Helsinki Final Act and the Charter of Paris for a new Europe inspires the 
domestic and external policies of the Community and Latvia and constitutes 
an essential element of the present agreement. 
Article 2 
Within the framework of their respective laws and regulations, the 
Contracting Parties undertake to facilitate and promote: 
- the harmonious development and diversification of trade between them; 
- the development of various types of commercial and economic cooperation. 
They therefore confirm their resolve to consider favourably, each for its 
own part, suggestions made by the other Party with a view to attaining 
these aims. -, 
TITLE II 
Trade and commercial cooperation 
Article 3 
1. This Agreement shall apply to trade in all products originating in the 
Community and in Latvia with the exception of products covered by the 
Treaty establishing the European Coal and Steel Community and of the 
textiles and apparel covered by Section XI of the Harmonized system. 
2. The provisions of this Agreement may be supplemented if necessary by 
sectoral agreements cr arrangements concluded between the community and 
Latvia. In particular, a separate agreement for textile products will be 
negotiated. /\f, £—~ 
*&-
-g-
Article 4 
Unless otherwise specified in this Agreement, trade and other commercial 
cooperation between the Contracting Parties shall be conducted in 
accordance with their respective regulations. 
Article 5 
1. The Contracting Parties shall accord each other most-favoured-nation 
treatment in all matters regarding: 
- customs duties and charges of any kind imposed on or in connection with 
importation or exportation, 
- the method of levying such duties and charges, 
- all rules and formalities in connection with importation and 
exportation, including provisions relating to customs clearance, 
transit, warehousing and transhipment, 
- taxes and other internal charges levied directly or indirectly on 
imported products, 
- methods of payment and the transfer of such payments, 
- the regulations affecting the sale, purchase, transport, distribution 
and use of goods on the domestic market. 
2. The provisions of paragraph 1 shall not apply to: 
(a) advantages accorded to adjacent countries in order to facilitate 
frontier traffic; N 
(b) advantages accorded with the aim of creating a customs union or a 
free trade area or pursuant to the creation of such a union or 
area; 
(c) advantages accorded to particular countries in accordance with the 
General Agreement on Tariffs and Trade and other international 
arrangements in favour of developing countries. 
Article 6 
Without prejudice to the rights and obligations stemming from international 
conventions on the temporary admission of goods which bind both sides, 
the Contracting Parties shall furthermore grant each other reciprocal 
exemption from import charges and duties on goods admitted temporarily, in 
the instances and according to the procedures stipulated by any other 
international convention on this matter binding only one of them. Account 
shall be taken of the conditions under which the obligations stemming from 
such a convention have been accepted by the Contracting Party in question. 
-f-
Article 7 
Latvia shall grant imports of products originating in the Community 
treatment which is non-discriminatory in relation to products originating 
in other countries, as regards the application of quantitative 
restrictions, the granting of licences and access to the foreign currency 
needed to pay for such imports. 
Article 8 
1. Without prejudice to Article 7, each of the Contracting Parties shall 
grant imports of products originating in the other the highest degree of 
liberalization generally extended to third countries. To that end, the 
specific quantitative restrictions applying to imports from Latvia into the 
Community shall be eliminated. 
2. For the purposes of this Agreement, "specific quantitative restrictions" 
shall mean those quantitative restrictions applied by the Community to 
imports originating in Latvia under Regulation (EEC) No 3420/83, which 
concerns products other than those to which quantitative restrictions are 
applied under Regulation (EEC) No 288/82. 
Article 9 
The Parties shall inform each other of any changes in their tariff or 
statistical nomenclature or of any decision taken in accordance with the 
procedures in force concerning the classification of products covered by 
this Agreement. 
Article 10 
Goods shall be traded between the Contracting Parties at market-related 
prices. 
Article 11 
1. The Contracting Parties shall consult each other if any product is being 
imported into the territory of one of them in such increased quantities or 
on such terms as to cause cr threaten to cause serious injury to domestic 
producers of like or directly competing products. 
2. The Contracting Party claiming serious injury or threat thereof shall 
request consultations by notification in writing and shall provide the 
other Party with all the relevant information required for a detailed 
examination of the situation. 
3. The consultations requested pursuant to paragraph 1 shall be held with a 
view to seeking mutually satisfactory solutions and with due regard for the 
fundamental aims of the Agreement; they shall be completed not later than 
30 days from the date of notification of the request by the Party 
concerned, unless the Parties agree otherwise. /\s- / 
-# 
4. If, as a result of such consultations, it is agreed that the situation 
referred to in paragraph 1 exists, exports shall be limited or such other 
action taken, possibly with regard to the price at which these exports are 
sold, as will prevent or remedy the injury. 
5. If, following action under paragraphs 1 to 4, agreement is not reached 
between the Contracting Parties, the Contracting Party which requested the 
consultations shall be free to restrict the imports of the products 
concerned to the extent and for such time as is necessary to prevent or 
remedy the injury. The other Contracting Party shall then be free to 
deviate from its obligations towards the first Party in respect of 
substantially equivalent trade. 
6. in critical circumstances, where delay would cause damage difficult to 
repair, such preventive or remedial action may be taken provisionally 
without prior consultation, provided consultations are held immediately 
after such action is taken. 
7. In the selection of measures under this Article, the Contracting Parties 
shall give priority to those which cause the least disturbance to the 
functioning of this Agreement. 
8. Where necessary the contracting Parties may hold consultations to 
determine when the measures adopted pursuant to paragraphs 4 to 6 shall 
cease to apply. 
Article 12 
1. This Agreement shall not preclude prohibitions or restrictions on 
imports, exports or goods in transit justified on grounds of public 
morality, public policy or public security, the protection of life and 
health of humans, animals or plants, the protection of industrial, 
commercial and intellectual property, or rules delating to gold or silver 
or imposed for the protection of national treasures of artistic, historic 
or archaeological value. 
Such prohibitions and restrictions must not, however, constitute a means of 
arbitrary discrimination or disguised restrictions on trade between the 
Contracting Parties. 
2. This Agreement shall not preclude the taking of action justified on 
grounds of protection of essential security interests: 
(a) relating to fissionable materials or the materials from which they 
are derived; 
(b) relating to traffic in arms, ammunition and implements of war and 
to such traffic in other goods and materials as is carried on 
directly or indirectly for the purpose of supplying a military 
establishment; 
(c) taken in time of war or other emergency in international relations 
or to allow it to comply with obligations it has accepted in 
connection with the maintenance of international peace and 
security. /,^. C-^. 
-y-
Article 13 
1. The Contracting Parties shall make every effort to promote, expand and 
diversify their trade on the basis of non-discrimination and reciprocity. 
In the spirit of this Article, the Joint committee established under 
Title V of this Agreement will attach special importance to examining ways 
of encouraging the reciprocal and harmonious expansion of trade. 
2. in furtherance of the aims of this Article and within the limits of 
their respective powers, the Contracting Parties agree on the necessity to 
improve favourable business regulations and facilities for each other's 
firms or companies on their respective markets, inter alia by taking steps: 
- to ensure the publication and facilitate exchanges of commercial and 
economic information on all matters which would assist the development 
of commercial and economic cooperation, for example: 
- general and sectoral import arrangements, 
economic and commercial law, including regulations on markets, 
companies and investment, 
macroeconomic information and statistics, including production, 
consumption and foreign trade statistics, 
- to facilitate the establishment and operation of each other's companies, 
- to encourage trade promotion activities, 
- to provide natural and legal persons of the other Party with guarantees 
of their individual and property rights, such as non-discriminatory 
access for that purpose to courts and appropriate administrative bodies 
of the Community and Latvia. Z^^^* ^— 
~i n 
3. Latvia will take measures guaranteeing an effective and adequate 
protection of intellectual, industrial and commercial property, at a level 
similar to that which exists in the Community, and will adhere to 
International Conventions on intellectual, industrial and commercial 
property. 
4. The Contracting Parties undertake to facilitate, within the limits of 
their respective powers, administrative cooperation between the appropriate 
authorities in matters relating to customs, in particular in the following 
areas: 
- vocational training, 
- simplification of customs documentation and procedures, and 
- prevention and detection of infringements of the rules on customs 
matters, including the rules governing import quotas. 
Article 14 
within the limits of their respective powers, the Contracting Parties: 
- shall encourage the adoption of arbitration for the settlement of 
disputes arising out of commercial and cooperation transactions 
concluded by companies, enterprises or economic organizations of the 
Community and those of Latvia, 
- agree that when a dispute is submitted to arbitration, each party to the 
dispute may freely choose its own arbitrator, irrespective of 
nationality, and that the presiding third arbitrator or the sole 
arbitrator may be a citizen of a third State, 
- shall encourage recourse to the arbitration rules developed by the 
United Nations Commission on International Trade Law (Uncitral) and to 
arbitration by any centre of a State signatory to the Convention on 
Recognition and Enforcement of Foreign Arbitral Awards concluded in 
New York on 10 uune IS58. 
TITLE III 
Economic cooperation 
Article 15 
1. In the light of their respective economic policies and objectives, the 
Contracting Parties, within the limits of their existing powers, shall 
foster economic cooperation on as broad a base as possible in all fields 
deemed to be in their mutual interest. 
The objectives of such cooperation shall be, inter alia: 
- to reinforce and diversify economic links between the Contracting 
Parties, A\/4 C^ . 
13 
- to contribute to the development of their respective economies and 
standards of living, 
- to open up new sources of supply and new markets, 
- to encourage cooperation between economic operators with a view to 
promoting joint ventures, licensing agreements, and other forms of 
industrial cooperation to develop their respective industries, 
- to encourage scientific and technological progress, 
- to support structural changes in the Latvian economy which will increase 
and diversify trade in goods and services with the Community, 
- to encourage the participation of small and medium-sized enterprises in 
trade and industrial cooperation. 
2. In order to achieve these objectives, the Contracting Parties shall make 
efforts to encourage and promote economic cooperation in areas of mutual 
interest, in particular in the following sectors: 
- industry, 
- agriculture, including agro-industry, 
- fisheries, 
- science and technology in areas in which the Contracting Parties are 
active and which they consider to be of mutual interest, 
- telecommunications, 
- energy, including the saving of energy and the development of new 
sources of energy, 
- mining and production of building materials, 
- environmental protection, including protection from water and air 
pollution and industrial accidents, and the management of natural 
resources; also taking into account environmental requirements in other 
policy areas such as industry, agriculture, energy, transport, 
- transport, communications and the running of ports, 
- tourism^ and other service activities, 
- economic, monetary, banking, insurance and financial services, 
- development of human resources and training, / XyS' / 
- health. 
-9-
- economic policy, 
- standards, 
- statistics. 
3. To give effect to the objectives of economic cooperation and within the 
limits of their respective powers, the contracting Parties shall encourage 
the adoption of measures aimed at creating favourable conditions for 
economic and industrial cooperation, including: 
- the facilitation of exchanges of commercial and economic information, 
- the development of a favourable climate for investment, notably by the 
extension by the Member States of the Community and Latvia of 
arrangements for investment promotion and protection, in particular for 
the transfer of profits and the repatriation of invested capital, and 
also of agreements on the avoidance of double taxation, 
- exchanges and contacts between persons and delegations representing 
commercial or other appropriate organizations, 
- the organization of seminars, fairs or exhibitions, symposia and 
business weeks. 
- the encouragement of activities contributing to technical competence in 
specific fields, notably commercialization. 
Article 16 
Without prejudice to the relevant provisions of the Treaties establishing 
the European Communities, this Agreement and any action taken pursuant to 
it shall in no way affect the powers of the Member States of the community 
to undertake bilateral activities with Latvia in the field of economic 
cooperation and to conclude, where appropriate, new economic cooperation 
:.gre<?.ment5 with Lc-tvie . 
TITLE IV 
Accession to international organizations and conventions 
Article 17 
The Community undertakes, within the limits of its powers, to support the 
accession of Latvia to international organizations and conventions to which 
the Community is a party, in order to enable Latvia to become more active 
in the world economic system. 
TITLE V 
Joint Committee 
Article 18 
1. A Joint Committee shall be set up, comprising representatives of the 
Community, on the one hand, and representatives of Latvia, on the other. 
The Joint Committee shall formulate recommendations by mutual agreement 
between the Contracting Parties. 
The Joint Committee shall, as necessary, adopt its own rules of 
procedure and programme of work. 
The Joint Committee shall meet once a year in Brussels and Riga 
alternately. Special meetings may be convened by mutual agreement, at 
the request of either Contracting Party. The Joint Committee shall be 
chaired alternately by each of the Contracting Parties. Wherever 
possible, the agenda for meetings of the Joint Committee shall be agreed 
beforehand. 
The Joint Committee may decide to set up working parties to assist it in 
carrying out its duties. 
2. The Joint Committee shall ensure the proper functioning of this 
Agreement and shall devise and recommend practical measures for 
achieving its objectives, keeping in view the economic and social 
policies of the Contracting Parties. 
3. The Joint Committee shall endeavour to find ways of encouraging the 
development of trade and commercial and economic cooperation between the 
contracting Parties, in particular, it shall: 
- examine the various aspects of trade between the Parties, 
notably its overall pattern, rate of growth, structure and 
diversification, the trade balance and the various forms of 
trade and trade promotion, 
- make recommendations on any trade or economic cooperation 
problem of mutual concern; 
seek appropriate means of avoiding possible difficulties in 
the fields of trade and cooperation and encourage various 
forms of commercial and economic cooperation in areas of 
mutual interest; 
~ consider measures likely to develop and diversify trade and 
economic cooperation, notably by improving import 
opportunities in the Community and in Latvia; * 
-li-
exchange information on macroeconomic plans and forecasts 
for the economies of the Contracting Parties which have an 
impact on trade and cooperation and, by extension, on the 
scope for developing complementarity between their 
respective economies and also on proposed programmes of 
economic reform; 
examine the situation concerning the procedures for the 
award of contracts for supplying goods and services 
following an international invitation to tender; 
exchange information on amendments to and developments in 
the laws, regulations and formalities of the Contracting 
Parties in the areas covered by this Agreement; 
examine favourably ways of improving conditions for the 
development of direct contacts between firms established in 
the Community and those established in Latvia; 
formulate and submit to the authorities of both Contracting 
Parties recommendations for resolving any problems that 
arise, where appropriate by means of the conclusion of 
arrangements or agreements. 
TITLE VI 
General and final provisions 
Article 19 
Subject to the provisions of Article 16, the provisions of this Agreement 
shall replace the provisions of agreements concluded between Member States 
of the Community and Latvia where the latter provisions are either 
incompatible with or identical to the former. 
Article 20 
This Agreement shall apply, on the one hand, to the territories in which 
the Treaty establishing the European Economic community is applied and 
under the conditions laid down in that Treaty and, on the other, to the 
territory of the Republic of Latvia. 
Article 21 
This Agreement shall enter into force on the first day of the second month 
following the date on which the Contracting Parties notify each other that 
the legal procedures necessary to this end have been completed. The 
Agreement is concluded for an initial period of ten years. The Agreement 
shall be automatically renewed year by year provided that neither 
contracting Party gives the other Party written notice of denunciation of 
the Agreement six months before it expires. Sis' / 
/* *'<+'— . 
However, the two Contracting Parties may amend the Agreement by mutual 
consent in order to take account of new developments, notably the situation 
which would arise from the accession of Latvia to the General Agreement on 
Tariffs and Trade. In the latter case, the Contracting Parties shall 
prepare together the amendments to this Agreement necessary to take account 
of the protocol of accession of Latvia to the General Agreement. If the 
Parties are unable to agree on this subject they reserve the right to 
denounce this Agreement. 
The parties reserve the right to suspend this Agreement in whole or in part 
with immediate effect if a serious violation occurs of the essential 
provisions of the present agreement. 
Article 22 
This Agreement is drawn up in duplicate in the Danish, Dutch, English, 
French, German, Greek, Italian, Portuguese, Spanish and Latvian languages, 
each text being equally authentic. * 

ISSN 0254-1475 
COM(92) 176 final 
DOCUMENTS 
EN 02 li 
Catalogue number: CB-CO-92-191-EN-C 
ISBN 92-77-43799-5 
Office for Official Publications of the European Communities 
L-2985 Luxembourg