EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 5.11.2008 
SEC(2008) 2786 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
COMMUNICATION FROM THE CO MMISSION TO THE COUNCIL 
 
Review of EU-Russia relations 
 
 pursuant to conclusions of the Extraordi nary European Council of September 1, 2008 
{COM(2008) 740 final} 
 
EN 2   EN TABLE OF CONTENTS 
INTRODUCTION/BASIS OF RELATIONSHIP ..................................................................... 3 
CURRENT AREAS OF BILA TERAL COOPERATION......................................................... 4 
Economic and trade relations ................................................................................................... .. 4 
Context  .............................................................................................................................. ........ 4 
Co-operation ............................................................................................................................. 5 
Energy  .............................................................................................................................. ........ 7 
Kaliningrad ............................................................................................................................... 7 
Political dialogue, common space on external security ............................................................. 8 Justice, Freedom, Security ..................................................................................................... .... 8 
Research, Education, Culture ................................................................................................... 10 
FINANCIAL CO-OPERATION.............................................................................................. 12 FUTURE AREAS OF BILA TERAL COOPERATION.......................................................... 13 
New Agreement ...................................................................................................................... 13 
Perspective of a free trade area ............................................................................................. 13 
Justice, Freedom, Security ..................................................................................................... 14 
Research, Education, Culture ............................................................................................... 15 
COOPERATION IN INTERNATIONAL OR GANISATIONS AND IN REGIONAL 
ORGANISATIONS AND INITIATIVES ................................................................. 16 
 
EN 3   EN INTRODUCTION/BASIS OF RELATIONSHIP 
1. The Extraordinary European Council of Se ptember 1, 2008, reque sted the Council, 
with the Commission, to conduct a careful, in-depth examination of the various 
aspects of EU-Russia relations. This review  is to be conducted in the run-up to the 
EU-Russia Summit scheduled for 14 November 2008, with the GAERC of 13-14 October 2008, having taken stock of developm ents in the Georgian-Russian conflict. 
2. The EU/Russia Partnership and Cooperation Agreement (PCA), the current legal 
basis for EU-Russia relations was negotiate d in 1992-1994 and entered into force on 
1 December 1997. Pursuant to Article 106, the PCA is concluded for an initial period of 10 years and is ‘ automatically renewed year by yea r provided that neither Party 
gives the other Party notice of denunciati on of the Agreement at least six months 
before it expires ’. At the Sochi Summit in May 2006, the EU and Russia agreed that 
the PCA would remain valid until a Ne w Agreement enters into force. 
3. The PCA sets out the main values on which the relationship is based, notably respect 
for democratic principles and human rights , the commitment to promote international 
peace and security, the principles of market  economy and sustainable development.  
4. The PCA economic provisions secured a number of key WTO principles  and 
commitments before the expected accession of Russia to the WTO including the 
most favoured nation clause. Further, it establishes provisions for trade in goods, 
conditions for business and establishment, trade in services and in more specific areas. It also contains provi sions on economic cooperation in a number of sectors. It 
provides in much less detail for cooperation on prevention of illegal activities, cultural cooperation and financial cooperation. It sets up an institutional framework based on the Cooperation Council and Co operation Committee, establishes a 
Parliamentary Cooperation Committee and cont ains a dispute settlement procedure 
based on non-binding conciliation.  
5. The provisions of the PCA have been deve loped in two ways. First, in 2003 the 
Cooperation Council was strengthened and renamed Permanent Partnership 
Council (PPC), allowing Ministers to meet in all necessary formats, not just Foreign 
Ministers. Second, in May 2005 the EU and Russia agreed the road maps  of the 
Common Economic Space, the Common Space of Freedom, Security and Justice, the 
Space of Co-operation in the field Extern al Security, as well as the Space of 
Research and Education, including Cultural As pects. They lay down a detailed set of 
objectives and a work plan for the short a nd medium term future. Sectoral dialogues 
have been set up to oversee the implementa tion of the road maps in the different 
common spaces. Energy is covered briefly in the PCA and cooperation has been developed through the Comm on Economic Space, the Energy Dialogue and the PPC 
framework.  
6. The institutional framework works gene rally well; however, problems concern 
meetings at Senior Official level. The Cooperation Committee has not met since 
October 2004 despite numerous requests from the Commission. The Committee has thus been unable to fulfil its task of monitoring the overall implementation of the 
PCA and prepare the meetings of the C ooperation Council (now PPC in Foreign 
Ministers’ format). Almost all the sub-committees are also inoperative. 
 
EN 4   EN CURRENT AREAS OF BILATERAL COOPERATION 
Economic and trade relations  
Context 
7. The EU and Russia are important trade partners. Russia ranks third among the 
EU's trading partners , after the USA and China. The EU is by far Russia's main 
trading partner, accounting for more than 50 % of its overall trade. EU bilateral trade 
with Russia is on a fast gr owing trend, with nominal grow th rates of about 20 % but 
due to stagnating imports of mineral fuels last year, the 2007 fi gures for the overall 
trade increased only by 9.1% in 2007. The figur es for the first seven months of 2008 
show that strong growth in bilateral trade is continuing this year. Total trade with 
Russia amounted to €232 billion in 2007 (c ompared with €130 billion in 2004). For 
the first seven months of 2008, total trade amounts to €165.3 billion, which is €36.5 billion more than the level reached in th e first seven months of 2007 (€128.8 billion). 
EU exports to Russia ar e diversified. They include d machinery and transport 
equipment (39%), chemicals (13%), manuf actured goods classified chiefly by 
material (11%), food and live animals (6 %). Russia exports to the EU mainly 
energy/mineral fuels (65.7%). 2007 saw rapid growth rates up to 28% in services 
exports and 7% in imports (mainly transpor tation and travel services). EU industry 
established on the Russian market is, from a general perspective, satisfied with the 
market conditions, but regularly highlight a number of structural issues (i.e. poor 
administrative capacity, corruption, et c.) and specific trade problems. 
8. Russia is included in the list of beneficiary countries of the Generalised System of 
Preferences (GSP)  for the period to 2011. The volume of Russian exports benefiting 
from the GSP is marginal, amounting to 1.59% of total Russian expor ts to the EU in 
2007.  
9. The Agreement on trade in steel and steel products  is in force since October 2007. 
In line with the provisions of the agreement, the Russian side has requested certain changes to it which are cu rrently under consideration. The agreement contains 
specific provisions on export duties in steel scrap which may be affected by a 
possible increase of these export duties. Ho wever, no formal decision has been taken 
so far on the Russian side.  
10. 80% of all cumulative investments  in Russia were made by EU Member States, even 
if some of these investments are Russian re-investments. A significant part of all 
Russian investments abroad are located with in the EU. EU foreign investment into 
Russia in 2007 was almost ten times higher than the amount invested in China, but 
just 15% of the amount invested in the US . Continued high investment levels have 
taken place despite the obstacles posed  by a complex regulatory environment, 
applied in an inconsistent manner. There is also ample evidence of a substantial 
slowdown in economic reform, accompan ied by a re-emergence of State 
intervention. 
11. The Russian stock markets  have performed poorly in 2008, similarly to other 
emerging and developed stock markets. Th e Russian RTS and MICEX indexes have 
seen dramatic falls since May (from a high of close to 2500 in mid-May to a low of 
791 on 13 October). This is related to th e ongoing worldwide financial instability, 
nevertheless, there are also Russian-speci fic components in this performance (the 
Georgia conflict; TNK-BP, the recent fall in oil prices). Stock market analysts 
acknowledge that the risks of investing in Russia are at  a high level now. Experts 
 
EN 5   EN believe that the financial instability could worsen the terms of borrowing abroad for 
large Russian companies. However, m acroeconomic indicators remain broadly 
sound, with growth forecast by the Commission close to 8% this year, while CPI inflation has increased (reaching 14.7% y-o-y by August) following a worldwide 
trend of higher prices. A very significant share of the €450 billion foreign exchange 
reserves of Russia are in euros, making Ru ssia one of the largest holders of euro-
denominated assets in the planet. 
Co-operation 
12. Based on the provisions of the PCA,  the Common Economic Space aims at 
furthering the integration of EU and Russian economies through enhanced economic 
cooperation and the convergence of regulat ory environments. The implementation of 
the Common Economic Space has led to the establishment of some 17 sectoral 
dialogues
1 conducive to  a better understanding of the respective EU and Russian 
regulatory environments and closer contacts  between administrations and a range of 
different stakeholders on both sides. The day to day business of  these dialogues is 
conducted relatively efficiently, and alt hough concrete results are limited, the 
cooperative atmosphere which has develope d should contribute to the achievement 
of our objectives in the ne gotiation of the New Agreement. Some progress has been 
made on regulatory convergence but much remains to be done and some important points agreed in principle are yet to be  implemented in practice (e.g. Siberian 
overflights, Energy Early Warning Mechanism). 
13. Preparations are on going on a new dialogue on public health . Russia is keen on 
this, primarily because of its recent emphasi s on modernising its social services using 
its newly-created wealth while facing ev er-more gloomy statistics on the state of 
health of average Russians. The EU interest  principally lies in the prevention of the 
spread of communicable diseases and enga ging Russian in a c onstructive area for 
cooperation.  
14. The large volume of cro ss-border trade has produced  its own problems. On customs , 
the EU and Russia have been working on th e implementation of a joint strategy to 
overcome the queues towards Russia at its la nd borders with the EU. While there has 
been substantial progress on the implementa tion of a pilot project for exchange of 
pre-arrival customs information (to be ope rational as of 1/1/2009), Russian customs 
reforms have been implemented at a slower pace than expected. The impact of the pilot project on traffic flows will be carefully monitore d and the strategy will be 
assessed in due time. It should be noted that  despite keen interest, no similar project 
has yet been launched with other nei ghbouring countries, reflecting Russia’s 
positioning as a major destination of EU trade. 
15. Both sides acknowledge that co-operation in the transport sector has great potential, 
especially in air and maritime safety or re garding interconnection of transport routes 
along the Northern Axis, but the problems over Siberian Overflights have been a 
severe obstacle. An agreement was reached in 2006 but Russian signature and implementation are still awaited. The agreemen t aims to put an end to a practice of 
charging for flying over Siberia, which is  not in line with basic principles of 
                                                
 
1 Transport; Industrial and Enterprise Policy ; Re gulatory dialogue on enterprise policy ; Space ; 
Information Society ; Agriculture ; Macro-econo mic policy ; Financial services ; Energy ; 
Procurement ; Environment ; Trade facilitation ; IPR ; Investment ; Fisheries; Regional co-operation ; 
Statistics. 
 
EN 6   EN international aviation and the Chicago C onvention, to which Ru ssia is a signatory. 
The EU aviation industry paid about 350 million EUR in 2007 and it seems likely 
that they will soon start paying again to obtain new overflight rights. This would de 
facto  acknowledge the postponement of the agreement in line with Russian 
statements linking its signature to th e completion of WTO accession negotiations. 
With the growing uncertainty regarding the date for the latter, accompanied by recent statements by the Russian Government that  it would be revisiti ng certain bilateral 
agreements, alternative meas ures are being discussed. 
16. There are concerns about many of  Russia’s regulations and pro cedures with regard to 
meeting international standards and which are sometimes applied in an inconsistent manner. In the sanitary and phytosanitary  field, this has caused problems for a 
number of Member States (bans on exports of Polish meat and plant products). 
Russia covers approximately one third of its demand for raw and processed 
agricultural products by imports and aims  at reducing this share in favour of 
domestic producers. Russia is also the sec ond largest destination for EU agricultural 
exports. A series of disproportionate Russi an trade restrictions justified by their 
domestic SPS standards has led the Commission, in close consultation with Member 
States, to negotiate a number of Memo randa of Understanding in this field
2 These 
commit EU industry to follow Russian require ments to avoid furthe r trade disruption, 
while at the same time establishing consultation mechanisms for situations where such issues arise and provide for opening discussions on the scie ntific rationale of 
Russian standards. The MoUs also represent a unified and coherent EU approach in view of Russian attempts to open bilate ral negotiations. Furthermore the Commission 
agreed 14 veterinary certific ates for export of animal pr oducts to Russia and agreed 
with Russia on the principles of regionalisation.  Russia has not wished to enter into 
negotiations on a formal Veterinary Ag reement as foreseen under the Common 
Economic Space. In the WTO context, Russia has agreed to bring its rules in line 
with the SPS Agreement on accession.  
17. A Fisheries Agreement covering the Baltic Sea has been concluded and is under 
ratification on the Russian side, after already having  been adopted by the EU. 
Beyond this Agreement, an MoU launching a high-level dialogue in the fisheries 
sector was signed in April, 2008. In the past two years, Russia-EU dialogue in 
various multilateral and bilateral fora on fi sheries matters in the North Atlantic has 
evolved and yielded positive results in particular in the context of the fight against illegal, unreported and unregulated fishing. 
18. In the area of the environment, there is a specific dialogue on environmental issues, 
with expert groups covering forestry, clim ate change, biodiversity, convergence of 
environmental policies and water/marine issues. The EU engages with Russia on 
climate change  in order to secure Russia’s support for a global and comprehensive 
post-2012 agreement. The EU’s climate coope ration with Russia in cludes adaptation 
and efforts to limit greenhouse gas emissi ons through energy efficiency, and gas 
flaring, as well as work with the private sector, and industry. Th e EU continues to 
promote Russia’s implementation of the Kyot o Protocol and its flexible mechanisms, 
in particular Joint Implementation projects.  
                                                
 
2 Veterinary MoU (Sept 2004) including rules on transit via EU territory, MoU on phytosanitary 
certification (2005), MoU on pesticide residues, n itrates and nitrites in plant products for human 
consumption (March 2008), MoU on conditions for deliveries of meat and raw meat products to the RF 
(March 2008). 
 
EN 7   EN Energy 
19. The EU and Russia have a long tradition of active cooperation in the energy sector . 
Both Russia and the EU benefit from th is situation. EU companies have made 
considerable investments in the Russian  energy sector while Russian energy 
companies are increasingly investing in the EU.  
20. The Russian Federation is the EU’s most important single supplier of energy 
products . Over a quarter of gas and oil consum ed in the EU originates in Russia. 
The EU is the most important market for Russia energy exports  and generates a 
significant part of its export revenues. Th e EU will need to import an increasing 
share of its energy resources over the next 20-30 years and a significant part of that 
increase might come from Russia. While Russia has been a reliable supplier of energy products to the EU for decades, di sputes with transit states as well as 
insufficient upstream investment and ageing pipeline infrastructure raise concerns 
about future supply. The EU has raised on a number of occasions the issue of 
interrupted oil flows through the branch of  the Druzhba pipeline going to Lithuania. 
On policy, Russia has signalled that it has no fundamental disa greements with the 
Energy Charter Treaty, but that it would stic k to its position of not ratifying the ECT 
and its Transit Protocol. Inadequate inve stment in the ener gy sector, expanding 
domestic demand and low energy efficiency in Russia as well as increased competition for Central Asian and Caspian gas, present potential risks to future energy supply in Russia itself as well as in consumer countries. 
21. The EU has actively enhanced di alogue and cooperation under the Energy Dialogue  
on issues such as energy efficiency a nd conservation, but also on questions of 
transparency, market developments and the investment climate in Russia. The Commission is committed to make the EU-Russia Early Warning Mechanism on supplies of gas and oil fully operational and to link it with similar mechanisms to be established with transit countries. Th e ongoing liberalisation of the EU energy 
market and the development of a common external dimension of EU energy policy 
also have an impact on the EU-R ussia bilateral energy cooperation. 
22. Russia is set to remain a strong energy power. Though both sides are engaged in 
diversification policies, the EU’s dependence on Russia as a supplier will remain strong and might be a source of concern. Interdependence is a core element of the 
relationship . However, the interpretation of re ciprocity which should characterise 
interdependence differs widely. The EU aims  to establish a true level playing field 
(i.e. transparency, non-discrimination, reciproc ity of market access, transit rights and 
third party access, long term predictability  and a competitive environment) in the 
face of continued difficulties that fore ign investors experience in accessing the 
Russian upstream sector as well as structural issues connected to the influence of the State in the energy sector.  
Regional Policy/Kaliningrad 
23. A Memorandum of Understanding has b een signed on cooperation on the area of 
regional policy. It created the basis for structured di alogue on regional policy 
including issues such as ways to promot e the development of disadvantaged areas, 
preparation of regional development strategi es, exchange of experience in support of 
innovation-driven regional development, improving cros s-border cooperation and 
support to facilitate co-operation betw een Russia and EU regions. The socio-
economic development of Kaliningrad has been a priority for the Russian 
Federation and the EU since 1991. The region stands to benefit from the recently-
 
EN 8   EN approved Cross-Border Co-operation progr ammes that receive funding from both the 
EU and the Russian Federation. Kaliningrad has also benefited from considerable 
investment by the EU into border infrastr ucture. Despite some initial concerns, the 
Facilitated Transit Scheme between the regi on and the rest of the Russian Federation 
has worked positively.  
Political dialogue, Common Space on External Security  
24. Regular political dialogue  is a feature of the EU-Russi a partnership. This dialogue is 
frequent and takes place at multiple levels. It includes: twice-yearly Summits; regular 
meetings of Foreign Ministers; monthly PSC  Troika meetings with Russia, Political 
Directors meetings, as well as working level contacts.  
25. These contacts are a way of developing a better understand ing of respective positions 
on international issues. While co-operation on the Middle East Peace Process and on 
non-proliferation, notably with reference to Iran, has seen some aligning of positions, 
on other issues, positions remain farther ap art. This has been the case on Kosovo, and 
in the common neighbourhood. Russia’s commitm ent to effective multilateralism has 
been put into question by the events in Georgia. 
26. Twice-yearly human rights consultations have been held since 2005. These 
consultations provide an opportunity to di scuss areas of concern in Russia and the 
EU respectively as well as cooperation in multilateral fora.  
27. Co-operation on civil protection has been stepped up following new administrative 
arrangements between DG Environment at the European Commission, and the 
Russian Emergency Services Mini stry concluded in June 2008.  
Justice, Freedom, Security 
28. Cooperation in Freedom, Security  and Justice  is an area where the interests of 
Russia and the EU often coincide. Russia has been willing to engage in this sector, even though some gap exists between decl arations and expressions of intent and 
reality on the ground. Regular bi -annual meetings of the PP C have provided a useful 
mechanism to give guidance to the expert level work. A challenge remains to ensure 
that issues related to human rights, democracy  and the rule of law are to be taken by 
Russia as part of this Common Space, in particular in the context of the visa 
dialogue.  
29. The EC-Russia Agreements on Visa Facilitation and Readmission  entered into 
force on 1 June 2007. The EU objective ha s been to ensure full, correct and 
harmonized implementation of both agreements in parallel. With regard to the Visa Facilitation Agreement, the EU has also pr essed hard to eliminate the complicated 
registration procedures  in Russia. With regard to readmission, the EU objective has 
been correct implementation of the agreement and the swift signature of bilateral implementation protocols. 
30. The continued full implementation of both agreem ents is in the interest of the EU in 
order to ensure the EU’s ability to enjoy facilitated travel of EU citizens to Russia 
and foster people-to-people contacts, wh ile enabling Member States to return 
undesired aliens back to Russia.
3 Russia accepted the Readmission Agreement in 
parallel to the Visa Facilitation Agreement, which in turn is largely perceived as the 
                                                 
3 During the transitional period expiring on 1 June 2010 the Readmission Agreement only applies to 
Russian citizens. 
 
EN 9   EN required first step towards visa liberalization.4 Furthermore, the correct application of 
the Readmission Agreement is for the EU one of the conditions for the successful visa liberalisation dialogue. 
31. On the basis of the 2006 terms of refe rence on the establishment of operational 
cooperation, FRONTEX and Russia’s Border Guard Service have agreed on a joint 
cooperation plan for 2007-2010. The plan enab les possible joint operations to take 
place between FRONTEX and Russia. Furthe r cooperation between the agencies is 
undoubtedly in the intere st of both sides. 
32. Changes in Russian legislation in October 2007 have resulted in  complications for 
EU citizens to regularize their longer-term stay  in Russia (i.e. stays of more than 
three months, not covered by the Visa Faci litation Agreement). EU businesses have 
also complained about the procedures a nd rules pertaining to work permits. The 
Russian administration has been open to  working with the EU in looking for 
solutions to the problems that have emerged.  
33. The EU’s objective is to ensure that EU c itizens are able to comply with the existing 
rules and regulations. Member States have  sought to present a common EU position 
on this issue rather than making bilateral arrangements with Russia. However,  it 
should be noted that the equivalent rule s on admission for the pur pose of carrying out 
a paid activity in the EU are not fully harmonised yet. 
34. With respect to asylum  there has been an improvement of the situation in Russia 
over the last years. This is notably the case for access to asylum procedures and for 
documentation of refugees and asylum s eekers. UNHCR and the Russian authorities 
agree on the need to have a new refugee la w in place, and there are also other areas 
in which improvements are required.  
35. However, it should be noted that many as ylum seekers in the EU originate from 
Russia. For the years 2005, 2006 and 2007 Russ ia ranked second among countries of 
origin of asylum seekers in the EU.  
36. A Memorandum of Understanding between the European Monitoring Centre on 
Drugs and Drugs Addiction and the Russian Federal Dr ugs Control Service was 
signed in 2007. The MoU facilitates exch anges of information between the two 
agencies. Cooperation in this field is in th e interest of both si des. Combating drug 
trafficking is high on the Russian agenda , particularly as regards precursors, 
synthetic drugs and heroin coming from Afghanistan. 
37. Cooperation between Europol  and Russian law enforcement authorities has been 
based on the existing strategic cooperation agreement which covers such fields as 
illegal immigration and trafficking in human beings, money laundering, 
counterfeiting currencies and documents, a nd drugs. Increased and intensified law 
enforcement cooperation is beneficial for both sides.  
38. The border agreement  between Russia and Estonia has been signed but Russia's 
ratification is pending. The border agreemen t between Russia and Latvia was ratified 
                                                
 
4 It should be noted that the EC-Russia Visa Facilitation Agreement has created an imbalance of 
treatment between the citizens of Georgia holding Georgian passports and the Russian passport holders 
in South Ossetia and Abkhazia and Georgian citizen s, and may indeed have created an incentive to 
acquire Russian citizenship. On 25 September 2008, the Commission recommended to the Council the 
negotiation of a Visa Facilitation Agreement with Ge orgia that would provide equivalent facilitations 
for Georgian citizens. Commission services are currently assessing th e consequences of the situation. 
 
EN 10   EN in 2007. Russia's border agreement with Lithua nia has been ratified,  but the border is 
not yet properly demarcated. It  remains in the interest of the EU to continue to seek 
Russian confirmation and ratification of the border agreement with Estonia and 
demarcation of all EU-Russia common borde rs according to international standards 
so as to ensure legal certaint y of EU’s external border.  
39. Co-operation with Russia in the fight against terrorism  is based on the 2002 Joint 
Statement on Counter-terrorism and the releva nt provisions of the road maps for the 
Common Spaces of Freedom, Security and Justice and of External Security.  
40. Russia has proposed an MoU on the fight against terrorism to take into account new 
fields of cooperation which are not current ly covered by the Jo int Statement and the 
Common Spaces (e.g. terrorist recruitment and radicalization), but the EU remains to 
be convinced about the added value of an  MoU. Informal information meetings 
concerning critical infrastructure protection have been held in 2007-2008. 
41. The EU wants efficient, concrete and fruitf ul co-operation with Russia in the field of 
counter-terrorism in full respect of the prin ciples of human rights and the rule of law. 
The implementation of the provisions in  the Common Spaces should remain the 
framework for cooperation.  
Research, Education, Culture 
42. Cooperation in the field of re search, education and culture is an area char acterised by 
strong mutual interests. Russia has been very  keen to engage in research cooperation 
which it sees it as a prime example of a “well balanced cooperation” where a 
common strategic viewpoint prevails.  
43. Research cooperation  is governed by the EC-Russia Science and Technology 
Cooperation agreement.  This agreement (in force since 2004) expires in 2009. 
Renewal is under preparation and requires a formal decision of the Council with 
consultation of the European Parliament . The following are ongoing or planned: 
regular meetings of the Joint EC-Russi a Steering Committee; meetings of FP7 
National Contact Points; participation of Ru ssian Federation entities in FP7; setting-
up and organisation of meetings of join t EC-Russia thematic research working 
groups. 
44. Entities from the Russian Federation part icipate in all thematic areas and sub-
programmes of the FP7. Since Russia enjoys th e status of an ICPC  (i.e. International 
Cooperation Partner Country), its entities ar e eligible for funding and are receiving 
funding in most cases to support their participation. Until now 218 Russian 
Federation participants have been sele cted in FP7 projects, with a requested 
Community contribution of some € 29 million .  
45. The EC & Euratom FP7 Work Programmes  for 2009 foresee several coordinated 
calls with Russia. A similar such coordina ted call is under discussion for the WP 
2010 in the area of Aeronautics research. Th e EU and Russia have effectively started 
synchronizing their research programmes with  a view to defining a more ambitious 
research agenda. These co-funded activities ar e in line with the ove rall trend and the 
changing attitude towards in ternational co-operation, whic h is increasingly based on 
equal sharing of funds and responsibilities.  
46. Cooperation with Russia further includes the Agreement for cooperation between 
the European Atomic Energy Community (Euratom) and the Russian 
Federation in the field of nuclear safety. This agreement concluded in 2002 for an 
 
EN 11   EN initial period of 10 years stipulates the c ooperation in all areas relating to nuclear 
safety (radiation protection, nuclear waste management et c), including research on 
reactor security. Furthermore, the Agreement for cooperation between the 
European Atomic Energy Community (Euratom ) and the Russian Federation in 
the field of controlled nuclear fusion (ITER)  was concluded in 2002 for an initial 
period of 10 years.  
47. Russia is a recipient party of the International Science and Technology Centre 
(ISTC), which is an intergovernmental organization established in 1992 through an 
agreement signed by the European Community and the European Atomic Energy Community (acting as one party), the USA, Canada, Japan, and the Russian 
Federation. The ISTC has provided an importa nt means to channel funding to former 
defence institutes to research and provided alternative livelihoods for weapons scientists. Nearly 30 000 former weapon sc ientists and engineers from the Russian 
Federation and other CIS countries have been involved in some 2600 projects during 
the past 14 years.  
48. However, the Russian Parliament has neve r ratified the agreement establishing the 
ISTC and the Russian authorities consid er that the ISTC has fulfilled its non-
proliferation task. Today the ISTC e ssentially acts as a match-making and 
implementing agency of rese arch projects. In 2009, the EC financial contribution 
through the Instrument for Stability ha s been reduced to 5 million EUR.  
49. Cooperation in the field of education has allowed for increasing contacts between 
students and teachers in the EU and Russia. Russia is fully committed to the goal of the European Higher Education Area in line  with the Bologna process. Co-operation 
centres on Russia’s participation in EC-funded Tempus and Erasmus Mundus 
programmes as well as the Jean Monnet Programme. 
50. Russia has been participating in the Tempus programme  since 1994. Russian 
universities have shown high interest in the Erasmus Mundus External 
Cooperation Window  programme focussing on academic and student mobility at 
undergraduate, postgraduate, PhD and pos t-PhD level. In 2008, Russia’s allocation 
translated into at least 570 scholarships and three new partnerships of EU-Russia 
universities. 
51. A particularly important project is the European Studies Institute  (ESI) in Moscow. 
The project is co-financed by Russia and the EC, which is supporting it through a 3 million EUR grant. As one of the few institutions with the competence and capacity to provide a one-year postgraduate Master’s  programme in EU studies, the Institute 
aims mainly at developing a cadre of o fficials conversant in EU issues. Yet the 
purpose of the Institute is much wider: to foster the involvement of a broad range of 
audiences in a wide-ranging deba te on EU-Russia relations.  
52. An evaluation is ongoing and it will determine the extent to which the ESI has 
achieved its initial ambitions. One of the problems is that the ESI targets solely 
officials and it has not been able to re ach out to cities other than Moscow.  
53. Cultural cooperation has had a pr omising start wi th the Kajaani  process 
launched in 2006 culminating with the Culture PPC in October 2007.  
54. The EU-Russia joint working group on cu lture was established in February 2007 
with the aim to draw up a Culture Action Plan focusing on the promotion of artistic 
and cultural projects, cooperation between cultural institutions and at UNESCO as 
well as convergence with European sta ndards in the broadcasting field. While a 
 
EN 12   EN number of cultural project initiatives have taken place with the support of EC 
assistance, not much progress has take n place on the Culture Action Plan; in 
addition, Russia has not yet ratified the UNESCO Conventi on on cultural diversity. 
FINANCIAL CO-OPERATION 
55. Russia receives assistance from a range instruments  including the European 
Neighbourhood and Partnership Instrument  (ENPI), European Instrument for 
Democracy and Human Rights (EIDHR), Instrument for Nuclear Safety and 
Cooperation (INSC) as well as the Instrument for Stability  (IfS) and humanitarian 
assistance. While ENPI Cross Border Coope ration is as an area of strong mutual 
interests, cooperation in other domains has become increasingly difficult due to 
Russia’s request for reciprocity. Russia’s ambition to become a new ODA provider 
of assistance further calls for a re-thi nk of EU-Russia fi nancial cooperation. 
56. Ongoing projects are financed through TACIS, EIDHR, IfS and ECHO. Some 
programmes included in the ENPI Interre gional Programme such as TAIEX, 
Erasmus Mundus and Tempus are already been implemented. There are currently 
approximately 270 ongoing projects worth 170 million EUR. 
57. Bilateral ENPI financial cooperation  is aimed at supporting the implementation of 
the road maps of the Four Common Spaces and the Kaliningrad region. The 
indicative budget for the period 2007- 2010 is 120 million EUR . Problems arise in 
financial cooperation due to the Russian authorit ies’ request to be “treated as equals”, 
i.e. Russia wishes to fund cooperation acti ons in Member States and wants these 
actions to enjoy the same privileges that Community programmes benefit from in Russia. The current arrangements unde r the ENPI do not cover this.  
58. There is a shift towards a programme struct ure similar to those run in industrialised 
countries with a strong emphasis on education and civil society . Russia receives 
funding from the ENPI Interr egional Programme for the Erasmus Mundus  External 
Cooperation Window, funding academic staff and student exchanges . The 
allocations for Russia were € 5 million in 2007, € 12 million in 2008 and € 8 million are planned for 2009. Russia participates to the Tempus programme  for cooperation 
in higher education. It received € 1 6.7 million in 2007 and € 13 million in 2008. 
Furthermore, support for civil society worth 5 million EUR is planned under the ENPI bilateral programme. 
59. Agreement on the seven ENPI Cross Border Cooperation  programmes reached at 
the June EU-Russia summit is a real mile stone in EU-Russia financial cooperation. 
Russia pledged to contribute with 122 million EUR over the period 2007-2013. Together with EC funding (307 million EU R) and Member States funding, these 
resources will promote sustainable economic and social developmen t in border areas, 
environment, public health and prevention and fight of organised crime, efficient and secure borders and “people-to-people” cont acts. These programmes stretching From 
the Kolarctic region to the Black Sea will start to be implemented in early 2009.  
60. In addition to past TACIS cooperat ion worth approximately 500 million EUR, 
Russia could benefit from support to nuclear  safety through the INSC. A programme 
worth 28 million EUR is awaiting Russian approval. As in the case of ENPI bilateral cooperation, Russia has requested a redefi nition of the cooperation framework. In 
2008, a preliminary programme worth 17 million EUR is under discussion.  
 
EN 13   EN 61. Under the European Instrument for Democracy and Human Rights  (EIDHR), the 
EU has supported a wide range of projects by local civil societ y in the fields of 
human rights and democratisation. Since its  launch in Russia in 1997, the EIDHR has 
supported over 250 projects. Between 2002 and 2007, over 6 million EUR have been 
granted to NGOs. A further 1.2 million EU R have been allocated under the 2008 
budget. These projects, which do not requir e endorsement by the beneficiary country, 
have been placed under increased scruti ny from the Russian authorities.  
62. The implementation of projects in the North Caucasus  has become increasingly 
difficult. A special programme under TA CIS focusing on health, education and 
economic recovery is still ongoing but no new initiatives are fore seen. In addition, 
Russia benefits from a € 11 million humanitarian aid package for the North Caucasus approved in June 2008. This package aims to  improve the humanitarian situation of 
the victims of the conflict in Chechnya.  
63. The EIB mandate for Russia, Eastern Europe an d the Southern Caucasus is worth € 
3.7 billion. There are now nine Russia proj ects worth € 2 bill ion in lending from 
EBRD/EIB in the joint pipe line. The projects have a total project value of €5.9 
billion and include the financing of PPP pr ojects in St. Petersburg and Moscow. The 
collaboration between the EIB and EBRD has developed in a very successful way 
with a strong focus on Russia.  
FUTURE AREAS OF BILA TERAL COOPERATION  
New Agreement 
64. The EU expects the New EU-Russia Agreement  to provide for a comprehensive 
legally binding framework to cover all ma in areas of the relationship based on 
international commitments which the EU and Russia have entered into. The agreement should provide substantive commitments on all main issues. It should contain a substantial section on energy, including nuclear energy, enshrining the 
principles of the Energy Charter Treaty . It should set out the objectives and 
principles of a free trade agreement, to be negotiated once Russia has completed its WTO accession negotiations. Furthermore, the agreement should also cover the 
possible association of Russia to the EU’s 7
th Framework Programme in Research 
and Development and its successors. Other specific agreements could be provided for, based on the provisions of the New Agreement.  
65. The opening round of the negotiations on the New Agreement took place in Brussels 
on 4
th July 2008. Following the Russia-Georgia conflict which broke on 7th August 
2008, the European Council post poned the negotiations. 
Perspective of a free trade area 
66. An EU-Russia Free Trade Area (FTA) agr eement would be a key building block 
towards a deeper economic integration between the EU and Russia on the basis of shared rules and a level playing fi eld. Given the ever growing economic 
interdependence, such a deep and comprehe nsive FTA is in the mutual interest of 
Russia and the EU. This would provide for the necessary legal basis to render effective markets openings leading to increa sed trade and investment flows. It would 
also provide for stronger  rights and obligations by defining legally binding 
commitments which can be enforced through a dispute settlement mechanism. An EU-Russia FTA agreement  would require further nego tiating directives, and should 
 
EN 14   EN build on Russia’s WTO membership. Severa l meetings on exploratory talks on the 
perspective of an FTA have taken place. 
67. Russia has expressed a strong interest in ma intaining or even increasing its already 
important market share in the EU uran ium enrichment and nuclear fuel supply 
market, though the Russian market for the EU  industry remains closed. On the basis 
of the mandate issued by the Council in 2003, technical consultations  have been held 
with the Russian Federation, though formal talks have not taken place. Provided the 
context of increasing coope ration continues related to the objectives of safety, 
security and non-proliferation and Russia’s ambitious plans to develop its nuclear 
generating capacities, a new comprehensiv e agreement on peaceful uses of nuclear 
energy could be considered for future discu ssions in the framewor k of pursuit of the 
negotiations on the New EU/Russia Agreement.  
Justice, Freedom, Security 
68. The EU and Russia have agreed to examine the conditions for visa -free travel as a 
long-term perspective in the context of EU-Russia Visa Dialogue. The possible 
content of discussions on external relati ons aspects in the block IV has been 
extensively discussed with the Member St ates. The EU has proposed a wider agenda 
including issues related to freedom of movement and non-discrimination.  
69. Both sides would benefit from increased travel and new possibi lities of people-to-
people contacts at all levels. The EU ha s sought the right balance between this 
aspiration and its legitimate security con cerns. Russia and the EU also differ with 
regard to the timetable for visa-free, and th e prerequisites needed to get to this point. 
70. Furthermore, as recommended in the Communication on Applying the Global 
Approach to Migration to the Eastern a nd South-Eastern Regi ons Neighbouring the 
European Union5, the implementation of other poi nts covered by the Road Map for 
the Common Space should be intensified, in particular regarding migration 
management, fight against illegal migr ation and cooperation on asylum issues. 
71. Europol is evaluating Russia's legislation implementing Council of Europe 1981 
Convention on the Automatic Processing of Personal Data. Satisfactory progress is a 
prerequisite for a possible Operationa l Agreement between Russia and Europol, 
which would allow exchange of persona l data. The Council awaits Europol's 
proposal on the start of the negotiations. 
72. Such an agreement would be in the intere st of both sides since concrete cooperation 
among law enforcement officials is fruitful  only in so far as the cooperation can 
address specific criminal operators and operations. However, the EU must not allow data exchanges on individuals if full assuranc es are not received with regard to the 
protection of personal data.  
73. Eurojust  and the Russian Prosecutor’s Office have been engaged in talks on a 
Cooperation Agreement. The date for the next  meeting has not been set so far. The 
further advancement of Eurojust-Russi a cooperation is preconditioned on the 
fulfilment of adequate protection of personal data.  
74. Informal consultations have been underw ay between Russia and the Commission 
with regard to the feasibility and po ssible scope of a bilateral agreement on judicial 
cooperation in  civil and commercial matters . Enhanced cooperation in this field is 
                                                
 
5 COM (2007) 247 
 
EN 15   EN important for both sides. A bilateral agreement between the EU and Russia in 
appropriate cases could repl ace numerous existing bilateral agreements between 
certain EU Member States and Russia. Th e EU objective is to ensure that Russia 
engages in proper cooperation at the multilate ral level by acceding to, and effectively 
implementing, multilateral conventions (in pa rticular the Hague Conventions), in 
addition to a strengthened cooperation via a possible EU-Russia bilateral agreement 
that could cover areas not falling un der those multilateral instruments. 
75. EU-Russia co-operation in the field of criminal law  has been accentuated by several 
high-profile cases and numerous practi cal problems faced by Member States. 
Increased cooperation is in the interest of both sides but is hampered by the need to 
ascertain to a satisfactory degree the fr ee and fair functioning of the Russian 
judiciary before any extradition can take place. 
76. Cybercrime  is a challenging new field of c ooperation where e nhanced cooperation 
would be in the interest of  both sides, but particular ly for the EU which needs 
Russia's assistance in closing down ille gal websites based in Russia. Initial 
discussions have been conducted concer ning a possible high-level EU-Russia 
conference. The challenge for the EU is to ensure that co-operation on the fight 
against cybercrime is not used as a means of further curtailing freedom of expression 
in Russia. As regards the us e of Internet for terrorist purposes, cooperation should be 
based on the Council of Europe Conven tion on the prevention of terrorism. 
77. The EU is a major producer of amphetamin e-based drugs in the world. Russia is a 
key source for precursors used for the il licit manufacturing of these drugs. The 
mandate of a new EU-Russia agreement covers  the area of drug precursors control, 
however a specific mandate is required to se t up the detailed rules for cooperation in 
this area building upon the releva nt international instruments6. A possible agreement 
with Russia on the control of drug precursors  would provide a firm legal ground 
for cooperation in the fight against illicit drugs. Negotiations for an agreement with 
Russia on the control of drug precursors  should be launched soon in the 
framework of the negotiation for the New EU /Russia Agreement, in order to provide 
a firm legal ground for cooperation in the fight against illicit drugs. Closer co-
operation with Russia is also instrumental  in controlling drug trafficking from 
Central Asia. 
Research, Education, Culture 
78. Russia on 10 April 2008 formally expressed its interest to become an associate 
member of the EU’s 7th Framework Programme in Research and Development . 
At the PPC on Research on 26 May, the EU co mmitted to take all the necessary steps 
to examine Russia’s request and " expressed the hope that a sa tisfactory outcome will 
be achieved as soon as possible ". A second meeting to prepare the association was 
envisaged for 24-25 September but has been postponed.  
79. The Association of Russia to 7th FP could be negotiated with in the framework of the 
New Agreement. The association would put the EU-Russia research cooperation on a 
new, higher level. 38 countries, incl uding the EU 27, participate in the 7th FP.  
80. Russian entities would enjoy the same rights and obligations in terms of participation 
and funding as entities from the EU. Russia representatives would be allowed to 
                                                 
6 Article 12 of the 1988 United Nations Convention against illicit traffic in narcotic drugs and 
psychotropic substances  
 
EN 16   EN participate as observers in FP7 related management committees and bodies which 
would facilitate convergence towards a common research agenda including EU 
priorities, e.g. climate change.  
COOPERATION IN INTERNATIONAL OR GANISATIONS AND IN REGIONAL 
ORGANISATIONS AND INITIATIVES  
81. WTO accession : The negotiations started nearly 13 years ago and made considerable 
progress over the past two years. However,  a limited but important list of unresolved 
issues remains to be solved. Furthermor e, the process has been now caught in a 
complex situation. There is a growing “ne gotiating” fatigue in Russia and support for 
an early accession seems to decrease. Th e overall political context has further 
complicated the ongoing process, including regarding some other trading partners. 
The conclusion of the WTO accession will re quire full co-operation and engagement 
between Russia and all concerned, which seem s to be particularly difficult at this 
moment. However, it is  repeatedly underlined that it would be in the interest of all 
trading partners to have Russia join the multilateral institution.  The EU and Russia 
concluded a bilateral market access agreement in 2004.  
82. Remaining outstanding issues concern e xport duties (in part icular for wood), 
discriminatory railway fees and SPS measures. In addition, there are a number of 
other remaining issues which require furt her discussion. On the multilateral side, 
there are still a number of unresolved i ssues with various WTO members. These 
include issues such as agriculture , state trading enterprises and SPS. 
83. For Russia, WTO membership would anchor the economic reform and create a more 
stable and predictable business envir onment, which would encourage further 
investments. It would in turn  contribute to greater diversification and modernization 
of Russia's economy leading to sustainable growth. For the EU, it would integrate 
Russia into the international rules-based trade system. 
84. Russian accession to the OECD  is under negotiation and is in the interest of both 
sides to address the many global challenges that affect our societies and to further 
integrate Russia into the world economy. Ke y accession criteria notably include the 
respect for the values of like-mindedness, respect of the rule of law – including 
international law – and good governance. Therefore, Russia’s accession to OECD will need to be coordinated with the process of Russia’s accession to the WTO.  
85. Relations in the Council of Europe  have become increasingl y tense in the last two 
years over human rights issues, and more specifically about the non-ratification of 
Protocol 6 to the ECHR
7 (abolition of the death penalty ), of Protocol 14 (reform of 
the Court), as well as ECHR rulings against Russia considered as politicized 
(Chechen cases, Iliascu case)  and therefore not accepted. Recently events in Georgia 
have cast a further shadow over coopera tion between the EU and Russia in the 
context of both the OSCE and the Council of Europe. 
86. There has been a growing tendency fo r Russia to block consensus in the OSCE , 
notably as regards draft Mini sterial Statements supposed to  set a broad course for the 
organisation. The main topic overshadowing activities in the politico-military dimension remains Russia’s suspension of  the CFE-Treaty (Conventional Forces in 
Europe). In the human dimension, Russia ha s repeatedly attacked the autonomy of 
                                                
 
7 ECHR: European Convention on Human Rights 
 
EN 17   EN ODIHR, sought to undermine its electoral obs ervation and challenged the role of 
NGOs. Russia has launched some bold attempts to reform the OSCE and pushed for the adoption of a “Charter” setting out  OSCE “basic goals, principles and 
commitments”.  
87. The EU and Russia cooperate and interact at a regional level.  It is in the EU’s 
interest to safeguard existing regional coope ration frameworks in order to be able to 
tackle concrete regional and local challe nges but also in orde r to maintain well-
functioning cooperation formats which en sure the continuation of a dialogue. 
Regional cooperation may also pave the wa y for the Russian re gional and municipal 
actors to engage better and dire ctly with EU counterparts.  
88. The revised Northern Dimension Policy  transformed the Northern Dimension into a 
genuinely common policy between its four partners. There has been a renewed Russian interest to engage and support th e further advancement of the Northern 
Dimension which has been welcomed by the EU.  
89. There is scope for including Arctic issues  in the regular dialogue between the EU 
and Russia both bilaterally and in the Arctic Council. In the framework of 
international cooperation under its new Integrated Maritime Policy , the EU has an 
interest to establish a regular high-le vel dialogue with Ru ssia to discuss the 
sustainable management of maritime resour ces and Law of the Sea matters in the 
Arctic and other maritime areas of a common interest.  
90. With regard to the Council of Baltic Sea States , the EU and Russia will need to 
cooperate in order to reform the organizati on on the basis of the decisions reached at 
the June 2008 Baltic Summit.  
91. Preparations are currently underway  in the Commission to prepare an EU Strategy 
for the Baltic Sea Region , which will be adopted during the Swedish EU 
Presidency. While the strategy will be an inte rnal EU strategy it is  clear that certain 
external aspects will require further cons ultations with Russia. The European Council 
conclusions of December 2007 referred to the Northern Dimension as the most 
appropriate forum for these discu ssions to take place. It will be in the interest of the 
EU to ensure that Russia is committed to the implementation of certain external aspects of the strategy (notably envir onment) without the EU being pushed to 
negotiate the internal aspects of the stra tegy (most notably th e acquis and internal 
market) with any third countries. Russia desi res that the strategy will enhance EU’s 
ability to coordinate internally and that  the strategy does not jeopardize the existing 
mechanisms under ND and CBSS.