Proposal for a COUNCIL DECISION on the conclusion by the European Economic Community of the interim Agreement between the European Economic Community and the European Coal and Steel Community of the one part and the Czech and Slovak Federal Republic of the other part on trade and trade related matters
Date: 1992-01-10
Institutions: European Commission
Subjects: Czechoslovakia, cooperation agreement (EU), economic cooperation, trade cooperation

Pllp 

COMMISSION OF THE EUROPEAN  COMMUNITIES 

tsm 

• 

C0MC91) 524 final 
Brussels, 13 December 1991 

Proposals for 
COUNCIL DECISIONS 

on the conclusion by the European  Economic Community of the Interim 
Agreement  between  the European  Economic  Community  and the European 
Coal  and Steel  Community of the one part and the Republic of Poland 
of the other  part on trade and trade related  matters 

on the conclusion by the European  Economic Community of the Interim 
Agreement  between  the European  Economic  Community  and the European 
Coal  and Steel  Community  of the one part  and the Czech  and Slovak 
Federal  Republic  of  the  other  part  on  trade  and  trade  related 
matters 

on the conclusion by the European  Economic  Community of the Interim 
Agreement  between  the European  Economic  Community  and the European 
Coal  and  Steel  Community  of  the one  part  and  the  Republic  of 
Hungary of the other  part on trade and trade  related  matters 

(presented by the Commission) 

Draft 
COMMISSION  DECISIONS 

concerning  the conclusion on behalf of the European  Coal  and Steel 
Community  of  the  Interim  Agreement  between  the European  Economic 
Community  and the European Coal and Steel  Community of the one part 
and  the Republic  of  Poland  of  the other  part  on  trade  and  trade 
related  matters 

concerning  the conclusion on behalf of the European  Coal  and Steel 
Community  of  the  Interim  Agreement  between  the European  Economic 
Community  and the European Coal and Steel  Community of the one part 
and  the Republic  of Hungary  of the other  part  on  trade  and trade 
related  matters 

concerning  the conclusion on behalf of the European  Coal  and Steel 
Community  of  the  Interim  Agreement  between  the European  Economic 
Community  and the European Coal and Steel  Community of the one part 
and  the Czech  and  Slovak  Federal  Republic  of  the other  part  on 
trade and trade  related  matters 

(Request  for Council  assent  and consultation of the ECSC  Committee, 
pursuant  to Article 95 of the ECSC  Treaty) 

Explanatory Memorandum 

1. The attached proposals for decisions provide the legal basis for the 

conclusion by the European Economic Community and European Coal and 
Steel Community of interim agreements between the European Economic 
Community and European Coal and Steel Community and Czechoslovakia, 
Hungary and Poland  respectively. 

2. A declaration by the Commission and the Council annexed to the 

negotiating directives for association agreements with Poland, Hungary 
and Czechoslovakia, adopted on 18 December  1990, stipulates that  interim 
agreements may be concluded, pending ratification of the Europe 
agreements by the national parliaments, for the purposes of provisional 
application of the sections of the agreements for which the Community 
has responsibility. 

3. Following the initialling of the Europe agreements in Brussels on 

22 November of this year, the interim agreements for the provisional 
application of the sections of the agreements relating to trade and 
back-up measures were initialled  at 
These 
agreements will be concluded  for a period ending when the Europe 
agreements enter into force, and in any case no later than 31 December 
1993. 

on 

4. These agreements suspend the trade provisions of the Agreements on trade 
and commercial and economic cooperation concluded between the European 
Economic Community and European Atomic Energy Community  (the latter only 
in the case of Czechoslovakia) and Czechoslovakia, Hungary and Poland 
respectively and those of the agreements between the European Coal and 
Steel Community and each of the three countries in question. 

5. The procedures for signing and concluding the agreements differ between 

the EEC and ECSC. 

Conclusion of the agreements proceeds as follows: 

- 

the Council, after consulting the European Parliament, will 
conclude the agreement on behalf of the EEC, by viture of the 
provisions of Article 113 of the EEC Treaty, by adopting the 
decisions contained  in (I); 

the Commission will conclude the agreement on behalf of the ECSC, 
in accordance with Article 95 of the ECSC Treaty, with the 
unanimous assent of the Council and after the Consultative 
Committee has been consulted, by adopting the decisions contained 
in (II). 

6. The Commission is accordingly  requesting the Council to adopt the 

proposals contained under  (I) and to give its assent to the decisions 
under (II). 

ANNEX I 

Proposals council decisions concerning the conclusion by the European Economic 

Community of interim agreements, on trade and trade related matters, 
between the European Economic Coiranunity and European Coal and Steel 
Community and Czechoslovakia, Hungary and Poland  respectively. 

Proposal  for a 

COUNCIL DECISION 

OF 

199. 

ON THE CONCLUSION BY THE EUROPEAN ECONOMIC COMMUNITY  OF THE 
INTERIM AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY  AND 
THE EUROPEAN COAL AND STEEL COMMUNITY OF THE ONE PART AND THE 
REPUBLIC OF POLAND OF THE OTHER PART ON 
TRADE AND TRADE RELATED MATTERS 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 
Community, and  in particular Article  113 thereof, 

Having regard to the proposal  from the Commission, 

Having regard to the opinion of the European Parliament, 

on 

Whereas,  pending  the entry  into  force of the European Agreement  signed 
199.,  it  is  necessary  to  approve  the 
in 
Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel  Community  of the one part  and  the Republic  of 
Poland  of  the  other  part  on  trade  and  trade  related  matters  signed  in 
[  Brussels ] on 

199.. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel  Community  of  the one part  and  the Republic  of 
Poland  of  the  other  part  on  trade  and  trade  related  matters  together 
with  the  Protocols  annexed  thereto,  the  declarations  and  the  exchange 
of  letters  annexed  to  the  Final  Act  are  hereby  approved  on  behalf  of 
the European Economic  Community. 

The texts of the  Interim Agreement  and of the Final Act are annexed  to 
this Decision. 

Article 2 

The President of the Council shall carry out the notification procedure 
provided  for  in  Article  49  of  the  Interim  Agreement  on  behalf  of  the 
European Economic Community. 

Done at; Brussels, 

Proposal  for a 

COUNCIL DECISION 

OF 

199. 

ON THE CONCLUSION BY THE EUROPEAN ECONOMIC COMMUNITY OF THE 
INTERIM AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY  AND 
THE EUROPEAN COAL AND STEEL COMMUNITY OF THE ONE PART AND THE 
CZECH AND SLOVAK FEDERAL REPUBLIC OF THE OTHER PART ON 
TRADE AND TRADE RELATED MATTERS 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 
Community, and in particular Article  113 thereof, 

Having regard to the proposal  from the Commission, 

Having regard to the opinion of the European Parliament, 

on 

Whereas, pending the entry  into  force of  the European Agreement  signed 
199.,  it  is  necessary  to  approve  the 
in 
Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel  Community  of  the  one  part  and  the  Czech  and 
Slovak  Federal  Republic  of  the  other  part  on  trade  and  trade  related 
matters signed  in  [ Brussels] on 

199.. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel  Community  of  the  one  part  and  the  Czech  and 
Slovak  Federal  Republic  of  the  other  part  on  trade  and  trade  related 
matters  together  with  the  Protocols  annexed  thereto,  the  declarations 
and  the  exchange  of  letters  annexed  to  the  Final  Act  are  hereby 
approved on behalf of the European Economic  Community. 

The texts of  the Interim Agreement  and of the Final Act  are annexed  to 
this Decision. 

Article 2 

The President  of the Council  shall carry out the notification  procedure 
provided  for  in Article  49  of  the  Interim  Agreement  on  behalf  of  the 
European Economic Community. 

Done at Brussels, 

Proposal  for a 

COUNCIL DECISION 

OF  . . . 

. . 199. 

ON THE CONCLUSION BY THE EUROPEAN ECONOMIC COMMUNITY  OF THE 
INTERIM AGREEMENT BETWEEN THE EUROPEAN ECONOMIC COMMUNITY  AND 
THE EUROPEAN  COAL AND STEEL COMMUNITY OF THE ONE PART AND THE 
REPUBLIC OF HUNGARY OF THE OTHER PART ON 
TRADE AND TRADE RELATED MATTERS 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 
Community, and  in particular Article 113 thereof, 

Having regard to the proposal  from the Commission, 

Having regard  to the opinion of the European Parliament, 

on 

Whereas,  pending  the entry  into  force of the European Agreement  signed 
in 
199.,  it  is  necessary  to  approve  the 
Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel Community  of the one part  and  the Republic  of 
Hungary  of  the other part on trade and trade related matters  signed  in 
(  Brussels] on 

199.. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim  Agreement  between  the  European  Economic  Community  and  the 
European  Coal  and  Steel Community  of  the one part  and  the  Republic  of 
Hungary  of  the  other  part  on trade  and trade  related  matters  together 
with  the  Protocols  annexed  thereto, the declarations  and  the  exchange 
of  letters  annexed  to  the  Final  Act  are  hereby  approved  on  behalf  of 
the European Economic Community. 

The texts of  the  Interim Agreement and of the Final Act are annexed  to 
this Decision. 

Article 2 

The President of the Council shall carry out the notification  procedure 
provided  for  in  Article  48 of  the  Interim  Agreement  on  behalf  of  the 
European Economic Community. 

Done at Brusseli 

ANNEX II 

Draft Commission decisions concerning the conclusion on behalf of the 
European Coal and Steel Community of interim agreements, on trade and trade 
related matters, between the European Economic Community  and European Coal 
and Steel Community and Czechoslovakia, Hungary and Poland  respectively. 

Draft 

COMMISSION DECISION 

OF 

199. 

CONCERNING THE CONCLUSION ON BEHALF OF THE EUROPEAN COAL AND STEEL 
COMMUNITY OF THE INTERIM AGREEMENT BETWEEN THE 
EUROPEAN ECONOMIC COMMUNITY AND THE EUROPEAN COAL AND STEEL 
COMMUNITY OF THE ONE PART AND THE 
REPUBLIC OF POLAND OF THE OTHER PART ON TRADE AND 
TRADE RELATED MATTERS 
(../.../ECSC) 

THE COMMISSION OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Coal  and Steel 
Community, and in particular the first paragraph of Article 95 thereof, 

on 

Whereas, pending the entry  into  force of the European Agreement  signed 
199., it is necessary  to  approve  the  Interim 
in 
Agreement between the European Economic Community and the European Coal 
and  Steel Community  of the one part and the Republic of Poland of the 
other  part on trade and trade  related  matters  signed  in  [Brussels] on 

199.. 

Whereas the conclusion of the Interim Agreement  is necessary to attain 
the objectives of the Community set out in particular in Articles 2 and 
3 of the Treaty establishing the European Coal and Steel Community and 
whereas the Treaty did not make provision for all the cases covered by 
this Decision. 

Having  consulted  the  Consultative  Committee  and  with  the  unanimous 
assent of the Council. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim Agreement  between the European  Economic  Community  and the 
European  Coal and Steel  Community of the one part and the Republic of 
Poland  of the other  part on trade  and trade  related  matters  together 
with the Protocols  annexed  thereto, the declarations  and the exchange 
of  letters  annexed  to the Final Act are hereby  approved  on behalf of 
the European Coal and Steel Community. 

The texts of the Interim Agreement and of the Final Act are annexed to 
this Decision. 

Article 2 

The  President  of  the  Commission  shall  carry  out  the  notification 
procedure provided for in Article 49 of the Interim Agreement on behalf 
of the European Coal and Steel Community. 

Done at Brussels, 

Draft 

COMMISSION  DECISION 

OF 

199. 

CONCERNING THE CONCLUSION ON BEHALF OF THE EUROPEAN  COAL AND STEEL 
COMMUNITY OF THE INTERIM AGREEMENT BETWEEN THE 
EUROPEAN ECONOMIC COMMUNITY AND THE EUROPEAN COAL AND STEEL 
COMMUNITY OF THE ONE PART AND THE 
REPUBLIC OF HUNGARY OF THE OTHER PART ON TRADE AND 
TRADE RELATED MATTERS 
(../.../ECSC) 

THE COMMISSION OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Coal  and Steel 
Community, and in particular the first paragraph of Article 95 thereof, 

on 

Whereas, pending the entry  into force of the European Agreement  signed 
in 
199., it is necessary  to approve  the  Interim 
Agreement between the European Economic Community and the European Coal 
and  Steel Community of the one part and the Republic of Hungary of the 
other  part on trade and trade  related  matters  signed  in  [Brussels] on 

199.. 

Whereas the conclusion of the Interim Agreement  is necessary  to attain 
the objectives of the Community set out in particular in Articles 2 and 
3 of the Treaty establishing the European  Coal and Steel  Community and 
whereas the Treaty did not make provision  for all the cases covered by 
this Decision. 

Having  consulted  the  Consultative  Committee  and  with  the  unanimous 
assent of the Council. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim  Agreement  between  the European  Economic  Community  and the 
European  Coal and Steel  Community  of the one part  and the Republic of 
Hungary  of the other  part  on trade and trade  related  matters  together 
with  the Protocols  annexed  thereto,  the declarations  and the exchange 
of  letters  annexed  to the Final Act are hereby  approved  on behalf of 
the European Coal and Steel  Community. 

The texts of the Interim Agreement and of the Final Act are annexed to 
this Decision. 

Article 2 

The  President  of  the  Commission  shall  carry  out  the  notification 
procedure provided for in Article 48 of the Interim Agreement on behalf 
of the European Coal and Steel Community. 

Done at Brussels, 

Ao 

Draft 

COMMISSION  DECISION 

OF 

199. 

CONCERNING THE CONCLUSION ON BEHALF OF THE EUROPEAN COAL AND STEEL 
COMMUNITY OF THE INTERIM AGREEMENT BETWEEN THE 
EUROPEAN ECONOMIC COMMUNITY AND THE EUROPEAN COAL AND STEEL 
COMMUNITY OF THE ONE PART AND THE 
CZECH AND SLOVAK FEDERAL REPUBLIC OF THE OTHER PART 
ON TRADE AND TRADE RELATED MATTERS 

(../.../ECSC) 

THE COMMISSION OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Coal  and Steel 
Community, and in particular the first paragraph of Article 95 thereof, 

on 

Whereas, pending the entry  into  force of the European Agreement  signed 
199., it is necessary  to  approve  the  Interim 
in 
Agreement between the European Economic Community and the European Coal 
and  Steel  Community  of the one part  and the Czech  and Slovak  Federal 
Republic of the other part on trade and trade related matters signed in 
[Brussels] on  ..........199.. 

Whereas the conclusion of the Interim Agreement  is necessary to attain 
the objectives of the Community set out in particular in Articles 2 and 
3 of the Treaty  establishing the European Coal and Steel Community and 
whereas the Treaty did not make provision for all the cases covered by 
this Decision. 

Having  consulted  the  Consultative  Committee  and  with  the  unanimous 
assent of the Council. 

HAD DECIDED AS FOLLOWS : 

Article 1 

The  Interim  Agreement  between the European  Economic  Community  and the 
European  Coal  and Steel  Community  of the one part  and the Czech and 
Slovak  Federal  Republic  of the other  part on trade  and trade  related 
matters  together  with  the Protocols  annexed  thereto, the declarations 
and  the  exchange  of  letters  annexed  to  the  Final  Act  are  hereby 
approved on behalf of the European Coal and Steel Community. 

The texts of the Interim Agreement and of the Final Act are annexed to 
this Decision. 

Article 2 

The  President  of  the  Commission  shall  carry  out  the  notification 
procedure provided  for in Article 49 of the Interim Agreement on behalf 
of the European Coal and Steel Community. 

Done at Brussels, 

J* 

EC / POLAND 
13/12/91 

INTERIM AGREEMENT 

on trade and trade related matters 

between  the EUROPEAN ECONOMIC COMMUNITY and  the EUROPEAN COAL AND STEEL 
COMMUNITY, of  the one  part,  and  the  Republic  of  Poland,  of  the other 
part. 

THE  EUROPEAN  ECONOMIC  COMMUNITY  and  the  EUROPEAN  COAL  AND  STEEL 
COMMUNITY, hereinafter  referred  to as "the Community", 

of  the one part, 

and the REPUBLIC OF POLAND, hereinafter  referred  to as "Poland" 

of  the other part, 

WHEREAS  the  Europe  Agreement  establishing  an  association  between  the 
European Communities and  their Member  States and  the Republic of Poland 
was signed  in 

1991; 

on 

WHEREAS  the  aim  of  the  Europe  Agreement  is  to  provide  an  appropriate 
framework  for  political  dialogue;  it  is  to  govern  commercial  and 
economic relations between  the Parties and  includes provisions relating 
to  financial  cooperation  and  assistance  and  the  promotion  of 
cooperation  in cultural matters; 

WHEREAS  the  Europe  Agreement  is  intended  to  strengthen  and  widen  the 
relations established previously, notably by the Agreement on Trade and 
Commercial  and  Economic  Cooperation  between  the  European  Economic 
Community  and Poland  signed on  19th  September  1989 and  the Protocol  on 
Trade and Commercial  and Economic Cooperation between  the European Coal 
and Steel  Community  and Poland signed on  16th October  1991. 

WHEREAS  it  is necessary  to  ensure  the  development  of  trade  relations 
between  the  implementation  of  the  agreements  on  Trade  and  Commercial 
and Economic Coopérât ion and  that of  the Europe Agreement; 

WHEREAS  to  this  end  it  is  necessary  to  implement  as  speedily  as 
possible,  by  means  of  an  interim  Agreement,  provisions  of  the  Europe 
Agreement  trade and  trade related matters; 

WHEREAS  it  is necessary  to ensure  that  pending  the entry  into force of 
the Europe Agreement  and  the establishment of  the Association  Council, 
the Joint Committee set up by the Agreement  on Trade and Commercial  and 
Economic  Cooperation  can  exercise  the  powers  assigned  by  the  Europe 
Agreement  to  the  Association  Council  which  are  necessary  in order  to 
implement  the  Interim Agreement. 

/Au4/rf/ACC0RDS/P.int.agree2 

-Ài> 

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

THE EUROPEAN  ECONOMIC  COMMUNITY 

THE EUROPEAN COAL AND STEEL  COMMUNITY 

THE REPUBLIC OF  POLAND 

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

HAVE AGREED AS FOLLOWS: 

TITLE  I: FREE MOVEMENT OF GOODS 

Article  1 (EA 7) 

1. 
The Community  and  Poland  shall  gradually  establish  a  free  trade 
area  in a  transitional  period  lasting  a maximum  of  ten  years  starting 
from  the  entry  into  force  of  this  Agreement  (hereinafter  called  "the 
Agreement")  in accordance with  the provisions of  the present  agreement 
and  in  conformity  with  those  of  the  General  Agreement  on  Tariffs  and 
Trade. 

The  Combined  Nomenclature  of  goods  shall  be  applied  to  the 

2. 
classification of goods  in trade between  the two parties. 

For  each  product  the  basic  duty  to  which  the  successive 
3. 
reductions  set  out  in  this  Agreement  are  to  be  applied  shall  be  that 
actually  applied erga omnes on the day preceding  the date of entry  into 
force of  the Agreement. 

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

The  Community  and  Poland  shall  communicate  to  each  other  their 

5. 
respective basic duties. 

Chapter  I: Industrial  products 

Article 2 (EA 8) 

The  provisions  of  this  Chapter  shall  apply  to  products 
1. 
originating  in the Community  and  in Poland  listed  in Chapters  25 to 97 
of  the Combined  Nomenclature with  the exception  of  the products  listed 
in Annex  I. 

/ i . . W , « / i r p n p n « 5 /P  Inf 

nnrmmO 

-A3 -

The  provisions  of  Articles 3  to 7  included  do  not  apply  to 

2. 
products mentioned  in Articles 9 and 10. 

Article  3 (EA 9) 

Customs duties on  imports applicable  in the Community  to products 
1. 
originating  in  Poland  other  than  those  listed  in  Annexes  M a,  lib 
and  III shall  be abolished on the entry  into force of  the Agreement. 

Customs duties on  imports applicable  in the Community  to products 
2. 
originating  in  Poland  which  are  listed  in  Annex  lia  shall  be 
progressively abolished  in accordance with  the following timetable: 

on  the date of entry  into force of this Agreement  each duty shall 
be reduced  to 50% of  the basic duty. 
one  year  after  the  date  of  entry  into  force  of  this  Agreement 
the remaining  duties shall  be eliminated. 

Customs  duties  on  imports  applicable  in  the  Community  to  products 
originating  in  Poland  listed  in  Annex  Mb  shall  be  progressively 
reduced,  from  the date of entry  into force of  this Agreement, by annual 
reductions  of  20%  of  the  basic  duty,  so  as  to  arrive  at  a  total 
abolition  by  the  end  of  the  fourth  year  after  the  date  of  entry  into 
force of  the Agreement. 

3. 
The  products  of  Polish  origin  listed  in Annex  III  shall  benefit 
from  a  suspension  of  customs  duties  on  imports  within  the  limits of 
annual  Community  tariff  quotas or  ceilings  increasing  progressively  in 
accordance with  the conditions defined  in that Annex  so as to arrive at 
a  complete  abolition  of  customs  duties  on  imports  of  the  products 
concerned  at  the end of  the fifth year at the  latest. 

At  the  same  time,  customs  duties  on  imports  applicable  to  import 
quantities  in excess of  the quotas or ceilings provided  for above shall 
be progressively  dismantled  from  the entry  Into force of  the Agreement 
by  annual  reductions of  15%.  By  the end  of  the  fifth  year,  remaining 
duties shall  be abolished. 

4. 
Quantitative  restrictions  on  imports  to  the  Community  and 
measures  having  equivalent  effect  shall  be  abolished  on  the  date  of 
entry  into  force  of  the  Agreement  with  regard  to  the  products 
originating  in Poland. 

Article 4 (EA 10) 

1. 
Customs  duties  on  imports  applicable  in  Poland  to  products 
originating  in the Community  listed  in Annex  IVa shall  be  abolished on 
the date of entry  into force of  the Agreement. 

2. 
Customs  duties  on  imports  applicable  in  Poland  to  products 
originating  in  the  Community  which  are  listed  in  Annex  IVb  shall  be 
progressively  reduced  as specified  in that Annex. 

/Au4/rf/ACCORDS/P.int.agree2 

-M 

Poland  shall  open  duty  free  tariff  quotas  for  products  originating  in 
the Community,  as  listed  in that  Annex  and  according  to  the conditions 
contained  therein. 

3. 
Customs  duties  on  imports  applicable  in  Poland  to  products 
originating  in  the  Community  other  than  those  listed  in  Annexes  IVa 
and  IVb shall  be progressively  reduced, and abolished  by the end of the 
seventh  year  at  the  latest  from  the entry 
according  to the following  timetable: 

the Agreement 

into force of 

three  years  after  the  date of  entry 
each duty  shall  be reduced  to 80% of 
four  years  after  the  date 
entry 
each duty  shall  be reduced 
60% of 
five  years  after  the  date 
entry 
each duty shall  be reduced 
40% of 
six  years  after  the  date 
entry 
each duty shall  be reduced 
20% of 
entry 
seven  years  after  the  date 
the remaining  duties shall  be eliminated; 

into  force of 
the basic duty 
into  force of 
the basic duty 
into  force of 
the basic duty 
into  force  of 
the basic duty 
into  force of 

of 
to 
of 
to 
of 
to 
of 

the  Agreement 

the  Agreement 

the  Agreement 

the  Agreement 

the  Agreement 

4. 
Quantitative  restrictions  on  imports  into  Poland  of  products 
originating  in  the  Community  and  measures  having  equivalent  effect 
shall  be  abolished  on  entry  into  force  of  the  Agreement  with  the 
exception  of  those  listed  in  Annex V  which  shall  be  abolished  in 
accordance with  the timetable provided  in that Annex. 

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

Article 5  (EA 11) 

Article 6  (EA 12) 

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

Article 7 (EA 13) 

1. 
The Community  and Poland shall progressively abolish between  them 
at  the  latest  by  the  end  of  the  fifth  year  after  entry  into  force of 
the  Agreement  any  customs  duties  on  exports  and  charges  having 
equivalent  effect. 

2. 
Quantitative  restrictions  on  exports  and  any  measures  having 
equivalent  effect  shall  be abolished by  the Community  and Poland on the 
entry  into force of  the Agreement  except  for  those applied  to products 
listed  in Annex  VI which shall  be eliminated  as specified  therein. 

Article 8 (EA 14) 

Each party  declares  its readiness  to reduce  its customs duties  in trade 

/Au4/rf/ACC0RDS/P.Int.agree2 

T 4 S-

with  the  other  party  more  rapidly  than  Is  provided  for  in  Articles  3 
and  4  if  its  general  economic  situation  and  the  situation  of  the 
economic  sector  concerned  so permit. 

The  Joint  Committee  referred  to  in Article  37  (hereinafter  referred  to 
as  "the  Joint  Committee") may make  recommendations  to this effect. 

Protocol  No  1  lays  down  the  arrangements  applicable  to  the  textile 
products  referred  to  therein. 

Article  9  (EA  15) 

Protocol  No 2  lays down  the arrangements  applicable  to products  covered 
by  the Treaty  establishing  the European  Coal  and  Steel  Community. 

Article  10  (EA  16) 

Article  11  (EA  17) 

The  provisions  of  the  present  Chapter  do  not  preclude  the  retention of 
an  agricultural  component  in  the  duties  applicable  to  products  listed 
in Annex  VII. 

Chapter  II -Agriculture 

Article  12 (EA  18) 

1. 
products originating  in the Community  and  in Poland. 

The  provisions  of  this  Chapter  shall  apply  to  agricultural 

The  term  "agricultural  products"  means  the  products  listed  in 
2. 
Chapters  1  to 24  of  the  Combined  Nomenclature  and  the  products  listed 
in  Annex  I,  but  excluding  fishery  products  as  defined  by  Regulation 
(EEC) N-  3796/81. 

Protocol  N*  3  lays  down  the  trade  arrangements  for  processed 
agricultural  products which  are  listed  in such  protocol. 

Article  13 (EA  19) 

Article  14 (EA  20) 

1. 
The  Community  shall  abolish  at  the  date  of  entry  into  force  of 
the Agreement  the quantitative  restrictions on  imports of  agricultural 
products  originating  in  Poland  maintained  by  virtue  of  Council 
Regulation  (EEC)  no  3420/83  in  the  form  existing  on  the  date  of 
signature  hereof. 

/Au4/rf/ACC0RDS/P.Int.agre«2 

Je-

2. 
The  agricultural  products  originating  in  Poland  listed  in 
Annex VIII  shall  benefit,  upon  the  date  of  entry  into  force  of  this 
Agreement,  from  the  reduction  of  customs  duties  and  levies within  the 
limit  of Community  quotas  and upon  the conditions provided  in the same 
Annex. 

3. 
Poland  shall  gradually  abolish  quantitative  restrictions  on 
imports of agricultural  products originating  in the Community  listed in 
Annex  IX  in accordance with  the conditions established  in that Annex. 

The  Community  and  Poland  shall  grant  each  other  the  concessions 
4. 
referred  to  in  Annexes Xa, Xb and Xc  and XI,  on  a  harmonious  and 
reciprocal  basis,  in accordance with  the conditions  laid down  therein. 

Talcing  account  of  the  volume  of  trade  in  agricultural  products 
5. 
between  them,  of  their  particular  sensitivity,  of  the  rules  of  the 
Common Agricultural  Policy of  the Community, of  the role of agriculture 
in  the  Polish  economy,  and  of  the  consequences  of  the  multilateral 
trade  negotiations  under  the  General  Agreement  on  Tariffs  and  Trade, 
the Community  and  Poland  shall  examine on  a regular  basis  in the Joint 
Committee,  product  by  product  and  on  an orderly  and  reciprocal  basis, 
the  possibilities of  granting  each other  further  concessions.  In this 
context  special  attention  will  be  given  to  agricultural  production 
based on natural  techniques. 

6. 
Talcing  account  of  the  need  for  an  increased  harmony  between  the 
agricultural  policies  in the Community  and Poland,  as well  as Poland's 
objective of becoming  a member  of  the Community,  both Parties will  have 
regular  consultations  in  the  Joint  Committee  on  the  strategy  and 
practical  modalities of  their  respective policies. 

Article  15 (EA 21) 

Notwithstanding  other  provisions  of  this  Agreement  and  in  particular 
Article 24,  if,  given  the  particular  sensitivity  of  the  agricultural 
marlcets,  imports  of  products  originating  in one  Party,  which  are  the 
subject  of concessions granted  in Article 14, cause serious disturbance 
to  the  marlcets  In  the  other  Party,  both  Parties  shall  enter  into 
consultations  immediately  to  find  an  appropriate  solution.  Pending 
such  solution,  the  Party  concerned  may  take  the  measures  it  deems 
necessary. 

Chapter  III - Fisheries 

Article  16 (EA 22) 

The  provisions  of  this  chapter  shall  apply  to  fishery  products 
originating  in  the  Community  and  in  Poland,  which  are  covered  by 
Regulation  (EEC) No 3796/81 on  the common organization of  the market  in 
the sector of  fishery products. 

/A  ..A  / „«  / i r r n p n <;  /p 

i nt 

nnr**7 

-47 -

Article  17 (EA 23) 

The  Parties  shall  conclude  as  soon  as  practicable  negotiations  of  an 
agreement  on fishery products. 

Thereafter,  the  provisions  of  Article  14,  paragraph  5  shall  apply 
mutatis mutandis  to fishery products. 

Chapter  IV - Common provisions 

Article  18 (EA 24) 

The  provisions  of  this  Chapter  shall  apply  to  trade  in  all  products 
except  where otherwise provided  herein or  in Protocols N*1, 2, or 3. 

Article  19 (EA 25) 

1. 
No  new  customs  duties  on  imports  or  exports  or  charges  having 
equivalent  effect  shall  be  introduced,  nor  shall  those already  applied 
be  increased,  in  the  trade  between  the Community  and  Poland  from  the 
date of entry  into force of  the Agreement. 

2. 
io new  quantitative  restriction on  imports or  exports or  measure 
having  equivalent  effect  shall  be  introduced  nor  shall  those  existing 
be made more  restrictive  in the  trade between  the Community  and  Poland 
from  the date of entry  into force of  the Agreement. 

Without  prejudice  to  the  concessions  granted  under  Article  14, 
3. 
the provisions of paragraphs  1 and 2 of this Article shall  not  restrict 
in  any  way  the  pursuance  of  the  respective  agricultural  policies  of 
Poland  and  the  Community  or  the  taking  of  any  measures  under  such 
policies. 

Article 20 (EA 26) 

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

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

Article 21  (EA 27) 

This  Agreement 

not  preclude  the  maintenance  or 
1. 
establishment  of  customs  unions,  free  trade  areas or  arrangements  for 
frontier  trade  except  insofar  as  they  after  the  trade  arrangements 

shall 

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-48  -

provided  for in this  Agreement. 

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

Article 22 (EA 28) 

Exceptional  measures  of  limited  duration  which  derogate  from  the 
provisions of Articles 4 and 19, paragraph  1  may be taken by Poland in 
the  form of  increased  customs  duties. 

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

Customs  duties on  imports  applicable  in Poland  to products  originating 
in  the  Community  introduced  by  these  measures  may  not  exceed  25% 
ad  valorem  and  shall  maintain  an  element  of  preference  for  products 
originating  in  the  Community.  The  total  value  of  imports  of  the 
products  which  are  subject  to  these  measures  may not  exceed  15% of 
total  imports of  industrial  products  from  the Community  as defined  in 
Chapter  I, during  the last  year  for which  statistics  are available. 

These  measures  shall  be applied  for  a period  not exceeding  five  years 
unless  a  longer  duration  is authorized  by  the Joint  Committee.  They 
shall  cease  to  apply  at  the  latest  at  the  expiration  of  the 
transitional  period. 

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

Poland  shall  inform  the Joint  Committee  of any exceptional  measures it 
Intends  to  take  and, at  the  request  of  the Community,  consultations 
shall  be held  in the Joint  Committee  on such  measures  and the sectors 
to which  they  apply  before  they are applied.  When  taking  such  measures 
Poland  shall  provide  the  Joint  Committee  with  a  schedule  for the 
elimination  of  the customs  duties  introduced  under  this  Article.  This 
schedule  shall  provide  for a  phasing  out of  these  duties  starting  at 
the  latest  two years  after  their  introduction  at  equal  annual  rates. 
The  Joint  Committee may decide on a different  schedule. 

Article 23 (EA 29) 

If one of the Parties  finds  that  dumping  is taking  place  in trade  with 
the  other  Party  within  the  meaning  of  Article VI  of  the  General 
Agreement  on  Tariffs  and  Trade,  it  may  take  appropriate  measures 

/Au4/rf/ACC0RDS/P.int .agr««2 

against  this  practice  in accordance  with  the Agreement  relating  to  the 
application  of  Article VI  of  the  General  Agreement  on  Tariffs  and 
Trade,  with  related  internal  legislation  and  with  the  conditions  and 
procedures  laid down  in Article 27. 

Article  24  (EA  30) 

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

serious  injury  to  domestic  producers  of  like  or  directly 
competitive  products  in the  territory of one of  the  Parties, or 
serious disturbances  in any  sector  of  the economy  or  difficulties 
which  could  bring  about  serious  deterioration  in  the  economic 
situation  of  a region, 

the  Community  or  Poland,  whichever  is concerned,  may  take  appropriate 
measures  under  the  conditions  and  in  accordance  with  the  procedures 
laid down  in Article  27. 

Article  25  (EA  31) 

Where  compliance with  the provisions of Articles 7 and  19  leads to 
(i) 

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

(ii)  a  serious  shortage, or  threat  thereof, of  a product  essential  to 

the exporting  party; 

and  where  the  situations  above  referred  to give  rise, or  are  likely  to 
give  rise  to major  difficulties  for  the exporting  party,  that  party  may 
take  appropriate  measures  under  the  conditions  and  in  accordance  with 
the  procedures  laid  down  in  Article  27.  The  measures  shall  be  non 
discriminatory  and  be  eliminated  when  conditions  no  longer  justify 
their  maintenance. 

Article  26  (EA  32) 

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

Article  27  (EA  33) 

1. 
In  the  event  of  the  Community  or  Poland  subjecting  imports  of 
products  liable  to  give  rise  to  the  difficulties  referred  to  in 
Article  24  to  an  administrative  procedure  having  as  its  purpose  the 
rapid  provision  of  information  on  the  trend  of  trade  flows,  it  shall 
inform  the other  party. 

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- t p-

2. 
In  the cases  specified  in Articles  23, 24 and 25,  before  taking 
the  measures  provided  for therein or, in cases  to which  paragraph 3(d) 
applies, as soon as possible, the Community  or Poland, as the case may 
be,  shall  supply  the  Joint  Committee  with  all  relevant  information 
with a view to seeking a solution  acceptable to the two parties. 

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

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

For the  implementation  of paragraph  2, the following  provisions 

3. 
shalI  apply: 

(a)  As  regards  Article  24,  the  difficulties  arising  from  the 
situation  referred  to  in  that  Article  shall  be  referred  for 
examination  to the Joint  Committee,  which  may take  any decision 
needed  to put an end to such  difficulties. 

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

(b)  As regards  Article 23, the Joint  Committee  shall  be  informed of 
the  dumping  case  as  soon  as the authorities  of  the  importing 
party  have  initiated  an  investigation.  When  no end has been put 
to the dumping or no other  satisfactory  solution has been  reached 
within  thirty  days  of  the matter  being  referred  to the  Joint 
Committee,  the  importing  party  may  adopt  the  appropriate 
measures. 

c) 

As  regards  Article 25,  the  difficulties  arising  from  the 
situations  referred  to  in  that  Article  shall  be  referred  for 
examination to the Joint  Committee. 

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

d) 

Where  exceptional  circumstances  requiring  immediate  action  make 
information  or  examination,  as  the  case  may  be, 
prior 
impossible,  the Community  or  Poland  whichever  is concerned  may, 
in  the  situations  specified  in  Articles  23,  24  and 25,  apply 
forthwith  the precautionary  measures  strictly  necessary  to deal 
with  the situation. 

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* 

Article  28  (EA  34) 

Protocol  No  4  lays  down  rules  of  origin,  for  the  application  of  tariff 
preferences  foreseen  in  this  Agreement. 

Article  29  (EA  35) 

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

Article  30  (EA  36) 

Protocol  No  5  lays  down  the  specific  provisions  to  apply  to  trade 
between  Poland  of  the  one  part  and  Spain  and  Portugal  of  the  other 
part. 

TITLE  lit  PAYMENTS.  COMPETITION  AND  OTHER 
ECONOMIC  PROVISIONS 

Article  31  (EA  59) 

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

Article  32  (EA  62) 

With  reference  to  the  provisions  of  this  Chapter,  and  notwithstanding 
the  provisions  of  Article  34,  until  a  full  convertibility  of  the 
Polish  currency  in  the  meaning  of  Article  VIII  of  the  International 
Monetary  Fund  is  introduced,  Poland  may  in  exceptional  circumstances 
apply  exchange  restrictions  connected  with  the granting  or  taking  up  of 
short  and  medium-term  credits  to  the  extent  that  such  restrictions  are 
imposed  on  Poland  for  the  granting  of  such  credits  and  are  permitted 
according  to Poland's  status  under  the  IMF. 

Poland  shall  apply  these  restrictions  in  a  non-discriminatory  manner. 
They  shall  be  applied  in  such  a  manner  as  to  cause  the  least  possible 
disruption  to  this  Agreement.  Poland  shall  inform  the  Joint  Committee 

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xz 

promptly  of  the  introduction  of  such  measures  and  of  any  changes 
therein. 

Article  33 (EA 63) 

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

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

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

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

2. 
Any practices  contrary  to this  Article  shall  be assessed  on the 
basis of criteria  arising  from  the application of the rules of Articles 
85, 86, and 92  of  the  Treaty  establishing  the  European  Economic 
Community. 

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

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

4.a  For the purposes of applying  the provisions of paragraph  1, point 
(iii),  the Parties  recognize  that  during  the first  five  years  after the 
entry  into  force  of  the Agreement,  any public  aid granted  by  Poland 
shall  be  assessed  taking  into  account  the  fact  that  Poland  shall  be 
regarded  as an area  identical  to those  areas of the Community  described 
in  Article  92.3(a),  of  the Treaty  establishing  the  European  Economic 
Community.  The Joint  Committee  shall,  taking  into account  the economic 
situation  of  Poland,  decide  whether  that  period  should  be extended by 
further  periods of five  years. 

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

With  regard  to  products  referred  to  in Chapters  II and III of 

5. 
Title  I : 

the  provision of paragraph  1 (iii) does not apply. 
any  practices  contrary  to  paragraph  1 (i)  should  be  assessed 
according  to  the  criteria  established  by  the  Community  on the 

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43 

basis  of  Articles  42 and 43  of  the  Treaty  establishing  the 
Community  and  in  particular  of  those 
European 
established  in Council  Regulation n' 26/1962. 

Economic 

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

is  not  adequately  dealt  with  under  the  implementing  rules 
referred  to in paragraph  3, or 
in  the absence  of  such  rules,  and  if  such  practice  causes or 
threatens  to cause  serious  prejudice  to the interest  of the other 
Party  or material  injury  to its domestic  industry,  including  its 
services  industry, 

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

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

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

8. 
This  Article  shall  not  apply  to  the  products  covered  by the 
Treaty  establishing  the European  Coal  and Steel  Community  which  are the 
subject  of Protocol  N*2. 

Article  34 (EA 64) 

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

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

Article  35 (EA 65) 

With  regard  to public  undertakings,  and undertakings  to which  special 

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- 1 4-

or  exclusive  rights  have  been  granted,  the  Joint  Committee  shall 
ensure  that  as  from  the  third  year  following  the  date  of  entry  into 
force  of  the Agreement,  the  principles  of  the  Treaty  establishing  the 
European  Economic  Community,  notably  Article 90, and  the principles of 
the  concluding  document  of  the  April  1990  Bonn  meeting  of  the 
Conference 
(notably 
entrepreneurs' freedom of decision) are upheld. 

in  Europe 

Cooperation 

Security 

and 

on 

Art icle 36 

1. 
Poland  shall  continue  to  improve  the protection of  intellectual, 
industrial  and  commercial  property  rights  in order  to provide, by  the 
end  of  the  fifth  year  from  the  entry  into  force  of  the  Agreement,  a 
level  of  protection  similar  to  that  provided  in  the  Community  by 
Community  Acts  irt  particular  the  ones  referred  to  in  Annex XIII, 
including comparable means of enforcing  such  rights. 

2. 
Mutual  assistance  between  administrative  authorities  in  customs 
matters  of  the  Parties  shall  take  place  in  accordance  with  the 
provisions of Protocol N*6. 

TITLE  III  : INSTITUTIONAL. GENERAL AND FINAL  PROVISIONS 

Article 37 (EA 102) 

The Joint Committee  set up by the Agreement  on Trade and Commercial  and 
Economic Cooperation signed between  the European Economic Community  and 
the Republic of Poland  on  19th September  1989 shall  perform  the duties 
assigned  to  it by this Agreement  until  the Association Council  provided 
for  in Article 102 of  the Europe Agreement  is established. 

Article 38 (EA 104) 

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

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

Article 39 (EA 105) 

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

/Au4/rf/ACC0RDS/P.int.agree2 

-%f-

The  Joint  Committee  may  settle  the  dispute  by  means  of  a 

2. 
decision. 

3. 
carrying out  the decision referred  to  in paragraph 2. 

Each  party  shall  be  bound  to  take  the  measures  involved  in 

In  the  event  of  it  not  being  possible  to  settle  the  dispute  in 

4. 
accordance  with  paragraph  2 of  this Article,  either  party  may  notify 
the  other  of  the  appointment  of  an  arbitrator;  the  other  party  must 
then appoint  a second arbitrator within two months. 

The Joint Committee shall  appoint a third arbitrator. 

The arbitrators' decisions shall  be taken by majority vote. 

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

Article 40 (EA 111) 

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

Article 41  (EA 112) 

Nothing  in  the  Agreement  shall  prevent  a  Party  from  taking  any 
measures: 
(a)  which  it  considers  necessary  to  prevent  the  disclosure  of 

information contrary  to  its essential  security  interests; 

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

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

Article 42 (EA 113) 

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

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

/Au4/rf/ACCORDS/P.int.agre«2 

- 1 6-

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

Article 43 (EA 114) 

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

Article 44 (EA 115) 

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

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

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

Protocols  1, 2, 3, 4, 5, 6  and 7 and 
form an  integral  part of  this Agreement. 

Annexes  I to XI and XIII  shall 

Article 45 (EA 117) 

Article 46 (EA 118) 

1. 
This  agreement  shall  be applicable until  the entry  into force of 
the  Europe  Agreement  signed  on  16th  December  1991  and  at  the  latest 
until  31st  December  1992. 

2. 
Either  party  may  denounce  this  Agreement  by  notifying  the other 
party.  This  Agreement  shall  cease  to  apply  six  months  after  the  date 
of such notification. 

Article 47 (EA 119) 

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

/Au4/rf/ACC0RDS/P.int.agree2 

-v-

Article 48 (EA 120) 

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

Article 49 

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

This  Agreement  shall  enter  into  force  on  the  first  day  of  the  second 
month  following  the  date  on  which  the  Parties  notify  each  other  that 
the procedures referred  to  in the first  paragraph  have been  completed. 

Upon  entry  into  force of  this Agreement, Articles 2 and 3 paragraph 2, 
to 17 of  the Agreement  between  the European Economic Community  and the 
Republic  of  Poland  on  trade  and  economic  and  commercial  cooperation 
signed  in  Brussels  on  19th September  1989  and  the  corresponding 
provisions  of  the  Protocol  between  the  European  Coal  and  Steel 
Community  and  the  Republic  of  Poland  signed  in  Brussels  on 
16 October  1991  shall  be suspended. 

Article 50 (EA 122) 

1. 
In  the  event  that  this  Agreement  enters  into  force  after  1st 
January  but  before  30th June  1992  for  the  purposes of  Titles  I and II 
of  this Agreement  and Protocols N's 1, 2, 3, 4, 5, 6 and 7 hereto, the 
terms  "date of entry  into force of  the Agreement" shall  mean: 

the  date  of  entry  into  force  in  relation  to  obligations  taking 
effect on  that date, and 
1st  January  1992  in  relation  to  obligations  taking  effect  after 
the  date  of  entry  into  force  by  reference  to  the  date of  entry 
into force. 

2. 
of Protocol  N'7 shall  apply. 

In the case of entry  into force after  1st January, the provisions 

/Au4/rf/ACC0RDS/P.int.agree2 

- J 8-

JOINT DECLARATIONS 

1. 

Article 1 paragraph  4 

The  Community  and  Poland  confirm  that  where  a  reduction  of  duties  is 
effected  by way of a suspension of  duties made  for  a particular  period 
of  time,  such  reduced  duties  shall  replace  the  basic  duties  only  for 
the  period  of  such  suspension,  and  that  whenever  a partial  suspension 
of  duties  is made, the preferential  margin between  the Parties will  be 
preserved. 

2. 

Article 33 

1. 
The  Joint  Committee  shall  establish  appropriate  measures  to 
ensure  that  all  agreements  covered  by  Article 33(i)  of  the  Agreement 
and  affecting  trade  between  the  Contracting  Parties  and  which  were 
concluded  before  the  entry  into  force  of  the  Agreement  will  be  dealt 
with  in a manner  similar  to what  is provided  in Article 7  of  Council 
Regulation  (EEC) no 17/62. 

2. 
The  Parties  shall  not  make  improper  use  of  provisions  on 
professional  secrecy  to  prevent  the  disclosure  of  information  in  the 
field of competition. 

3. 
Parties  may  request  the  Joint  Committee  at  a  later  stage,  and 
after  the  adoption  of  the  implementing  rules  referred  to  in 
Article  33(3),  to  examine  to  what  extent  and  under  which  conditions 
certain  competition  rules  may  be  directly  applicable,  taking  into 
account  the  progress  made  in  the  integration  process  between  the 
Community  and Poland. 

3. 

Article 33. paragraph 2 

When applying  the criteria arising from the application of  the rules of 
articles  85,  86  and  92  of  the  Treaty,  the  notion  of  affectation  of 
trade  between Member  States defined  in such  articles  shall  be  replaced 
by the notion of affectation of trade between  the Community  and  Poland. 

4. 

Article 36 

The  Parties  agree  that  for  the  purpose  of  this  Interim  Agreement 
"intellectual,  industrial  and  commercial  property"  is  to  be  given  a 
similar  meaning  as  in  Article  36  of  the  EEC  Treaty  and  includes  in 
particular  protection  of  copyright  and  neighbouring  rights,  patents, 
industrial  designs,  trademarks  and  service  marks,  topographies  of 
integrated  circuits,  software,  geographical  indications  as  well  as 
protection  against  unfair  competition  and  protection  of  undisclosed 
information on know-how. 

/Au4/rf/ACC0RDS/P.int.ogre«2 

a* 

Annexes VI Mb  and Xc 

Surveillance  mechanisms  in  the  form  of  export  certificates  for  fruit 
and vegetable products  listed  in Annexes VII lb and Xc of  this Agreement 
shall  be  introduced  by  Poland  for  the purpose of monitoring  exports of 
these  products  to  the  Community  and  avoiding  undue  distortion  of  the 
Community  market.  The  surveillance  mechanisms  shall  be  introduced  at 
the  latest  from  1 June 1992. 

The modalities  for  the monitoring of  trade  in these products,  including 
the  modalities  for  exchange  of  information,  shall  be  established  by 
Poland  in cooperation with  the competent  services of  the Community. 

6. 

Article 5 of Protocol  N'6 to the Agreement 

The  Contracting  Parties  stress  that  the  reference  which  is  made  in 
Article 5  of  Protoci  N'6  to  their  own  legislation  may  cover,  where 
appropriate,  an  international  commitment  they  could  have  contracted, 
such  as  the  Convention  on  the  service  abroad  of  judicial  and  extra 
judicial  documents  in  civil  or  commercial  matters,  concluded  in  The 
Hague on November  15, 1965. 

/Au4/rf/ACC0RDS/P.int.agr««2 

*• 

UNILATERAL  DECLARATIONS 

Declarations by Poland 

1. 

Article 33 

Notwithstanding  the provisions of Article 33 the rights of the Parties 
under  the Agreement  on  Interpretation  and Application  of Articles  VI, 
XVI  and  XXIII  of  the General  Agreement  on  Tariffs  and  Trade  are not 
impaired". 

2- 

Agricultural  products 

Poland  expresses  its  strong  belief  that  the  Community  will  take 
effective  precautions  to ensure  that  its agricultural  export  subsidies 
do not displace shipments  from  Poland  to third  countries. 

These  precautions  should be reviewed by the Joint  Committee. 

3. 

Article 36 

By  the end of the fifth  year  from  the entry  into force of the Agreement 
Poland  shall  apply  to accede  to the Munich  Convention  on the Grant of 
European  Patents  of  5 October  1973.  Poland  shall  also  accede  to the 
following multilateral  conventions: 

internationale  sur  la  protection  des  artistes 

convention  de Berne  pour  la protection des oeuvres  littéraires et 
artistiques  dans  l'Acte de Paris du 24 juillet 1971; 
convention 
interprètes ou exécutants, des producteurs de phonogrammes et des  -> 
organismes de radiodiffusion signée à Rome  le 26 October 1961; 
traité  de Budapest  sur  la reconnaissance  internationale du dépôt 
des  micro-organismes  aux  fins  de  la  procédure  en  matière  de 
brevets, signé à Budapest  en 1977 et modifié en 1980. 
the  Madrid  Protocol  concerning  the  international  registration of 
Trade Marks  (Madrid  1989). 

to  which  Member  States  are parties, or  which  are de facto  applied by 
Member  States. 

Poland  declares  that  it  also  attaches  importance  to  the  following 
multilateral  conventions: 

convention  de  Paris  pour  la  protection  de  la  propriété 
industrielle dans  l'Acte de Stockholm  de 1967 (Union de  Paris); 
arrangement  de  Madrid  concernant  l'enregistrement  international 
des marques  dans  l'Acte de Stockholm de 1967 (Union de  Madrid); 
traité de coopération en matière de brevets  signé à Washington en 
1970  (Union du PCT). 

Poland  also  declares  that  by the end of the fifth  year  from  the entry 
into  force  of  the  Agreement,  it  shall  comply  in  its  internal 
legislation  with  the  substantial  provisions  of  the  Nice  Agreement 
concerning  the  international  Classification  of  Goods  and Services for 
the purposes of registration of marks  (Geneva  1977, amended  1979). 

/Au4/rf/ACC0RDS/P.int.agree2 

# 

Declarations by the European  Community 

1. 

Article 8. paragraph  4 of the protocol  N#2 on ECSC  products 

It  is understood  that  the possibility  of an exceptional  extension of 
the  five-years  period  is strictly  limited  to  the particular  case of 
Poland  and does not  impair  the position of the Community  in relation to 
other  cases  nor  prejudge  international  commitments.  The  possible 
derogation  foreseen  in paragraph  4  takes  into  account  the  particular 
difficulties  of  Poland  in restructuring  the steel  sector  and the fact 
this process has been  launched  very  recently. 

2- 

Protocol N'6 

Protocol  N'6  is  applicable  to  the  extent  that  it  covers  Community 
competences. 

/Au4/rf/ACC0RDS/P.Int.agr«e2 

to 

EC / HUNGARY 
13/12/91 

INTERIM AGREEMENT 

on trade and  trade related matters 

between  the EUROPEAN  ECONOMIC COMMUNITY  and  the EUROPEAN COAL AND STEEL 
COMMUNITY,  of  the one  part,  and  the  Republic  of  Hungary, of  the other 
part. 

THE  EUROPEAN  ECONOMIC  COMMUNITY  and  the  EUROPEAN  COAL  AND  STEEL 
COMMUNITY,  hereinafter  referred  to as "the  Community", 

of  the one part, 

and  the REPUBLIC OF HUNGARY, hereinafter  referred  to as  "Hungary" 

of  the other  part, 

WHEREAS  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their  Member  States  and  the  Republic  of 
Hungary was signed  in 

1991; 

on 

WHEREAS  the  aim  of  the  Europe  Agreement  is  to  provide  an  appropriate 
framework  for  political  dialogue;  it  is  to  establish  a  gradual  free 
trade area between  the Community  and Hungary covering  substantially all 
trade  between  them;  it  is to govern  commercial  and  economic  relations 
between  the  Parties  and  includes  provisions  relating  to  financial 
cooperation  and assistance and  the promotion of cooperation  in cultural 
matters; 

WHEREAS  the  Europe  Agreement  is  intended  to  strengthen  and  widen  the 
relations established  previously, notably by the Agreement  on Trade and 
Commercial  and  Economic  Cooperation  between  the  European  Economic 
Community  and Hungary signed on 26th September  1988 and the Protocol  on 
Trade and Commercial  and Economic Cooperation between  the European Coal 
and Steel  Community  and Hungary signed on 31st October  1991. 

WHEREAS  it  is necessary  to  ensure  the  development  of  trade  relations 
between  the  implementation  of  the  agreements  on  Trade  and  Commercial 
and  Economic Cooperation and  that of  the Europe Agreement; 

WHEREAS  to  this  end  it  is  necessary  to  implement  as  speedily  as 
possible,  by  means  of  an  interim  Agreement,  provisions  of  the  Europe 
Agreement  on trade and  trade related matters; 

WHEREAS  it  is necessary  to ensure  that  pending  the entry  into force of 
the  Europe  Agreement  and  the establishment  of  the Association  Council, 
the Joint Committee  set up by the Agreement  on Trade and Commercial  and 
Economic  Cooperation  can  exercise  the  powers  assigned  by  the  Europe 
Agreement  to  the  Association  Council  which  are  necessary  in order  to 
implement  the  Interim Agreement. 

/Au4/rf/ACCORDS/H.int.agree! 

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

THE EUROPEAN  ECONOMIC  COMMUNITY 

THE EUROPEAN COAL AND STEEL  COMMUNITY 

THE REPUBLIC OF  HUNGARY 

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

HAVE AGREED AS FOLLOWS: 

TITLE  I: FREE MOVEMENT OF GOODS 

Article  1 (EA 7) 

1. 
The Community  and Hungary  shall  gradually  establish  a free trade 
area  in a  transitional  period  lasting  a maximum  of  ten  years  starting 
from  the  entry  into  force  of  this  Agreement  (hereinafter  called  "the 
Agreement")  in accordance  with  the provisions of  the present  agreement 
and  in  conformity  with  those  of  the  General  Agreement  on  Tariffs  and 
Trade. 

2. 
The  Combined  Nomenclature  of  goods  shall  be  applied  to  the 
classification of  goods  for  imports  into the Community.  The Hungarian 
customs  tariffs  shall  be  applied  to  the  classification  of  goods  for 
imports  into Hungary. 

3. 
Subject  to  specific  provisions  in Chapters  II  and  III,  for  each 
product  the  basic  duty  to which  the  successive  reductions  set  out  in 
this  Agreement  are  to  be  applied  shall  be  that  actually  applied  erga 
omnes  on  the  day  preceding  the  date  of  entry  into  force  of  the 
Agreement. 

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

The  Community  and  Hungary  shall  communicate  to each  other  their 

5. 
respective basic duties. 

/Au4/rf/ACC0RDS/H.int.agree 

y* 

Chapter  I:  Industrial  products 

Article 2 (EA 8) 

The  provisions  of  this  Chapter,  shall  apply  to  products 
1. 
originating  in the Community  and in Hungary  listed  in chapters 25 to 97 
of  the Combined  Nomenclature  and of the Hungarian  Customs  Tariffs  with 
the exception of products  listed  in Annex  I. 

The  provisions  of  Articles 3  to 7  included  do  not  apply  to 

2. 
products mentioned  in Articles 9 and 10. 

Article 3 (EA 9) 

1. 
Customs  duties on  imports  applicable  in the Community  to products 
originating  in  Hungary  other  than  those  listed  in  Annexes  lia,  Mb 
and  Ml  shall  be abolished on the entry  into force of the Agreement. 

2. 
Customs  duties on  imports  applicable  in the Community  to products 
originating  in  Hungary  which  are  listed  in  Annex  Ma  shall  be 
progressively  abolished  in accordance with  the following  timetable: 

on  the date of entry  into  force of this Agreement  each  duty  shall 
be  reduced  to 50% of the basic  duty. 
one  year  after  the date  of  entry  into  force  of  this  Agreement 
the  remaining  duties  shall  be eliminated. 

Customs  duties  on  imports  applicable  in  the  Community  to  products 
originating  in  Hungary  listed  in  Annex  lib  shall  be  progressively 
reduced,  from  the date of entry  into force of this Agreement, by annual 
reductions  of  20% of  the  basic  duty,  so  as  to  arrive  at  a  total 
abolition  by the end of  the fourth  year  after  the date  of  entry  into 
force of the Agreement. 

3. 
The  products  of  Hungarian  origin  listed  in  Annex  ill  shall 
benefit  from  a  suspension  of  customs  duties  on  imports  within  the 
limits  of  annual  Community  tariff  quotas  or  ceilings  increasing 
progressively  in accordance  with  the conditions  defined  in the Annex. 
At  the  same  time,  customs  duties  on  imports  applicable  to  import 
quantities  in excess of the quotas or ceilings provided  for above  shall 
be  progressively  reduced  in accordance  with  the conditions  set out in 
Annex  III so as to arrive at a complete  abolition of customs  duties on 
imports  of the products  concerned  at the end of the fifth  year  at the 
latest. 

4. 
Quantitative  restrictions  on  imports  to  the  Community  and 
measures  having  a equivalent  effect  shall  be abolished  on the date of 
entry  into  force  of  the  Agreement  with  regard  to  the  products 
originating  in Hungary. 

/Au4/rf/ACC0RDS/H.Int.agree 

Article 4 (EA 10) 

1. 
Customs  duties  on  imports  applicable  in  Hungary  to  products 
originating  in  the  Community  which  are  listed  in  Annex  IV  shall  be 
reduced  progressively: 
Upon  entry  into force of the Agreement  - to  two-thirds  of  the  basic 

On  January  1, 1993 - 

On  January  1, 1994 - 

duty, 
to  one-third  of  the  basic 
duty, 
to zero. 

Customs  duties  on  imports  applicable  in  Hungary  to  products 
2. 
originating  in the Community  not  listed  in Annexes  IV and V  shall  be 
reduced  progressively: 
on  January  1, 1995 - to two-thirds of the basic  duty, 
on  January  1, 1996 - to  one-third of the basic  duty, 
on  January  1, 1997 - to zero. 

3. 
Customs  duties  on  imports  applicable  in  Hungary  to  products 
originating  in  the  Community  which  are  listed  in  Annex V  shall  be 
reduced  progressively: 
on  January  1, 1995 - to 90% of the basic  duty, 
on  January  1, 1996 - to 75% of the basic  duty, 
on  January  1, 1997 - to 60% of the basic  duty, 
on  January  1, 1998 - to 45% of the basic  duty, 
on  January  1, 1999 - to 30% of the basic  duty, 
on  January  1, 2000 - to 15% of the basic  duty, 
on  January  1, 2001 - to  0% of the basic  duty. 

4. 
Quantitative  restrictions  on  imports  into  Hungary  and  measures 
having  an  equivalent  effect  thereto  of  products  originating  in the 
Community  as  listed  in  Annex  Via  shall  be  progressively  abolished 
between  January  1,  1995  and  December  31,  2000  according  to  the 
timetable  provided  in that  Annex. 
All  other  quantitative  restrictions 
and  measures  having  an  equivalent  effect  thereto  shall  be  abolished 
upon  entry  into force of the Agreement. 

The  Joint  Committee  referred  to in Article 36 (hereinafter  referred to 
as  "the  Joint  Committee")  shall  periodically  review  the  progress 
achieved  in dismantling  quantitative  restrictions. 

From  the date  of entry  into  force  of the Agreement  Hungary  shall  open 
import  ceilings  for  products  originating  In  the Community  listed  in 
Annex  VIb and on the conditions contained  therein. 

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

Article 5  (EA 11) 

Article 6  (EA 12) 

The  Community  shall  abolish  in its imports  from  Hungary  charges  having 
an  effect  equivalent  to customs  duties on  imports  upon  the entry  into 

/i..4/.«/ir<rnon(/u  i.. »  mm»**. 

force of  the Agreement. 

Hungary  shall  abolish on  its  imports  from  the Community  charges having 
an  effect  equivalent  to  customs  duties  on  imports  in  accordance  with 
the following  timetable: 

January  1 1995  January  1 1996  January  1 1997 

the 1%  licensing  fee 
the 2% customs clearance 

1% 
- 

fee 

the 3% statistical  fee 

1% 

1% 

1% 

1% 

1% 

Article 7 (EA 13) 

1. 
The  Community  and  Hungary  shall  progressively  abolish  between 
them  at  the  latest  by  the end of  the fifth  year  after  entry  into force 
of  the  Agreement  any  customs  duties  on  exports  and  charges  having 
equivalent  effect  as well  as  quantitative  restrictions on  exports  and 
any  measures  having  equivalent  effect  except  those  that  might  be 
required  for  the administration of  international obligations. 

Article 8 (EA 14) 

Each party declares  its readiness to reduce  its customs duties  in trade 
with  the  other  party  more  rapidly  than  is provided  for  in Articles 3 
and 4  if  its  general  economic  situation  and  the  situation  of  the 
economic sector  concerned so permit. 

The Joint  Committee  referred may make recommendations to this effect. 

Protocol  No 1  lays  down  the  arrangements  applicable  to  the  textile 
products referred  to therein. 

Article 9 (EA 15) 

Protocol  No 2  lays down the arrangements applicable to products covered 
by  the Treaty establishing the European Coal  and Steel  Community. 

Article  10 (EA 16) 

Article  11  (EA 17) 

1. 
The  provisions  of  the  present  Chapter  do  not  preclude  the 
retention  by  the Community  of  an  agricultural  component  in the  duties 
applicable  to  products  listed  in  Annex VII  in  respect  of  products 
originating  in Hungary. 

The  provisions  of  the  present  Chapter  do  not  preclude  the 
2. 
introduction  of  an  agricultural  component  by  Hungary  in  the  duties 
applicable  to  the products  listed  in Annex VII  in respect  of  products 
originating  in the Community. 

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tt 

Chapter 

II 

- A g r i c u l t u re 

A r t i c le  12  (EA  18) 

1. 
products originating  in the Community  and  in Hungary. 

The  provisions  of  this  Chapter  shall  apply  to  agricultural 

2. 
The  term  "agricultural  products"  means  the  products  listed  in 
Chapters  1  to 24  of  the  Combined  Nomenclature  and  of  the  Hungarian 
Customs  Tariffs  and  the  products  listed  in  Annex  I,  but  excluding 
fishery products as defined by Regulation  (EEC) N'3796/81. 

Protocol  N" 3  lays  down  the  trade  arrangements  for  processed 
agricultural  products which are  listed  in such protocol. 

Article  13 (EA 19) 

Article  14 (EA 20) 

1. 
The  Community  shall  abolish  at  the  date  of  entry  into  force  of 
the Agreement  the quantitative restrictions on  imports of agricultural 
products  originating  in  Hungary  maintained  by  virtue  of  Council 
Regulation  no  3420/83  in  the  form  existing  on  the  date  of  signature 
hereof. 

2. 
The  agricultural  products  originating  in  Hungary  listed  in 
Annex VII I shall  benefit,  upon  the  date  of  entry  into  force  of  this 
Agreement,  from  the  reduction  of  customs  duties  and  levies within  the 
limits of Community  quotas and upon  the conditions provided  in the same 
Annex. 

3. 
Agricultural  products  listed  in  Annex  IXa  originating  in  the 
Community  shall  be  imported  into  Hungary  free  of  quantitative 
Agricultural  products  originating  in  the  Community 
restrictions. 
listed  in Annex  IXb shall  be  free  from  quantitative  restrictions up to 
the quantities set out  in that Annex. 

The Community  and  Hungary  shall  grant  each  other  the  concessions 
4. 
referred  to  in  Annexes Xa,  Xb  and  Xc  and XI,  on  a  harmonious  and 
reciprocal  basis,  in accordance with  the conditions  laid down  therein. 

Taking  account  of  the  volume  of  trade  in  agricultural  products 
5. 
between  them,  of  their  particular  sensitivity,  of  the  rules  of  the 
Common  Agricultural  Policy  of  the  Community  and  of  the  rules  of 
agricultural  policy  of  Hungary  and  of  the  consequences  of  the 
multilateral  trade negotiations  under  the General  Agreement  on  Tariffs 
and  Trade,  the  Community  and  Hungary  shall  examine  in  the  Joint 
Committee,  product  by  product  and  on  an orderly  and  reciprocal  basis, 
the possibilities of granting each other  further concessions. 

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3* 

Article  15 (EA 21) 

Notwithstanding  other  provisions  of  this  Agreement  and  in  particular 
Article 24,  if, given  the particular  sensitivity  of  the  agricultural 
markets,  imports  of  products  originating  in one Party,  which  are the 
subject of concessions granted  in Article  14, cause  serious  disturbance 
to  the  markets  in  the  other  Party,  both  Parties  shall  enter  into 
consultations  immediately  to  find  an  appropriate  solution.  Pending 
such  solution,  the  Party  concerned  may  take  the  measures  it  deems 
necessary. 

Chapter  III - Fisheries 

Article  16 (EA 22) 

The  provisions  of  this  chapter  shall  apply  to  fishery  products 
originating  in  the  Community  and  in  Hungary,  which  are  covered  by 
Regulation  (EEC) No 3796/81 on the common  organization of the market in 
the sector of fishery  products. 

The provisions of Article 14, paragraph  5  shall  apply mutatis  mutandis 
to  fishery  products. 

Article  17 (EA 23) 

Chapter  IV - Common  provisions 

Article 18 (EA 24) 

The  provisions  of  this  Chapter  shall  apply  to  trade  in all  products 
except  where otherwise  provided  herein or  in Protocols  N*1, 2, or 3. 

Article 19 (EA 25) 

1. 
No new  customs  duties  on  imports  or  exports  or  charges  having 
equivalent  effect  shall  be  introduced, nor shall  those  already  applied 
be  increased,  in the trade  between  the Community  and Hungary  from the 
date of entry  into force of the Agreement. 

2. 
No new quantitative  restriction on  imports or exports or measure 
having  equivalent  effect  shall  be  introduced  nor shall  those  existing 
be made more  restrictive  in the trade between  the Community  and Hungary 
from  the date of entry  into force of the Agreement. 

3. 
Without  prejudice  to the concessions  granted  under  Article  14 the 
provisions of paragraphs  1 and 2 of  this Article  shall  not restrict  in 
any  way  the  pursuance  of  the  respective  agricultural  policies  of 

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*-

Hungary  and  the  Community  or  the  taking  of  any measures  under  such 
policies. 

Article 20 (EA 26) 

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

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

Article  21 (EA 27) 

This 

Agreement 

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

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

Article 22 (EA 28) 

Exceptional  measures  of  limited  duration  which  derogate  from  the 
provisions  of Articles 4 and 19, paragraph 1  may be  taken  by  Hungary 
in the form of  increased  customs  duties. 

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

Customs  duties on  imports  appIicable  in Hungary  to products  originating 
in  the  Community  introduced  by  these  measures  may  not  exceed  25% 
ad  valorem  and  shall  maintain  an  element  of  preference  for  products 
originating  in  the  Community.  The  total  value  of  imports  of  the 
products  which  are subject  to  these  measures  may not  exceed  15%  of 
total  imports  from  the Community  of  industrial  products, as defined in 
Chapter  I during  the last  year  for which  statistics are available. 

These  measures  shall  be applied  for  a period  not exceeding  five  years 
unless  a  longer  duration  is authorized  by  the Joint  Committee.  They 
shall  cease  to  apply  at  the  latest  at  the  expiration  of  the 
transitional  period. 

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

Hungary  shall  inform  the Joint  Committee  of any exceptional  measures it 
intends  to  take  and, at  the  request  of  the Community,  consultations 
shall  be held  in the Joint  Committee  on such  measures  and the sectors 
to which  they  apply  before  they are applied.  When  taking  such  measures 
Hungary  shall  provide  the  Joint  Committee  with  a  schedule  for the 
elimination  of  the customs  duties  introduced  under  this  Article.  This 
schedule  shall  provide  for  a  phasing  out of  these  duties  starting  at 
the  latest  two years  after  their  introduction,  at  equal  annual  rates. 
The  Joint  Committee  may decide on a different  schedule. 

Article  23 (EA 29) 

If one of the Parties  finds  that  dumping  is taking  place  in trade  with 
the  other  Party  within  the  meaning  of  Article VI  of  the  General 
Agreement  on  Tariffs  and  Trade,  it  may  take  appropriate  measures 
against  this  practice  in accordance  with  the Agreement  relating  to the 
application  of  Article VI  of  the  General  Agreement  on  Tariffs  and 
Trade,  with  related  internal  legislation,  and with  the conditions and 
procedures  laid  down  in Article 27. 

Article  24 (EA 30) 

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

serious  injury  to  domestic  producers  of  like  or  directly 
competitive  products  in the territory of one of the Parties, or ' 
serious disturbances  in any sector of the economy or difficulties 
which  could  bring  about  serious  deterioration  in  the  economic 
situation of a region, 

the  Community  or  Hungary,  whichever  is concerned  may  take  appropriate 
measures  under  the  conditions  and  in  accordance  with  the  procedures 
laid  down  in Art icIe  27. 

Article  25 (EA 31) 

Where  compliance with  the provisions of Articles 7 and 19 leads to 
(i) 

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

(ii)  a serious  shortage, or  threat  thereof, of a product  essential  to 

the exporting  party, 

and  where  the situations  above  referred  to give  rise, or are  likely to 
give  rise  to major  difficulties  for the exporting  party,  that  Party may 
take  appropriate  measures  under  the conditions  and  in accordance  with 
the  procedures  laid  down  in Article  27.  The  measures  shall  be non-

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* 

discriminatory  and  be  eliminated  when  conditions  no  longer  Justify 
their  maintenance. 

Article 26 (EA 32) 

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

Article 27 (EA 33) 

In  the event  of the Community  or  Hungary  subjecting  imports of 
1. 
products  liable  to  give  rise  to  the  difficulties  referred  to  in 
Article  24  to  an  administrative  procedure  having  as  its purpose  the 
rapid  provision  of  information  on the trend  of  trade  flows,  it  shall 
inform  the other  party. 

2. 
In the cases  specified  in Articles 23, 24  and 25, before  taking 
the  measures  provided  for therein or, in cases  to which  paragraph 3(d) 
applies, as soon as possible, the Community  or Hungary, as the case may 
be,  shall  supply  the  Joint  Committee  with  all  relevant  information 
with  a view  to seeking  a solution  acceptable  to the two parties. 

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

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

3. 
shalI  apply: 

For the  implementation  of  paragraph 2, the  following  provisions 

(a)  As  regards  Article 24,  the  difficulties  arising  from  the 
situation  referred  to  in  that  Article  shall  be  referred  for 
examination  to the Joint  Committee,  which  may  take  any  decision 
needed  to put an end to such  difficulties. 

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

(b)  As  regards  Article  23, the Joint  Committee  shall  be  informed of 
the  dumping  case  as  soon  as  the  authorities  of  the  importing 
party  have  initiated  an  investigation.  When  no end has been put 

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^ 

to the dumping or no other  satisfactory  solution has been  reached 
within  thirty  days  of  the  matter  being  referred  to  the  Joint  f 
Committee,  the  importing  party  may  adopt  the  appropriate 
measures. 

' 

c) 

As  regards  Article 25,  the  difficulties  arising  from  the 
situations  referred  to  in  that  Article  shall  be  referred  for 
examination  to the Joint  Committee. 

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

d) 

Where  exceptional  circumstances  requiring  immediate  action  make 
information  or  examination,  as  the  case  may  be, 
prior 
impossible,  the Community  or Hungary  whichever  is concerned may, 
in  the  situations  specified  in  Articles 23,  24  and 25,  apply 
forthwith  the precautionary  measures  strictly  necessary  to deal 
with  the situât ion. 

Protocol  No 4  lays down  rules of origin,  for the application of tariff 
preferences  foreseen  in this Agreement. 

Article 28 (EA 34) 

Article 29 (EA 35) 

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

Article 30 (EA 36) 

Protocol  No 5  lays  down  the  specific  provisions  to  apply  to  trade 
between  Hungary  of  the one part  and  Spain  and Portugal  of  the other 
part. 

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TITLE  II: PAYMENTS. COMPETITION  AND  OTHER 
ECONOMIC  PROVISIONS 

Article  31  (EA  59) 

The  Parties  undertake  to  authorize,  in  freely  convertible  currency, 
any  payments  on  the  current  account  of  balance  of  payments  to  the 
extent  that  the  transactions  underlying  the  payments  concern  movement 
of  goods  between  the  Parties  which  have  been  liberalized  pursuant  to 
the present  Agreement. 

Article  32  (EA  62) 

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

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

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

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

Any  practices  contrary  to  this  Article  shall  be  assessed  on  the 
2. 
basis of  criteria  arising  from  the appIicat ion of  the  rules of  Articles 
85, 86, and  92  of  the  Treaty  establishing  the  European  Economic 
Community. 

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

» 

4.a 
For  the purposes of  applying  the provisions of  paragraph  1, point 
( M i ),  the Parties  recognize  that  during  the  first  five years  after  the 
entry  into  force  of  the  Agreement,  any  public  aid  granted  by  Hungary 
shall  be  assessed  taking  into  account  the  fact  that  Hungary  shall  be 
regarded  as an area  identical  to those areas of  the Community  described 
in  Article  92.3(a),  of  the  Treaty  establishing  the  European  Economic 
Community.  The  Joint  Committee  shall, taking  into account  the  economic 
situation  of  Hungary,  decide  whether  that  period  should  be  extended  by 
further  periods of  five years. 

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

5. 
Title  I : 

With  regard  to  products  referred  to  in  Chapters  II and  III  of 

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¥»• 

the  provision of paragraph  1 (iii) does not apply, 
any  practices  contrary  to  paragraph  1 (i)  should  be  assessed 
according  to  the  criteria  established  by  the Community  on the 
basis  of  Articles 42 and 43  of  the  Treaty  establishing  the 
European 
Economic  Community  and  in  particular  of  those 
established  in Council  Regulation  n*  26/1962. 

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

is  not  adequately  dealt  with  under  the  implementing  rules 
referred  to in paragraph  3, or 
in  the  absence  of  such  rules,  and  if  such  practice  causes or 
threatens  to cause  serious  prejudice  to the interest  of the other 
Party  or material  Injury  to its domestic  industry,  including  its 
services  industry, 

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

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

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

This  Article  shall  not  apply  to  the  products  covered  by the 
8. 
Treaty  establishing  the European  Coal  and Steel  Treaty  which  are the 
subject  of Protocol  N*2. 

Article  33 (EA 63) 

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

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

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Hi 

Article  34  (EA  64) 

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

Article  35 

1. 
Hungary  shall  continue  to  improve  the protection of  intellectual, 
industrial  and  commercial  property  rights  in order  to  provide,  by  the 
end  of  the  fifth  year  from  the  entry  into  force  of  the  Agreement,  a 
level  of  protection  similar  to  that  provided  in  the  Community  by 
Community  Acts,  in  particular  the  ones  referred  to  in  Annex  XIII, 
including  comparable  means of enforcing  such  rights. 

2. 
Mutual  assistance  between  administrative  authorities  in  customs 
matters  of  the  Parties  shall  take  place  in  accordance  with  the 
provisions of  Protocol  N'6. 

TITLE  Ml  : INSTITUTIONAL. GENERAL  AND  FINAL  PROVISIONS 

Article  36  (EA  104) 

The  Joint  Committee  set  up by  the Agreement  on Trade  and Commercial  and 
Economic  Cooperation signed  between  the European  Economic  Community  and 
the Republic of  Hungary  on  26th  September  1988 shall  perform  the  duties 
assigned  to  it by  this Agreement  until  the Association  Council  provided 
for  in Article  104 of  the Europe Agreement  is established. 

Article  37  (EA  106) 

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

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

Article  38  (EA  107) 

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

tf 

2. 
decision. 

The  Joint  Committee  may  settle  the  dispute  by  means  of  a 

3. 
carrying out the decision  referred  to in paragraph 2. 

Each  party  shall  be  bound  to  take  the  measures  involved  in 

In the event  of  it not being  possible  to settle  the dispute  in 

4. 
accordance  with  paragraph  2 of  this  Article,  either  party  may  notify 
the  other  of  the appointment  of  an  arbitrator;  the other  party  must 
then  appoint  a second  arbitrator  within  two months. 

The  Joint  Committee  shall  appoint  a third  arbitrator. 

The  arbitrators' decisions  shall  be taken by majority  vote. 

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

Article  39 (EA 113) 

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

Article 40 (EA 114) 

(b) 

(c) 

Nothing  in  the  Agreement  shall  prevent  a  Party  from  taking  any 
measures: 
(a) 

which  it  considers  necessary  to  prevent  the  disclosure  of 
information  contrary  to its essential  security  interests; 
which  relate  to the production of, or trade  in arms, munitions or 
war  materials  or  to  research,  development  or  production 
indispensable  for  defence  purposes,  provided  that  such  measures 
do  not  impair  the  conditions  of  competition  in  respect  of 
products not  intended  for specifically military  purposes; 
which  it considers  essential  to  its own security  in the event of 
serious  internal  disturbances  affecting  the maintenance  of law 
and  order,  in  time  of  war  or  serious  international  tension 
constituting  threat  of war, or  in order  to carry  out obligations 
it  has  accepted  for  the  purpose  of  maintaining  peace  and 
international  security. 

Article 41  (EA115) 

1. 
any  special  provisions  contained  therein: 

In the fields  covered  by this  Agreement  and without  prejudice to 

the  arrangements  applied  by  Hungary  in respect  of  the Community 
shall  not  give  rise  to  any  discrimination  between  the  Member 

/ A u 4 / r f / A C C O R D S / H . I n t .a n r mm 

Hh 

States,  their  nationals, or  their  companies or firms. 

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

2. 
The provisions  of paragraph  1 shall  not prevent  the Parties  from 
applying  foreign  exchange  laws  and  regulations  that  provide  different 
treatment  for  residents  and non-residents  within  the meaning  of  these 
laws and regulations. 

Article 42 (EA 116) 

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

Article 43 (EA 117) 

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

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

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

Protocols  1, 2, 3, 4, 5, 6 and 7, and Annexes  I to XI and XIII  shall 
form an  integral  part of this  Agreement. 

Article 44 (EA 119) 

Article 45 

1, 
This  agreement  shall  be applicable  until  the entry  into  force of 
the  Europe  Agreement  signed  on  16th December  1991 and at  the  latest 
until  31st December 1992. 

2. 
Either  party  may denounce  this  Agreement  by  notifying  the other 
party.  This  Agreement  shall  cease  to apply  six months  after  the date 
of  such  notification. 

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tf 

Article  46  (EA  121) 

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

Article  47  (EA  122) 

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

Art icle 48 

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

This  Agreement  shall  enter  into  force  on  the  first  day  of  the  second 
month  following  the  date  on  which  the  Parties  notify  each  other  that 
the procedures  referred  to  in the  first  paragraph  have  been  completed. 

Upon  entry  into  force  of  this  Agreement,  Articles  1 and  2 paragraph  2, 
to Article  10 of  the  Agreement  between  the  European  Economic  Community 
and  the  Republic  of  Hungary  on  trade  and  economic  and  commercial 
cooperation  signed  in  Brussels  on  26th  September  1988,  and  the 
corresponding  provisions  of  the  Protocol  between  the  European  Coal  and 
Steel  Community  and  the  Republic  of  Hungary  signed  in Brussels  on  31st 
October  1991  shall  be  suspended. 

Article  49  (EA  124) 

1. 
In  the  event  that  this  Agreement  enters  into  force  after  1st 
January  but  before  30th  June  1992  for  the  purposes  of  Titles  I and  II 
of  this  Agreement  and  Protocols  N's  1, 2,  3,  4,  5, 6  and  7  hereto,  the 
terms  "date of  entry  into  force of  the Agreement"  shall  mean: 

the  date  of  entry  Into  force  in  relation  to  obligations  taking 
effect  on  that  date, and 
1st  January  1992  in  relation  to  obligations  taking  effect  after 
the  date  of  entry  into  force  by  reference  to  the  date  of  entry 
into  force. 

2. 
of  Protocol  N'7 shall  apply. 

In the case of  entry  into  force  after  1st  January,  the  provisions 

fc-

JOINT  DECLARATIONS 

1• 

Article  1. paragraph  4 

The  Community  and Hungary  confirm  that  where  a  reduction  of  duties is 
effected  by way of a suspension of duties  made  for a particular  period 
of  time,  such  reduced  duties  shall  replace  the basic  duties  only for 
the  period  of  such  suspension,  and that  whenever  a  partial  suspension 
of  duties  is made,  the preferential  margin  between  the Parties  will be 
preserved. 

2. 

Article 32 

The  Parties  shall  not make  improper  use of  provisions  on  professional 
secrecy  to  prevent  the  disclosure  of  information  in  the  field  of 
compet it ion. 

3- 

Article 35 

The  Parties  agree  that  for  the  purpose  of  this  Interim  Agreement 
"inteïiectual,  industrial  and  commercial  property"  is to  be  given  a 
similar  meaning  as  in Article  36 of  the EEC Treaty  and  includes  in 
particular  protection  of  copyright  and  neighbouring  rights,  patents, 
industrial 
software, 
topographies of  integrated  circuits, geographical  indications,  as well 
as  protection  against  unfair  competition  and protection  of  undisclosed 
information on know-how. 

trademarks  and 

designs, 

service 

marks, 

4. 

Article  5 of Protocol N'6 

The  Contracting  Parties  stress  that  the reference  which  is made  in this 
Article  to  their  own  legislation  may  cover,  where  appropriate,  any 
international  commitment  they  could  have  contracted,  such  as  the 
Convention  on  the  service  abroad  of  Judicial  and  extra-judicial 
documents  in  civil  or  commercial  matters,  concluded  in The  Hague  on 
November  15,  1965. 

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5* 

UNILATERAL  DECLARATIONS 

Declarations by Hungary 

Article 1 

1. 
Hungary  will  make  every  effort  to adopt  the Combined  Nomenclature  as 
soon as possible. 

Article 4 

2. 
Hungary  will  reduce  customs  duties on  imports  applicable  in Hungary to 
products  originating  in the Community  in such  a way as to assure  that 
the  value  of customs  duty  free  trade  from  1st January  1994 will  amount 
to  at  least  25% of  total  industrial  imports  from  the Community  on the 
basis of  last  year  for which  statistics will  be then  available. 

Article 35 

3. 
By  the  end  of  the  fifth  year  from  the  entry  into  force  of  the 
Agreement,  Hungary  shall  apply  to  accede  to the Munich  Convention  on 
the  Grant  of  European  Patents  of  5 October  1973.  Hungary  shall  also 
accede  to the following  multilateral  conventions: 

Protocol  relating  to  the  Madrid  Agreement  concerning  the 
International  Registration of Marks  (Madrid  1989); 
International  Convention  for  the  Protection  of  Performers, 
Producers  of  Phonograms  and  Broadcasting  Organizations  (Rome, 
1961); 

to  which  Member  States  are parties,  or  which  are de facto  applied  by 
Member  States. 

Hungary  declares  that  it  also  attaches  importance  to  the  following 
multilateral  conventions: 

Berne  Convention  for  the  Protection  of  Literary  and  Artistic 
Works  (Paris Act, 1971); 
Paris  Convention  for  the  Protection  of  Industrial  Property 
(Stockholm  Act, 1967 and amended  in 1979); 
Madrid  Agreement  concerning  the  International  Registration  of 
Marks  (Stockholm  Act, 1967 and amended  in 1979); 
Nice  Agreement  concerning  the  International  Classification  of 
Goods  and Services  for the purposes of the Registration of Marks 
(Geneva  1977, amended  1979); 
Budapest  Treaty  on the  International  Recognition  of  the  Deposit 
of  Micro-organisms  for  the  purposes  of  Patent 
Procedures 
(1977, modified  in 1980); 
Patent  Cooperation  Treaty  (Washington  1970, amended  1979 and 
modified  in 1984). 

Declarations by the European  Community 

1• 

Article 8. paragraph  4 of Protocol  N'2 on ECSC  Products 

It  is understood  that  the possibility  of  an exceptional  extension  of 
the  five-year  period  is  strictly  limited  to  the  particular  case  of 
Hungary  and does  not  impair  the position  of  the Community  in relation 

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& 

to  other  cases  nor  prejudge  international  commitments.  The  possible 
derogation  foreseen  in paragraph  4  takes  into  account  the  particular 
difficulties  of Hungary  in restructuring  the steel  sector  and the fact 
that  this process has been  launched  very  recently. 

2. 

Protocol N'6 

Protocol  N'6  is  applicable  to  the  extent  that  it  covers  Community 
competences. 

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5X 

EC / CSFR 
13/12/91 

INTERIM  AGREEMENT 

on  trade  and  trade  related  matters 

between  the  EUROPEAN  ECONOMIC COMMUNITY  and  the EUROPEAN  COAL  AND  STEEL 
COMMUNITY,  of  the one  part,  and  the Czech  and  Slovak  Federal  Republic, 
of  the other  part. 

THE  EUROPEAN  ECONOMIC  COMMUNITY  and  the  EUROPEAN  COAL  AND  STEEL 
COMMUNITY,  hereinafter  referred  to as  "the  Community", 

of  the one  part, 

and  the  CZECH  AND  SLOVAK  FEDERAL  REPUBLIC,  hereinafter  referred  to  as 
"the  CSFR" 

of  the other  part, 

WHEREAS  the  Europe  Agreement  establishing  an  association  between  the 
European  Communities  and  their Member  States and  the CSFR  was signed  in 
on 

1991 ; 

WHEREAS  the  aim  of  the  Europe  Agreement  is  to  provide  an  appropriate 
framework  for  political  dialogue;  it  is  to  govern  commercial  and 
economic  relations between  the Parties and  includes provisions  relating 
to  financial  cooperation  and  assistance  and  the  promotion  of 
cooperation  in cultural  matters; 

WHEREAS  the  Europe  Agreement  is  intended  to  strengthen  and  widen  the 
relations  established  previously, notably  by  the Agreement  on Trade  and 
Commercial  and  Economic  Cooperation  between  the  European  Economic 
Community  and  the CSFR  signed on 7th May  1990 and  the Protocol  on  Trade 
and  Commercial  and  Economic  Cooperation  between  the  European  Coal  and 
Steel  Community  and  the CSFR  initialled on  28th  June  1991. 

WHEREAS  it  is  necessary  to  ensure  the  development  of  trade  relations 
between  the  implementation  of  the  agreements  on  Trade  and  Commercial 
and  Economic  Cooperation  and  that  of  the Europe  Agreement; 

WHEREAS  to  this  end  it  is  necessary  to  implement  as  speedily  as 
possible,  by  means  of  an  interim  Agreement,  provisions  of  the  Europe 
Agreement  on  trade  and  trade  related  matters. 

WHEREAS  it  is necessary  to ensure  that  pending  the  entry  into  force of 
the  Europe  Agreement  and  the establishment  of  the Association  Council, 
the  Joint  Committee  set  up by  the Agreement  on Trade  and  Commercial  and 
Economic  Cooperation  can  exercise  the  powers  assigned  by  the  Europe 
Agreement  to  the  Association  Council  which  are  necessary  in  order  to 
implement  the  Interim Agreement. 

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fir 

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

THE  EUROPEAN  ECONOMIC  COMMUNITY 

THE  EUROPEAN  COAL  AND  STEEL  COMMUNITY 

THE CZECH  AND  SLOVAK  FEDERAL  REPUBLIC 

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

HAVE  AGREED  AS  FOLLOWS: 

TITLE  I: FREE MOVEMENT  OF  GOODS 

Article  1 (EA  7) 

1. 
The  Community  and  the  CSFR  shall  gradually  establish  a  free 
trade  area  in  a  transitional  period  lasting  a  maximum  of  ten  years 
starting  from  the  entry  into  force  of  this  Agreement  (hereinafter 
referred  to  as  "the  Agreement")  in  accordance  with  the  provisions  of 
the  present  agreement  and  in  conformity  with  those  of  the  General 
Agreement  on Tariffs and Trade. 

The  Combined  Nomenclature  of  goods  shall  be  applied  to  the 

2. 
classification of  goods  in trade between  the  two parties. 

3. 
For  each  product  the  basic  duty  to  which  the  successive 
reductions  set  out  in  this  Agreement  are  to  be  applied  shall  be  that 
actually  applied  erga omnes on  the day  preceding  the date of  entry  into 
force of  the  Agreement. 

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

The  Community  and  the CSFR  shall  communicate  to each  other  their 

5. 
respective basic  duties. 

Chapter  i:  Industrial  products 

Article  2  (EA  8) 

1. 
The  provisions  of  this  Chapter  shall  apply  to  products 
originating  in  the  Community  and  in  the  CSFR  listed  in  Chapters  25 

/Au4/rf/ACCORDS/C.int.agree 

$H 

to 97 of the Combined  Nomenclature  with  the exception  of the products 
Iisted  in Annex  I. 

The  provisions  of  Articles 3  to 7  included  do  not  apply  to 

2. 
products  mentioned  in Articles 9 and 10. 

Article  3 (EA 9) 

Customs  duties on  imports  applicable  in the Community  to products 
1. 
originating  in  the  CSFR  other  than  those  listed  in  Annexes  M a, 
Mb  and III  shall  be  abolished  on  the  entry  into  force  of  the 
Agreement. 

2. 
Customs  duties on  imports  applicable  in the Community  to products 
originating  in  the  CSFR  which  are  listed  in  Annex  ila  shall  be 
progressively  abolished  in accordance  with  the following  timetable: 

on  the date of entry  into  force of this Agreement  each  duty  shall 
be  reduced  to 50% of the basic  duty. 
one  year  after  the date  of  entry  into  force  of  this  Agreement 
the  remaining  duties shall  be eliminated. 

Customs  duties  on  imports  applicable  in  the  Community  to  products 
originating  in  the  CSFR  listed  in Annex  Mb  shall  be  progressively 
reduced,  from  the date of entry  into  force of this Agreement, by annual 
reductions  of 20% of the basic  duty  so as to arrive at total  abolition 
by  the end of the fourth  year  after  the date of entry  into  force of the 
agreement. 

3. 
The  products  of  CSFR  origin  listed  in  Annex  III  shall  benefit 
from  a  suspension  of  customs  duties  on  imports  within  the  limits of 
annual  Community  tariff  quotas or ceilings  Increasing  progressively in 
accordance  with  the conditions  defined  in that  Annex  so as to arrive at 
a  complete  abolition  of  customs  duties  on  imports  of  the  products 
concerned  at the end of the fifth  year  at the latest. 

At  the  same  time,  customs  duties  on  imports  applicable  to  import 
quantities  in excess of the quotas or ceilings provided  for above  shall 
be  progressively  dismantled  from  the entry  into  force of the Agreement 
by  annual  reductions  of 15%.  By the end of the fifth  year,  remaining 
duties shall  be abolished. 

Quantitative 

having  an  effect 
restrictions  and  measures 
4. 
equivalent  to  quantitative  restrictions  on  imports  to  the  Community 
shall  be  abolished  on  the date  of  entry  into  force  of  the  Agreement 
with  regard  to the products  originating  in the CSFR. 

Article 4 (EA 10) 

Customs  duties  on  imports  applicable  in  the  CSFR  to  products 
1. 
originating  in the  Community  which  are  listed  in Annex  IV  shall  be 
abolished  on the date of entry  into  force of the Agreement. 

Customs  duties  on  imports  applicable  in  the  CSFR  to  products 
2. 
originating  in  the  Community  which  are  listed  in  Annex  V  shall  be 

/Au4/rf/ACC0RDS/C.int.agree 

« 

progressively  reduced  in accordance  with  the following  timetable: 

on  the date of entry  into  force of the Agreement  each  duty  shall 
be  reduced  to 80% of the basic duty-, 
three  years  after  the date  of entry  into  force of  the  Agreement 
each  duty  shall  be reduced  to 40% of the basic  duty; 
five  years  after  the date  of entry  into  force  of  the Agreement 
the  remaining  duties  shall  be eliminated. 

3. 
Customs  duties  on  imports  applicable  in  the  CSFR  to  products 
originating  in  the  Community  which  are  listed  in  Annex  VI  shall  be 
progressively  reduced  according  to the following  timetable: 

three  years  after  the date of entry  Into  force of the Agreement 
each  duty  shall  be reduced  to 80% of the basic  duty, 
five  years  after  the date  of  entry  into  force  of  the Agreement 
each  duty  shall  be reduced  to 60% of the basic  duty; 
seven  years  after  the date  of entry  into  force  of the Agreement 
each  duty  shall  be reduced  to 40% of the basic  duty, 
nine  years  after  the date  of  entry  into  force  of  the Agreement 
the  remaining  duties  shall  be eliminated. 

4. 
Customs  duties  on  imports  applicable  in  the  CSFR  to  products 
originating  in the Community  which  are  listed  in Annex  VII  shall  be 
progressively  reduced  in accordance  with  the following  timetable: 

on  the date of entry  into  force of the Agreement  each  duty  shall 
be  reduced  to 80% of the basic  duty; 
three  years  after  the date of entry  into  force of the Agreement 
each  duty  shall  be reduced  to 60% of the basic  duty 
five  years  after  the date  of  entry  Into  force of 
each  duty  shall  be reduced  to 40% of the basic  duty 
seven  years  after  the date  of entry  into  force of 
each  duty  shall  be reduced  to 20% of the basic  duty 
nine  years  after  the date  of  entry  into  force  of  the Agreement 
the  remaining  duties  shall  be eliminated. 

the  Agreement 

the  Agreement 

5. 
Quantitative  restrictions  on  imports  into  the CSFR  of  products 
originating  in the Community  shall  be abolished  upon  entry  into  force 
of  the Agreement,  excpet  for those  listed  in Annex  V I M,  which  shall be 
progressively  abolished  by the end of the transitional  period. 

6. 
Measures  having an effect  equivalent  to quantitative  restrictions 
on  imports  into the CSFR of products originating  in the Community  shall 
be  abolished  upon  entry  into  force of the Agreement. 

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

Article 5 (EA 11) 

Article 6 (EA 12) 

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

/Au4/rf/ACC0RDS/C.Int.agree 

-5(r 

> 

Article 7 (EA 13) 

1. 
The  Community  and  the CSFR  shall  progressively  abolish  between 
them  at the latest  by the end of the fifth  year  after  entry  into  force 
of  the  Agreement  any  customs  duties  on  exports  and  charges  having 
equivalent  effect. 

Quantitative  restrictions on exports to the CSFR  and any measures 
2. 
having  equivalent  effect  shall  be  abolished  by  the Community  on the 
entry  into  force of the Agreement. 

Quantitative  restrictions  on  exports  to  the  Community  and any 
3. 
measures  having  equivalent  effect  shall  be abolished  by the CSFR  upon 
entry  into  force of the Agreement,  except  for those  restrictions  listed 
in  Annex  IX which  shall  be abolished  at the  latest  by the end of the 
fifth  year  after  the entry  into  force of the Agreement. 

Article 8 (EA 14) 

Each  party  declares  its readiness  to reduce  its customs  duties  in trade 
with  the other  party  more  rapidly  than  is provided  for  in Articles 3 
and 4  if  its  general  economic  situation  and  the  situation  of  the 
economic  sector  concerned  so permit. 

The  Joint  Committee  referred  to in Article  37 (hereinafter  referred  to 
as  "the Joint  Committee") may take  recommendations to this  effect. 

Protocol  No 1  lays  down  the  arrangements  applicable  to  the  textile 
products  referred  to therein. 

Article 9 (EA 15) 

Protocol  No 2  lays down the arrangements  applicable  to products  covered 
by  the Treaty  establishing  the European  Coal  and Steel  Community. 

Article  10 (EA 16) 

Article  11 (EA 17) 

1. 
The  provisions  of  the  present  chapter  do  not  preclude  the 
retention  by the Community  of an agricultural  component  in the duties 
applicable  to  products  listed  in  Annex  X  in  respect  of  products 
originating  in the CSFR. 

The  provisions  of  the  present  chapter  do  not  preclude  the 
2. 
introduction  of  an  agricultural  component  by  the CSFR  in the  duties 
applicable  to  the products  listed  in Annex  X  in  respect  of  products 
originating  in the Community. 

/ i . .i  / ,* 

/ i r ^ f t D f \ e /r 

: .» 

Chapter  M  - A g r i c u l t u re 

A r t i c le  12  (EA  18) 

The  provisions  of  this  Chapter  shall  apply  to  agricultural 

1. 
products  originating  in the Community  and in the CSFR. 

2. 
The  term  "agricultural  products"  means  the  products  listed  in 
Chapters  1 to 24 of the Combined  Nomenclature  and the products  listed 
in  Annex  I,  but  excluding  fishery  products  as  defined  by  Regulation 
(EEC) No 3796/81. 

Protocol  n*  3  lays  down  the  trade  arrangements  for  processed 
agricultural  products  which  are listed  in such  protocol. 

Article  13 (EA 19) 

Article  14 (EA 20) 

1. 
The Community  shall  abolish  at  the date  of  entry  into  force of 
imports  of 
the 
Agreement 
agricultural  products  originating  in the CSFR  maintained  by  virtue of 
Council  Regulation  no  3420/83  in  the  form  existing  on  the  date  of 
signature  hereof. 

restrictions  on 

quantitative 

their 

2. 
The  agricultural  products  originating  in  the  CSFR  listed  in 
Annex  XI  shall  benefit,  upon  the  date  of  entry  into  force  of  this 
Agreement,  from  the reduction  of customs  duties  and  levies  within  the 
limits of Community  quotas and upon  the conditions  provided  in the same 
Annex. 

3. 
The  CSFR  shall  abolish  quantitative  restrictions  on  imports of 
agricultural  products  originating  in the Community  listed  in Annex XII 
in accordance  with  the conditions  laid  down  in that  Annex. 

4. 
The Community  and the CSFR  shall  grant  each  other  the concessions 
referred  to  in  Annexes  XII la  and b  and XIV,  on  a  harmonious  and 
reciprocal  basis,  in accordance  with  the conditions  laid  down  therein. 

5. 
Taking  account  of  the volume  of  trade  in agricultural  products 
between  them,  of  their  particular  sensitivity,  of  the  rules  of the 
Common  Agricultural  Policy  of  the  Community,  of  the  rules  of  the 
agricultural  policy  of  the  CSFR,  and  of  the  consequences  of  the 
multilateral  trade  negotiations  under  the General  Agreement  on  Tariffs 
and  Trade,  the  Community  and  the  CSFR  shall  examine  in  the  Joint 
Committee,  product  by product  and on an orderly  and reciprocal  basis, 
the  possibilities of granting  each  other  further  concessions. 

Notwithstanding  other  provisions  of  this  Agreement,  and  in  particular 
Article  24, if, given  the particular  sensitivity  of  the  agricultural 

Article  15 (EA 21) 

8 

markets,  imports  of  products  originating  in one party,  which  are the 
subject  of concessions  granted  in Article 14, cause  serious  disturbance 
to  the  markets  in  the  other  Party,  both  parties  shall  eriter  into 
consultations  immediately  to  find  an  appropriate  solution.  Pending 
such  a  solution,  the party  concerned  may  take  the measures  it  deems 
necessary. 

Chapter  Mi  - Fisheries 

Article  16 (EA 22) 

The  provisions  of  this  chapter  shall  apply  to  fishery  products 
originating  in  the  Community  and  in the  CSFR,  which  are  covered  by 
Regulation  (EEC) No 3796/81  on the common  organization of the market  in 
the  sector  of fishery  products. 

Article  17 (EA 23) 

The  fishery  products  originating  in the CSFR  listed  in Annex  XV shall 
benefit  upon  the date  of  entry  into  force  of  this  Agreement  from the 
reduction  of customs  duties  provided  in that  Annex.  The provisions of 
Article  14  paragraph  5  shall  apply  mutatis  mutandis  to  fishery 
products. 

Chapter  IV - Common  provisions 

Article  18 (EA 24) 

The  provisions  of  this  chapter  shall  apply  to  trade  in all  products, 
except  where  otherwise  provided  herein or in Protocols N* 1, 2 or 3. 

Article  19 (EA 25) 

1. 
No new  customs  duties  on  imports  or  exports  or  charges  having 
equivalent  effect  shall  be  introduced,  nor shall  those  already  applied 
be  increased,  in the trade  between  the Community  and the CSFR  from the 
date of entry  into  force of the Agreement. 

2. 
No new quantitative  restriction  on  imports or exports or  measure 
having  equivalent  effect  shall  be  introduced,  nor shall  those  existing 
be  made  more  restrictive,  in the trade  between  the Community  and the 
CSFR  from  the date of entry  into  force of the Agreement. 

3. 
Without  prejudice  to the concessions  granted  under  Article  14 the 
provisions of paragraphs  1 and 2 of this Article  shall  not restrict  in 
any  way the pursuance  of  the respective  agricultural  policies  of the 
CSFR  and  the  Community  or  the  taking  of  any  measures  under  such 
policies. 

/Au4/rf/ACCORDS/C.int.agree 

•

*• 

Article  20 (EA 26) 

1. 
The two parties  shall  refrain  from  any measure or practice  of an 
internal  fiscaI  nature  establishing,  whether  directly  or  indirectly, 
discr ImirVat Ion  between  the  products  of  one  party  and  like  products 
originating  in the territory of the other  party. 

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

Article  21 (EA 27) 

This 

Agreement 

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

shall 

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

Article 22 (EA 28) 

Exceptional  measures  of  limited  duration  which  derogate  from  the 
provisions of Articles 4 and 19 paragraph  1 may be taken by the CSFR in 
the  form of  increased  customs  duties. 

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

Customs  duties  on  imports  applicable  in  the  CSFR  to  products 
originating  in  the  Community  introduced  by  these  measures  may not 
exceed  25% ad valorem  and shall  maintain  an element  of  preference for. 
products  originating  in the Community.  The total  value  of  imports of 
the  products  which  are  subject  to these measures may not exceed  15% of 
total  imports  from  the Community  of  industrial  products  as defined  in 
Chapter  I, during  the last  year  for which  statistics are available. 

These  measures  shall  be applied  for a period  not exceeding  five  years, 
unless  a  longer  duration  is authorized  by  the Joint  Committee.  They 
shall  cease  to  apply  at  the  latest  at  the  expiration  of  the 
transitional  period. 

No  such  measures can be  introduced  in respect  of a product  if more  than 
three  years  have  elapsed  since  the  elimination  of  all  duties  and 

/Au4/rf/ACC0RDS/C.int.aaree 

10 

quantitative  restrictions  or  charges  or  measures  having  an  equivalent 
effect  concerning  that  product. 

The  CSFR  shall  inform  the Joint  Committee  of any exceptional  measures 
it  intends  to take  and, at the request  of the Community,  consultations 
shall  be held  in the Joint  Committee  on such  measures  and the sectors 
to  which  they  apply  before  they  are  applied.  When  taking  such 
measures,  the CSFR  shall  provide  the Joint  Committee  with  a  schedule 
for  the  elimination  of  the  customs  duties  introduced  under  this 
article.  This  schedule  shall  provide  for a phasing out of these  duties 
starting  at  the  latest  two  years  after  their  introduction  at  equal 
annual  rates.  The Joint  Committee  may decide on a different  schedule. 

Article  23 (EA 29) 

If one of the Parties  finds  that  dumping  is taking  place  in trade  with 
the  other  party  within  the  meaning  of  Article  VI  of  the  General 
Agreement  on  Tariffs  and  Trade,  it  may  take  appropriate  measures 
against  this  practice  in accordance  with  the Agreement  relating  to the 
application  of  Article VI  of  the  General  Agreement  on  Tariffs  and 
Trade,  with  related  internal  legislation  and with  the conditions and 
procedures  laid  down  in Article 27. 

Article  24 (EA 30) 

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

serious  injury  to  domestic  producers  of  like  or  directly 
competitive  products  in the territory of one of the Parties, or 
serious disturbances  in any sector of the economy  or difficulties 
which  could  bring  about  serious  deterioration  in  the  economic 
situation of a region, 

the Community  or the CSFR, whichever  is concerned, may take  appropriate 
measures  under  the  conditions  and  in  accordance  with  the  procedures 
laid  down  in Art icIe  27. 

Article  25 (EA 31) 

Where  compliance  with  the provisions of Articles 7 and 19 leads to 
(I) 

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

(ii)  a serious  shortage, or  threat  thereof, of a product  essential  to 

the  exporting  party; 

and  where  the situations  above  referred  to give  rise, or are  likely to 
give  rise  to major  difficulties  for the exporting  party,  that  party may 
take  appropriate  measures  under  the conditions  and  in accordance  with 
the  procedures  laid  down  in Article  27.  The measures  shall  be  non 
discriminatory  and  be  eliminated  when  conditions  no  longer  justify 

/Au4/rf/ACC0RDS/C.int.agree 

a 

their  maintenance. 

Article 26 (EA 32) 

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

Article 27 (EA 33) 

1. 
In the event  of the Community  or the CSFR  subjecting  imports of 
products  liable  to  give  rise  to  the  difficulties  referred  to  in 
Article  24  to an  administrative  procedure  having  as  its purpose  the 
rapid  provision  of  information  on the trend  of  trade  flows,  it shall 
inform  the other  party. 

2. 
In the cases  specified  in Articles 23, 24 and 25, before  taking 
the  measures  provided  for therein or, in cases  to which  paragraph 3(d) 
applies, as soon as possible, the Community  or the CSFR  as the case may 
be  shall  supply  the  Joint  Committee  with  all  relevant  information, 
with  a view to seeking a solution  acceptable  to the two parties. 

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

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

3. 
shalI  apply: 

For the  implementation  of  paragraph 2, the following  provisions 

(a)  As  regards  Article 24,  the  difficulties  arising  from  the 
situation  referred  to  in  that  Article  shall  be  referred  for 
examination  to the Joint  Committee,  which  may  take  any decision 
needed  to put an end to such  difficulties. 

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

(b)  As  regards  Article 23, the Joint  Committee  shall  be  informed of 
the  dumping  case  as  soon  as  the  authorities  of  the  importing 
party  have  initiated  an  investigation.  When  no end has been put 
to the dumping  within  the meaning of Article VI of the GATT or no 

/Au4/rf/ACC0RDS/C.int.aaree 

iV 

other  satisfactory  solution  has  been  reached  within  thirty  days 
of  the  matter  being  referred  to  the  Joint  Committee,  the 
importing  party  may  adopt  the  appropriate  measures. 

(c) 

As  regards  Article  25,  the  difficulties  arising  from  the 
situations  referred  to  in  that  article  shall  be  referred  for 
examination  to  the  Joint  Committee. 

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

(d) 

Where  exceptional  circumstances  requiring  immediate  action  make 
prior  information  or  examination,  as  the  case  may  be,  impossible, 
the  Community  or  the  CSFR  whichever  is  concerned  may,  in  the 
situations  specified  in  Articles  23,  24  and  25,  apply  forthwith 
the  precautionary  and  provisional  measures  strictly  necessary  to 
deal  with  the  situation,  and  the  Joint  Committee  will  be  informed 
immediately. 

Protocol  No  4  lays  down  rules  of  origin,  for  the  application  of  tariff 
preferences  foreseen  in this  Agreement. 

Article  28  (EA  34) 

Article  29  (EA  35) 

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

Article  30  (EA  36) 

Protocol  No  5  lays  down  the  specific  provisions  to  apply  to  trade 
between  the  CSFR  of  the  one  part  and  Spain  and  Portugal  of  the  other 
part. 

a 

TITLE  II: PAYMENTS. COMPETITION  AND OTHER 
ECONOMIC  PROVISIONS 

Article  31  (EA  59) 

The  Parties  undertake  to  authorize  in freely  convertible  currency,  any 
payments  on  the  current  account  of  balance  of  payments  to  the  extent 
that  the  transactions underlying  the payments  concern movement  of  goods 
between  the Parties which  have been  liberalized  pursuant  to the present 
Agreement. 

Article  32  (EA  62) 

With  reference  to  the  provisions  of  this  Chapter,  and  notwithstanding 
the  provisions  of  Article  34,  until  a  full  convertibility  of  the  CSFR 
currency  in  the  meaning  of  Article  VIII  of  the  International  Monetary 
Fund  is  introduced,  the  CSFR  may  in  exceptional  circumstances  apply 
exchange  restrictions  connected  with  the granting  or  taking  up of  short 
and  medium-term  credits  to  the  extent  that  such  restrictions  are 
imposed  on  the CSFR  for  the granting  of  such  credits  and  are  permitted 
according  to the CSFR's  status under  the  IMF. 

The CSFR  shall  apply  these  restrictions  in a non-discriminatory manner. 
They  shall  be  applied  in  such  a manner  as  to  cause  the  least  possible 
disruption  to  this  Agreement.  The  CSFR  shall  inform  the  Joint 
Com*, it tee  promptly  of  the  introduction  of  such  measures  and  of  any 
changes  therein. 

Article  33  (EA  63) 

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

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

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

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

2. 
Any  practices  contrary  to  this  Article  shall  be  assessed  on  the 
basis of  criteria  arising  from  the application  of  the  rules of  Articles 
85, 86, and  92  of  the  Treaty  establishing  the  European  Economic 
Community. 

The  Joint  Committee  shall, within  three  years  of  the  entry  into 
3. 
force  of  the  Agreement,  adopt  the  necessary 
rules  for  the 
implementation of  paragraphs  1 and  2.  Until  the  implementing  rules are 
adopted,  practices  incompatible  with  paragraph  1 of  Article  3  shall  be 

-«t 

dealt  with  by  the  Parties  on  their  respective  territories  according  to 
their  respective  legislations.  This  is without  prejudice  to Article  33 
paragraph  6 of  this  Agreement. 

4.a 
For  the  purposes  of  applying  the provisions  of  paragraph  1,  point 
(iii),  the  Parties  recognize  that  during  the  first  five  years  after  the 
entry  into  force  of  the  Agreement,  any  public  aid  granted  by  the  CSFR 
shall  be  assessed  taking  into  account  the  fact  that  the  CSFR  shall  be 
regarded  as  an  area  identical  to  those  areas of  the Community  described 
in  Article  92.3(a),  of  the  Treaty  establishing  the  European  Economic 
Community.  The  Joint  Committee  shall,  taking  into account  the  economic 
situation  of  the CSFR,  decide  whether  that  period  should  be extended  by 
further  periods of  five  years. 

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

5. 
Title  I : 

With  regard  to  products  referred  to  in  Chapters  II and  III  of 

the  provision  of  paragraph  1  (iii) does  not  apply, 
any  practices  contrary  to  paragraph  1 (i)  should  be  assessed 
according  to  the  criteria  established  by  the  Community  on  the 
basis  of  Articles  42  and  43  of  the  Treaty  establishing  the 
European 
those 
established  in Council  Regulation  n*  26/1962. 

in  particular  of 

Community 

Economic 

and 

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

is  not  adequately  dealt  with  under  the  implementing  rules 
referred  to  in paragraph  3, or 
in  the  absence  of  such  rules,  and  if  such  practice  causes  or 
threatens  to cause  serious  prejudice  to  the  interest  of  the  other 
Party  or  material  injury  to  its  domestic  industry,  including  its 
services  industry 

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

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

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

4>(-

S. 
This  Article  shall  not  apply  to  the  products  covered  by  the 
Treaty  establishing  the  European  Coal  and  Steel  Treaty  which  are  the 
subject  of  Protocol  N*2. 

Article  34  (EA  64) 

1. 
Where  one  or  more  Member  States  of  the  Community  or  the  CSFR  is 
in  serious  balance  of  payments  difficulties,  or  under  imminent  threat 
thereof,  the  Community  or  the  CSFR,  as  the  case  may  be,  may,  in 
accordance  with  the  conditions  established  under  the  General  Agreement 
on  Tariffs  and  Trade,  adopt  restrictive  measures,  including  measures 
relating  to  imports, which  shall  be of  limited  duration  and  may  not  go 
beyond  what  is  necessary  to  remedy  the  balance  of  payments  situation. 
The  measures  shall  be  progressively  relaxed  as  balance  of  payments 
conditions  improve  and  they  shall  be  eliminated  when  conditions  no 
longer  Justify  their  maintenance.  The  Community  or  the  CSFR,  as  the 
case  may  be,  shall  inform  the  other  party  forthwith  of  their 
introduction  and,  whenever  practicable,  of  a  time  schedule  for  their 
removal. 

The  Parties  shall  nevertheless  endeavour  to  avoid  the  imposition 

2. 
of  restrictive measures  for  balance  of  payments  purposes. 

Article  35  (EA  65) 

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

Article  36 

shall 

continue 

The  CSFR 

1. 
the  protection  of 
intellectual,  industrial  and  commercial  property  rights  in  order  to 
provide, by  the end  of  the  fifth  year  after  the entry  into force of  the 
Agreement,  for  a  level  of  protection  similar  to  that  provided  in  the 
Community  by  Community  Acts,  in  particular  the  ones  referred  to  in 
Annex  XVII,  including  comparable  means of  enforcing  such  rights. 

improve 

to 

2. 
Mutual  assistance  between  administrative  authorities  in  customs 
matters  of  the  Parties  shall  take  place  in  accordance  with  the 
provisions  of  Protocol  N*6. 

TITLE  III  : INSTITUTIONAL. GENERAL  AND  FINAL  PROVISIONS 

Article  37  (EA  103) 

The  Joint  Committee  set  up  by  the Agreement  on  Trade  and  Commercial  and 
Economic  Cooperation  signed  between  the  European  Economic  Community  and 
the  CSFR  on  7th  May  1990  shall  perform  the  duties  assigned  to  it  by 

1t>C 

this  Agreement 
Article 103 of the Europe  Agreement  is established. 

until  the  Association  Council  provided  for  in 

Article 38 (EA 105) 

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

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

Article 39 (EA 106) 

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

2. 
decision. 

The  Joint  Committee  may  settle  the  dispute  by  means  of  a 

3. 
carrying out the decision  referred  to in paragraph 2. 

Each  party  shall  be  bound  to  take  the  measures  involved  in 

In the event  of  it not being  possible  to settle  the dispute  in 

4. 
accordance  with  paragraph  2 of  this  Article,  either  party  may  notify 
the  other  of  the appointment  of an  arbitrator;  the other  party  must 
then  appoint  a second  arbitrator  within  two months. 

The  Joint  Committee  shall  appoint  a third  arbitrator. 

The  arbitrators'  decisions  shall  be taken by majority  vote. 

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

Article 40 (EA 112) 

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

including 

property 

those 

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

Article 41 (EA 113) 

/Au4/rf/ACC0RDS/C.int.agree 

#• 

(a) 

(b) 

(c) 

which  it  considers  necessary  to  prevent  the  disclosure  of 
information  contrary  to its essential  security  interests; 
which  relate to the production of, or trade  In arms, munitions or 
war  materials  or  to  research,  development  or  production 
indispensable  for  defence  purposes,  provided  that  such  measures 
do  not  impair  the  conditions  of  competition  in  respect  of 
products not  intended  for specifically  military  purposes; 
which  it considers  essential  to its own security  in the event of 
serious  internal  distrubances  affecting  the maintenance  of  law 
and  order,  in  time  of  war  or  serious  international  tension 
constituting  threat  of war or  in order  to carry  out obligations 
it  has  accepted  for  the  purpose  of  maintaining  peace  and 
international  security. 

Article 42 (EA 114) 

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

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

Article 43 (EA 115) 

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

Article 44 (EA 116) 

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

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

In  the selection  of  measures,  priority  must  be  given  to  those  which 
least  disturb  the functioning  of  the Agreement.  These  measures  shall 
be  notified  immediately  to the Joint  Committee  and shall  be the subject 
of  consultations  within  the  Joint  Committee  if  the  other  Party  s6 
requests. 

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a 

Article 45 (EA 118) 

Protocols  1, 2, 3, 4, 5, 6  and 7, and Annexes  I to XV and XVII  shall 
form an  integral  part of this Agreement. 

Article 46 ( EA 119) 

This  agreement  shall  be applicable  until  the entry  into  force of 
1. 
the  Europe  Agreement  signed  on  16th December  1991 and at  the  latest 
until  31st December 1992. 

Either  party  may denounce  this  Agreement  by  notifying  the other 
2. 
party.  This  Agreement  shall  cease  to apply  six months  after  the date 
of  such  notification. 

Article 47 (EA 120) 

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

Article 48 (EA 121) 

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

Article 49 

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

This  Agreement  shall  enter  into  force  on  the first  day of  the second 
month  following  the date  on which  the Parties  notify  each  other  that 
the procedures  referred  to in the first  paragraph  have  been  completed. 

Upon  entry  into  force of  this  Agreement,  Articles 2 and 3 paragraph 2, 
to 16 of the Agreement  between  the European  Economic  Community  and the 
Czech  and Slovak  Federal  Republic on trade  and economic  and commercial 
cooperation  signed  in Brussels  on 7th May 1990 and  the  corresponding 
provisions  of  the  Protocol  between  the  European  Coal  and  Steel 
Community  and  the  Czech  and  Slovak  Federal  Republic  initialled  on 
28th  June  1991,  if they  have entered  into  force,  shall  be suspended. 

Article 50 (EA 123) 

In  the  event  that  this  Agreement  enters  into  force  after  1st 
1. 
January  but before  30th  June  1992 for the purposes  of Titles  I and II 
of  this  Agreement  and Protocols N's 1, 2, 3, 4, 5, 6 and 7 hereto, the 

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b3 

terms  "date of  entry  into force of  the Agreement"  shall  mean: 

the  date  of  entry  into  force  in  relation  to  obligations  taking 
effect  on  that  date, and 
1st  January  1992  in  relation  to  obligations  taking  effect  after 
the  date  of  entry  into  force  by  reference  to  the  date  of  entry 
into force. 

2. 
of  Protocol  N*7 shall  apply. 

In the case of  entry  into force after  1st  January,  the  provisions 

1* 

JOINT  DECLARATIONS 

1 

Article  1 paragraph 4 

The  Community  and the CSFR  confirm  that  where  a reduction of duties is 
effected  by way of a suspension  of duties  made  for a particular  period 
of  time,  such  reduced  duties  shall  replace  the basic  duties  only for 
the  period  of  such  suspension,  and that  whenever  a partial  suspension 
of  duties  is made,  the preferential  margin  between  the Parties  will be 
preserved. 

2. 

Articie 33 

The  Parties  shall  not  make  an 
professional  secrecy  to prevent  the 
field of competition. 

improper  use 
disclosure of 

of  provisions  on 
information  in the 

3.  Article 36 

The  Parties  agree  that  for  the  purpose  of  this  Interim  Agreement 
"intellectual,  industrial  and  commercial  property"  is to  be  given  a 
similar  meaning  as  in Article  36 of  the EEC Treaty  and  includes  in 
particular  protection  of  copyright  and  neighbouring  rights,  patents, 
industrial  designs,  trademarks  and  service  marks,  topographies  of 
integrated  circuits,  software,  geographical  indications  as  well  as 
protection  against  unfair  competition  and  protection  of  undisclosed 
information on know-how. 

4. 

Article 5 of Protocol  N' 6 to the Agreement 

The  Contracting  Parties  stress  that  the  reference  which  is  made  in 
Article  5 of  Protocol  N' 6  to  their  own  legislation  may cover,  where 
appropriate,  an  international  commitment  they  could  have  contracted, 
such  as  the Convention  on  the service  abroad  of  judicial  and  extra 
judicial  documents  in  civil  or  commercial  matters,  concluded  in The 
Hague on November  15,  1965. 

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n 

UNILATERAL  DECLARATIONS 

Declaration  by the CSFR 

1. 
"The  implementation  of  this  agreement  shall  be the sole  responsibility 
of  the CSFR. 

In  accordance  with  the  constitutional  acts  of  the  CSFR,  the  Czech 
Republic  and  the  Slovak 
participate  in  this 
implementation." 

Republic  shall 

Art icle 36 

2. 
Not  later  than  1 March  1997,  the CSFR  shall  apply  to  accede  to the 
Munich  Convention  on the Grant  of  European  Patents  of 5 October 1973. 
The  CSFR  shall  also  accede  to  the  Protocol  relating  to  the  Madrid 
Agreement  concerning  the  International  Registration  of  Marks  (Madrid 
1989),  to  which  Member  States  are  parties,  or  which  are  de facto 
applied by Member  States. 

The  CSFR  declares  that  it  also  attaches  importance  to  the  following 
multilateral  conventions: 

Berne  Convention  for  the  Protection  of  Literary  and  Artistic 
Works  (Paris Act, 1971); 
International  Convention  for  the  Protection  of  Performers, 
Producers  of  Phonograms  and  Broadcasting  Organizations  (Rome, 
1961); 
Paris  Convention  for  the  Protection  of  Industrial  Property 
(Stockholm  Act, 1967 and amended  in 1979); 
Madrid  Agreement  concerning  the  International  Registration  of 
Marks  (Stockholm Act, 1967 and amended  in 1979); 
Nice  Agreement  concerning  the  International  Classification  of 
Goods  and Services  for the purposes of the Registration of Marks 
(Geneva  1977, amended  1979); 
Budapest  Treaty  on  the  International  Recognition  of  the Deposit 
of  Micro-organisms  for  the  purposes  of  Patent  Procedures 
(1977, modified  in 1980); 
Patent  Cooperation  Treaty  (Washington  1970, amended  1979 and 
modified  in 1984). 

Declarations by the European  Community 

Art.8.  paragraph  4 of the Protocol  N' 2 on ECSC  products 

1• 
It  is understood  that  the possibility  of  an exceptional  extension of 
the  five-year  period  is strictly  limited  to the particular  case of the 
CSFR  and does  not  impair  the position  of the Community  in relation to 
other  cases  not  prejudge  international  commitments.  The  possible 
derogation  foreseen  in paragraph  4  takes  into  account  the  particular 
difficulties of the CSFR  in restructuring  the steel  sector  and the fact 
that  this  process has been  launched  very  recently. 

/Au4/rf/ACC0RDS/C.int.aaree 

2. 

Protocol  N'6 

it-

Protocol  N'6  is  applicable  to  the  extent  that  it  covers  Community 
competences. 

ISSN 0254-

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Catalogue number : CB-CO-91-608-EN 

ISBN 92-77-7916S 

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