Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and Ukraine, of the other part
Date: 1994-06-01
Institutions: European Commission
Subjects: EU Member State, European Community, Ukraine, cooperation agreement

COMMISSION  OF  THE  EUROPEAN  COMVIUNITIES 

C0M(94) 226  final 

Brussels, 01.06.1994 

94/ 0136(AVC) 

Proposal 

for a Council and Commission Decision 

on the conclusion of the Partnership and Cooperation Agreement 

between the European Communities and their Member States 

of the one part, and Ukraine, of the other part 

(presented  by  the  Commission) 

Explanatory  memorandum 

1.  The  attached  proposal  for  a  Council  and  Commission  Decision  constitutes  the  legal 
instrument for the conclusion of the Partnership  and Cooperation  Agreement  between 
the European Communities and their Member States, on the one hand, and Ukraine, on 
the other. 

2.  Following  the  Council's  adoption  of  the  negotiating  directives  on  5  October  1992, 
negotiations with Ukraine were held in the course of  1993 and  1994. After four rounds 
of negotiations, the Agreement was initialled on 23 March 1994. 

3.  The Agreement is a mixed Agreement  covering  areas for which both the  Communities 
and the  Member  States  are  competent,  and  is  concluded  for  an  initial  period  of  ten 
years. 

It  establishes  a political  dialogue.  The  Agreement  covers  also  trade  in  goods,  labour 
conditions, establishment and operation of companies, cross-border supply of services, 
payments  and  capital,  competition,  intellectual,  industrial  and  commercial  property 
protection,  legislative  cooperation,  economic  cooperation,  cultural  cooperation  and 
financial  cooperation. 

The Agreement  contains a clause which allows it to be suspended,  even unilaterally,  if 
it is  considered  that  there  has been  a breach  of  the  essential  elements  underlying  the 
Agreement  i.e.  respect  for  democracy,  human rights and the  principles  of  the  market 
economy. 

The  Agreement  sets  out  an  institutional  framework  for  its  implementation  with  a 
Cooperation  Council,  a  Cooperation  Committee  and  a  Parliamentary  Cooperation 
Committee. 

The  Agreement  refers  to  the  prospect  of  a  future  free  trade  area.  In  1998, 
circumstances will be assessed  in order to  see  whether negotiations  can begin  in view 
of a free trade agreement. 

Customs cooperation is covered by a separate protocol. 

4.  The  Agreement  will,  as  far  as  relations  between  the  Community  and  Ukraine  are 
concerned,  replace  the  Agreement  on  Trade  and  Commercial  and  Economic 
Cooperation between the European  Economic  Communities and USSR,  signed  on  18 
December  1989. 

5.  The  procedures  of  the  three  Communities  (EC,  EAEC  and  ECSC)  for  signing  and 

concluding the Agreement differ. 

For the purpose of concluding the Agreement : 

the Council will conclude the Agreement, with the assent of the European 
Parliament, on behalf of the European Community in accordance with Articles 113 
and 235 and in conduction with Article 228 (3), second sub paragraph of the EC 
treaty by adopting the attached decisions; 

the Commission will conclude the Agreement on behalf of the ECSC in 
accordance with Article 95 of the ECSC, after consulting the Consultative 
Committee and with the unanimous assent of the Council, ; 

The Commission will conclude the Agreement (on behalf of the European Atomic 
Energy Community) after the Council approved it in accordance with the second 
paragraph of Article  101 of the Euratom Treaty ; 

The  conclusion  of  the  Agreement  will  have  to  be  ratified  by  all  the  Member  States 
given the mixed nature of the Agreement,. 

6.  In view of the above, the Commission asks the Council to adopt the annexed decision. 

.16-/tt 

COUNCIL AND COMMISSION  DECISION 

OF 

on the conclusion of the Partnership  and Cooperation  Agreement 

between the European  Communities  and  their Member  States 

of the one part, and  Ukraine, of the other part 

(../.. ./ECSC, EC, EURATOM) 

THE COUNCIL OF THE EUROPEAN UNION, 

THE COMMISSION, of the European Communities 

Having regard to the Treaty establishing the European Coal and Steel Community, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113 and 235 in conjunction with Article 228 (3), second subparagraph thereof, 

Having regard to the Treaty establishing the European Atomic Energy Community,  and in 
particular the second paragraph of Article  101 thereof, 

Having regard to the assent of the European Parliament, 

the  Partnership  and  Cooperation  Agreement  between 

Whereas, 
the  European 
Communities  and their Member  States,  of  the  one  part,  and Ukraine,  of  the  other part, 
signed 

, should be approved, 

Having  consulted  the Consultative  Committee  and with the unanimous  agreement  of the 
Council, 

HAVE DECIDED AS FOLLOWS : 

Article 1 

The  Partnership  and  Cooperation  Agreement  between  the  European  Communities  and 
their Member  States  of  the  one  part,  and  Ukraine,  of  the  other  part,  together  with  the 
Protocol,  the exchanges  of letters and the declarations are hereby approved  on  behalf of 
the European  Community,  the European Coal and Steel  Community,  and the European 
Atomic Energy Community. 

These texts are attached to this Decision. 

Article 2 

1.  The  position  to  be  adopted  by  the  Community  in  the  Cooperation  Council  shall  be 
determined by the Council, on a proposal from the Commission, or, where appropriate, 
by  the  Commission,  in  each  case  in  accordance  with  the  relevant  provisions  of  the 
Treaties  establishing  the  European  Community,  the  European  Coal  and  Steel 
Community and the European Atomic Energy Community. 

2.  In  accordance  with  Article  78  of  the  Partnership  and  Cooperation  Agreement,  the 
President  of the Council  shall preside over the Cooperation  Council  and shall present 
the  Community's position.  A  representative  of the  Commission  shall  preside  over the 
Cooperation Committee in accordance with its rules of procedure and shall present the 
Community's position. 

Article 3 

The President  of the Council  shall  give the  notification  provided  for  in Article  99  of the 
Agreement on behalf of the European Community.  The President of the Commission shall 
give  such  notification  on  behalf  of  the  European  Coal  and  Steel  Community  and  the 
European Atomic Energy Committee. 

Done at Brussels, 

AC 

Final act 

The plenipotentiaries of : 

THE KINGDOM OF BELGIUM, 
THE KINGDOM OF DENMARK, 
THE REPUBLIC OF GERMANY, 
THE HELLENIC REPUBLIC, 
THE KINGDOM OF SPAIN, 
THE FRENCH REPUBLIC, 
IRELAND, 
THE ITALIAN REPUBLIC, 
THE GRAND DUCHY OF LUXEMBOURG, 
THE KINGDOM OF THE NETHERLANDS, 
THE PORTUGUESE REPUBLIC, 
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, 

Contracting  Parties  to  the  Treaty  establishing  the  EUROPEAN  COMMUNITY,  the 
Treaty  establishing  the  EUROPEAN  COAL  AND  STEEL  COMMUNITY,  and  the 
Treaty establishing the EUROPEAN ATOMIC ENERGY COMMUNITY, 

hereinafter referred to as "the Member States", and of 

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

of the one part, and 

the plenipotentiaries of Ukraine, 

of the other part, 

meeting 
in the year one thousand  nine hundred  and ninety-four  for  the  signature  of 
the  Partnership  and  Cooperation  Agreement  establishing  a  partnership  between  the 
European Communities  and their Members  States,  of  the  one  part,  and  Ukraine,  of  the 
other  part,  hereinafter  referred  to  as  the  Partnership  and  Cooperation  Agreement,  have 
adopted the following text : 

the  Partnership  and  Cooperation  Agreement  and  the  Protocol  on  mutual  assistance  in 
customs matters. 

-/ 

The  plenipotentiaries  of  the  Member  States  and  of  the  Community  and  the 
plenipotentiaries of Ukraine have adopted the texts  of the Joint declarations Usted below 
and annexed to this Final Act : 

Joint Declaration concerning Article  13 of the Agreement 

Joint Declaration concerning Article 23 of the Agreement 

Joint Declaration concerning Article 24 of the Agreement 

Joint Declaration concerning the notion of "control" in Article 25(b) and Article 36 of the 
Agreement 

Joint Declaration concerning Article 42 of the Agreement 

Joint Declaration concerning Article 94 of the Agreement 

The  plenipotentiaries  of  the  Member  States  and  of  the  Community  and  the 
plenipotentiaries  of  Ukraine  have  also  taken  note  of  the  following  exchanges  of  letters 
annexed to this Final Act : 

Agreement  in  the  form  of  an  exchange  of  letters  concerning  Article  13bis  of  the 
Agreement 

Agreement in the form of an exchange of letters concerning the Chapter on establishment 
of companies, Title IV, Chapter 2 of the Agreement 

Done  at 
ninety four. 

in the  year  one  thousand  nine  hundred  and 

For the Council and the Commission of the European Communities. 

For Ukraine. 

/i  $ 

PARTNERSHIP AND COOPERATION AGREEMENT 

BETWEEN THE EUROPEAN COMMUNITIES AND 

THEIR MEMBER STATES, AND UKRAINE 

PARTNERSHIP AND COOPERATION AGREEMENT 

Establishing  a  partnership  between  the  European  Communities  and their Member  States,  of  the 
one part, and Ukraine, of the other part. 

THE KINGDOM  OF BELGIUM, 

THE KINGDOM OF  DENMARK, 

THE FEDERAL REPUBLIC OF GERMANY, 

THE HELLENIC  REPUBLIC, 

THE KINGDOM OF SPAIN, 

THE FRENCH REPUBLIC, 

IRELAND, 

THE ITALIAN REPUBLIC, 

THE GRAND DUCHY OF LUXEMBOURG, 

THE KINGDOM OF THE NETHERLANDS, 

THE PORTUGUESE REPUBLIC, 

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, 

contracting parties to the Treaty establishing the European  Community,  the  Treaty  estabUshing 
the  European  Coal  and  Steel  Community,  and  the  Treaty  establishing  the  European  Atomic 
Energy Community, 

hereinafter referred to as "Member States", and 

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

hereinafter  referred to as "the Community", 

of the one part, 

and  UKRAINE 

of the other part, 

TAKING  ACCOUNT  of the  wish  of  the  Parties  to  establish  close  relations  building  upon  the 
existing historical links between them, 

CONSIDERING  the  importance of developing cooperative  links  between the  Union,  its  Member 
States and Ukraine and the common values that they share, 

RECOGNIZING that the Community and  Ukraine wish to strengthen these links and to  establish 
partnership  and  cooperation  which  would  strengthen  and  widen  the  relations  established  in  the 
past  in  particular  by  the  Agreement  between  the  European  Economic  Community  and  the 
European  Atomic  Energy  Community and the  Union  of Soviet  Socialist  Republics  on  Trade  and 
Commercial and Economic Cooperation, signed on  18 December  1989, 

CONSIDERING  the  commitment  of  the  Community  and  its  Member  States  and  of  Ukraine  to 
strengthening 
the  political  and  economic  freedoms  which  constitute  the  very  basis  of  the 
partnership, 

CONSIDERING  the  commitment  of the  Parties  to  promote  international  peace  and  security  as 
well as  the peaceful  settlement  of disputes  and  to cooperate to  this  end  in  the  framework  of  the 
United Nations and the Conference on Security and Cooperation in Europe, 

CONSIDERING the firm commitment of the Community and  its Member  States  and  of  Ukraine 
to  the  full  implementation  of  all principles  and  provisions  contained  in the  Final Act of the 
Conference  on  Security  and Cooperation in Europe (CSCE), the Concluding Documents of the 
Madrid  and  Vienna  Follow  Up  Meetings,  the  Document  of  the  CSCE  Bonn  Conference  on 
the  CSCE  Helsinki 
Economic  Cooperation, 
Document  1992, "the Challenges of Change1*, 

the  Charter  of  Paris  for  a  New  Europe  and 

RECOGNIZING in that context that support of independence, sovereignty and territorial  integrity 
of  Ukraine  will  contribute  to  safeguarding  of  peace  and  stability  in  the  region  of  Central  and 
Eastern Europe and on the European Continent as a whole, 

CONFIRMING  the attachment  of the Community  and  its Member  States  and  of  Ukraine  to  the 
European Energy Charter and to the Declaration of the Luzem Conference, April  1993, 

CONVINCED  of  the  paramount  importance  of  the  rule  of  law  and  respect  for  human  rights, 
particularly  those  of  minorities,  the  establishment  of  a  multiparty 
system  with  free  and 
democratic  elections  and economic liberalisation aimed at setting up a market economy, 

BELIEVING that there is a  necessary  connection  between  full  implementation  of partnership  on 
the one hand, and continuation of  the actual accomphshment of Ukraine's pohtical, economic and 
legal  reforms  on  the  other  hand,  as  well  as  the  introduction  of  the  factors  necessary  for 
cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, 

DESIROUS  of  encouraging  the  process  of  regional  cooperation  in  the  areas  covered  by  this 
agreement with the neighbouring countries  in order to  promote the prosperity  and  stability of the 
region, 

DESIROUS  of  establishing  and  developing  regular  political 
international  issues of mutual interest, 

dialogue 

on  bilateral  and 

RECOGNIZING  AND  SUPPORTING  the  wish  of  Ukraine  to  establish  close  cooperation  with 
European  institutions, 

TAKING  ACCOUNT  of  the  Union's  willingness  to  develop  economic  cooperation  and  provide 
technical assistance, as appropriate, for the implementation of economic reform  in Ukraine, 

.

/

/

>• 

BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between 
Ukraine  and  a  wider  area  of  cooperation  in  Europe  and  neighbouring  regions  and  Ukraine's 
progressive integration into the open international trading system, 

CONSIDERING  the  commitment  of  the  Parties  to  liberalise  trade,  based  on  the  principles 
contained in the General Agreement on Tariffs and Trade, as amended by the Uruguay Round, 

CONSCIOUS of the need to improve conditions affecting business and investment, and conditions 
in areas such as establishment of companies, labour, provision of services and capital movements, 

WELCOMING AND RECOGNISING the importance of Ukraine's efiforts, aimed at transition of 
its  economy away from a  state trading  country  with  centrally  planned  economy  into  a  market 
economy, 

CONVINCED that continued progress towards a market economy will be fostered  by cooperation 
between the Parties in the forms set out in this Agreement, 

CONVINCED that this Agreement will create a new climate for  economic relations between the 
Parties  and  in  particular  for  the  development  of  trade  and  investment,  which  are  essential  to 
economic restructuring and technological modernization, 

DESIROUS of estabUshing close cooperation  in the area  of environment protection  taking  into 
account the interdependence existing between the Parties in this field, 

BEARING in mind the intention of the Parties to develop their cooperation  in the field of civil 
science  and  technologies,  including  space  research,  in  view  of  the  complementarity  of  their 
activities in this area, 

DESIROUS of establishing cultural cooperation and improving the flow of information, 

Have agreed as follows : 

Article 1 

A Partnership  is hereby established between the Community and  its Member  States  of the one 
part, and Ukraine of the other part  The objectives of this partnership are: 

to  provide  an  appropriate framework for  the  political dialogue 
between the Parties allowing the development of close pohtical relations, 
to  promote trade and investment and harmonious  economic relations  between  the  Parties 
and so to foster their sustainable development 
to  provide  a basis for mutually advantageous economic, social,  financial,  civil  scientific 
technological  and cultural  cooperation, 
to support Ukrainian efforts to consolidate its democracy and to develop its economy and  to 
complete the transition into a market economy. 

.  /  //. 

TITLE I  ; GENERAL  PRINCIPLES 

Article 2 

Respect for  the democratic principles and human rights as  defined  in particular in the Helsinki 
Final  Act  and the  darter  of  Paris  for  a  New  Europe,  as  well  as  the  principles  of  market 
economy,  including those enunciated in the documents of the CSCE Bonn Conference,  underpin 
the  Parties  and  constitute  an- essential  element  of 
the 
partnership and of the present Agreement. 

internal  and  external  policies  of 

Article 3 

The Parties consider that it is essential for the future prosperity and stability  of  the  region of the 
former Soviet  Union  that  the newly  independent states which have emerged from the dissolution 
of  the  Union  of  Soviet  Socialist  Republics  (hereinafter  called  "Independent  States")  should 
maintain  and  develop  cooperation  among  themselves  in  compliance  with  the  principles  of  the 
Helsinki  Final Act and with  international  law and spirit of  good  neighbourly  relations  and will 
make every effort to encourage this process. 

In view of the above the Parties consider that the development of their relations should take due 
account of Ukraine's wish to maintain cooperative relations with other Independent States. 

Article 3 bis 

The Parties undertake to consider, in particular when Ukraine has further advanced in the process 
of economic reform, developments of the relevant Titles of this Agreement, in particular Title  in 
and  Article  4 Ibis,  with  a  view  to  the  establishment  of  a  free  trade  area  between  them.  The 
Cooperation  Council  may  make  iecommendations on  such  developments  to  the  Parties.  Such 
developments  shall  only  be  put  into  effect  by  virtue  of  an  agreement  between  the  Parties  in 
accordance with their respective procedures,  l ie  Parties shall consult each other in the year 1998 
whether circumstances, and in particular Ukraine's advances in market oriented economic reforms 
and the economic conditions prevailing there at that time, allow the beginning of negotiations  on 
the establishment of a free trade area. 

Article 3 ter 

The  Parties  undertake  to  examine together, by  mutual  consent,  amendments  which  it  may  be 
appropriate to make to any part of the Agreement  in view of  changes  in circumstances,  and  in 
particular of the situation arising from Ukraines accession to GATT.  The first examination shall 
take place three years after  the entry into force  of the  Agreement  or when  Ukraine  becomes  a 
Contracting Party of GATT, whichever is earlier. 

TITLE II ; POLITICAL  DIALOGUE 

Article 4 

A regular political dialogue shall be established between the Parties which they  intend to develop 
and intensify.  It shall accompany and consolidate the rapprochement between the Community and 
Ukraine, support the political  and  economic changes  underway  in that  country  and  contribute  to 
the establishment of new forms of cooperation. The political dialogue: 

shall  strengthen  the  links of  Ukraine with the  Community,  and thus  with  the  community  of 
democratic nations. The economic convergence achieved through this Agreement will lead to 
more intense political relations; 

shall  bring  about  an  increasing  convergence  of  positions  on  international  issues  of  mutual 
concern thus increasing security and stability. 

shall  foresee  that  the  Parties  endeavour  to  cooperate  on  matters  pertaining  to  the 
strengthening  of  stability  and  security  in  Europe,  the  observance  of  the  principles  of 
democracy, the respect  and  promotion  of human  rights,  particularly  those  of  minorities  and 
shall hold consultations, if necessary, on the relevant matters. 

Article  5 

Consultations as appropriate shall be held between the Parties at the highest political level. 

At ministerial level, political dialogue shall take place within the Cooperation  Council  established 
in Article 77 and on other occasions including with the Union Troika by mutual  agreement. 

Article 6 

Other  procedures  and  mechanisms  for  political  dialogue  shall  be  set  up  by  the  Parties  by 
establishing  appropriate  contacts,  exchanges  and  consultations,  in  particular  in  the  following 
forms: 

regular meetings at the level of the senior officials  between representatives of Ukraine 
and representatives of the Union; 

taking full  advantage of all diplomatic channels between the parties, including 
appropriate contacts in the bilateral as well as the multilateral field, such as United 
Nations, CSCE meetings and elsewhere; 

exchanging regular information  on matters of mutual interest concerning political 
cooperation in Europe ; 

any other means which would contribute to consolidating and developing political dialogue. 

Article  7 

Pohtical  dialogue  at  parliamentary  level  shall  take  place  within  the  framework  of  the 
Parliamentary  Cooperation  Committee  which  shall  be  established  under  Article  82  of  the 
Agreement. 

TITLE III: TRADE IN GOODS 

Article 8 

1.  The Parties shall accord to one another most-favoured-nation treatment according to Article 

1, paragraph  1 of the GATT. 

2.  The provisions of paragraph  1  shall not apply to: 

(a)  advantages  granted  with  the  aim  of  creating  a  customs  union  or  a  free-trade  area  or 

pursuant to the creation of such  a union or area; 

(b)  advantages  granted  to particular countries  in  accordance with the  General Agreement on 
Tarifis  and Trade  and  with other  international  arrangements  in favour  of  developing 
countries; 

(c)  advantages accorded to adjacent countries in order to facilitate frontier traffic. 

Article 9 

1.  The parties agree that the principle of freedom of transit of goods is an essential condition of 

attaining the objectives of this Agreement 

In this connection each Party shall provide for unrestricted transit via or through its territory 
of goods originating in the customs territory or destined for the customs territory of the other 
Party. 

2.  The  rules  described  in Article V, paragraphs  2,  3, 4  and  5  of  the  GATT  are  applicable 

between the two Parties. 

3.  The  rules  contained  in this  Article  are  without  prejudice  to  any  special  rules  relating  to 
specific sectors, in particular such as transport, or products agreed between the_Parties. 

Article 9bis 

The  provisions  of Article 8 paragraph  1 and Article 9 paragraph 2 shall  not  apply,  during  a 
transitional period expiring on the 31.12.1998 or the accession of Ukraine to GATT, whichever is 
earlier, to advantages defined  in Annex I granted by Ukraine to other Independent States as  from 
the day preceding the date of entry into force of the Agreement. 

Article 10 

Without prejudice to the rights and obhgations  stemming from international  conventions  on the 
temporary admission of goods which bind both Parties, each Party  shall furthermore  grant the 
other  Party  exemption from import  charges  and  duties  on  goods  admitted  temporarily,  in the 
instances and according to the procedures stipulated by any other international convention on this 
matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions 
under which the obligations stemming from such a convention have been accepted by the Party in 
question. 

Article 11 

Goods  originating  in  Ukraine  and  the  Community  respectively  shall  be  imported  into  the 
Community  and  Ukraine  respectively  free  of  quantitative  restrictions  without  prejudice  to  the 
provisions  of Article  13,  16,  17, annex II, and to the provisions of Article 77,  81, 244,  249 and 
280 of the Acts of Accession of Spain and Portugal to the European Community. 

Article  11 bis 

1.  The products of the territory of one Party imported into the territory of the other Party shall 
not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in 
excess of those applied, directly or indirectly, to like domestic products. 

2.  Moreover, these products shall be accorded treatment no less favourable than that accorded 
to like products of national origin in respect of all laws, regulations and requirements 
affecting their internal sale, offering for sale, purchase, transportation, distribution or use. 
The provision of this paragraph shall not prevent the application of differential  internal 
transportation charges which are based exclusively on the economic operation of the means 
of transport and not on the nationality of the product. 

Article 11 ter 

The  following  Articles  of  the  GATT  shall  be  applicable  mutatis  mutandis  between  the  two 
Parties. 

(i)  Article VII, paragraphs  1,2, 3,4a, 4b, 4d, 5; 

(ii)  Article VIE; 

(iii)  Article EX; 

(iv)  Article X. 

Article 12 

Goods shall be traded between the Parties at market-related prices. 

Article  13 

Where any product is being imported into the territory of one of the Parties in such increased 
quantities  and under such  conditions  as  to  cause  or threaten to  cause  substantial  injury to 
domestic producers of like or direct competitive products, the Community or Ukraine, which 
ever  is  concerned,  may  take  appropriate  measures  in  accordance  with  the  following 
procedures and conditions. 

2.  Before taking any measures, or in cases to which paragraph 4  applies  as  soon  as  possible 
thereafter,  the  Community or  Ukraine as  the case may  be  shall  supply  the  Cooperation 
Committee  with all  relevant  information  with  a  view  to  seeking  a  solution  acceptable  to 
both Parties. 

3. 

4. 

5. 

If,  as  a  result of the consultations, the  Parties  do not  reach  agreement  within  30  days  of 
referral to the  Cooperation Committee  on  actions to avoid the situation, the  Party  which 
requested consultations  shall be free to restrict imports  of the products  concerned  to  the 
extent and for  such  time  as  is necessary  to  prevent or remedy the  injury,  or to  adopt 
other appropriate measures. 

In critical  circumstances  where delay would  cause  damage  difficult  to  repair,  the  Parties 
may take the measures before the consultations, on the condition that consultations shall  be 
offered immediately after taking such action. 

In the selection of measures under this Article, the Contracting Parties shall give priority to 
those which cause least disturbance to the achievement of the aims of this Agreement. 

Article 13 bis 

Nothing  in  this  Title,  and  in  Article  13  in  particular  shall  prejudice  or  affect  in  any  way  the 
taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI 
of the GATT, the Agreement on implementation  of Article  VI of the GATT, the Agreement  on 
interpretation  and application  of  Articles  VI,  XVI  and XXIII  of  the  GATT  or related internal 
legislation. 

In respect of anti-dumping or subsidies investigations, each Parry agrees to examine  submissions 
by  the  other  Party  and  to  inform  the  interested  parties  concerned  of  the  essential  facts  and 
considerations  on  the  basis  of  which  a  final  decision  is  to  be  made.  Before  definitive  anti 
dumping and countervailing duties are imposed, the Party shall  do the utmost to  bring  about  a 
constructive solution to the problem. 

Article 15 

The Agreement  shall  not  preclude  prohibitions  or  restrictions  on  imports,  exports  or  goods  in 
transit justified on grounds of pubhc morahty, pubhc pohcy or pubhc security; the protection  of 
health and life of humans, animals or plants; the protection of 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 16 

This  Title  III  shall  not  apply  to  trade  in textile products  falling  under  chapters  50  to  63  of  the 
Combined  Nomenclature.  Trade  in  these  products  shall  be  governed  by  a  separate  agreement, 
initialed on 5th May  1993 and applied provisionally since  1st January 1993. 

Article  17 

1.  Trade  in  products  covered  by  the  Treaty  establishing the  European  Coal  and  Steel 
Community  shall  be  governed  by  the  provisions  of  this  Title  III,  with  the  exception  of 
Article  11  and  upon  entry  into  force,  by  the  provisions  of  an  agreement  on  quantitative 
arrangements conœming exchanges of ECSC steel products. 

2.  A  contact  group  on  coal  and  steel  matters  is  set  up,  comprising  representatives  of  the 

Community on the one hand, and representatives of Ukraine on the other. 

The  contact  group  shall  exchange,  on  a  regular  basis,  information  on  all  coal  and  steel 
matters of interest  to  the Parties. 

Article  18 

Trade  in  nuclear  materials  shall  be  subject  to  the  provisions  of  a  specific  Agreement  to  be 
concluded between the European Atomic Energy Community and Ukraine. 

10 

TITLE IV: PROVISIONS AFFECTING  BUSINESS AND  INVESTMENT 

Chapter I: Labour  conditions 

Article  19 

Subject  to  the  laws,  conditions  and  procedures  applicable  in  each  Member  State,  the 
Community and the Member  States shall endeavour to ensure that the treatment  accorded  to 
Ukrainian nationals, legally employed in the territory  of  a Member  State shall be free from 
any  discrimination  based  on  nationality,  as  regards  working  conditions,  remuneration  or 
dismissal, as compared to its own nationals. 

Subject  to  the  laws,  conditions  and  procedures  applicable  in  Ukraine,  Ukraine  shall 
endeavour  to  ensure  that  the  treatment  accorded  to  nationals  of  a  Member  State,  legally 
employed  in  the  territory  of  Ukraine  shall  be  free  from  any  discrimination  based  on 
nationality,  as  regards  working  conditions,  remuneration  or  dismissal,  as  compared  to  its 
own nationals. 

Article  19 bis 

Coordination  of Social  Security 

The Parties shall conclude agreements in order: 

(i) 

to  adopt,  subject  to  the  conditions  and  modalities  applicable  in  each  Member  State,  the 
provisions  necessary  for  the  coordination  of  Social  Security  systems  for  workers  of 
Ukrainian nationality, legally employed in the territory of a Member State.  These  provisions 
will in particular ensure that: 

all  periods  of  insurance,  employment  or  resident  completed  by  such  workers  in  the 
various Member States shall be added together for the purpose of pensions in respect of old 
age, invalidity and death and for the purpose of medical care for such workers; 

any  pensions  in  respect  of  old  age,  death,  invalidity,  industrial  accidents  or 
occupational  disease,  with  the  exception  of  the  special  non-contributory  benefits,  shall  be 
freely transferable  at the  rate  applied  by  virtue  of  the  law  of  the  debtor  Member  State  or 
States; 

(ii) 

to  adopt,  subject  to  the  conditions  and  modalities  applicable  in  Ukraine,  the  provisions 
necessary to accord to workers who are nationals of a Member State and legally employed in 
Ukraine, treatment similar to that specified  in the second indent of paragraph (i). 

Article  19  ter 

The  measures  to  be  taken  in  accordance  with  Article  19  bis  shall  not  affect  any  rights  or 
obhgations  arising from bilateral  agreements  linking  Ukraine and the Member  States  where those 
agreements  provide  for  more  favourable  treatment  of  nationals  of  Ukraine  or  of  the  Member 
States. 

11 

The  Cooperation  Council  shall  examine  which  joint  efforts  can  be  made  to  control  illegal 
immigration taking into account the principle and practice of readmission. 

Article 20 

Article 21 

The  Cooperation  Council  shall  examine which  improvements  can be made in  working  conditions 
for  business  people consistent  with the international  commitments  of the  Parties,  including  those 
set out in the document of the CSCE Bonn Conference. 

The  Cooperation  Council  shall  make  recommendations  for  the implementation  of Articles  19,  20 
and  21. 

Article 22 

12 

Chapter H:  Conditions affecting the establishment and operation of companies 

Article 23 

1.  a)  The  Community  and  its  Member  States  shall  grant  for  the  establishment  of  Ukrainian 

companies  in  their  territories  treatment  no  less  favourable  than  that  accorded  to 
companies  of  any  third  country,  and  this  in  conformity  with  their  legislation  and 
regulations. 

b)  Without prejudice to the reservations listed in Annex  IV, the Community  and  its  Member 
States shall grant to subsidiaries  of Ukrainian  companies  established  in their territories  a 
treatment no less favourable than that granted to any Community companies, in respect of 
their operation, and this in conformity with their legislation and regulations. 

c)  The  Community  and  its  Member  States  shall  grant  to  branches  of  Ukrainian  companies 
established  in  their  territories  a  treatment  no  less  favourable  than  that  accorded  to 
branches  of  companies  of  any  third  country,  in  respect  of  their  operation,  and  this  in 
conformity with their legislation and regulations. 

2.  a)  Without  prejudice  to  the  reservations  listed  in  Annex  V,  Ukraine  shall  grant  for  the 
establishment  of  Community  companies  in  its  territory,  a  treatment  no  less  favourable 
than that accorded to its own companies or to companies  of any third  country  whichever 
is the better,  and this in conformity with its legislation and regulations. 

b)  Ukraine shall grant to subsidiaries and branches  of Community companies, established  in 
its  territory,  treatment  no  less  favourable  than  that  accorded  to  its  own  companies  or 
branches  respectively  or  to  companies  or  branches  of  any  third  country  respectively, 
whichever  is  the  better,  in  respect  of  their  operations,  and  this  in  conformity  with  its 
legislation and regulations. 

3. 

The  provisions  of  paragraphs  1  and  2  cannot  be  used  so  as  to  circumvent  a  Party's 
legislation  and  regulations  applicable  to  access  to  specific  sectors  or  activities  by 
subsidiaries of companies of the other Party established in the territory of such first Party. 

The treatment referred  to  in paragraph  1 and 2 shall benefit  companies  established  in the 
Community and Ukraine respectively at the date of entry into force of this Agreement and 
companies established after that date once they are established. 

Article 24 

1.  The provisions of Article 23  shall not apply to air transport, inland  waterways  transport  and 

maritime transport, without prejudice to the provisions of Article 96. 

2.  However,  in  respect  of  activities  undertaken  by  shipping  agencies  for  the  provision  of 
international  maritime transport  services,  including  intermodal  activities  involving  a  sea  leg, 
each Party  shall permit  to the  companies  of the  other  Party  their  commercial  presence  in  its 
territory  in  the  form  of  subsidiaries  or  branches,  under  conditions  of  establishment  and 
operation  no  less  favourable  than  those accorded  to  its  own  companies  or  to  subsidiaries  or 
branches of companies of any third country, whichever are the better. 

13 

Such activities include, but are not limited to: 

(a)  marketing  and  sales  of  maritime  transport  and  related  services  through  direct  contact  with 
customers, from quotation to invoicing, whether these services  are operated  or offered  by the 
service  supplier  itself  or  by  service  suppliers  with  which  the  service  seller  has  established 
standing business arrangements; 

(b)  purchase and use, on their own account or on behalf of their customers  (and the resale to their 
customers) of any transport  and  related  services,  including  inward  transport  services  by  any 
mode, particularly  inland waterways, road and  rail, necessary  for  the  supply  of an  integrated 
service; 

(c)  preparation  of documentation  conœrning transport  documents,  customs  documents,  or  other 

documents related to the origin and character of the goods transported; 

(d)  provision  of business  information  of any means, including computerised  information  systems 
and  electronic  data  interchange  (subject  to  any  nonKhscriminatory  restrictions  concerning 
telecommunications); 

(e)  setting up of any business arrangement, including participation  in the company's  stock and the 
appointment of personnel  recruited  locally (or,  in the case of foreign  personnel,  subject  to the 
relevant provisions of this Agreement), with any locally established  shipping agency; 

(f)  acting on behalf of the companies, organising the call of the ship or taking over cargoes  when 

required. 

For the purposes of this Agreement: 

Article  25 

b) 

c) 

a)  A  "Community company" or a  "Ukrainian  company"  respectively  shall  mean  a  company  set 
up in accordance with the laws of a Member  State or of Ukraine respectively  and  having  its 
registered office or central administration or principal place of business in the territory of the 
Community  or  Ukraine  respectively.  However,  should  the  company,  set  up  in  accordance 
with the laws of a Member State or Ukraine respectively, have only its registered office  in the 
territory  of  the  Community  or  Ukraine  respectively,  the  company  shall  be  considered  a 
Community  or  Ukrainian  company  respectively  if  its  operations  possess  a  real  and 
continuous link with the economy of one of the Member States or Ukraine respectively. 
"Subsidiary" of a company shall mean a company which is effectively  controlled by the  first 
company. 
"Branch" of a company shall mean a place of business not having legal personality which has 
the  appearance  of  permanency,  such  as  the  extension  of a  parent  body,  has  a  management 
and is materially equipped to negotiate business with third parties  so that the latter,  although 
knowing that there will  if necessary be a  legal  link with the parent  body, the head  office  of 
which  is  abroad,  do  not  have  to  deal  directly  with  such  parent  body  but  may  transact 
business at the place of business constituting the extension. 
"Establishment" shall mean the right of Community or Ukrainian companies as referred  to in 
Article  25  a) to take  up  economic activities  by  means  of the  setting  up  of  subsidiaries  and 
branches in Ukraine or in the Community respectively. 
"Operation" shall mean the pursuit of economic activities. 
"Economic  activities"  shall  mean  activities  of  an  industrial,  commercial  and  professional 
character. 

e) 
f) 

d) 

14 

(g)  With regard to international maritime transport, including  intermodal operations  involving  a 
sea leg, shall also be beneficiaries of the provisions of this Chapter and Chapter in,  nationals 
of  the  Member  States  or  of  Ukraine  established  outside  the  Community  or  Ukraine 
respectively,  and  shipping  companies  established  outside  the  Community  or  Ukraine  and 
controlled by nationals of a Member State or Ukrainian nationals respectively, if their vessels 
are  registered  in  that  Member  State  or  in  Ukraine  respectively  in  accordance  with  their 
respective legislations. 

Article 26 

1.  Notwithstanding any other provisions of the Agreement, a  Party shall not be  prevented  from 
taking measures for  prudential  reasons, including  for  the protection  of investors,  depositors, 
pohcy holders or persons to whom a fiduciary duty is owed by a financial service supplier,  or 
to  ensure the  integrity  and  stability  of the  financial  system.  Where  such  measures  do  not 
conform with the provisions of the Agreement, they shall not be used as a means of avoiding 
the obligations of a Party under the Agreement. 

2.  Nothing  in  the  Agreement  shall  be  construed  to  require  a  Party  to  disclose  information 
relating to the affairs  and accounts of individual customers or any confidential  or  proprietary 
information  in the possession of public entities. 

Article 27 

The provisions of the present Agreement shall not prejudice the apphcation by each Party  of  any 
measure necessary to prevent the circumvention of its measures concerning third country access to 
its market, through the provisions of this Agreement. 

Article 28 

1.  Notwithstanding  the  provisions  of  Chapter  I  of  this  Title,  a  Community  company  or  a 
Ukrainian  company  established  in die  territory  of  Ukraine  or  the  Community  respectively 
shall  be  entitled  to  employ,  or  have  employed  by  one  of  its  subsidiaries  or  branches,  in 
accordance with the legislation in force  in the host country of establishment, in the  territory 
of  Ukraine  and  the  Community  respectively,  employees  who  are  nationals  of  Community 
Member States and Ukraine respectively, provided that  such employees are key personnel  as 
defined in paragraph 2 of this Article, and that they are employed exclusively by companies, 
subsidiaries  or  branches.  The  residence  and  work  permits  of  such  employees  shall  only 
cover the period of such employment. 

2.  Key  personnel  of the  above  mentioned  companies  herein  referred  to  as  "organisations"  are 
"intra-corporate  transferees"  as  defined  in  (c)  of  this  Article  in  the  following  categories, 
provided that the organisation is a juridical person  and that the persons concerned  have been 
employed by it or have been partners  in it (other than  as  majority  shareholders),  for  at  least 
the year immediately preceding such movement: 

(a) Persons  working  in  a  senior  position  with  an  organisation,  who  primarily  direct  the 
management  of  the  establishment,  receiving  general  supervision  or  direction  principally 
from the board of directors or stockholders of the business or their equivalent,  including: 

15 

- directing the establishment or a department or sub-division of the establishment; 
-  supervising  and  controlling  the  work  of  other  supervisory,  professional  or  managerial 

employees; 

- having  the  authority  personally  to  hire  and  fire  or  recommend  hiring,  firing  or  other 

personnel actions, 

(b) Persons  working  within  an  organisation  who possess  uncommon  knowledge  essential  to 
the  establishment's  service,  research  equipment,  techniques  or  management. 
The 
assessment  of  such  knowledge  may  reflect,  apart  from  knowledge  specific  to  the 
establishment,  a  high level of qualification  referring  to a type of  work  or  trade  requiring 
specific technical knowledge, including membership of an accredited  profession. 

(c)An  "intra-corporate  transferee"  is  defined  as  a  natural  person  working  within  an 
organisation  in the territory of a Party, and being temporarily transferred  in the context of 
pursuit  of  economic  activities  in  the  territory  of  the  other  Party; 
the  organisation 
concerned  must  have  its  principal  place  of  business  in  the  territory  of  a  Party  and  the 
transfer  be  to  an  establishment  (branch,  subsidiary)  of  that  organisation,  effectively 
pursuing like economic activities in the territory of the other Party. 

Article  30 

1.  The  Parties  shall  use their  best  endeavours  to  avoid  taking  any  measures  or  actions  which 
render  the  conditions  for  the  establishment  and  operation  of  each  other's  companies  more 
restrictive  than  the  situation  existing  on  the  day  preceding  the  date  of  signature  of  the 
Agreement. 

2.  The  provisions  of  this  Article  are  without  prejudice  to  those  of  Article  37: 

the  situations 
covered by such Article 37 shall be solely governed  by its provisions to the exclusion  of any 
other. 

3.  Acting  in  the  spirit  of partnership and cooperation and  in hght of provisions  contained  in 
Article 43 the Government of Ukraine shall inform the Community of its intentions to submit 
new  legislation  or  adopt  new  regulations  which  may  render  the  conditions  for  the 
establishment or operation in Ukraine of subsidiaries and branches of Community companies 
more restrictive than the situation existing on the day preceding the date of  signature  of the 
Agreement.  The  Community  may  request  Ukraine  to  communicate  the  drafts  of  such 
legislation or regulations and to enter into consultations about those  drafts. 

4.  Where  new  legislation  or  regulations  introduced  in  Ukraine  would  result  in  rendering  the 
conditions for establishment of Community companies  into its territory and  for  the operation 
of  subsidiaries  and  branches  of  Community  companies  established  in  Ukraine  more 
•  restrictive  than  the  situation  existing  on  the  day  of  signature  of  the  Agreement,  such 
respective legislation or regulations shall not apply during three years following the entry into 
force  of the  relevant  act to those subsidiaries  and branches  already established  in Ukraine  at 
the time of entry into force of the relevant act. 

16 

Chanter M;  Cross-border  supply  of services  between  the Community  and  Ukraine 

Article 31 

1.  The Parties undertake in accordance with the provisions of this Chapter to take the necessary 
steps  to  allow progressively  the  supply  of  services  by  Community  or  Ukrainian  companies 
who  are  established  in  a  Party  other  than  that  of  the  person  for  whom  the  services  are 
intended, taking into account the development of the services sectors in the Parties. 

2.  The  Cooperation  Council  shall  make recommendations  for  the implementation  of  paragraph 

1 of this Article. 

Article 32 

The  Parties  shall  cooperate  with  the  aim  of  developing  a  market-oriented  service  sector  in 
Ukraine. 

Article 33 

1.  The  Parties  undertake  to  apply  effectively  the  principle  of  unrestricted  access  to  the 

international maritime market and traffic  on a commercial basis. 

a)  The  above  provision  does  not  prejudice  the  rights  and- obhgations  arising  from  the 
United Nations  Code of Conduct  for  Liner  Conferences,  as applicable to one or  other 
Contracting  Party  to  the  present  Agreement.  Non-conference  lines  will  be  free  to 
operate in competition with a conference as long as they adhere to the principle of  fair 
competition on a commercial basis. 

b)  The Parties  affirm  their  commitment  to  a  freely  competitive  environment  as  being  an 

essential feature of the dry and liquid bulk trade. 

2. 

In applying the principles of paragraph  1, the Parties shall: 

a) 

b) 

not apply,  as from entry into force  of this agreement, any cargo sharing provisions  of 
bilateral  agreements  between  any  Member  State  of  the  Community  and  the  former 
Soviet Union; 

not introduce cargo sharing clauses in future  bilateral  agreements  with third  countries, 
other than in those exceptional circumstances where liner shipping companies from one 
or  other  Party  to  the  present  agreement  would  not  otherwise  have  an  effective 
opportunity to ply for trade to and from the third country concerned; 

c) 

prohibit cargo sharing arrangements  in future  bilateral  agreements  concerning  dry  and 
liquid bulk trade; 

17 

d) 

abolish,  upon  entry 
this  Agreement,  all  unilateral  measures, 
administrative,  technical  and  other  obstacles  which  could  have  restrictive  or 
discriminatory effects  on the free supply of services in international maritime transport. 

into  force  of 

Each Party shall grant, inter alia, no less favourable  treatment, than that accorded to a 
Party's own ships for the ships flying the flag of the other Party with  regard to  access 
to  ports  open  to  international  trade,  the  use  of  infrastructure  and  auxiliary  maritime 
services  of  the  ports,  as  well  as  related  fees  and  charges,  customs  facilities  and  the 
assignment of berths and facilities  for loading and unloading. 

The same treatment  shall  also be accorded  by  each  Party  in  respect  of  ships  operated 
by  the  other  Party's  nationals  and  companies,  which  fly  the  flag  of  a  third  country, 
after a transitional pericKi expfrmg not later than  1  July  1997. 

Nationals  and  companies  of  the  Community  providing  international  maritime  transport 
services  shall  be free to  provide  international  sea-river  services  in  the  inland  waterways  of 
Ukraine and vice versa. 

Article 33 bis 

With  a  view  to  assuring  a  coordinated  development  of  transport  between  the  Parties,  adapted  to 
their  commercial  needs,  the  conditions  of  mutual  market  access  and  provision  of  services  in 
transport  by road, rail and inland waterways and, if applicable, in air transport  may be dealt with 
by specific  agreements where appropriate negotiated  between the Parties  as  defined  in Article  91 
after  entry into force of this Agreement. 

18 

Chapter IV;  General  Provisions 

Article 34 

1.  The  provisions  of  this  Title  shall  be  applied  subject  to  limitations justified  on  grounds  of 

public pohcy, public security or pubhc health. 

2.  They  shall  not apply  to  activities  which  in the territory  of  either  Party  are  connected,  even 

occasionally, with the exercise of official  authority. 

Article 35 

For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the  Parties 
from  applying  their  laws  and  regulations  regarding  entry  and  stay,  work,  labour  conditions  and 
establishment  of natural  persons and supply of services, provided that - in so doing  - they do not 
apply them in a manner as to nullify  or impair the benefits  accruing to any Party  under the terms 
of a specific  provision of the Agreement.  The above provision does not prejudice  the  application 
of Article 34. 

Article 36 

Companies which are controlled and exclusively owned by Ukrainian companies  and  Community 
companies jointly  shall  also be beneficiaries  of the  provisions  of  Chapters  H,  HI  and  IV  of  this 
Title. 

Article 37 

Treatment granted by either Party to the other hereunder shall, as from the day one month prior  to 
the  date  of  entry  into  force  of  the  relevant  obhgations  of  the  GATS,  in  respect  of  sectors  or 
measures  covered by the GATS, in no case be more favourable  than that  accorded  by  such  first 
Party  under  the  provisions  of  GATS  and  this  in  respect  of  each  service  sector,  sub-sector  and 
mode of supply. 

Article 38 

For the purposes  of  Chapters  II, III  and  IV  of this  Title, no account  shall  be taken  of  treatment 
accorded by the Community, its Member States or Ukraine pursuant to commitments  entered  into 
in economic integration agreements in accordance with the principles of Article V of the GATS. 

19 

Article 39 

1.  The  Most  Favoured Nation treatment granted  in accordance with the provisions of this Title 
shall  not  apply  to  the tax  advantages  which the  Parties  are providing  or  will  provide  in the 
future  on the basis of agreements to avoid double taxation, or other tax arrangements. 

2.  Nothing in this Title shall be construed to prevent the adoption or enforcement  by the  Parties 
of  any  measure  aimed  at  preventing  the  avoidance  or  evasion  of  taxes  pursuant  to  the  tax 
provisions  of agreements  to  avoid  double taxation  and  other tax  arrangements,  or  domestic 
fiscal  legislation. 

3.  Nothing  in  this  Title  shall  be  construed  to  prevent  Member  States  or  Ukraine  from 
distinguishing, in the apphcation of the relevant provisions of their fiscal legislation, between 
taxpayers who are not in identical situations, in particular as regards their place of residence. 

Article 40 

Without prejudice to Article 28, no provision of Chapters II, HI and IV hereof shall be  interpreted 
as giving the right to: 

-  nationals of the Member  States  or of Ukraine  respectively to enter,  or  stay  in, the territory  of 
Ukraine  or  the  Community  respectively  in  any  capacity  whatsoever,  and  in  particular  as  a 
shareholder or partner in a company or manager or employed thereof or supplier or recipient of 
services; 

-  Community subsidiaries  or  branches  of Ukrainian  companies  to  employ  or  have employed  in 

the territory of the Community nationals of Ukraine; 

-  Ukrainian  subsidiaries  or  branches  of Community  companies to employ  or  have employed  in 

the territory of Ukraine nationals of the Member States; 

-  Ukrainian  companies  or  Community  subsidiaries  or  branches  of  Ukrainian  companies  to 
supply  Ukrainian  persons  to  act  for  and  under  the  control  of  other  persons  by  temporary 
employment contracts; 

-  Community  companies  or  Ukrainian  subsidiaries  or  branches  of  Community  companies  to 
supply workers who are nationals of the Member States by temporary employment contracts. 

20 

TITLE V: CURRENT PAYMENTS AND CAPITAL 

Article 41 

1.  The  Parties  undertake to authorize in freely convertible currency,  any  payments  on the 
current account of balance of payments between residents of the Community and of Ukraine 
connected  with the movement of goods, services  or persons  made in accordance  with the 
provisions of the present Agreement. 

2.  With  regard to transactions on the capital account of  balance of payments, from entry into 
force of the Agreement, the free movement of capital  relating  to  direct investments made in 
companies formed in accordance  with  the laws  of  the host country and investments made 
in accordance  with  the  provisions  of Chapter  II of this Tide IV,  and  the  liquidation  or 
repatriation of these investments and of any profit stemming therefrom shall be ensured. 

3.  Without  prejudice to Paragraph 2 or to Paragraph 5, as from entry into force of  this 

Agreement, no new foreign  exchange  restrictions on the movement of capital  and  current 
payments  connected therewith between residents of  the  Community  and Ukraine shall be 
introduced and the existing arrangements shall not become more restrictive. 

4.  The  Parties  shall  consult  each  other  with a  view to facilitate  the movement  of  forms  of 
capital  other  than  those  referred  to  in  paragraph  2  above  between  the  Community  and 
Ukraine in order to promote the objectives of the present Agreement. 

5.  With  reference to the provisions of this Article, until a full  convertibihty of the Ukrainian 
currency within the meaning of Article VHI of the articles of agreement of the International 
Monetary  Fund  is  introduced, Ukraine may in exceptional  circumstances  apply  exchange 
restrictions  connected  with the granting or taking up of short and  medium-term  financial 
credits to the extent that such restrictions are imposed on Ukraine for the granting of such 
credits and are permitted according to Ukraine's status under the IMF. Ukraine 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.  Ukraine  shall  inform  the 
Cooperation  Council  promptly  of the  introduction  of  such  measures  and  of  any  changes 
therein. 

6.  Without prejudice to paragraph  1 and 2, where, in exceptional circumstances, movement of 
capital  between  the  Community  and  the  Ukraine  cause,  or  threaten  to  cause,  serious 
difficulties  for the operation of exchange rate pohcy or monetary pohcy in the Community or 
Ukraine,  the  Community  and  Ukraine,  respectively,  may  take  safeguard  measures  with 
regard  to  movements  of  capital  between  the  Community  and  Ukraine  for  a  period  not 
exceeding six months if such measures are strictly necessary. 

21 

TITLE VI: COMPETITION. INTELLECTUAL. INDUSTRIAL AND  COMMERCIAL 
PROPERTY PROTECTION AND LEGISLATIVE  COOPERATION 

Article 41bis 

1.  The  parties  agree  to  work  to  remedy or  remove through  the  application  of  their  competition 
laws  or otherwise,  restrictions  on  competition  by  enterprises  or  caused  by  State  intervention 
insofar as they may affect trade between the Community and the Ukraine. 

2. 

In order to attain the objectives mentioned in paragraph  1 : 

2.1  The  Parties  shall  ensure  that  they  have  and  enforce  laws  addressing  restrictions  on 

competition by enterprises within their jurisdiction. 

2.2  The  Parties  shall  refrain  from  granting  State  aids  favouring  certain  undertakings  or  the 
production  of  goods  other  than  primary  products  as  defined  in  the  General  Agreement  on 
Tariffs  and Trade, or the provision of services, which distort or threaten to distort  competition 
insofar as they affect  trade between the Community and the Ukraine. 

2.3  Upon request by one Party, the other Party shall provide information  on its aid schemes or on 
particular  individual  cases  of  State  aid.  No  information  needs  to  be  provided  which  is 
covered by legislative requirements of the Parties on professional  or commercial secrets. 

2.4  In the case of State monopolies of a commercial character, the Parties declare their readiness, 
as  from  the  fourth  year from the date  of entry  into  force  of their  Agreement,  to  ensure  that 
there  is  no  discrimination  between  nationals  of  the  Parties  regarding  the  conditions  under 
which goods are procured or marketed. 

2.5  In the case of pubhc undertakings  or undertakings to which Member  States  of the  European 
Union  or the  Ukraine grant exclusive  rights, the  Parties  declare their  readiness,  as  from  the 
fourth year from the date of entry into force of this Agreement, to ensure that there is neither 
enacted nor maintained any measure distorting trade between the Community and the Ukraine 
to an extent contrary to the Parties* respective interests.  This provision  shall not obstruct the 
performance,  in law or fact, of the particular tasks assigned to such undertakings. 

2.6  The period defined  in paragraphs 2.4 and 2.5 may be extended by agreement of the Parties. 

3.  Consultations  may  take  place  within  the  Cooperation  Committee  at  the  request  of  the 
Community  or  Ukraine  on  the  restrictions  or  distortions  of  competition  referred  to  in 
paragraphs  1 and  2  and  on the enforcement  of their competition  rules,  subject  to  limitations 
imposed  by  laws  regarding  disclosure  of  information,  confidentiality  and  business  secrecy. 
Consultations may also comprise questions on the interpretation of paragraphs  1 and 2. 

4.  The  Parties  with  experience  in  applying  competition  rules  shall  give  full  consideration  to 
providing  other  Parties, upon  request and within available  resources, technical  assistance  for 
the development and implementation or competition rules. 

5.  The above provisions  in no way affect  the Parties' rights to apply adequate measures,  notably 
those referred  to in Article  13 bis, in order to address distortions of trade in goods or services. 

22 

Article 42 

Pursuant  to  the  provisions  of  this  Article  and  of  Annex  HI,  Ukraine  shall  continue  to 
improve 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 existing in the Community,  including effective  means of  enforcing 
such  rights. 

By  the  end  of  the  fifth  year after  entry  into  force  of the Agreement,  Ukraine shall 
accede  to  the multilateral  conventions  on  intellectual,  industrial  and  commercial  property 
rights referred  to  in Paragraph  1 of Annex III to which Member States of the  Community 
are  parties  or  which  are  de  facto  applied  by  Member  States  according  to  the  relevant 
provisions contained in these conventions. 

Article 43 

1.  The  Parties  recognize  that  an  important  condition  for  strengthening  the  economic 

links 
between  Ukraine and  the Community  is the approximation of Ukraine's existing and future 
legislation to that of the  Community.  Ukraine shall endeavour to ensure that its  legislation 
will be gradually made compatible with that of the Community. 

2.  The  approximation  of laws shall extend to the foUowing  areas in particular: customs law, 
company law, banking law, company accounts and  taxes,  intellectual  property, protection 
of workers  at  the  workplace, financial services, rules on competition, pubhc procurement, 
protection  of  health and life  of  humans,  animals  and plants, the  environment,  consumer 
protection,  indirect  taxation,  technical  rules  and  standards,  nuclear  laws  and  regulations, 
transport. 

3.  The  Community  shall  provide  Ukraine  with  technical  assistance  as  appropriate  for  the 

implementation of these measures,  which may include i.e. : 

the exchange of experts; 

the provision of early information especially on relevant legislation; 

organization of seminars; 

training activities; 

aid for translation of Community legislation in the relevant sectors. 

23 

TITLE  VII: ECONOMIC  COOPERATION 

Article 44 

1.  The Community and Ukraine shall establish economic cooperation aimed at  contributing  to 
the process of economic reform and recovery and sustainable  development  of Ukraine. 
Such cooperation shall strengthen and develop economic links, to the benefit of both parties. 

2. 

Policies and other measures will be designed to bring about economic and social reforms and 
restructuring of the economic system in Ukraine and will be guided by the requirements of 
sustainability and harmonious social development; they will also fully  incorporate 
environmental considerations. 

3.  To this end the cooperation will concentrate, on industrial cooperation, investment  promotion 
and  protection, pubhc procurement, standards  and  conformity  assessments,  mining and  raw 
materials,  science  and  technology,  education  and  training,  agriculture  and  agro-industrial 
sector,  energy,  civil  nuclear  sector,  environment,  transport,  space,  telecommunications, 
financial  services,  money  laundering,  monetary  policy,  regional  development,  social 
cooperation,  tourism,  small  and medium  sized  entreprises,  information  and  communication, 
consumer protection, customs, statistical cooperation, economics and drugs. 

4. 

Special attention shall be devoted to measures capable of fostering  cooperation  between the 
Independent  States  and  other  neighbouring  countries  with  a  view  to  stimulating  a 
harmonious development of the region. 

5.  Where appropriate,  economic  cooperation  and  other 

forms  of  cooperation provided  for 
in this Agreement may be supported  by technical  assistance  from  the  Community,  taking 
into account  the Community's relevant Council regulation applicable to technical  assistance 
in the Independent  States, the priorities agreed upon  in the  indicative programme  related  to 
European  Community technical  assistance  to  Ukraine  and  its  established  coordination  and 
implementation procedures. 

6.  The  Cooperation  Council shall make recommendations  as to the development  of  cooperation 

in fields identified  in paragraph 3 of this Article. 

Article 45 

Industrial  cooperation 

Cooperation shall aim at promoting the following  in particular: 

the development of business links between economic operators of both  sides, e.g.  in view of 
the transfer of technologies and know-how; 
Community  participation  in  Ukraine's  efforts  to  restructure  and  technically  upgrade  its 
industry; 
the improvement of management; 
the  development  of  appropriate  commercial  rules  and  practices, 
marketing; 
environmental protection. 
adaptation  of the structure of industrial  production  to  the standards  of  an  advanced  market 
economy; 
the conversion of the military-industrial  complex 

including  product 

24 

2. 

The  provisions  of this  article shall  not affect  the  enforcement  of  Community  competition 
rules applicable to undertakings. 

Article 46 

Investment promotion  and  protection 

1.  Bearing  in mind the  respective powers  and  competences  of the  Community  and  the  Member 
States, cooperation  shall aim to establish a  favourable  climate  for  investment,  both  domestic 
and  foreign,  especially  through  better  conditions  for  investment  protection,  the  transfer  of 
capital and the exchange of information on investment opportunities. 

2.  The aims of this cooperation shall be in particular: 

-  the conclusion, where appropriate, between the Member States and Ukraine, of 

agreements for the promotion and protection of investment; 

-  the conclusion, where appropriate, between the Member States and Ukraine, of 

agreements to avoid double taxation; 

-  the creation of favourable conditions for attracting foreign  investments into the 

Ukrainian economy; 

-  to  establish stable and adequate business law and conditions, and to exchange 
information on laws, regulations and administrative practices in the field of 
investment; 

-  to  exchange information  on investment opportunities  in the form of inter alia  trade 

fairs, exhibitions, trade weeks and other events. 

Article 47 

Public  Procurement 

The Parties shall cooperate to develop conditions for open and competitive award  of contracts  for 
goods and services in particular through calls for tenders. 

Article 48 

Cooperation  in the field of standards  and  conformity  assessment 

1.  Cooperation  between the Parties shall promote alignment  with  internationally  agreed  criteria, 
principles  and guidelines  followed  in the field of  quality.  The  required  actions  will  facilitate 
progress  towards  mutual  recognition  in  the  field  of  conformity  assessment,  as  well  as  the 
improvement of Ukrainian product quality. 

25 

2.  To this end they shall seek: 

to  promote  appropriate  cooperation  with  organisations  and  institutions  specialised  in these 
fields; 

to  promote  the  use  of  Community  technical  regulations  and  the  application  of  European 
standards and conformity assessment procedures; 

to  permit  the  sharing  of  experience  and  technical  information  in  the  field  of  quality 
management. 

Article 49 

Mining and  raw  materials 

1.  The  Parties shall aim at increasing investment and trade in mining and raw materials. 

2.  The cooperation shall focus  in particular on the following  areas : 

exchange of information  on the developments in the mining and non-ferrous  metals 
sectors, 
the establishment of a legal framework for cooperation, 
trade matters, 
the  development  of  legislative  and  other  measures  in  the  field  of  environmental 
protection 
training 
safety in the mining industry 

Article SO 

Cooperation  in science and  technology 

1.  The Parties shall promote cooperation in civil scientific research and technological 

development (RTD) on the basis of mutual benefit and, taking into account the availability of 
resources, adequate access to their respective programmes and subject to appropriate levels of 
effective  protection of intellectual, industrial and commercial property rights  (IPR). 

2. 

Science and technology cooperation shall cover: 

the exchange of scientific and technical  information; 
joint RTD activities, 
training activities and mobility programmes  for  scientists,  researchers  and  technicians 
engaged in RTD in both sides. 

Where such cooperation takes the form  of activities  involving education  and/or training, it  should 
be carried out in accordance with the provisions of article 5 i. 

The  Parties,  on  the  basis  of  mutual  agreement,  can  engage  in  other  forms  of  cooperation  in 
science and technology 

26 

In carrying  out such cooperation activities, special attention shall be devoted  to  the  redeployment 
of  scientists,  engineers,  researchers  and technicians  which  are  or  have  been  engaged  in  research 
on/and production of weapons of mass destruction. 

3. 

The  Cooperation  covered  by  this  article  shall  be  implemented  according  to  specific 
arrangements to be negotiated  and concluded in accordance with the procedures  adopted  by 
each party, and which shall set out, inter alia, appropriate IPR provisions. 

Article 51 

Education  and  training 

1.  The  Parties  shall  cooperate  with  the  aim  of  raising  the  level  of  general  education  and 

professional  qualifications  in Ukraine, both in the  public and private sectors. 

2. 

The cooperation shall focus in particular on the following areas: 

updating  higher  education  and  training  systems  in  Ukraine  including  the  system  of 
certification  of higher educational establishments and diplomas of higher education; 
the training of public and private sector executives and civil  servants  in priority  areas 
to be determined; 
cooperation  between  educational  establishments  cooperation,  between  educational 
establishments and firms; 
mobility for  teachers, graduates, administrators, young scientists  and  researchers,  and 
young people; 
promoting teaching in the field of European Studies within the appropriate institutions; 
teaching Community languages; 
post-graduate training of conference  interpreters; 
training journalists; 
training of trainers. 

3. 

The  possible  participation  of  one  Party  in  the  respective  programmes  in  the  field  of 
education  and  training  of  the  other  Party  could  be  considered  in  accordance  with  their 
respective  procedures  and,  where  appropriate,  institutional  frameworks  and  plans  of 
cooperation will then be established building on participation of Ukraine in the  Community's 
TEMPUS  programme. 

Article 52 

Agriculture and the agro-industrial  sector 

The purpose of cooperation in this area shall be the pursuance of agrarian reform,  the 
modernisation, privatisation and restructuring of agriculture, the agro-industrial and  services 
sectors in Ukraine, development of domestic and foreign markets for the Ukrainian  products, in 
conditions that ensure the protection of the environment, taking into account the necessity to 
improve security of food supply.  The Parties shall also aim at the gradual approximation  of 
Ukrainian standards to Community technical regulations concerning industrial  and  agricultural 
food products including sanitary and phytosanitary  standards. 

27 

Article  53 

Energy 

Cooperation shall take place within the principles  of the market  economy and the  European 
Energy Charter, against a background of the progressive integration of the energy markets in 
Europe. 

The cooperation shall include among others the following areas : 

the  environmental  impact  of  energy  production  supply  and  consumption,  in  order  to 
prevent or minimise the environmental damage resulting from these activities; 
improvement of the quality  and  security of energy supply,  including  diversification  of 
suppliers, in an economic and environmentally sound manner; 
formulation of energy policy; 
improvement  in management  and  regulation  of the energy sector  in line with a  market 
economy; 
the  introduction  of  the  range  of  institutional,  legal,  fiscal  and  other  conditions 
necessary to encourage increased energy trade and  investment; 
promotion of energy saving and energy  effectiveness; 
modernisation, development and diversification  of energy  infrastructure; 
improvement  of energy technologies  in  supply and  end  use across the  range of  energy 
types; 
management and technical training in the energy sector. 

Article 54 

Cooperation  in the civil nuclear  sector 

1.  Bearing in mind the respective powers and  competences  of the Community and  its  Member 
States, cooperation  in the civil nuclear sector shall take place through the implementation  of 
specific  agreements  on  i.e.  trade  in  nuclear  materials,  nuclear  safety  and  thermonuclear 
fusion  and in accordance with the legal procedures of each Party. 

2. 

the  problems 
The  parties  shall  cooperate,  including  in  international  fora,  in  addressing 
which have arisen as a consequence of the Chernobyl  disaster;  cooperation  could  involve in 
particular: 

a joint study of the scientific problems related to the accident at Chernobyl; 
combating the radioactive contamination of air, soil and water; 
monitoring and supervision of the radioactive condition of the environment; 
dealing with emergency nuclear/radioactivity  situations; 
de-contamination of radioactively polluted land and handing of nuclear waste; 
medical problems related to the impact of nuclear accidents on the population health; 
solution of the safety problem of the destroyed 4th power  unit at Chernobyl; 
economic and administrative aspects of efforts  to  overcome the disaster; 
ti^ining  in the area of preventing and mitigating nuclear accidents; 
scientific  and  technical  aspects  of  the  remedial  activities  relating  to  the  eradication  of  the 
consequences of the Chernobyl  disaster; 
Other areas subject to agreement of the parties. 

28 

Article 55 

Environment 

1.  Bearing in mind the European Energy Charter and the Declaration of the Luzem  Conference 
1993, the Parties shall develop and strengthen their cooperation on environment and human 
health. 

2.  Cooperation shall aim at combating the deterioration of the environment and in particular : 
- effective  monitoring of pollution levels and assessment of environment; system of 

information  on the state of the environment; 

- combating local, regional and transboundary air and water pollution; 
- ecological  restoration; 
- sustainable, efficient  and environmentally effective  production and use of energy;  safety 

of industrial plants; 

- classification  and safe handling of chemicals; 
- water quality; 
- waste reduction, recycling and safe disposal, implementation of the Basle  Convention; 
- the environmental impact of agriculture, soil erosion, and chemical pollution; 
- the protection of forests; 
- the conservation of biodiversity, protected areas and sustainable use and  management 

of biological resources; 

- land-use planning, including construction and urban planning; 
- use of economic and fiscal instruments; 
- global climate change; 
- environmental education and awareness; 
- implementation of the Espoo Convention on Environmental Impact Assessment in a 

transboundary context. 

3.  Cooperation shall take place particularly through : 

- planning for the handling of disasters and other emergency situations; 
- exchange of information and experts, including information  and experts dealing with the 
transfer of clean technologies and the safe and environmentally sound use of 
biotechnologies; 

- joint research activities; 
- improvement of laws towards Community standards; 
- cooperation at regional level, including cooperation within the framework of the European 

Environment Agency, and at international level; 

- development of strategies, particularly with regard to global and climatic issues and also 

in view of achieving sustainable development; 

- environmental impact studies. 

29 

Article 56 

Transport 

The Parties shall develop and strengthen their cooperation in the field of transport. 

This cooperation shall, inter alia, aim at restructuring and modernising transport systems and 
networks in Ukraine and developing and ensuring, where appropriate, compatibility of 
transportation  systems in the context of achieving a more global transport system. 

The cooperation shall include, inter alia : 

- the modernising of management and operations of road transport, railways, ports and  airports 
- modernisation and development of railways, waterways, road, port, airport and air navigation 
infrastructure  including the modernisation of major  routes of common interest and the trans-
European links for the above modes; 

- promotion and development of multi-modal  transport; 
- the promotion of joint research and development programmes; 
- preparation of the legislative and institutional framework for pohcy development and 

implementation  including privatisation of the transport  sector. 

Article 57 

Space 

Bearing in mind the respective competences of the Community, its Member States and the 
European Space Agency the Parties shall promote where appropriate long term cooperation 
in the areas of civil space research, development and commercial applications. The Parties 
will pay particular attention to initiatives making full use of the complementarity of their 
respective space activities. 

Article 58 

Postal  services and  Telecommunications 

Within  their  respective  powers  and  competences  the  Parties  shall  expand  and  strengthen 
cooperation in the following areas: 

the establishment  of policies  and  guidelines  for  the  development  of the  telecommunications 
sector and postal services; 
development of principles of a tariff policy and marketing  in telecommunications  and postal 
services; 
encourage  the  development  of  projects  for  telecommunications  and  postal  services  and 
attracting  investment; 
enhancing efficiency  and quality of the provision of telecommunications  and  postal  services, 
amongst others through liberalization of activities of sub-sectors; 
advanced application of telecommunications, notably in the area of electronic funds  transfer; 
management of telecommunications networks and their ''optimization''; 
an appropriate  regulatory  basis  for the provision  of telecommunicational  and  postal  services 
and for the use of a radio frequency spectrum; 
training  in  the  field  of  telecommunications  and  postal  services  for  operations  in  market 
conditions. 

30 

Article 59 

Financial  Services 

Cooperation  shall  in  particular  aim  at  facihtating  the  involvement  of  Ukraine  in  universally 
accepted systems of mutual settlements.  Technical assistance shall focus on: 

the  development  of  banking  and  financial  services, the  development  of  common  market  of 
credit  resources,  the  involvement  of  Ukraine  in  universally  accepted  system  of  mutual 
settlements; 

the  development  of  fiscal  system,  institutions  in  Ukraine,  exchange  of  experience  and 
personnel training; 

the development of insurance services, which would inter aha create a favourable  framework 
for the Community's companies' participation in the establishment of joint ventures in the 
insurance sector in Ukraine, as well as the development of export credit insurance. 

this cooperation shall in particular contribute to foster the development of relations between 
Ukraine and the EC Member States in the financial services sector. 

Article  60 

Money  laundering 

The Parties agree on the necessity of making efforts  and cooperating in order to prevent the 
use of their financial systems for laundering of proceeds from criminal activities in general 
and drug offences  in particular. 

Cooperation  in  this  area  shall  include  administrative  and  technical  assistance  with  the 
purpose  of  establishing  suitable  standards  against  money  laundering  equivalent  to  those 
adopted  by  the  Community  and  international  fora 
in  this  field,  including  the  Financial 
Action Task Force (FATF). 

Article 61 

Monetary  policy 

At the request of the Ukrainian authorities, the Community shall provide technical  assistance 
designed to support the efforts  of Ukraine towards the creation and strengthening of its own 
monetary system and the introduction of a new monetary unit which is to become a  convertible 
currency and the gradual adjustment  of its policies to those of the European Monetary  System. 
This will include informal  exchange of views concerning the principles and the functioning  of the 
European Monetary  System. 

31 

Article 62 

Regional  development 

1.  The Parties shall strengthen cooperation on regional development and land-use planning. 

2. 

To  this  end, they  shall  encourage  exchange  of  information  by  national,  regional  and  local 
authorities  on  regional  and  land-use  planning  policy  and  on  methods  of  formulation  of 
regional policies with special emphasis on the development of disadvantaged areas. 

They  shall  also  encourage  direct  contacts  between  the  respective  regions  and  public 
organizations  responsible  for  regional  development  planning  with  the  aim,  inter  alia,  to 
exchange methods and ways of fostering regional development. 

Article 63 

Social  cooperation 

1.  With regard to health and safety, the parties shall develop cooperation between them with the 

aim of improving the level of protection of the health and safety of workers. 

The cooperation shall include notably: 

education and training on health and safety issues with specific attention to high risk 
sectors of activity; 
development and promotion of preventive measures to combat work related diseases 
and other work related ailments; 
prevention of major accidents hazards and the management of toxic chemicals; 
research to develop the knowledge base in relation to working environment and the 
health and safety of workers. 

2.  With regard to employment, the cooperation shall include notably technical assistance to: 

optimization of the labour market; 
modernisation of the job-finding and consulting services; 
planning and management of the restructuring programmes; 
encouragement of local employment development; 
exchange of information  on the programmes of flexible employment, including those 
stimulating self-employment and promoting entrepreneurship. 

3.  The Parties shall pay special attention to cooperation in the sphere of social protection which, 
inter alia, shall include cooperation in planning and implementing social protection reforms  in 
Ukraine. 

These reforms  shall aim to develop in Ukraine methods of protection intrinsic to market 
economies and shall comprise all directions of social protection. 

32 

Article 64 

Tourism 

The  Parties shall increase and develop cooperation between them, which shall include : 

facilitating  the tourist trade; 
cooperation between official tourism bodies 
increasing  the flow of information; 
transferring know-how; 
studying  the  opportunities  for  joint  operations; 
training for tourism development; 

Article 65 

Small and medium-sized  enterprises 

1.  The Parties shall aim to develop and strengthen small and medium-sized  enterprises  and 
their associations and cooperation between SMEs in the Community and  Ukraine. 

2.  Cooperation shall include technical assistance, in particular in the following  areas: 

the development of a legislative framework for SMEs; 
the  development  of  an  appropriate  infrastructure  (an  agency  to  support  SMEs, 
communications, assistance to the creation of a fund for SMEs); 
the development of technology parks. 

Article 66 

Information  and communication 

The Parties shall support the development of modern methods of information  handling,  including 
the media, and stimulate the effective mutual exchange of information.  Priority shall  be given to 
programmes aimed at providing the  general pubhc  with basic information about the Community, 
and Ukraine including,  where possible,  mutual access to databases  in full  respect  of  intellectual 
property  rights. 

Article 67 

Consumer Protection 

The  Parties  will  enter  into  close  cooperation  aimed  at  achieving  compatibility  between  tiieir 
systems  of  consumer protection.  This  cooperation  shall  comprise  in particular  the  provision  of 
expertise on legislative and institutional reform, the establishment of permanent  systems  of mutual 
information  on  dangerous  products,  the  improvement  of  information  provided  to  consumers 
especially  on  prices,  characteristics  of  products  and  services  offered,  training  activities  for 
administration officials  and other consumer interest representatives, the development  of  exchanges 
between  the  consumer  interest  representatives,  and  increasing  the  compatibility  of  consumer 
protection policies. 

33 

Article 68 

Customs 

1.  The aim  of cooperation  shall  be to guarantee  compliance  with  all the  provisions  scheduled 
for  adoption  in  connection  with  trade  and  fair  trade  and  to  achieve  the  approximation  of 
Ukraine's customs system to that of the Community. 

2.  Cooperation shall include the following  in particular: 

the exchange of  information 
the improvement of working methods 
the introduction of the combined nomenclature and the single administrative  document 
the interconnection between the transit systems of the Community and  Ukraine 
the simplification  of inspections and formalities  in respect of the carriage of goods; 
the support in the introduction of modern customs information  systems 
the organisation of seminars and training periods 

3.  Without prejudice to further cooperation foreseen in this Agreement and in particular  Article 
71 the mutual assistance between administrative authorities in customs matters of the Parties 
shall take place in accordance with the provisions of the Protocol attached to this 
Agreement. 

Article 69 

Statistical  cooperation 

Cooperation  in  this  area  shall  have  as  its  aim  the  development  of  an  efficient  statistical 
system  to  provide  the  reliable  statistics  needed  to  support  and  monitor  the  process  of 
economic reform and contribute to the development of private enterprise in Ukraine. 

The Parties, in particular, shall cooperate in the following  fields: 
adaptation  of  Ukrainian  statistical  system  to  international,  methods,  standards  and 
classification; 
exchange of statistical  information; 
provision  of  necessary  statistical  macro  and  microeconomic  information  to  implement  and 
manage economic reforms; 
To  this  end  the  Community  shall  contribute  through  rendering  technical  assistance  to 
Ukraine. 

34 

Article 70 

Economies 

The  Parties  shall  facilitate  the  process  of  economic  reform  and  the  coordination  of  economic 
policies  by  cooperating  to  improve  understanding  of  the  fundamentals  of  their  respective 
economies  and the design and implementation of  economic pohcy  in market economies.  To this 
end the Parties shall exchange information on macro economic performance and prospects. 

The Community shall provide technical assistance as to; 

assist Ukraine in the process of economic reform by providing expert advisory and technical 
assistance, 
encourage cooperation among economists  in order to expedite the transfer of know-how  for 
the  drafting  of  economic  policies,  and  provide  for  wide  dissemination  of  policy-relevant 
research. 

Article 71 

Drugs 

Within the framework of their respective powers  and competences the Parties  shall  cooperate in 
increasing  the  effectiveness  and  efficiency  of  policies  and  measures  to  counter  the  illicit 
production,  supply  and  traffic  of  narcotic  drugs  and  psychotropic  substances,  including  the 
prevention of diversion of precursor chemicals, as  well  as in promoting  drug demand prevention 
and  reduction.  The  cooperation  in this  area  shall  be  based  on  mutual  consultation  and  close 
coordination  between  the  Parties  over the  objectives  and  measures  on the  various  drug-related 
fields. 

35 

TITLE VIII: CULTURAL COOPERATION 

Article  72 

The  Parties  undertake  to  promote,  encourage  and  facilitate  cultural  cooperation.  Where 
appropriate,  the  Community's  cultural  cooperation  programmes  or  those  of  one  or  more 
Member  States  may be the subject of  cooperation  and further  activities  of  mutual  interest 
may be developed. 

36 

TITLE  IX  : FINANCIAL  COOPERATION 

Article  73 

In  order to achieve the objectives  of this Agreement and  in accordance  with  Articles  74, 75  and 
76  Ukraine  shall  benefit  from  temporary  financial  assistance  from  the  Community  by  way  of 
technical assistance in the form of grants to accelerate the economic transformation  of Ukraine. 

Article 74 

This  financial  assistance shall be covered within the framework ofthe~Opcratien  TACIS  foreseen 
in the Community's relevant Council Regulation. 

Article  75 

The  objectives  and  the  areas  of  the  Community's  financial  assistance  shall  be  laid  down  in  an 
indicative programme reflecting  established  priorities to be agreed between the two Parties taking 
into account Ukraine's needs, sectoral absorption capacities and progress with reform.  The Parties 
shall inform the Cooperation Council thereof. 

Article  76 

In  order  to  permit  optimum  use  of  the  resources  available,  the  Parties 
shall  ensure  that 
Community technical  assistance contributions  are made  in close coordination  with  those  from 
other sources  such  as  the  Member States,  other countries, and international organisations  such 
as  the  International  Bank  for  Reconstruction  and  Development  and  the  European  Bank  for 
Reconstruction  and Development as well as UNDP and IMF. 

37 

TITLE  X: INSTITUTIONAL. GENERAL  AND FINAL  PROVISIONS 

Article  77 

A  Cooperation  Council  is  hereby  established  which  shall  supervise  the  implementation  of  this 
Agreement.  It shall meet at ministerial  level once a year and when circumstances  require. It  shall 
examine any major  issues arising within the framework of the Agreement  and  any other  bilateral 
or  international  issues  of  mutual  interest  for  the  purpose  of  attaining  the  objectives  of  this 
Agreement. The Cooperation Council may also make appropriate recommendations, by agreement 
between the two Parties. 

Article  78 

1.  The  Cooperation  Council  shall consist of the members  of the Council  of the European  Union 
and  members  of  the  Commission  of  the  European  Communities,  on  the  one  hand,  and  of 
members of the Government of Ukraine, on the other. 

2.  The Cooperation Council shall establish its rules of procedure. 

3.  The office  of President of the Cooperation Council shall be held alternately by a  representative 

of the Community and by a member of the Government of Ukraine. 

Article 79 

The  Cooperation  Council  shall  be  assisted  in  the  performance  of  its  duties  by 
a 
Cooperation Committee composed of representatives  of  the members of the Council of the 
European  Union and  of members  of the  Commission  of  the  European  Communities  on 
the  one  hand  and  of representatives  of thé Government of Ukraine on the other,  normally 
at  senior civil servant  level. The office  of President  of the  Cooperation  Committee  shall  be 
held alternately by the Community and by Ukraine. 

In  its  rules  of  procedure  the  Cooperation  Council  shall  determine 
Cooperation  Committee,  which  shall  include  the  preparation 
Cooperation Council,  and how the  Committee  shall  function. 

the  duties  of  the 
of  the 

of  meetings 

The Cooperation  Council  may delegate any of  its  powers  to  the Cooperation  Committee, 
which will ensure continuity between meetings  of  the Cooperation Council. 

Article 80 

The  Cooperation  Council may  decide  to  set  up  any  other  special  committee  or  body  that  can 
assist  it  in  carrying  out 
the  composition  and  duties  of  such 
committees or bodies  and  how they shall  function. 

its  duties  and  shall  determine 

Article  81 

When  examining  any  issue  arising  within  the  framework  of  this  Agreement  in  relation  to  a 
provision  referring  to  an article of the GATT, the Cooperation  Council shall take  into account  to 
the greatest extent possible the interpretation  that  is generally given to the article of the GATT in 
question by the Contracting Parties to the General  Agreement. 

38 

Article 82 

A Parhamentary  Coopération Committee is hereby established.  It shall  be  a  forum  for  Members 
of the  Ukrainian  Parliament  and the European  Parliament  to  meet and  exchange  views.  It  shall 
meet at intervals which it shall itself determine. 

Article  83 

1.  The  Parhamentary  Cooperation  Committee  shall  consist  of  members  of  the  European 
Parliament, on the one hand, and of members of the  Ukrainian Parliament, on the other. 

2. 

The Parhamentary Cooperation Committee shall establish its rules of procedure. 

3. 

The  Parliamentary  Cooperation  Committee  shall  be  presided  in  turn  by  the  European 
Parliament and the Ukrainian  Parliament respectively, 
in accordance with the provisions  to 
be laid down in its rules of procedure. 

Article 84 

The  Parliamentary  Cooperation  Committee  may  request  relevant  information 
the 
implementation  of this Agreement  from  the  Cooperation  Council,  which  shall  then  supply  the 
Committee with  the  requested  information. 

regarding 

The  Parliamentary  Cooperation  Committee  shall  be  informed  of the  recommendations  of  the 
Cooperation Council. 

The  Parhamentary  Cooperation  Committee  may  make  recommendations  to  the  Cooperation 
Council. 

Article 85 

1.  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 
those  concerning  intellectual,  industrial  and 
commercial property. 

their  property  rights,  including 

2.  Within the limits of their respective powers, the Parties: 

transactions  concluded  by  economic  operators  of 

s\iall  encourage  the  adoption  of  arbitration  for  the  setdement  of  disputes  arising  out  of 
commercial  and  cooperation 
the 
Community and those of Ukraine; 
agree that where a  dispute is submitted to arbitration, each Party to the dispute may,  except 
where the rules  of the arbitration  centre chosen  by the  Parties  provide  otherwise,  choose  its 
own  arbitrator,  irrespective  of  his  nationality,  and  that  the  presiding  third  arbitrator  or  the 
sole arbitrator may be a citizen of a third state; 
will  recommend  their economic operators to choose by mutual  consent  the  law  applicable  to 
their contracts; 
shall  encourage  recourse  to  the  arbitration  rules  elaborated  by  the  United  Nations 
Commission on International Trade Law (Uncitral) and to arbitration by any centre of a  state 
signatory  to  the  Convention  on  Recognition  and  Enforcement  of  Foreign  Arbitral  Awards 
done at New York on  10th June  1958. 

39 

Article 86 

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  o£  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. 

(d)  which it considers necessary to respect its international  obligations and commitments on the 

control of dual use industrial goods and technologies. 

Article 87 

1. 

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

the arrangements  applied by Ukraine 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 Ukraine shall not  give rise to any 
Œscrimination between Ukrainian nationals,  or  its companies or  firms. 

2. 

The provisions of Paragraph  1 are without prejudice  to  the  right  of the Parties  to  apply the 
relevant provisions of their fiscal legislation to tax payers who are not in identical  situations 
as regards their place of residence. 

Article 88 

1.  Each  of  the  two  Parties  may  refer  to  the  Cooperation  Council  any  dispute  relating  to  the 

application or interpretation of this Agreement. 

2.  The Cooperation Council may settle the dispute by means of a  recommendation. 

3.  In the event of it not being possible to settle the dispute in accordance with paragraph  2 of this 
Article, either Party may notify  the other of the appointment  of an conciliator; the  other  Party 
must  then  appoint  a  second  conciliator  within  two  months.  For  the  application  of  this 
procedure,  the  Community  and  the  Member  States  shall  be  deemed  to  be  one  Party  to  the 
dispute. 

The Cooperation Council shall appoint a third  conciliator. 

The  conciliator's  recommendations  shall  be  taken  by  majority  vote.  Such  recommendations 
shall not be binding upon the Parties. 

40 

Article 89 

The Parties agree to consult promptly through appropriate channels at the request of either party 
to discuss any matter concerning the interpretation or implementation of this Agreement and other 
relevant aspects of the relations between the Parties. 

The provisions of this Article shall in no way affect  and are without prejudice to Articles 13, 
13bis, 88 and 94. 

Article 90 

Treatment granted to Ukraine hereunder  shall in no case  be more favourable  than that granted  by 
the Member States to each other. 

Article  91 

For  the  purposes  of this  Agreement, the term  "Parties" shall  mean  Ukraine  on the one part,  and 
the  Community, or the Member States, or the Community  and the Member  States,  in  accordance 
with their respective powers, on the other part. 

Article 92 

Insofar as matters covered by this Agreement are covered by the European Energy Charter Treaty 
and Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters 
but only to the extent that such apphcation is provided for therein. 

Article  93 

This  Agreement 
is  concluded  for  an  initial  period  of  10  years.  The  Agreement  shall  be 
automatically  renewed  year  by  year provided  that  neither  Party  gives  the  other  Party  written 
notice of denunciation  of the Agreement six months before it expires. 

41 

Article 94 

The Parties shall take any general or specific measures required to fulfil  their obhgations  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  fulfil  an  obligation  under  the 
Agreement, it may take the appropriate measures.  Before  so doing, except in cases  of  special 
urgency,  it  shall  supply the  Cooperation  Council  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  these  measures,  priority  must  be  given  to  those  which  least  disturb  the 
functioning  of  the  Agreement.  These  measures  shall  be  notified 
immediately  to  the 
Cooperation Council if the other  Party so requests. 

Article 95 

Annexes I, D, III, IV, V, V bis and the Protocol shall form an integral part of this  Agreement. 

Article 96 

This  Agreement  shall not,  until  equivalent  rights  for  individuals  and  economic  operators  have 
been achieved  hereunder,  affect  rights assured  to  them through  existing Agreements  binding  one 
or more Member  States on  the one hand and Ukraine on the other except  in areas  railing  within 
Community competence and without prejudice to the obhgations of Member States resulting from 
this Agreement in areas falling within their competence. 

Article 97 

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

Article 97 bis 

The  Secretary-General  of  the  Council  of  the  European  Union  shall  be  the  depositary  of  this 
Agreement. 

Article 98 

This  original  of the Agreement,  of which  the Danish,  Dutch,  English,  French,  German,  Italian, 
Spanish,  Greek,  Portuguese  and  Ukrainian  languages  are equally  authentic,  shall  be  deposited 
with the Secretary-General of the Council of the European  Union. 

42 

Article 99 

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  the  Secretary-General  of  the  Council  of  the  European  Union  that  the 
procedures referred to in this paragraph have been completed. 

its  entry 

this  Agreement  shall  replace  the  Agreement  between 

into  force,  and  as  far  as  relations  between  Ukraine  and  the  Community  are 
Upon 
concerned, 
the  European  Economic 
Community,  the  European  Atomic  Energy  Community  and  the  Union  of  Soviet  Socialist 
Republics  on  trade  and  economic  and  commercial 
cooperation  signed  in  Brussels  on  18 
December  1989. 

Article  100 

In the event that, pending the completion of the procedures necessary for the entry into force of 
this Agreement,  the provisions of certain parts of this Agreement are put into effect  in  1994 by 
means of an interim agreement between the Community and Ukraine, the Contracting  Parties 
agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean 
the date of entry into force of the interim Agreement. 

43 

LIST OF  ANNEXES 

Annex I 

Indicative list of advantages granted by Ukraine to the Independent  States in 
accordance with Article 9bis. 

Annex II 

Exceptional measures which derogate from the provisions of Article  11. 

Annex III 

Intellectual, Industrial and Commercial  Property conventions  (Article 42). 

Annex IV 

Community reservations in accordance with Article 23 paragraph  lb 

Annex V 

Ukrainian reservations in accordance with Article 23 paragraph  2a 

Annex Vbis 

Financial services: definitions 

List of Protocols 

Protocol  on mutual assistance in customs matters. 

44 

ANNEX  I 

Indicative list of advantages granted by Ukraine to the Independent States in accordance with 
Article 9bis. 

1.  Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan,  Russia 

No import duties are implemented. 
No export duties are implemented as regards goods delivered under clearing and  interstate 
agreements within the volumes stipulated  in these agreements. 
No VAT is applied on export and import.  No excise is applied on export. 
All Independent States - export quotas for deliveries of products under annual  interstate trade 
and cooperation agreements are opened in the same way as for deliveries for state needs. 

2.  Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan, -

Payments could be made in roubles 
Russia - payments could be made in roubles or karbovanets. 
All Independent States - special system of non-commercial operations, including payments 
resulting from these operations. 

3.  All Independent States - special system of current payments. 

4.  All Independent States - special price system in trade with some raw materials and semi 

finished products. 

5.  All Independent States - special conditions of transit. 

6.  All Independent States - special conditions of customs procedures. 

45 

ANNEX 17 

Exceptional measures which derogate from the provisions of Article 11 

Exceptional measures which derogate from the provisions of Article  11 may be taken by 
Ukraine in the form of quantitative restrictions on a non-discriminatory basis. 

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

The total value of imports of the products which are subject  to these measures may not 
exceed  15 % of total imports from the Community during the last year, prior to the 
introduction of any quantitative restrictions for which statistics are available. 

These measures may only be applied during a transitional  period ending  31st  December 
! 998  unless parties agree otherwise, or when Ukraine becomes a contracting  Party to GATT 
whichevci  is earlier. 

( Jkrainc shall  inform the Cooperation  Council of any measures it intends to take under the 
terms of the present annex, and, at the request of the Community, consultations  shall be held 
in the Cooperation  Council on such measures and the sectors to which they apply  before 
they enter into force. 

ANNEX  m 

Intellectual. Industrial and Commercial  Property conventions (Article 42) 

1. 

Paragraph 2 of Article 42 concerns the following  multilateral  conventions: 

Berne  Convention  for  the  Protection  of  Literary  and  Artistic  Works 
1971); 

(Pans  Act, 

for 
International  Convention 
Phonograms and Broadcasting Organizations  (Rome,  1961); 

the  Protection 

of  Performers,  Producers 

of 

Protocol 
Registration of Marks  (Madrid,  1989); 

relating 

to 

the  Madrid  Agreement 

concerning  the  International 

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); 

International  Convention  for  the  Protection  of  New  Varieties  of  Plants  (UPOV) 
(Geneva Act,  1978) 

2.  Ukraine shall make its best  endeavours  to  accede, without  undue delay,  to  the  1991  Act  of 

the International Convention for the Protection of New Varieties of Plants (UPOV). 

3.  The  Cooperation Council  may  recommend  that  paragraph  2  of  Article  42  shall  apply  to 
other  multilateral  conventions.  If  problems  in  the  area  of  intellectual,  industrial  and 
commercial property affecting  trading conditions were to occur, urgent consultations  will  be 
undertaken,  at  the  request  of  either  Party,  with  a  view  to  reaching  mutually  satisfactory' 
solutions. 

4.  The Parties confirm the importance they attach to the obligations arising from the  following 

multilateral conventions: 

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); 

Patent  Cooperation  Treaty  (Washington  1970,  amended  and  modified  in  1979  and 
1984); 

5. 

6. 

From  the entry  into  force  of this  Agreement  Ukraine  shall  grant  to  Community  companies 
and  nationals,  in  respect  of  the  recognition  and  protection  of  intellectual,  industrial  and 
commercial  property,  treatment  no  less  favourable  than  that  granted  by  it  to  any  third 
country under bilateral  agreements. 

The provisions of paragraph  5 shall  not apply to advantages granted  by Ukraine to any third 
country  on  an  effective  reciprocal  basis  or  to  advantages  granted  by  Ukraine  to  another 
country of the former  USSR. 

47 

ANNEX IV 

Community reservations in accordance with Article 23 paragraph  lb 

Mining 

In some Member States, a concession may be required for mining and mineral rights for  non-EC 
controlled companies. 

Fishing 

Access to and use of the biological resources and fishing grounds situated in the maritime waters 
coming under the sovereignty or within the jurisdiction of Member States of the Community is 
restricted to fishing vessels flying the flag of a Community Member State and registered in 
Community territory unless otherwise provided  for. 

Real estate purchase 

In some Member States, the purchase of real estate by non-EC companies is subject  to 
restrictions. 

Audiovisual services including radio 

National treatment concerning production and distribution, including broadcasting and other 
forms of tramission to the pubhc, may be reserved to audiovisual works meeting certain origin 
criteria. 

Telecommunications  services including mobile and satellite services 

Reserved  services 
In some Member States market access concerning complementary services and infrastructures  is 
restricted. 

Professional  services 

Services reserved to natural persons nationals of Member States.  Under certain conditions those 
persons may create companies. 

Agriculture 

In some Member States national treatment is no apphcable to non-EC controlled companies which 
wish to undertake an agricultural enterprise.  The acquisition of vineyards by non-EC controlled 
companies is subject to notification, or, as necessary, authorisation. 

News agency services 

In some Member States limitations of foreign participation in publishing companies and 
broadcasting companies. 

48 

ANNEXV 

Ukrainian reservations in accordance, with Article 23 paragraph  2a 

The  application  of  the  reservations  in  this  annex  shall  in  no  case  result  in  treatment  less 
favourable than that accorded to companies of any third country. 

1.  Financial  services (as defined  in Annex V bis) 

1-1 Banking  and  related  financial  services ; 

During  a  transitional  period  not  exceeding  five  years  from  the  date  of  signature  of  this 
Agreement,  Ukraine  may,  in  respect  of  the  establishment  of  subsidiaries  and  branches  of 
Community companies  in Ukraine, continue to apply the provisions of the Ukrainian  laws: 

- 

"on the system of currency regulation and currency control" 
"on banks and banking activities" 
"on collateral" 
"on stocks and stock exchange" 
"on privatization papers" (related to the distribution and trading of privatization 
vouchers) 

During  the  transitional  period  referred  to  above,  no  new  regulations  or  measures  shall  be 
introduced which increase the  level of discrimination  applying  to  subsidiaries  or  branches  of 
Community companies as compared to Ukrainian companies. 

1.2  Insurance  (as defined  in Annex V bis) : 

No later than five years following the date of signature of this Agreement Ukraine  shall  create 
the necessary  conditions for the establishment of Community  insurance companies  as  well  as 
joint insurance companies in accordance with Article 23.2 a. 

During  the  transitional  period  referred  to  above,  no  new  regulations  or  measures  shall  be 
introduced which increase the level of discrimination  applying  to  subsidiaries  or  branches  of 
Community companies as compared to Ukrainian companies. 

Insurance activities in some sectors for foreigners  are closed, limited or are subject  to  special 
requirements during the transitional period. 

2.  Other  areas: 

Brokerage of immovable property including land 

Ownership and use of natural  resources 
Use of subsoil and natural  resources including mining. 
Acquisition and sale of natural  resources 

49 

Fishing 
Access  to  and  use  of  the  biological  resources  and  fishing  grounds  situated  in  Ukrainian 
territorial  waters and in Ukraine's exclusive economic zone is subject to restrictions. 

Hunting is restricted in accordance with the legislation of Ukraine. 

Agriculture 
Acquisition and sale of agricultural  land and  forests. 

Lease of state property 
The lease of state property may be required to be paid in freely convertible currency. 

Telecommunications 
Authorisation  may  be  required  for  companies  controlled  by  foreigners  in  respect  of 
establishment. 

Mass media companies 
Some limitation of foreign  participation  in mass media activities. 

Some professional  activities 
Professional  activities  in  some  sectors  are  reserved  to  Ukrainian  nationals  or  are  subject  to 
special  requirements  (medicine,  education,  legal  services  not  including  business  consultancy 
involving relevant legal aspects). 

Historical buildings and monuments 

50 

ANNEX V bis 

Financial Services  :  Definitions: 

A financial service is any service of a  financial  nature offered  by a  financial  service  supplier of  a 
party.  Financial services include the following  activities: 

A.  All insurance and insurance-related  services. 

1.  Direct insurance (including co-insurance), 

(i) 
(ii) 

life 
non-life 
2.  Reinsurance and  retrocession. 
3. 
4.  Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim 

Insurance intermediation, such as brokerage and agency. 

settlement services. 

B.  Banking and other financial services (excluding insurance). 

1.  Acceptance of deposits and other repayable funds from the public. 
2.  Lending of all types, including consumer credit, mortgage credit, factoring  and  financing 

of commercial transaction. 

3.  Financial leasing. 
4.  All payment and money transmission services, including credit charge and debit cards, 

travellers cheques and bankers  drafts. 

5.  Guarantees and commitments. 
6.  Trading for own account or for the account of customers, whether on an exchange, in an 

over the counter market or otherwise, the following: 
a) 
b) 
c) 
d) 

money market instruments (including cheques, bills, certificates  of deposits, etc.) 
foreign  exchange 
derivative products including, but not limited to, futures  and options 
exchange rates and interest rate instruments, including products such as swaps, 
forward rate agreements, etc. 
transferable  securities 
other negotiable instruments and financial assets, including bullion. 

e) 
f) 

7.  Participation in issues of all kinds of securities, including under-writing and placement as 
agent (whether publicly or privately) and provision of services related to such issues. 

8.  Money broking 

9.  Asset management, such as cash or portfolio management, all forms  of collective 

investment management, pension fund  management, custodial depository and  trust 
services. 

10.  Settlement and clearing services for financial assets, including securities,  derivative 

products, and other negotiable  instruments. 

51 

11.  Provision and transfer of financial information, and financial data processing and related 

software by suppliers of other financial services. 

12.  Advisory intermediation and other auxiliary financial services on all the activities listed in 
points  1 to 11 above, including credit reference and analysis, investment and portfolio 
research and advice, advice on acquisitions and on corporate restructuring and 
strategy. 

The following activities are excluded from the definition of financial services: 

(a)  Activities  carried  out  by  central  banks  or  by  any  other  public  institution  in  pursuit  of 

monetary and exchange rate policies. 

(b)  Activities  conducted  by  central  banks,  government  agencies  or  departments,  or  public 
institutions,  for  the  account  or  with  the  guarantee  of  the  government,  except  when  those 
activities  may be  carried  out by financial service  suppliers  in  competition  with  such  public 
entities. 

(c)  Activities  forming  part  of  a  statutory  system  of  social  security  or public  retirement plans, 
except when those activities may be carried out by financial service suppliers  in competition 
with public entities or private institutions. 

52 

PROTOCOL 

ON MUTUAL ASSISTANCE 

BETWEEN ADMINISTRATIVE AUTHORITIES 

IN CUSTOMS MATTERS 

53 

Article  1 

Definitions 

For the purposes of this Protocol : 

a)  "customs  legislation"  shall  mean  provisions  applicable  in  the  territories  of  the  Parties  and 
governing the import, export, transit of goods and their placing under any customs  procedure, 
including measures of prohibition, restriction and control and adopted by the said Parties; 

b)  "customs  duties"  shall  mean  all  duties, taxes,  fees  or  any  other  charges  which  are  levied  and 
collected in the territories of the Parties, in application of customs legislation, but not  including 
fees and charges which are limited in amount to the approximate costs of services  rendered; 

c)  "applicant  authority",  shall  mean  a  competent  administrative  authority  which  has  been 
appointed  by  a  Party  for  this  purpose  and  which  makes  a  request  for  assistance  in  customs 
matters; 

d)  "requested  authority",  shall  mean  a  competent  administrative  authority  which  has  been 
appointed  by  a Party  for  this purpose and  which  receives  a  request  for  assistance  in  customs 
matters; 

e)  "contravention",  shall  mean any  violation  of the  customs  legislation  as  well  as  any  attempted 

violation of such legislation. 

Article 2 

Scone 

1.  The  Parties  shall  assist  each  other,  within  their  competences,  in  the  manner  and  under  the 
conditions laid down in this Protocol, in ensuring that customs legislation is correctly applied, 
in particular by the prevention, detection and investigation of contraventions of this  legislation. 

2.  Assistance, in customs matters, as provided for  in this Protocol,  applies  to  any  administrative 
authority  of  the  Parties  which  is  competent  for  the  apphcation  of  this  Protocol.  It  shall  not 
prejudice  the  rules  governing  mutual  assistance  in  criminal  matters.  Nor  shall  it  cover 
information  obtained  under  powers  exercised  at  the  request  of  the judicial  authority,  unless 
those authorities so agree. 

Article  3 

Assistance on  request 

At  the  request  of  the  applicant  authority,  the  requested  authority  shall  furnish  it  with  all 
relevant  information  to  enable  it  to  ensure  that  customs  legislation  is  correctly  applied, 
including  information  regarding  operations  noted  or  planned  which  contravene  or  would 
contravene such  legislation. 

54 

2.  At the request of the applicant authority, the requested authority shall inform  it whether goods 
exported from the territory of one of the Parties have been properly imported  into the  territory 
of the other Party, specifying,  where appropriate, the customs procedure applied to the goods. 

3.  At the request of the applicant authority, the requested  authority  shall take the necessary  steps 

to ensure that a surveillance is kept on : 

(a)  natural or legal persons  of whom there are reasonable grounds  for  believing that they are 

contravening or have contravened customs legislation; 

(b)  movements  of  goods  notified  as  possibly  giving  rise  to  substantial  contraventions  of 

customs  legislation; 

(c)  means  of  transport  for  which  there  are  reasonable  grounds  for  believing  that  they  have 

been, are or may be used in the contravening of customs legislation. 

Article 4 

Spontaneous  assistance 

The  Parties  shall  provide  each  other,  in  accordance  with  their  laws,  rules  and  other  legal 
instruments,  with  assistance  if  they  consider  that  to  be  necessary  for  the  correct  application  of 
customs legislation, particularly when they obtain information  pertaining to : 

-  operations  which  have  contravened,  contravene  or  would  contravene  such  legislation  and 

which may be of interest to other Parties; 

-  new means or methods employed in realizing such operations; 

-  goods known to be subject to substantial contravention of customs  legislation. 

Article S 

Delivery/Notification 

At  the  request  of  the  apphcant  authority,  the  requested  authority  shall  in  accordance  with  its 
legislation take all necessary  measures 

in order to deliver all documents, 
to notify  all decisions, 

falling  within the scope of this  Protocol to an addressee, residing or established  in  its  territory.  In 
such a case Article 6, point 3 is applicable. 

55 

Article 6 

Form  and  substance of requests for  assistance 

1.  Requests  pursuant  to  this  Protocol  shall  be  made  in  writing.  Documents  necessary  for  the 
execution of such requests shall accompany the request. When required because of the urgency 
of the situation, oral requests may be accepted, but must be confirmed  in writing  immediately. 

2.  Requests pursuant to paragraph  1  of this Article shall include the following  information  : 

the apphcant authority making the request; 

(a) 
(b)  the measure requested; 
(c) 
(d) 
(e) 

the object of and the reason for the request; 
the laws, rules and other legal elements involved; 
indications as exact and comprehensive as possible on the natural or legal persons 
being the target of the investigations; 

(f)  a summary of the relevant facts and of the enquiries already carried out, except in 

cases provided for in Article 5. 

3.  Requests shall be submitted in an official  language of the requested authority or  in a  language 

acceptable to such authority. 

4.  If  a  request  does  not  meet  the  formal  requirements,  its  correction  or  completion  may  be 

demanded ; the ordering of precautionary measures may, however, take place. 

Article 7 

Execution of  requests 

1.  In order to comply with a request for assistance, the requested authority or, when the latter can 
not act on its own, the administrative department  to  which the  request has  been  addressed  by 
this authority, shall proceed, within its competence and available  resources, as though  it were 
acting  on  its  own  account  or  at  the  request  of  other  authorities  of  that  same  Party,  by 
supplying  information  already  possessed,  by  carrying  out  appropriate  enquiries  or  by 
arranging for them to be carried out. 

2.  Requests  for  assistance  will  be  executed  in  accordance  with  the  laws,  rules  and  other  legal 

instruments of the requested  Party. 

3.  Duly authorised  officials  of a  Party may, with the  agreement  of the  other  Party  involved  and 
within the conditions laid down by the latter, obtain from the offices  of the requested  authority 
or other authority for  which the  requested  authority  is  responsible,  information  relating to the 
contravention  of  customs  legislation  which  the  applicant  authority  needs  for  the  purposes  of 
this Protocol. 

4.  Officials  of  a  Party  may,  with  the  agreement  of  the  other  Party  involved  and  within  the 
conditions laid down by the latter, be present at enquiries carried out in the latter's  territory. 

56 

Article 8 

Form  in which information  is to be  communicated 

1.  The requested authority shall communicate results of enquiries to the applicant authority  in the 

form of documents certified  copies of documents, reports and the like. 

2.  The  documents  provided  for  in  paragraph  1 may  be  replaced  by  computerized  information 

produced in any form for the same purpose. 

Article 9 

Exceptions to the obligation  to provide  assistance 

1.  The  Parties  may  refuse  to  give  assistance  as  provided  for  in  this  Protocol,  where  to  do  so 

would : 

(a)  be likely to prejudice sovereignty, public policy, security or other essential  interests; 

(b) 

or 
involve currency or tax regulations other than regulations concerning customs duties; 
or 

(c)  violate an industrial, commercial or professional  secret. 

2.  Where the apphcant  authority asks for  assistance which it would itself be unable to provide if 
so asked, it shall draw attention to that fact  in its request. It shall then be left to the  requested 
authority to decide how to respond to such a  request. 

3.  If assistance  is  withheld  or  denied, the  decision  and  the  reasons therefore  must  be  notified  to 

the apphcant authority without delay. 

Article  10 

Obligation  to observe  confidentiality 

1.  Any  information  communicated  in  whatsoever  form  pursuant  to  this  Protocol  shall  be  of  a 
confidential  nature. It shall be covered by the obligation of official  secrecy and  shall enjoy  the 
protection  extended  to  like information  under the  relevant  laws of the  Party  which  received  it 
and the corresponding provisions applying to the Community authorities. 

2.  Nominative data shall not be transmitted whenever there are reasonable grounds to believe that 
the  transfer  or  the  use  made  of  the  date  transmitted  would  be  contrary  to  the  basic  legal 
principles of one of the Parties, and,  in particular,  if the person  concerned  would  suffer  undue 
disadvantages.  Upon  request, the  receiving  Party  shall  inform  the furnishing  Party  of the  use 
made of the information  supplied and of the results achieved. 

3.  Nominative  data  may  only be transmitted  to  customs  authorities  and,  in the  case  of  need  for 
prosecution  purposes,  to  public  prosecution  and  judicial  authorities.  Other  persons  or 
authorities  may  obtain  such  information  only  upon  previous  authorisation  by  the  furnishing 
authority. 

57 

4.  The furnishing  Party shall verify  the accuracy of the information  to  be transferred.  Whenever 
it  appears  that the  information  supphed  was  inaccurate  or  to  be deleted,  the  receiving  Party 
shall  be  notified  without  delay.  The  latter  shall  be  obliged  to  carry  out  the  correction  or 
deletion. 

5.  Without  prejudice  to  cases  of  prevailing  public  interest,  the  person  concerned  may  obtain, 

upon request, information  on the data stores and the purpose of this storage. 

Article  11 

Use of  information 

1.  Information  obtained  shall  be used  solely  for  the  purposes  of  this  Protocol  and  may  be  used 
within each  Party  for  other purposes only with the prior written  consent of the  administrative 
authority which furnished  the information  and shall be subject to any restrictions  laid down by 
that authority. 

2.  Paragraph  1  shall  not  impede  the  use  of  information  in  any  judicial  or  administrative 

proceedings subsequently instituted for failure to comply with customs  legislation. 

3.  The Parties may,  in their records of evidence, reports  and testimonies  and  in proceedings  and 
charges  brought  before  the  courts,  use  as  evidence  information  obtained  and  documents 
consulted in accordance with the provisions of this Protocol. 

Article  12 

Experts  and  witnesses 

An  official  of  a  requested  authority  may  be  authorized  to  appear,  within  the  limitations  of  the 
authorization granted, as  expert or witness in judicial  or adrninistrative proceedings  regarding  the 
matters  covered  by  this  Protocol  in the jurisdiction  of  another  Party,  and  produce  such  objects, 
documents or authenticated copies thereof, as may be needed for the proceedings. The request  for 
an  appearance  must  indicate  specifically  on  what  matters  and  by  virtue  of  what  title  or 
qualification  the official  will be questioned. 

Article  13 

Assistance  expenses 

The  Parties  shall  waive  all  claims  on  each  other  for  the  reimbursement  of  expenses  incurred 
pursuant  to  this  Protocol,  except,  as  appropriate,  for  expenses  to  experts  and  witnesses  and  to 
interpreters  and translators who are not dependent upon public services. 

58 

Article 14 

Implementation 

1.  The  management  of  this  Protocol  shall  be  entrusted  to  the  central  customs  authorities  of 
Ukraine  on  the  one  hand  and  the  competent  services  of  the  Commission  of  the  European 
Communities  and,  where  appropriate,  the  customs  authorities  of  the  Member  States  of  the 
European  Union  on  the  other.  They  shall  decide  on  all  practical  measures  and  arrangements 
necessary  for  its  application,  taking  into  consideration  rules  in  the  field  of  data  protection. 
They  may  recommend  to  the competent  bodies  amendments  which  they  consider  be  made  to 
this  Protocol. 

2.  The Parties shall consult each other and subsequentiy  keep each other informed  of the detailed 
rules of implementation which are adopted in accordance with the provisions of this Protocol. 

Article  15 

Complementarity 

1.  This  Protocol  shall complement  and  not  impede the application  of any  agreements  on  mutual 
assistance  which  have  been  concluded  or  may  be  concluded  between  individual  or  several 
Member  States  of  the  European  Union  and  Ukraine.  Nor  shall  it  preclude  more  extensive 
customs cooperation granted under such agreements. 

2.  Without  prejudice  to  Article  11,  these  agreements  do  not  prejudice  Community  provisions 
governing  the  communication  between  the  competent  services  of  the  Commission  and  the 
customs  authorities  of  the  Member  States  of  any  information  obtained  in  customs  matters 
which could be of Community  interest. 

59 

JOINT DECLARATION  CONCERNING  ARTICLE  13 

The  Community  and  Ukraine declare that the  text  of the  safeguard  clause  does  not  grant  GATT 
safeguard  treatment. 

60 

JOINT DECLARATION  CONCERNING ARTICLE 23 

Without prejudice to the reservations  listed in Annexes IV and  V and to the provisions  of Articles 
37 and  40, the Parties  agree that the words  Min conformity  with their  legislation  and  regulations" 
mentioned  in  paragraphs  1  and  2  of  Article  23  mean  that  each  Party  may  regulate  the 
establishment  and  operation  of companies  on  its  territory,  provided  that  these  regulations  do  no V 
create for the establishment  and operations  of companies  of the other  Party  any  new  reservations 
to the treatment no less  favourable  than that accorded  to their own companies or to companies  or 
branches or subsidiaries companies of any third country. 

61 

JOINT DECLARATION CONCERNING ARTICLE 23 

Without prejudice to the reservations  listed in Annexes IV and  V and to the provisions  of  Articles 
37 and  40, the  Parties  agree that the words  "in conformity  with their  legislation  and  regulations" 
mentioned  in  paragraphs  1  and  2  of  Article  23  mean  that  each  Party  may  regulate  the 
establishment  and  operation  of companies  on  its  territory,  provided  that  these  regulations  do  no "t 
create for the establishment  and operations of companies  of the other  Party  any new  reservations 
to the treatment no less favourable  than that accorded to their own companies  or to companies  or 
branches or subsidiaries companies of any third country. 

61 

JOINT DECLARATION CONCERNING THE NOTION OF  "CONTROL" 
IN ARTICLE 25(b) AND ARTICLE 36 

1.  The Parties confirm their mutual understanding that the question of control shall depend on 

the factual  circumstances of the particular case. 

2.  A company shall, for example, be considered as being "controlled" by another  company, and 

thus a subsidiary of such other company if : 

the other company holds directly or indirectly a majority  of the voting  rights,  or 

the other company has the right to appoint or dismiss a majority  of the  administrative 

organ, of the management organ or of the supervisory organ and is at the same time a 
shareholder or member of the subsidiary. 

3.  Both Parties consider the criteria in paragraph  2 to be non-exhaustive. 

63 

JQINTDECLARATION  CONCERNING ARTICLE 42 

the  purpose  of  the  Agreement,  intellectual,  industrial  and 
The  Parties  agree  that  for 
commercial  property  includes  in particular  copyright,  including  the  copyright  in  computer 
programs,  and  neighbouring 
the  rights  relating  to  patents,  industrial  designs, 
geographical  indications,  including  appellations  of  origin,  trademarks  and  service  marks, 
topographies  of  integrated  circuits  as  well  as  protection  against  unfair  competition  as 
referred to in Article  10 bis of the Paris  Convention  for the protection  of  Industrial  Property 
and protection of undisclosed  information  on know-how. 

rights, 

The Parties declare that the term "intellectual, industrial and commercial property" shall be 
translated  into Ukrainian as "intelektualna  vlasnist". 

64 

JOINT DECLARATION CONCERNING ARTICLE  94 

The  Parties  agree, for  the purpose  of its  correct  interpretation  and  its  practical  apphcation,  that 
the  term  "cases  of  special  urgency"  included  in  Article  94  of  the  Agreement  mean  cases  of 
material  breach  of  the  Agreement  by  one  of  the  Parties.  A  material  breach  of  the  Agreement 
consists in 

a) 

repudiation of the Agreement not sanctioned by the general  rules of international  law 

or 

b) 

violation of the essential elements of the Agreement set out in Article 2. 

(O 

EXCHANGE OF LETTERS CONCERNING ARTICLE 13 bis 

It is understood that the provisions of Article  13 bis are neither intended to, nor shall slow down, 
hinder or impede the procedures provided for in the respective legislations of the Parties regarding 
anti-dumping and subsidies investigations. 

66 

Exchange  of  letters  in  relation  to  the  chapter  on  establishment  of  companies.  Title  IV 
Chapter  2 

Letter  from  Deputy Foreign  Minister  Makarenko  to the negotiator  of the  Community 

Dear  Sir, 

I refer to the Partnership and Cooperation Agreement  initialled on 23rd March  1994. 

As I underlined during the negotiations, Ukraine grants to Community companies  establishing  and 
operating  in  Ukraine  in  certain  respects  a privileged  treatment.  I explained  that  this  reflects  the 
Ukrainian policy to promote by all means the establishment of Community companies  in Ukraine. 

With this  in mind, it is my understanding  that  during the period  between  the  date  of  initialling  of 
this  agreement  and  the  entry  into  force  of  the  relevant  articles  on  establishment  of  companies, 
Ukraine  shall  not  adopt  measures or regulations  which  would  introduce  or  worsen  discrimination 
of Community  companies vis-à-vis  Ukrainian companies or companies from  any third  country  as 
compared to the situation existing on the date of initialling of this agreement. 

1 would  be obliged  if you could acknowledge receipt of this letter. 

Mr Makarenko 
Deputy Foreign Minister  of Foreign  Affairs 

Letter  of  reply 

Dear  Sir, 

Thank you for letter of (date), which read : 

"Dear Sir, 

I refer to the Partnership and Cooperation Agreement  initialled on 23rd March  1994. 

As I underlined during the negotiations, Ukraine grants to Community companies  establishing  and 
operating  in  Ukraine  in certain  respects  a  privileged  treatment.  I  explained  that  this  reflects  the 
Ukrainian policy to promote by all means the establishment of Community companies  in Ukraine. 

With this  in mind,  it is my understanding that  during the period  between  the  date  of  initialling  of 
this  agreement  and  the  entry  into  force  of  the  relevant  articles  on  establishment  of  companies, 
Ukraine shall  not adopt measures or regulations  which  would  introduce  or  worsen  discrimination 
of Community companies vis-à-vis Ukrainian companies or companies  from  any third  country  as 
compared to the situation existing on the date of initialling of this agreement. 

I would be obliged  if you could acknowledge receipt of this letter." 

I can acknowledge receipt of this letter. 

67 

, 

// 

ISSN 0254-1475 

COM(94) 226 final 

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