Proposal for a Council and Commission Decision on the conclusion of the Agreement on Partnership and Cooperation between the European Communities and their Member States of the one part, and Russia, of the other part
Date: 1994-06-15
Institutions: European Commission
Subjects: EAEC, ECSC, Russia, cooperation agreement (EU)

COMMISSION OF THE EUROPEAN  COMMUNITIES 

COM(94) 257  final 

Brussels, 15.06.1994 

94/  015KAVC) 

Proposal 

for a Council and Commission Decision 

on the conclusion of the Agreement on Partnership and Cooperation 

between the European Communities and their Member States 

of the one part, and Russia, 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  Agreement  on  Partnership  and  Cooperation 
between  the  European  Communities  and their Member  States,  on  the  one  hand,  and 
Russia, on the other. 

2.  Following  the  Council's  adoption  of  the  negotiating  directives  on  5  October  1992, 

negotiations with Russia took place in the course of 1992,  1993 and 1994. 

3.  The  Agreement  is  a  mixed-type  Agreement  covering  areas  for  which  both  the 
Community  and  the  Member  States  are  competent,  and  is  concluded  for  an  initial 
period often 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  covering  human  rights  which  allows  it  to  be 
suspended, even unilaterally, in an emergency. 

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

The  Agreement  establishes  the  prospect  of  a  future  free  trade  area.  In  1998, 
circumstances  will  be  assessed  in order to  see whether  negotiation  can begin  towards 
free trade. 

4.  The Agreement will  supersede,  as far as Russia is concerned, the Agreement  on Trade 
and  Commercial  and  Economic  Cooperation  between  the  European  Economic 
Communities and USSR,  signed on 18 December 1989. 

/K 

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 on behalf of the European Community  in 
accordance with Articles 113 and 235 of the EC Treaty by adopting the attached 
decisions; 

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 ECSC; 

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

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

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

A*-

COUNCIL AND COMMISSION DECISION 

on the conclusion of the Agreement on Partnership and Cooperation 

between the European Communities and their Member States 

of the one part, and Russia, of the other part 

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

THE COUNCIL OF THE EUROPEAN UNION, 

THE EUROPEAN COMMISSION, 

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  paragraph  2  and  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  approval  of  the  Council  granted  pursuant  to  Article  101  of  the 
Treaty establishing the European Atomic Energy Community, 

Whereas  the  Agreement  on  Partnership  and  Cooperation  between  the  European 
Communities and their Member  States, on the one part, and Russia,  on the other,  signed 
on ..., should be approved, 

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

Having regard to the assent of the European Parliament, 

HAVE DECIDED AS FOLLOWS : 

At 

Article 1 

The Agreement  on Partnership and Cooperation between the European Communities and 
their  Member  States  of  the  one  part,  and  Russia,  of  the  other  part,  together  with  the 
Protocols,  the  connected  exchanges  of  letters,  the  declarations  and  the  final  act  of 
adoption of the Agreement  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  90 of the Agreement  on Partnership  and Cooperation,  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  112 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, 

/"  I 

4  Draft  • 

FINALACT 

The plenipotentiaries  of 

THE KINGDOM OF BELGIUM, 

THE KINGDOM OF DENMARK, 

THE REPUBUC OF GERMANY, 

THE HELLENIC REPUBLIC, 

THE KINGDOM OF SPAIN, 

THE FRENCH REPUBUC, 

IRELAND, 

THE ITALIAN REPUBUC, 

THE GRAND DUCHY OF LUXEMBOURG, 

THE KINGDOM OF THE NETHERLANDS, 

THE PORTUGUESE REPUBUC, 

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,  heremaâer referred to  as  "the 
Community", 

of the one part, and 

the plenipotentiary of the RUSSIAN FEDERATION, hereinafter referred to as "Russia", 

of the other part, 

this 

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

The  Agreement  on  Partnership  and  Cooperation  including  its  annexes  and  the  foUowing 
Protocols: 

Protocol  1  on the establishment of a coal and steel contact group, 

Protocol 2  era mutual administrant assistance for 

customs legislation, 

/it, 

The plenipotentiaries of the Member States and of the  Community and the plenipotentiary  of 
Russia have adopted the texts of the joint declarations listed below and annexed to this Final 
Act 

Joint declaration in relation to Thle in and Article 94 of the Agreement 

Joint declaration in relation to Article 10 of the Agreement 

Joint declaration in relation to Article 12 of the Agreement 

Joint declaration in relation to Article 17 of the Agreement 

Joint declaration in relation to Article 18 of the Agreement 

. Joint declaration in relation to Article 22 of the Agreement 

Joint declaration in relation to Article 23 of the Agreement 

Joint declaration in relation to Article 24 of the Agreement 

Joint declaration in relation to Articles 26,32 and 37 of the Agreement 

Joint declaration in relation to Article 28 of the Agreement 

Joint declaration in relation to Article 29 (3) of the Agreement 

Joint declaration in relation to Article 30 of the Agreement 

Joint declaration in relation to Article 30 a) and g) of the Agreement 

Joint declaration in relation to the notion of "control" in Article 30 (b) and Article 45 of 
the Agreement 

Joint declaration in relation to Article 30 (h), 3rd subparagraph of the Agreement 

Joint declaration in relation to Article 31 of the Agreement 

Joint declaration in relation to Articles 34 and 38 of the Agreement 

Joint declaration in relation to Article 35 of the Agreement 

Joint declaration in relation to Article 39, (2c), 2nd subpara, of theAgreement on 
opening ports 

Joint declaration in relation to Article 39, (2c), 2nd subpara, of the Agreement on vessels 
under a third flag 

Joint declaration in relation to Article 44 of theAgreement 

Joint declaration in relation to Article 46 (2) of the Agreement 

Joint declaration in relation to Article 48 of the Agreement 

Joint declaration in relation to Article 52 of the Agreement 

Joint declaration in relation to Article 53 (2.2) of the Agreement 

Joint declaration in relation to Article 54 of the Agreement 

Joint declaration in relation to Article 99 of the Agreement 

Joint declaration in relation to Article 101 of the Agreement 

Joint declaration in relation to Article 107 of the Agreement 

Joint declaration in relation to Article 107 (2) of the Agreement 

Joint declaration in relation to Articles 2 and 107 of the Agreement 

Joint declaration in relation to Article 112 of the Agreement 

Joint declaration in relation to Article 6 of Protocol 2 

A  ( 

The plenipotentiaries of the Member States and of the Community and the plempotentiaries  of 
Russia have also taken note of the foUowing exchanges of letters annexed to this Final Act 

Exchange of letters in relation to Article 18 of the Agreement 

Exchange of letters in relation to Article 22 of the Agreement 

Exchange of letters in relation to Article 29 of the Agreement 

Exchange of letters in relation to Article 52 of the Agreement 

The plenipotentiary of Russia has taken note of the declarations  listed below and annexed  to 
this Final Act 

Community declaration in relation to Article 36 of the Agreement 

Community declaration in relation to Article 54 of the Agreement 

The  plenipotentiaries  of  the  Member  States  and  of  the  Community  have  taken  note  of  the 
declarations listed below and annexed to this Final Act 

Declaration by Russia in relation to Article 34 of the Agreement 

Declaration by Russia in relation to Article 36 of the Agreement 

Done  at 
four. 

.' 

For the Kingdom of Belgium: 
etc. 

in the year one thousand nine hundred and  ninety 

For  the  European  Community  represented  by  the  Council  of  the  European  Union  and  the 
Commission of the European Communities: 

For the Russian Federation: 

A  i 

9 June 1994 

AGREEMENT ON PARTNERSHIP AND COOPERATION 

ESTABLISHING A  PARTNERSHIP BETWEEN THE EUROPEAN  COMMUNITIES  AND THEIR 
MEMBER  STATES,  OF  THE  ONE  PART, AND  THE  RUSSIAN  FEDERATION,  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 establishing 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 THE RUSSIAN FEDERATION 

hereinafter referred to as "Russia", 

of the other part, 

4k 

CONSIDERING the importance of the historical links existing between 
the Community, its Member States and Russia and the common values 
that they share, 

RECOGNIZING that the community  and Russia wish to strengthen these 
lin<s  and  to  establish  partnership  and  cooperation  which  would 
deepen and widen the relations established between them 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, hereinafter referred to as 
the 1989 Agreement, 

CONSIDERING the commitment of the Community and its Member States, 
acting  in the  framework  of the European  Union  established  by the 
Treaty  on  European  Union  of  7  February  1992, and  of  Russia  to 
strengthening  the 
which 
constitute the very basis of the partnership, 

economic  freedoms 

political 

and 

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, the Conference on Security and Cooperation in Europe, and 
other fora, 

CONSIDERING  the  firm  commitment  of  the  Community  and  its  Member 
Stares 
and  of  Russia  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 Economic Cooperation, 
the  Charter  of  Paris  for  a  New  Europe  and  the  CSCE  Helsinki 
Document 1992, "the Challenges of Change", 

CONFIRMING  the  attachment  of  the  Community  and  its  Member  States 
and of Russia to the aims  and principles  set out  in the European 
Energy  Charter  of  17 December  1991 and  in the  Declaration  of the 
Lucerne Conference of 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 
eco nomy, 

BELIEVING  that the  full  implementation  of  partnership  presupposes 
the  continuation  and  accomplishment  of  Russia's  political  and 
economic reforms, 

DESIROUS of encouraging the process of regional cooperation  in the 
areas covered by this Agreement between the countries of the former 
USS*  in  order  to  promote  the  prosperity  and  stability  of  the 
region, 

°L. 

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

TAKING ACCOUNT of the Community's willingness to provide technical 
assistance,  as  appropriate,  for  the  implementation  of  economic 
reform in Russia and for the development of economic cooperation, 

BEARING IN MIND the utility of the Agreement in favouring a gradual 
rapprochement  between  Russia  and  a wider  area  of  cooperation  in 
Europe  and  neighbouring  regions  and  Russia'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, hereinafter referred to as "GATT", as amended by 
the Uruguay Round Trade Negotiations, and taking into account the 
establishment of the World Trade organisation, hereinafter referred 
to as "WTO", 

RECOGNISING that Russia is no longer a state trading country; - it 
is  now  a  country  with  an  economy  in  transition  -,  continued 
progress towards a market economy will be fostered by cooperation 
between the Parties in the forms set out in this Agreement, 

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, 

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  establishing  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  space  field  in view of  the  complementarity  of 
their activities in this area, 

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

Have agreed as fol low's : 

Article 1 

A  Partnership  is  hereby  established  between  the  community  and  its 
Member  states  of  the  one  part,  and  Russia  of  the  other  part.  The 
objectives of this partnership ares 

to  provide  an  appropriate framework for  the  political dialogue 
between  the  Parties allowing the development  of close relations 
between them in this field, 
to  promote trade and investment and harmonious  economic relations 
between the Parties based on the principles of market economy and 
so to foster sustainable development in the Parties, 

-  to strengthen political and economic freedoms, 
-  to  support  Russian  efforts  to  consolidate  its  democracy  and  to 
develop its economy and  to  complete the transition into a market 
economy, 

-  to  provide  a basis for economic, social,  financial  and cultural 
cooperation  founded  on the principles of mutual advantage, mutual 
responsibility and support, 

-  to promote activities of joint interest, 

to  provide  an  appropriate  framework  for  the  gradual  integration 
between Russia and a wider area of cooperation in Europe, 
to create the necessary conditions for the future establishment of 
a  free  trade  area  between  the  Community  and  Russia  covering 
substantially  all  trade  in  goods  between  them,  as  well  as 
conditions  for  bringing  about  freedom  of  establishment  of 
companies,  of  cross-border  trade  in  services  and  of  capital 
movements. 

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 charter of Paris for a New 
Europe underpin  the  internal  and  external  policies  of  the Parties 
and constitute an essential element of partnership  and of the present 
Agreement. 

Article 3 

The Parties undertake to consider development of the relevant titles of 
this  Agreement,  in  particular  Title  III  and  Article  53,  as 
circumstances allow, with a view to the establishment of  a free trade 
area between them.  The Cooperation Council may make recommendations on 
such  developments  to the Parties. Such development  shall only  be put 
into effect by virtue of an agreement between the Parties in accordance 
with their respective  procedures.  The Parties  shall examine  together 
in  the  year  1998  whether  circumstances  allow  the  beginning  of 
negotiations on the establishment of a free trade area. 

Article 4 

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  Russia's  accession  to  GATT/WTO.  The  first 
examination shall take place three years after the entry into force of 
the Agreement or when Russia becomes a Contracting Party to GATT/WTO, 
whichever is earlier. 

Article 5 

1.  The most  favoured  nation  treatment  granted  by  Russia  under  this 
Agreement  shall not apply during a transitional period  expiring 5 
years after the entry into force of this Agreement  in relation to 
advantages defined in Annex 1 granted by Russia to other countries 
of the former USSR. This period may be extended where  appropriate 
for specific sectors by mutual consent between the Parties-

2.  In  the  case  of  the  most  favoured  nation  treatment  granted  under 
Title III the transitional period referred to in paragraph  1 shall 
expire three years after the entry into force of the Agreement or 
when Russia becomes a Contracting  Party of GATT/WTO, whichever is 
earLier. 

TITLE II ; POLITICAL DIALOGUE 

Article 6 

A  regular political dialogue shall be established between the Parties 
which  t-hey intend  to  develop  and  intensify.  It  shall  accompany  and 
consolidate  the  rapprochement  between  the European  Union  and  Russia, 
support  the  political  and  economic  changes  underway  in  Russia  and 
contribute  to  the  establishment  of  new  forms  of  cooperation.  The 
political dialogue: 

8haLl strengthen the links between Russia and the European Union. 
The economic convergence achieved through this Agreement shall lead 
to more intense political relations; 

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

-  shall  foresee  that  the  Parties  endeavour  to cooperate  on matters 
pertaining  to  the  observance  of  the  principles  of  democracy  and 
human  rights  and  hold  consultations  if  necessary,  on  matters 
related to their due implementation. 

Article 7 

1.  Meetings  shall  take  place  in principle  twice  a  year  between  the 
President  of  the  European  Council  and  the  President  of  the 
Commission  of  the  European _ Communities  on  one  side  and  the 
President of Russia on the other. 

2.  At  ministerial  level, political  dialogue  shall  take  place  within 
the  Cooperation  Council  established  in  Article  90  and  on  other 
occasions,  including  with  the  European  Union  Troika,  by  mutual 
agreement. 

Article 8 

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

-  biannual  meetings  at  senior  official  level  between  the  European 
Union Troika on the one hand, and officials of Russia on the other; 

taking full advantage of diplomatic channels; 

any  other  means,  including  the  possibility  of  expert  meetings, 
which  would  contribute  to  consolidating  and  developing  this 
dia Logue. 

Article 9 

Political  dialogue at parliamentary  level shall take place within the 
framework  of  the  Parliamentary  Cooperation  Committee  established  in 
Article 95. 

TITLE III: TRADE IN GOODS 

Article 10 

1.  The Parties shall accord to one another the general most-favoured 
nation treatment described in Article I paragraph 1 of the GATT. 

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

(a) advantages  accorded  to  adjacent  countries  in  order  to  facilitate 

frontier traffic; 

(b) advantages  granted  with  the aim of creating  a customs union  or a 
free trade area or pursuant to the creation of such union or area. 
The terms "customs union" and "free trade area" shall have the same 
meaning  as those  described  in paragraph  8 of Article  XXIV  of the 
GATT or created through the procedure indicated in paragraph  10 of 
the same GATT article; 

(c) advantages  granted  to  particular  countries  in  accordance  with 
the  GATT  and  with  other  international  arrangements  in  favour  of 
developing countries. 

Article 11 

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. 

3.  Article III paragraphs  8, 9 and 10 of the GATT shall be applicable 

mutatis mutandis between the Parties. 

Article 12 

1.  The Parties  agree  that  the principle  of  freedom of  transit  is an 
essential condition of attaining the objectives of this Agreement. 
In this connection each Party shall provide for freedom of transit 
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 shall be applicable between the Parties. 

3) 

Article 13 

The following articles of the GATT shall be applicable mutatis mutandis 
between the Parties: 

i)  Article VII, paragraphs 1, 2, 3, 4 a), b) and d), 5; 
ii) Article VIII; 
iii)Article IX; 
iv) Article X. 

Article 14 

Without  prejudice  to  the  rights  and  obligations  stemming  from 
international  conventions  on  the  temporary  admission  of  goods  which 
bind  both  Parties,  each  Party  shall  furthermore  grant  the  other 
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.  Such legislation shall be applied on 
a most-favoured nation basis and thus subject to the exceptions listed 
in Article  10 paragraph  2 of the present Agreement. 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 15 

1.  Goods originating  in Russia shall be imported  into the  Community 
free  of  quantitative  restrictions  without  prejudice  to  the 
provisions of articles  17, 20 and 21 of the present Agreement and 
to the provisions of articles 77, 81, 244, 249 and 280 of the Acts 
of Accession of Spain and Portugal to the European community. 

2.  Goods originating  in the Community  shall be  imported  into Russia 
free  of  quantitative  restrictions  without  prejudice  to  the 
provisions of articles 17, 20 and 21  and of Annex 2 to the present 
Agreement. 

Article 16 

Until Russia becomes  a Contracting Party to the GATT/WTO, the Parties 
shall hold consultations  in the cooperation committee on their import 
tariff policies, including changes in tariff protection. In particular, 
such  consultations  shall  be  offered  prior  to^ the  increase  of  tariff 
protection. 

Article 17 

1.  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 directly  competitive  products, the community 
or Russia, 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 Russia 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.  The Parties shall commence consultations promptly 
within the Cooperation Committee. 

3.  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 or to adopt other appropriate measures to  the 
extent and for  such  time  as  is necessary  to  prevent or remedy 
the injury. 

4.  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. 

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

6.  Where a safeguard measure is taken by one Party in accordance with 
the provisions  of  this  article, the other Party  shall be  free to 
deviate  from  its  obligations  under  Title  III  of  this  Agreement 
towards  the  first  Party  in  respect  of  substantially  equivalent 
trade. 

Sucn  action  shall  not  be  taken  before  consultations  have  been 
offered  by  such  other  Party  nor  if  agreement  has  been  reached 
witnin 45 days following the date these consultations were offered. 

7.  The  right  of  deviation  from  the  obligations  referred  to  in 
paragraph 6 shall not be exercised for the first three years that a 
safeguard measure is in effect, provided that the safeguard measure 
has been taken as a result of an absolute increase in imports, for 
the  maximum  period  of  four  years,  and  in  conformity  with  the 
provisions of this Agreement. 

Article 18 

Nothing in this Title, and in Article 17 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 antidumping or subsidy investigations, each Party 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 
antidumping and countervailing duties are imposed, the Parties shall do 
their utmost to bring about a constructive solution of the problem. 

Article 19 

The  Agreement  shall  not  preclude  prohibitions  or  restrictions  on 
imports,  exports  or  goods  in transit  justified  on  grounds  of  public 
morality,  public  policy  or  public  security; the protection  of  health 
and  life  of  humans,  animals  or  plants;  the  protection  of  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 20 

Title III shall not affect the provisions of the Agreement between the 
European  Economic  Community  and  the  Russian  Federation  on  trade  in 
textile  products  initialled  on  12  June  1993  and  applied  with 
retroactive effect as from 1 January 1993.  Furthermore, Article  15 of 
the  present  Agreement  shall  not  apply  to  trade  in  textile  products 
falling under Chapters 50 to 63 of the combined nomenclature. 

Article 21 

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 
15; and 

upon its entry  into force, by the provisions of the  agreement 
on quantitative arrangements concerning exchanges of ECSC steel 
products. 

2.  The establishment of a contact Group on coal and steel matters  is 

governed by Protocol No.l  annexed to this Agreement. 

10 

Article 22 

Trade in Nuclear Materials 

1.  Trade in nuclear materials shall be covered by: 

-  the provisions of this Agreement with the exception of Articles 

15 and 17 paragraphs 1 to 5 and paragraph 7; 

-  the provisions of Articles 6, 7, 14 and 15 paragraphs 1, 2, 3 -
first sentence, and paragraphs 4 and 5 of the 1989 Agreement; 

-  the attached exchange of letters. 

2.  Notwithstanding the provisions of paragraph 1 of this Article, the 
Parties  agree  to  take  all  necessary  steps  to  arrive  at  an 
arrangement covering trade in nuclear materials by 1 January 1997. 

3.  Until  such  an  arrangement  is  reached,  the  provisions  of  this 

Article will continue to apply. 

4.  Steps  will  be  taken  to  conclude  an  agreement  regarding  nuclear 
safeguards, physical  protection  and  administrative  cooperation  in 
transfers  of  nuclear  materials.  Until  such  an  agreement  is  in 
force,  the  respective  legislation  and  international  non-
proliferation  obligations  of  the  Parties  will  be  applicable  as 
regards the transfer of nuclear materials. 

5.  For the purpose  of  the  application  of the regime provided  for in 

paragraph 1: 

-  the  reference  in  Article  6 and Article  15 paragraph  5 of  the 
1989 Agreement to "this Agreement" shall be read as meaning the 
regime established by paragraph 1 of this Article; 

the reference in Article 17 paragraph 6 of the present Agreement 
to  "this Article"  shall  be  read  as meaning  Article  15 of  the 
1989 Agreement; 

-  the reference  in articles 6, 7, 14 and 15 of the 1989 Agreement 
to  the  "Contracting  Parties"  shall  be  read  as  meaning  the 
Parties to the present Agreement; 

the reference to the "Joint Committee" in Article 15 of the 1989 
Agreement  shall  mean  the  Cooperation  Committee  provided  for 
mder Article 92 of the present Agreement. 

11 

TITLE IV: PROVISIONS ON BUSINESS AND INVESTMENT 

Chapter I : Labour conditions 

Article 23 

1.  Subject to the laws, conditions and procedures applicable  in each 
Member State, the Community and the Member states shall ensure that 
the  treatment  accorded  to  Russian  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. 

2.  Russia shall, subject to the conditions  and modalities  applicable 
in Russia,  accord  the  treatment  referred  to  in paragraph  1  to 
nationals  of  a  Member  State  who  are  legally  employed  in  its 
territory. 

Article 24 

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 Russian 
nationality,  legally  employed  in  the  territory  of  a  Member 
state  and  where  applicable  for the  members  of  their  family, 
legally  resident  there.  These  provisions  will  in  particular 
ensure that: 

-  all periods of insurance, employment or residence 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  and  where  applicable  for  such  family 
members; 

any  pensions  in  respect  of  old  age,  death,  industrial 
accident  or  occupational  disease,  or  of  invalidity 
resulting therefrom, 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; 

i  -> 

-  the  workers  in  question  shall  where  applicable  receive 
family  allowances  for the  abovementioned members  of  their 
family -

(ii) 

to  adopt,  subject  to  the  conditions  and  modalities 
applicable in Russia, the provisions necessary to accord to 
workers  who  are  nationals  of  a  Member  State  and  legally 
employed  in  Russia,  and  to  members  of  their  families 
legally resident there, treatment similar to that specified 
in the second and third indents of paragraph (i). 

Article 25 

The measures to be taken in accordance with Article 24 of the present 
Agreement  shall  not  affect  any  rights  or  obligations  arising  from 
bilateral agreements  linking Russia and the Member  States where those 
agreements provide for more favourable treatment of nationals of Russia 
or of the Member States. 

Article 26 

The Cooperation Council shall examine which improvements can be made in 
working  conditions  for  businessmen  consistent  with  the  international 
commitments of the Parties, including those set out in the document of 
the CSC3 Bonn Conference. 

The  Cooperation  Council  shall  make  recommendations  for  the 
implementation of Articles 23 and 26 of the present Agreement. 

Article 27 

13 

Chapter II: Conditions affecting the establishment and 
operation of companies 

Article 28 

1.  The community and  its Member States of the one part and Russia of 
the  other  part,  shall  grant  to  each  other  treatment  no  less 
favourable than that accorded to any third country, with regard to 
conditions  affecting  the  establishment  of  companies  in  their 
territories  and  this  in  conformity  with  the  legislation  and 
regulations applicable in each Party. 

2.  Without  prejudice  to  the  reservations  listed  in  Annex  3,  the 
Community  and  its  Member  States  shall  grant  to  Community 
subsidiaries  of  Russian  companies  a treatment  no  less  favourable 
than  that  granted  to  other  community  companies  or  to  Community 
companies  which  are  subsidiaries  of  any  third  country  companies 
whichever is the better, in respect of their operation and this in 
conformity with their legislation and regulations. 

3.  Without prejudice  to  the  reservations  listed  in  Annex  4,  Russia 
shall  grant  to  Russian  subsidiaries  of  Community  companies  a 
treatment  no  less  favourable  than  that  granted  to  other  Russian 
companies  or  to  Russian  companies  which  are  subsidiaries  of  any 
third  country  companies  whichever  is  the  better,  in  respect  of 
their  operation  and  this  in  conformity  with  its  legislation  and 
regulations. 

4.  The Community and  its Member states of the one part and Russia of 
the other  part  shall  grant  to branches  of  Russian  and  Community 
companies  respectively  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. 

5.  The  provisions  of  paragraphs  2  and  3  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 
fir3t Party. 

The  treatment  referred  to  in  paragraphs  2  and  3  shall  benefit 
companies  established  in the community and Russia respectively  at 
the  date  of  entry  into  force  of  this  Agreement  and  companies 
established after that date once they are established. 

14 

Article 29 

The provisions of Article 28 of the present Agreement together with the 
following provisions  shall apply  in  respect of banking  and  insurance 
services referred to in Annex 6. 

1.  In respect of banking services referred to in Annex 6, part B, the 
nature  of  the  treatment  accorded  by  Russia  under  Article  28, 
paragraph  1, with regard to establishment by means of the setting 
up of subsidiaries only and under Article 28, paragraph 3, is set 
out in Annex 7, part A. 

In respect of  insurance  services referred to in Annex 6, part A, 
paragraphs 1 and 2, the nature of the treatment accorded by Russia 
under Article 28, paragraph 1, is set out in Annex 7, part B. 

2.  Notwithstanding  any  other  provisions  of  this  Agreement,  a  Party 
sha 11 not be prevented from taking measures for prudential reasons, 
including  for  the  protection  of  investors,  depositors,  policy 
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.  Such measures  shall not be used  as a means of 
avoiding the Party's obligations under the Agreement. 

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. 

3.  Without  prejudice  to  the  provisions  of  Part  A,  paragraph  1, 
•  subparagraphs  d  and  e  of  Annex  7,  the  Community  and  the  Member 
States of the one part and Russia of the other part shall not adopt 
any  new  regulations  or  measures  which  would  introduce  or  worsen 
discrimination as compared to the situation existing on the date of 
the signature of the Agreement as regards conditions affecting the 
establishment of  the other Party's companies  in their territories 
in comparison to their own companies. 

The  parties  agree  that  the  terms  "worsen  discrimination"  include 
the aggravation of discriminatory conditions or their extension or 
reintroduction after the current period of application-

4.  For the purposes of this Agreement, as regards banking activities a 
company  shall be  regarded  as  a Russian  subsidiary  of  a Community 
company when more than fifty percent  (50%) of its share capital is 
held by the Community company. 

14) 

AX 

For the purposes of this Agreement: 

Article 30 

a)  -Establishment"  shall  mean  the  right  of  Community  or  Russian 
companies as referred to in paragraph  (h) of this article to take 
up economic activities by means  of  the setting up of subsidiaries 
and branches in Russia or in the community respectively. 

In  respect  of  financial  services  mentioned  in  Article  29, 
"establishment"  shall  mean  the  right  of  Community  or  Russian 
companies  as referred to in paragraph  (b) of this article to take 
up economic activities by means of the setting up of  subsidiaries 
and  branches  in  Russia  or  in  the  Community  respectively  after 
receiving  a  licence  from  the competent  authorities  in  conformity 
with the legislation and regulations applicable in each Party. 

b)  **Subsidiary" of a company shall mean a company which is controlled 

by che first company. 

c)  "Economic  activities"  shall  mean  activities  of  an  industrial, 
commercial or professional character, including financial services. 

d)  "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. 

e)  "Community  subsidiary"  or  "Russian  subsidiary"  respectively  shall 
mean a "Community company" or a "Russian company" respectively, as 
hereafter  defined,  which  is  also  a  subsidiary  of  a  "Russian 
company" or a "Community company" respectively. 

f)  A national of a Member State or of Russia respectively shall mean a 
natural person who is a national of one of the Member States or of 
Russia  respectively  in  accordance  with  their  respective 
legislation. 

g)  "Operation" shall mean the pursuit of economic activities. 

In  respect  of  financial  services  mentioned  in  Article  29, 
"operation"  shall mean the pursuit of all the economic  activities 
authorized by the  licence granted to the Company by the competent 
authorities in conformity with the laws and regulations applicable 
in each Party. 

Ak 

h)  A  "Community  company"  or  a  "Russian  company"  respectively  shall 
mean a company set up in accordance with the laws of a Member State 
or  of  Russia  respectively  and  having  its  registered  office  or 
central  administration,  or  principal  place  of  business  in  the 
territory of the Community or Russia  respectively. However, should 
the company, set up in accordance with the laws of a Member State 
or  Russia  respectively,  have  only  its  registered  office  in  the 
territory  of  the  Community  or  Russia  respectively,  the  company 
* shall be considered a Community or Russian company  respectively if 
its operations possess a real and continuous link with the economy 
of one of the Member States or Russia respectively. 

With  regard  to  international  maritime  transport,  shall  also  be 
beneficiaries  of  the  provisions  of  this  chapter  and  Chapter III, 
shipping companies established outside the Community  or Russia and 
controlled  by  nationals  of  a  Member  state  or  of  Russia 
respectively, if their vessels are registered in that Member state 
or in Russia in accordance with their respective legislations. 

For  the  purposes  of  this  provision,  international  maritime 
transport  shall  be  considered  to  include  intermodal  transport 
operations  involving  a  sea  leg  without  prejudice  to  applicable 
nationality  restrictions  concerning  the  carriage  of  goods  and 
passengers by other transport modes. 

i)  For the purpose of Article 29 and Annex 7, with regard to banking 
services  referred  to  in Annex  6,  part  B,  "Russian  subsidiary" or 
"Community  subsidiary" as defined  in paragraph e), shall refer to 
sucn a subsidiary which  is a bank  in accordance with  the  laws of 
Russia or a Member State respectively. 

For the purpose of Article 29 and Annex 7, with regard to banking 
services  referred  to  in  Annex  6,  part  B,  "community  company  or 
"Russian company" as defined in paragraph  h),  shall refer to such a 
company  which  is  a  bank  in  accordance  with  the  laws  of  a  Member 
State or Russia respectively. 

Al 

Article 31 

Notwithstanding Article 100, the provisions of the present Title shall 
not prejudice the application by each Party of any measure necessary to 
prevent the cixcumvention, through the provisions of this Agreement, of 
its measures concerning third country access to its market. 

Article 32 

1.  Notwithstanding  the  provisions  of  Chapter I  of  this  Title, a 
Community  company  and  a  Russian  company  established  in  the 
territory  of  Russia  or  the  Community  respectively  shall  be 
entitled to  employ, or have employed  by one of its subsidiaries, 
branches or joint ventures, in accordance with  the legislation in 
force in the host country of  establishment,  in  the territory  of 
Russia and the Community respectively, employees who are nationals 
of  Member  states  and  Russia  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, branches  or  joint  ventures. 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 "organizations" are "intra-corporate transferees" as defined in 
paragraph  2(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  (branch, 
subsidiary  or  joint  venture)  , receiving  general  supervision  or 
direction principally  from the board of directors or  stockholders 
of the business or their equivalent, including: 

.-  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 
wor<  or  trade  requiring  specific  technical  knowledge,  including 
memoership of an accredited profession. 

a 

(c) An  "intra-corporate  transferee"  is  defined  as  a  natural  person 
working  within  an  organisation  din 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  of 
that organisation, effectively pursuing like economic activities in 
the territory of the other Party. 

Article 33 

The Parties  recognize  the  importance  of  granting  each  other  national 
treatment with regard to the establishment  and, where not so foreseen 
herein, operation  of  each  other's  companies  in their territories and 
agree  to  consider  the  possibility  of movement  towards  this  end  on  a 
mutually satisfactory basis, and ,in the light of any recommendations by 
the Cooperation Council. 

Article 34 

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.  By the end of the third year after signature of the Agreement at 
the  latest, and  thereafter  at annual  intervals  the Parties  shall 
examine within the Cooperation Council: 

measures introduced by either Party since the signature of 
the Agreement which  affect the establishment  or operation 
of  companies  of  one  Party  in  the  territory  of  the  other 
Party, and which are the subject of commitments assumed in 
Article 28; and 

-  whether it is possible for the Parties to assume 

the  obligation  not  to  take  any  measures  or  actions 
which  may  render the conditions  for the  establishment 
and  operation  of  each  other's  companies  more 
restrictive than the situation existing at the time of 
such examination, where not already foreseen herein, or 

-  other obligations affecting their freedom of action 

in  areas  agreed  between  the  Parties  in  respect  of  the 
commitments assumed in Article 28. 

4? 

If  after  such  examination  one  Party  is  of  the  view  that  measures 
introduced by the other Party since the signature of the Agreement 
result  in  a  situation  which  is  significantly  more  restrictive  in 
respect  of  establishment  or  operation  of  companies  of  the  first 
Party  in  the  territory  of  the  other  Party  as  compared  with  the 
situation existing  at the date of signature of the Agreement,  such 
Party may request the other Party to enter  into consultations.  In 
such case the provisions of Part A of Annex  8 shall  apply. 

3.  In  furtherance of the aims of this article, measures  shall be taken 

as  indicated in Part B of Annex  8. 

4.  The  provisions  of  this  article  are  without  prejudice  to  those  of 
Article  51:  the  situations  covered  by  such  Article  51  shall  be 
solely governed by its provisions to the exclusion of any other. 

Article  35 

1.  Article  28  shall  not  apply  to  air  transport,  inland  waterways 

transport  and maritime  transport. 

2.  However,  in  respect  of  activities,  as  indicated  below,  undertaken 
by  shipping agencies  for the provision of  services  to  international 
maritime  transport,  including  intermodal  transport  operations 
involving  a,sea-leg,  each  Party  shall  permit  to  the  companies  of 
the  other  Party  to  have  a  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,  and this in conformity 
with the legislation  and regulations  applicable  in each  Party. 

3.  Such activities  include: 

(a) marketing  and  sales  of maritime  transport  and  related  services 
through  direct  contact  with  customers,  from  quotation  to 
invoicing; 

(b) purchase  and  resale  of  any  transport  and  related  services, 
including  transport  services  by  any  inland  mode,  necessary  for 
the supply  of an  intermodal  service; 

(c) preparation  of  documentation  concerning  transport  documents, 
customs documents, or other documents  related  to the origin  and 
character  of the goods  transported; 

1° 

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

(e) setting  up  of  any  business  arrangement  with  other  shipping 

agencies; 

(f) acting  on  behalf  of  the  companies,  inter  alia  in  organising  the 

call of the vessel or taking over cargoes when required. 

V 

Chapter III: Cross border supply of services 

Article 36 

For the sectors listed in Annex 5 to this Agreement, the Parties shall 
grant each other treatment no less favourable than that accorded to any 
third country with regard to the conditions affecting the cross border 
supply  of  services,  by  Community  or  Russian  companies  into  the 
territory  of  Russia  or  the  community  respectively,  pursuant  to  the 
legislation and regulations applicable in each Party. 

Article 37 

Subject to the provisions of Article 48 of the present Agreement, the 
Parties  shall  permit  for  the  sectors  listed  in  Annex  5  to  this 
Agreement  the  temporary  movement  of  natural  persons,  who  are 
representatives  of  a  Community  or  a  Russian  company  and  are  seeking 
temporary entry for the purpose of negotiating for the sales of cross-
border supply services or entering intc agreements to sell cross-border 
services  for  that  company,  where  those  representatives  will  not  be 
engaged  in making  direct  sales to the general public  or  in supplying 
services themselves. 

Article 38 

1.  For  the  sectors  listed  in  Annex  5,  each  Party  may  regulate  the 
conditions of cross border supply of services into  its territory. 
Insofar as these regulations are of general application they shall 
be administered in a reasonable, objective and impartial manner. 

2.  Paragraph  1 is without  prejudice  to the  provisions  of Article 36 

and Article 50. 

3.  By  the end of the third  year after  signature  of the Agreement at 
the  latest,  the  Parties  shall  examine  within  the  Cooperation 
Council: 

measures introduced by either Party since the signature of 
the  Agreement  which  affect  the  cross-border  supply  of 
services covered by Article 36 

whether it is possible for the Parties to assume 

-  the  obligation  not  to  take  any  measures  or  actions 
which  may  render  the  conditions  for  the  cross-border 
supply  of  services  covered  by  Article  36  more 
restrictive than the situation existing at the time of 
such examination 

22 

other obligations affecting their freedom of action 

in  areas  agreed  between  the  Parties  in  respect  of  the 
commitments assumed in Article 36. 

If after  such examination  one Party  is of the view that measures 
introduced by the other Party since the signature of the Agreement 
result  in  a  situation which  is significantly  more  restrictive  in 
respect of cross-border supply of services covered by Article 36 as 
compared with  the  situation existing  at the date of  signature of 
the  Agreement,  such  first  Party  may  request  the  other  Party  to 
enter into consultations. In such case the provisions of Part A of 
Annex 8 shall apply. 

4.  In furtherance of the aims of this article, measures shall be taken 

as indicated in Part B of Annex 8. 

5.  The provisions  of  this  article  are without  prejudice  to those of 
Article  51: the  situations  covered  by  such  Article  51  shall  be 
solely governed by its provisions to the exclusion of any other. 

Article 39 

1.  With regard to maritime transport, the Parties undertake to apply 
effectively  the  principle  of  unrestricted  access  to  the 
international market and traffic on a commercial basis. 

a)  The  above  provision  does  not  prejudice  the  rights  and 
obligations  arising  under  the  United  Nations  Convention  on  a 
Code  of  Conduct  for  Liner  Conferences,  as  applicable  for  a 
Party  to the present Agreement. Non-conference  lines  shall 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)  not apply, in their mutual trades, as from entry into force of 
this  Agreement,  any  cargo  sharing  provisions  of  bilateral 
agreements between any Member  State and the former USSR; 

(5) 

23 

b)  not  introduce  cargo  sharing  arrangements  in  future  bilateral 
agreements with third countries concerning dry and liquid bulk 
and liner trade. However, this does not exclude the possibility 
of  such  arrangements  concerning  liner  cargo  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)  abolish,  upon  entry  into  force  of  this  Agreement,  all 
unilateral  measures,  administrative,  technical  and  other 
obstacles  which  could  constitute  a  disguised  restriction  or 
have discriminatory effects on the free  supply  of services in 
international maritime transport. 

Each  Party  shall  grant,  inter  alia,  a  treatment  no  less 
favourable  than  that  accorded  to  a  Party's  own  vessels,  for 
vessels  used  for  the transport  of  goods, passengers  or both, 
and flying the flag of the other Party, with respect to access 
to ports open to foreign vessels, the use of infrastructure and 
auxiliary maritime services of those ports, as well as related 
fees  and  charges,  customs  facilities  and  the  assignment  of 
berths and facilities for loading and unloading. 

3.  The  Parties  agree  that,  following  the  entry  into  force  of  this 
Agreement  and  not  later  than  31 December  1996, they will conduct 
negotiations on the stage-by-stage opening of the inland waterways 
of each Party to the nationals and shipping companies of the other 
Party, in respect of the freedom tc provide international sea-river 
services. 

2.4 

Article 40 

For  the  purpose  of  establishing  favourable  conditions  for  rail 
transport between the Parties, it is agreed that both Parties will, in 
the framework of this Agreement  and through appropriate bilateral and 
multilateral mechanisms, promote: 

-  the  facilitation  of  customs  and  other  border  clearance 

procedures for freight and for rolling stock; 

-  cooperation  in the creation of  suitable rolling  stock meeting 

the requirements of international traffic; 

-  the  approximation  of  regulations  and  procedures  which  govern 

international transport; 

the  safeguarding  and  development  of  international  passenger 
traffic between Russia and the Member States. 

Article 41 

Cooperation shall ensure fair, balanced and competitive conditions for 
the space launching  and transportation market based on sound economic 
factors  and,  in  particular,  steps  will  be  taken  to  promote  the 
negotiation  and  implementation  of  multilateral  rules  regarding 
international trade in space launching and transportation services. 

During  the transitional  period  to  the  year  2000,  conditions  for  the 
supply of space launch services shall be agreed upon. 

Article 42 

The  Parties  shall  endeavour  to  provide  each  other  every  assistance 
possible  as  regards  measures  promoting  cross-border  trade  in  mobile 
satellite communications on their respective territories, in conformity 
with their respective legislation, practices and conditions, applied by 
each  Party.  In  1996,  the  Parties  will  meet  to  consider  the 
possibilities  of  granting  to  each  other  MFN  treatment  for  mobile 
satellite services. 

Article 43 

With a view to assuring a coordinated development of transport between 
the Parties,adapted to their commercial needs, the Parties may, after 
the entry  into force  of  this Agreement, conclude  specific Agreements 
regarding  the conditions of mutual market access and of provision of 
services in the transport  sector, to the extent that these conditions 
are not already addressed by this Agreement, such agreements may apply 
to more than one or to a single mode of transport. 

rt 

Chapter IV: General Provisions 

Article 44 

For the purposes of Chapters II, III and Title V, no account shall be 
taken  of  treatment  accorded  by  the  community,  its  Member  States  or 
Russia  pursuant  to  commitments  entered  into  in  economic  integration 
agreements. 

Article 45 

Companies  which  are  controlled  and  exclusively  owned  by  Russian 
companies  and Community companies  jointly shall also be beneficiaries 
of the provisions of Chapters II and III of this Title and of Title V. 

Article 46 

1.  The  provisions  of  this  Title  shall  be  applied  subject  to 
limitations  justified  on  grounds  of  public  policy(*),  public 
security or public 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 47 

The  Cooperation  Council  shall  make  recommendations  for  the  further 
liberalization  of  trade  in  services,  taking  into  account  the 
development  of  the  services  sectors  in  the  Parties  and  the  other 
international commitments entered into by the Parties, in particular in 
the  light  of  the  final  results  of  the  negotiations  of  the  General 
Agreement on Trade in services, hereinafter referred to as "GATS". 

Article 48 

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 46. 

(1) To be translated in Russian as "obschestvenniy poriadok' 

Article 49 

a)  The Most Favoured Nation treatment  granted  in accordance with the 
provisions  of  Title  IV  or  Title  V  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. 

b)  Nothing  in Title  IV or Title V  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. 

c)  Nothing in Title IV or Title v shall be construed to prevent Member 
States  or  Russia  from  distinguishing,  in  the  application  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 50 

Without prejudice to Articles 32 and 37, no provision of Chapters II, 
III and IV hereof shall be interpreted as giving the right to: 

nationals  of  the  Member  states  or  of  Russia  respectively  to 
enter,  or  stay  in, the  territory  of  Russia  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  Russian  companies  to 
employ  or  have  employed  in  the  territory  of  the  Community 
nationals of Russia; 

-  Russian  subsidiaries  or  branches  of  community  companies  to 
employ or have employed in the territory of Russia nationals of 
the Member States; 

-  Russian  companies  or  Community  subsidiaries  or  branches  of 
Russian companies  to supply workers who  are Russian  nationals 
to act for and under the control of other persons by temporary 
employment contracts; 

-  Community  companies  or  Russian  subsidiaries  or  branches  of 
Community companies to supply workers who are nationals of the 
Member states to act for and under the control of other persons 
by temporary employment contracts. 

<k 

Article 51 

1.  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  obligations  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 the GATS, 
and this, in respect of each service sector, sub-sector and mode of 
supply. 

2.  Without  prejudice  to  the  automatic  nature  of  the  provisions  of 
paragraph 1, the Party which has assumed obligations under the GATS 
shall  inform  the  other  of  the  appropriate  provisions  and  the 
adaptions resulting therefrom for this Agreement. 

3.  Within  one  month  of. receipt  from  the  Party,  which  has  assumed 
obligations  under  the  GATS,  of  the  information  referred  to  in 
paragraph  2 above, the other Party may notify the first Party of 
its  intention  to  make  adjustments  to  its  obligations  under  this 
Title, and make those adjustments as follows: 

-  where  a  service  sector,  sub-sector  or  mode  of  supply  of  a 
service has been excluded from the Agreement, its scope reduced 
or made  subject  to  the  fulfilment  of  conditions  pursuant  to 
paragraph 1, the identical sector, sub-sector or mode of supply 
may be excluded  or  its scope reduced  in the same way or made 
subject to the fulfilment of identical or similar conditions. 

4.  These adjustments made by the second Party should lead to the re-
establishment of a balance of obligations between the Parties. 

5.  In the case that a Party considers that the adjustments made under 
paragraph 3 have not led to the re-establishment of the balance of 
obligations between the Parties, such Party may request the other 
Party, to enter into consultations within 30 days in order to find 
a  satisfactory  solution  by  means  of  any  other  appropriate 
adjustment of its obligations under this Title. 

6.  If  within  30  days  of  the  opening  of  such  consultations  no 
satisfactory solution has been found, the procedures of Article 101 
will be applicable at the request of either Party. 

2? 

TITLE V: PAYMENTS AND CAPITAL 

Article 52 

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

2.  The free movement of capital between residents of the Community and 
of Russia in the form of direct investment made in companies formed 
in  accordance  with  the  laws  of  the  host  country,  and  direct 
investment made in accordance with the provisions of Chapter II of 
Title IV, and the transfer abroad of this investment, including any 
compensation payments arising from measures such as expropriation, 
nationalisation or measures of equivalent effect, and of any profit 
stemming therefrom shall be ensured. 

3.  The  provisions  of  paragraph  2  .shall  not  prevent  Russia  from 
applying  restrictions  on  outward  direct  investment  by  Russian 
residents.  Five years after the entry into force of this Agreement 
the  Parties  agree  to  consult  over  the  maintenance  of  these 
restrictions, taking into account all the relevant monetary, fiscal 
and financial considerations. 

4.  Transfers in respect of capital movements covered under paragraph 2 
shall  be  made  on  the  same  exchange  rate  conditions  as  those 
relating to current transactions. 

5.  Without  prejudice  to  Paragraphs  6  and  7,  after  a  transitional 
period of 5 years as from entry into force of this Agreement, the 
Parties shall not introduce any new restrictions on the movement of 
capital and current payments connected therewith between residents 
of  the  Community  and  Russia  and  shall  not  make  the  existing 
arrangements  more  restrictive.  However,  the  introduction  of 
restrictions  during  the  transitional  period  referred  to  in  the 
first sentence of  this paragraph  shall not  affect  the  rights and 
obligations of the Parties under paragraphs  2, 3, 4 and 9 of this 
article. 

6.  After  the  prohibition  in  paragraph  5  has  come  into  effect  and 
without  prejudice  to  Paragraphs  1  and  2  where,  in  exceptional 
circumstances, movements  of  capital  between  the  residents  of  the 
Community  and  Russia  cause,  or  threaten  to  cause,  serious 
difficulties for the operation of exchange rate policy or monetary 
policy  in  the  Community  or  Russia,  the  Community  and  Russia, 
respectively, may take safeguard measures with regard to movements 
of  capital  between  the  Community  and  Russia  for  a  period  not 
exceeding six months if such measures are strictly necessary. 

<o »-7 

7.  With  reference  to  the  provisions  of  this  Article,  until  a  full 
convertibility  of  the  Russian  currency  within  the  meaning  of 
Article  VIII  of  the  articles  of  agreement  of  the  International 
Monetary  Fund  (IMF)  is  introduced,  Russia  may  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  Russia  for  the  granting  of  such  credits  and  are 
permitted according to Russia's status under the IMF. 

Russia  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. Russia  shall inform 
the  Cooperation  Council  promptly  of  the  introduction  of  such 
measures and of any changes therein. 

8.  The  Parties shall consult each other with a view to facilitate the 
movement of capital between the Community and Russia  in order to 
promote the objectives of the present Agreement. The Parties shall 
particularly  endeavour  to further  liberalize movements  of capital 
related  to  portfolio  investment  and  commercial  credits,  and 
movements of capital related to financial loans and credits granted 
by  Community  residents  to  Russian  residents.  The  Cooperation 
Council  shall  make  appropriate  recommendations  within  the  first 
five years after entry into force of this Agreement. 

9.  The  Parties  shall  accord  to  one  another  most-favoured  nation 
treatment  in  respect  of  freedom  of  current  payments  and  capital 
movements and in respect of methods of payment. 

?e 

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

Article 53 

Competition 

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

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  export  aids  favouring 
certain  undertakings  or  the  production  of  products  other  than 
primary  products.  The  Parties  also  declare  their  readiness,  as 
from  the  third  year  from  the  date  of  entry  into  force  of  this 
Agreement, to establish for other aids which distort or threaten to 
distort  competition  insofar  as  they  affect  trade  between  the 
Community  and  Russia,  strict  disciplines,  including  the  outright 
prohibition  of  certain  aids.  These  categories  of  aids  and  the 
disciplines  applicable  to each  shall be defined  jointly  within  a 
period of three years after entry into force of this Agreement. 

Upon  request  by  one  Party,  the  other  Party  shall  provide 
information on its aid schemes or in particular individual cases of 
State aid. 

2.3 During  a  transitional  period  expiring  five years  after  the  entry 
into.force of the Agreement, Russia may take measures inconsistent 
with paragraph  2.2, second  sentence, provided  that these measures 
are  introduced  and  applied  in  the  circumstances  referred  to  in 
annex 9. 

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

In the case of public undertakings or undertakings to which Member 
States or Russia grant exclusive rights, the Parties declare their 
readiness, as from the third 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 
Russia 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 tc such undertakings. 

(6) 

^u 

2.5 The  period  defined  in paragraphs  2.2  and  2.4  may  be extended by 

agreement of the Parties. 

3.  Consultations  may  take  place within  the  Cooperation  Committee  at 
the  request  of  the  community  or  Russia  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 
information, 
confidentiality  and  business  secrecy.  Consultations  may  also 
comprise questions on the interpretation of paragraphs 1 and 2. 

disclosure 

regarding 

laws 

by 

of 

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

5.  The  above  provisions  in no way  affect  a  Party's rights  to  apply 
adequate  measures,  notably  those  referred  to  in  Article  18, in 
order to address distortions of trade. 

Article 54 

Intellectual, Industrial and Commercial Property Protection 

1.  Pursuant  to  the  provisions  of  this  Article  and  Annex  10,  the 
Parties confirm the importance they attach to ensure adequate and 
effective  protection  and  enforcement  of  intellectual,  industrial 
and commercial property rights.(2) 

2.  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 1978); 
Madrid Agreement  concerning  the  International  Registration  of 
Marks (Stockholm Act, 1967, and amended in 1979); 
Nice Agreement  concerning  the  International  classification of 
Goods  and  Services  for  the  purposes  of  the  Registration  of 
Marks (Geneva 1977, and amended in 1979); 
Budapest Treaty on the International Recognition of the Deposit 
of Microorganisms  for the purposes of Patent Procedures  (1977, 
modified in 1980); 

-  Patent  Cooperation  Treaty  (Washington  1970,  amended  and 

modified in 1980). 
Protocol  relating  to  the  Madrid  Agreement  concerning  the 
International Registration of Marks (Madrid, 1989). 

' 

3.  The implementation of the provisions of this article and Annex 10 
shaLl  be  regularly  reviewed  by  the  Parties  in  accordance  with 
Article  90.  If  problems  in  the  area  of  intellectual,  industrial 
and commercial property affecting trading conditions were to occur, 
urgent consultations shall be undertaken, at the request of either 
Party, with a view to reaching mutually satisfactory solutions. 

(2) The term "intellectual, industrial and commercial property" will 

be translated into Russian by "intellectual'naya sobstvennost". 

TV 

Article 55 

Legislative Cooperation 

1.  The Parties recognize that an important condition for strengthening 
the  economic  links  between  Russia  and  the  community  is  the 
approximation  of  legislation.  Russia  shall  endeavour  to  ensure 
that  its legislation  shall be gradually made compatible with that 
of the community. 

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

33 

TITLE VII: ECONOMIC COOPERATION 

Article 56 

1.  The Community and Russia  shall foster economic cooperation of wide 
scope in order to contribute to the expansion of their respective 
economies, to the creation of a supportive  international  economic 
environment and to the integration between Russia and a wider area 
of  cooperation  in  Europe,  such  cooperation  shall  strengthen  and 
develop economic links to the benefit of both Parties. 

2.  Policies  and other measures  of the Parties  related  to  this  title 
shall in particular be designed to bring about economic and social 
reforms  and  restructuring  in  Russia  and  shall  be  guided  by  the 
requirements  of  sustainability  and  harmonious  social development; 
they shall also fully incorporate environmental considerations. 

3.  The cooperation shall, inter alia, cover: 

-  development of their respective industries and transport; 

exploration of new sources of supply and of new markets; 

-  encouragement of technological and scientific progress; 
-  encouragement  of  a  stable  social  and  human  resources 

development and of local employment development; 

-  promotion  of  the  regional  cooperation  with  the  aim  of  its 

harmonious and sustainable development. 

4.  The Parties consider it essential that, alongside with establishing 
a relationship of partnership and cooperation with each other, they 
maintain  and  develop  cooperation  with  other  European  states  and 
with  the  other  countries  of  the  former  USSR  with  a  view  to  a 
harmonious development of the region and shall make every effort to 
encourage this process . 

5.  As  far  as  applicable  economic  and  other  forms  of  cooperation 
provided for in this Agreement may be supported by the community on 
the  basis  of  the  relevant  Council  regulations  on  technical 
assistance to the countries of the former USSR, taking into account 
the  priorities  agreed  upon  by  the  Parties.  Support  may  also  be 
provided through  such other relevant Community  instruments  as may 
be available. 

Special  attention  shall  be  devoted  by  the  Parties  to  measures 
capable  of  fostering  cooperation with  the  other  countries  of  the 
former USSR. 

6.  The  provisions  of this Title shall not affect the enforcement of 
the  Parties'  competition  rules  and  of  the  specific  competition 
provisions of this agreement applicable to undertakings. 

34 

Article 57 

Industrial cooperation 

1.  cooperation shall aim at promoting in particular: 

-  the development  of business  links between  economic operators, 

including.small and medium-size enterprises. 

-  the improvement of management on enterprise level; 
-  the  process  of  privatisation  in  the  context  of  economic 
restructuring, and the strengthening of the private sector; 
efforts  in both public  and private sector, to restructure and 
modernize  the  industry,  during  the  transition  period  leading 
towards  a  market  economy  and  under  conditions  ensuring 
environment protection and sustainable development; 

-  the conversion of defence industries; 

the  development  of  appropriate  market-based  commercial  rules 
and practices as well as the transfer of know-how. 

2.  Industrial  cooperation  initiatives  shall  take  into  account 
priorities  determined  by  the  community  and  by  Russia.  The 
initiatives  should  seek  in  particular  to  establish  a  suitable 
framework  for undertakings, to  improve management  know-how  and to 
promote  transparency  as  regards  markets  and  conditions  for 
undertakings. 

Article 58 

Investment promotion and protection 

1.  Bearing  in  mind  thé  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 Russia  of  agreements  for  the promotion  and  protection of 
investment; 
the  conclusion, where  appropriate, between  the  Member  States 
and Russia of agreements to avoid double taxation; 

-  to exchange information on investment opportunities in the form 
of  inter alia trade  fairs, exhibitions, trade weeks  and other 
events; 

-  to exchange information on laws, regulations and administrative 

practices in the field of. investment. 

3S 

Article 59 

public Procurement 

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

Article 60 

Standards and conformity assessment; consumer protection 

1.  Within the limits of their competence, and in accordance with their 
legislation the Parties shall take measures with a view to reducing 
the differences which  exist between the Parties  in the fields of 
metrology, standardisation and certification by encouraging the use 
of internationally agreed instruments in those fields. 

The  Parties  shall closely  cooperate  in the  above-mentioned  areas 
with the relevant European and other international organisations; 

The Parties  shall, in particular, encourage  practical  interaction 
of  their  respective  organisations, with  the  aim  of  starting  to 
negotiate mutual recognition agreements in the field of conformity 
assessment activities. 

2.  The  Parties  shall  enter  in  close  cooperation  with  a  view  to 
achieving  compatibility  between  their  systems  of  consumer 
protection. 

This cooperation  shall be aimed  in particular at 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,  the 
development  of  exchanges  between  the  consumer  interest 
representatives,  and  increasing  the  compatibility  of  consumer 
protection policies. 

it 

Article 61 

Mining and raw materials 

1.  The  Parties  shall  cooperate  with  a  view  to  fostering  the 
development  of  the  sectors  of  mining  and  raw  materials. Spécial 
attention shall be paid to cooperation in the sector of non-ferrous 
metals. 

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

exchange  of  information  on  all  matters  of  interest  to  the 
Parties  concerning  the  mining  and  raw  materials  sectors  , 
including trade matters; 
the adoption and implementation of environmental legislation; 
training. 

3.  Sucn cooperation  shall be regularly  reviewed  by  the Parties  in a 
special  committee  or  body  to  be  set  up  in  accordance  with  the 
provisions of Article 93. 

4.  This  article  is  without  prejudice  to  articles  dealing  more 
specifically with raw materials, in particular Articles 21,  65 and 
66. 

Article 62 

Science and technology 

1.  The Parties shall promote bilateral 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 on 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 63. 

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.  sucn  Cooperation  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 63 

Education and training 

1.  The Parties shall cooperate with the aim of raising the level  of 
general  education  and  professional  qualifications  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 Russia; 
-  the training of public and private sector executives and senior 

civil servants in priority areas to be determined; 

-  cooperation 

between 

universities, 

cooperation 

between 

universities and firms; 

-  mobility  for  teachers,  graduates,  young  scientists  and 

researchers, administrators and young people; 

-  promoting teaching in the field of European Studies within the 

appropriate institutions; 

-  teaching languages of the Community and of Russia; 
-  postgraduate training of conference interpreters;, 

training of journalists; 

-  exchange of methods of training and promotion of use of modern 

training programmes and technical facilities; 

-  development of distant education and new training technologies; 

training of trainers; 

3.  The participation of one Party in the respective programmes in the 
fie Id  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 could then be established building on participation of 
Russia in the Community's TEMPUS programme. 

%i 

Article 64 

Agriculture and the agro-industrial sector 

1.  cooperation  shall  aim  at  the  modernisation,  restructuring  and 
privatisation  of  agriculture  and  the  agro-industrial  sector  in 
Russia  in  conditions  which  ensure  that  the  environment  is 
respected.  This  cooperation  shall  be  through,  inter  alia, 
developing  private  farm  and  distribution  channels,  methods  of 
s to rage,  marketing  and  management,  modernising  the  rural 
infrastructure  and  improvement  of  agricultural  land-use  planning, 
improving productivity, quality and efficiency, and the transfer of 
technology  and  know-how.  The  Parties  shall  aim  at  achieving 
compatibility between their sanitary and phytosanitary standards. 

Article 65 

Energy 

1.  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. 

2.  The cooperation shall include among others the following areas: 

-  improvement of the quality and security of energy supply 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 efficiency; 

-  modernisation 

energy 
interconnection of gas supply and electricity networks; 

infrastructure, 

of 

including 

the  environmental  impact  of  energy  production  supply  and 
consumption,  in  order  to  prevent  or  to  minimise  the 
environmental damage resulting from these activities. 

-  improvement of energy technologies in supply and end use across 

the range of energy types; 

management and technical training in the energy sector. 

17) 

H 

Article 66 

Nuclear sector 

Bearing in mind the respective powers and competences of the community 
and  its  Member  states,  civil  cooperation  in  the  nuclear  sector 
shall  take  place  inter  alia  through  the  implementation  of  two 
agreements on thermonuclear fusion, and on nuclear safety to be agreed 
upon between the Parties. 

Article 67 

Space 

Without prejudice to Article 41, the  Parties  shall promote  long term 
cooperation  as  appropriate  in  the  areas  of  civil  space  research 
development  and  commercial  application.  They  shall  pay  particular 
attention to initiatives making on mutual beneficial basis full use of 
the complementarity of their respective activities. 

Article 68 

Construction 

The  Parties  shall  cooperate  in  the  field  of  construction  industry, 
particularly in the areas covered by Articles 55, 57, 60, 62, 63 and 77 
of this agreement. 

This  cooperation  shall,  inter  alia,  aim  at  modernising  and 
restructuring  the  construction  sector  in  Russia  in  line  with  the 
principles  of  a market  economy  and  duly  taking  into  account  related 
health, safety and environmental aspects. 

Article 69 

Environment 

1.  Bearing in mind the European Energy Charter and the Declaration of 
the  Lucerne  Conference  of  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; 

an 

-  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 thé Espoo Convention on Environmental impact 
Assessment in .a transboundary context. 

3.  Cooperation shall take place particularly through: 

disaster planning 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 (Community standards); 

cooperation at regional level (including cooperation within the 
framework of the European Environment Agency established by the 
Community 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; 

Article 70 

Transport 

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

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

The cooperation shall include, inter alia: 

the  modernizing  of  management  and  operations  of  road  transport, 
raiLways, ports and airports; 

M 

modernization  and  development of railways, waterways, road, port, 
airport  and  air  navigation  infrastructure  including  the 
modernization  of  major  routes  of  common  interest  and  the 
transeuropean links for the above modes; 
promotion and development of multimodal transport; 
the promotion jointly of R and D programmes; 
preparation  of  the  legislative  and  institutional  framework  for 
policy  development  and  implementation  including  privatisation  of 
the transport sector. 

Article 71 

Postal services and Telecommunications 

The Parties  shall expand  and  strengthen  cooperation  in this area 
with the aim of gradual integration at the technical level of their 
respective  telecommunications  and  postal  networks.  To  this  end 
they shall initiate notably the following actions: 

exchange information on telecommunications and postal services 
and TV and broadcasting policies 
exchange technical and other information, conduct training and 
advisory operations 
carry out transfer of technology and know-how 
have the appropriate bodies from both sides elaborate and carry 
out joint projects 
promote new communication facilities first of all for the needs 
of commercial and public institutions 

-  promote European technical  standards, systems of certification 

and regulatory approaches 

-  cooperate  in  securing  the  communication  in  critical 
circumstances, consult each other on elaboration of guidelines 
for operator cooperation in conditions of catastrophes etc. 

These activities shall focus, inter alia, on the following priority 
areas : 

development 
integrated 
telecommunications  sector in Russia in the framework of market 
reforms and creation of an appropriate regulatory basis; 

modernisation 

and 

of 

an 

-  modernization  of  Russia's  telecommunications  network  and  its 
integration  at  the  technical  level  into  European  and  world 
networks ; 

-  cooperation  in development  of  systems  of  information exchange 
and  data  transmission  between  organizations  of  the  Community 
and Russia; 

-  integration  at  the  technical  level  of  transeuropean 

telecommunications networks; 
modernization  of  Russia's  postal  and  broadcasting  services, 
including legal and regulatory aspects; 

Lti 

-  the  management  of  telecommunications,  postal,  TV  and 
broadcasting  services in the changing economic environments of 
both parties, including inter alia,  organizational structures, 
strategy and planning, tariff policy, purchasing principles. 

Article 72 

Financial Services 

The Parties shall cooperate with the aim of establishing and developing 
a  suitable  framework  for  the  banking,  insurance  and  other  financial 
services sector in Russia adapted to the needs of market economy. 

The cooperation shall focus on: 

-  developing  accounting  standards which are  suitable  for a free 
market  economy  and  which  are  compatible  with  the  standards 
adopted by EC Member States; 

restructuring of the banking, insurance and financial system; 

-  improvement  of  monitoring  and  regulation  of  the  banking, 

insurance and financial services sector; 

-  developing compatible auditing systems; 

-  exchange  of  information  on  the  respective  laws  in  force  or 

under preparation; 

-  modern infrastructure of commercial and private banks. 

Article 73 

Regional development 

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

They shall encourage exchange of information by national, regional and 
local  ciuthorities  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 encourage direct contacts between the respective regions and 
public organisations responsible for regional development planning with 
the  aim,  inter  alia,  to  exchange  methods  and  forms  of  regional 
development fostering. 

(8) 

43 

Article 74 

'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 Russia. 

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

The  cooperation  shall  also  include  technical  assistance  to  the 
development  of  social  insurance  institutions  with  the  aim  of 
promoting  gradual  transition  te-  a  system  consisting  of  a 
combination  of  contributory  and  social  assistance  forms  of 
protection,  as  well  as  respective  non-governmental  organisations 
providing social services. 

44 

Article 75 

Tourism 

Thé 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. 

Article 76 

small and medium-sized enterprises 
1.  The Parties shall aim to develop and strengthen small and medium-

sized  enterprises  (SMEs) and  promote cooperation  between  SMEs  of 
the Community and Russia. 

2.  The Parties shall encourage the exchange of information  and know-

how, inter alia, in areas such as: 

-  legal,  administrative,  technical,  tax,  financial  and  other 
conditions  necessary  for setting up and expansion of  SMEs and 
for cross-border cooperation; 

-  the  provision  of  the  specialized  services  required  by  SMEs, 
like  management  and  marketing  training,  accounting,  quality 
control  and  creation  and  strengthening  of  agencies  providing 
such services; 

-  establishment  of  continuous  and  stable  links  between  the 
Community and Russian operators in order to improve the flow of 
information  to  SMEs  and  promoting  cross-border  cooperation, 
inter  alia,  through  access  to  and  operation  of  Business 
cooperation Network, Euro-lnfo-Correspondence Centres  provided 
the necessary conditions are met for any of these networks. 

The  Parties  shall  closely  cooperate with  a  view  to  ensuring 
that  the  necessary  conditions  for access to the  networks  are 
met. 

kÇ 

Article 77<3> 

Communication, Informatics  and Information Infrastructure 

1.  The  Parties  shall  support  the  development  of  modern  methods  of 
information  handling,  including  the  media.  They  shall  take 
appropriate  steps  to  stimulate  the  effective  mutual  exchange  of 
information.  Priority  shall  be  given  to  programmes  aimed  at 
providing  the  general  public  with  basic  information  about  the 
community  and  professional,  inter  alia,  business  circles  with 
specialised information. 

2.  The  Parties  shall  make  the  necessary  efforts  to  expand  and 
.strengthen  cooperation  in  order  to  establish  the  appropriate 
information  infrastructure.  To  this  end  they  shall  initiate 
notably the following actions : 

the exchange  of  information  on  policies  for  the  establishment  of 
information infrastructures including regulatory policies; 
exploration  of the possibility  for  joint projects on research and 
development  in information  and communication  technologies, and on 
the establishment  of an information  infrastructure  adapted  to the 
needs  of  a  market  economy,  taking  into  account  the  conversion 
potential  of  Russian  enterprises  and  Russian  interests  for 
informatization  and  allowing  for mter-operability  with  Community 
information infrastructures; 

-  development  of  joint  programmes  concerning  the  training  of 

specialists in information technologies and information services; 
promotion of European technical standards, systems of certification 
and regulatory approaches. 

Article 78 

Customs 

1.  The  aim  of  cooperation  shall  be  to  achieve  compatibility  of  the 

customs systems of the Parties. 

2.  Cooperation shall include the following in particular: 

the exchange of information; 

-  the improvement of working methods; 
-  harmonisation  and  simplification  of  customs  procedures 

regarding the goods traded between the Parties; 

(3) Russia will translate  'informatics and information 
infrastructures' by  'informatsia i informatizatsia' 

c, c 

the  interconnection  between  the  transit  systems  of  the 
Community and Russia; 

-  the  support  in  the  introduction  and  management  of  modern 
customs  information  systems, including  computer  based  systems 
on the customs check points; 

-  mutual assistance and joint actions with respect to "dual-use" 

goods and goods subject to non-tarif limitations; 

-  the organization of seminars and training periods. 

Technical assistance shall be provided where necessary. 

3.  Without prejudice to further cooperation foreseen in this agreement 
and in particular Articles 82 and 84, the mutual assistance between 
administrative  authorities  in customs matters of the Parties shall 
take place in accordance with the provisions of Protocol No. 2. 

Article 79 

Statistical cooperation 

1.  The  cooperation  shall  aim  at  further  development  of  efficient 
statistical  systems,  informational  and  programme-technological 
compatibility  of  statistical data, to provide, in time, reliable 
statistics needed  to support and monitor the economic  cooperation 
between the Parties, the process of economic reforms in Russia, and 
to contribute to the development of private enterprises in Russia. 

2.  The Parties shall cooperate in particular: 

to enhance  the development of an efficient  statistical  system 
in  Russia,  in  particular  to  elaborate  an  appropriate 
institutional framework; 

to improve the standards of training and the professional level 
of the statistical personnel; 

to  bring  about  harmonization  with  international, " and  in 
particular, Community methods, standards and classifications; 

-  to  provide  private  and  public  sector  economic  operators  with 

the appropriate macro- and microeconomic data; 

to guarantee the confidentiality of data; 

exchange  statistical  information  and  to  this  end  to  build  up 
and/or to make appropriate use of databases. 

k> 

Article 80 

Economics 

1.  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  policy  in  market 
economies. 

The Parties shall: 

-  exchange information on macroeconomic performance and prospects 

and on development strategies; 

-  analyse  economic  issues  of  mutual  interest,  including  the 
framing of economic policies and implementation instruments; 

encourage  extensive  cooperation  among  economists  and  senior 
officials in order to expedite the transfer of information and 
know-how for the drafting of economic policies and provide for 
wide dissemination of the results of policy-relevant research. 

Article 31 

Money laundering 

1.  The  Parties  agree  on  the  necessity  of  making  every  effort  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. 

2.  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). 

^2 

Article 82 

Drugs 

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  in 
the  various  drug-related  fields  and  shall,  inter  alia,  provide  for 
exchange of training programmes and include, where available, technical 
assistance from the community. 

Article 83 

Cooperation in the field of 
regulation of capital movements and payments in Russia 

Without prejudice to Article 52, the Parties, recognizing the necessity 
of  a  stable  functioning  and  development  of  the  Russian  domestic 
currency  market  shall  cooperate  in  the  field  of  creation  of  an 
effective  system  of  regulation  of  capital movements  and  payments  in 
Russia. 

Bearing in mind the experience, competence and respective possibilities 
of  the  Member  States  and  the  Community,  cooperation  in  this  field 
supported by technical assistance from the Community shall cover inter 
alia: 

establishing  links  between  competent  authorities  of  the 
Community and its Member States and of Russia; 
exchanging information on a regular basis; 
helping in the development of appropriate regulations. 

In  ord€!r  to  permit  an  optimal  use  of  the  resources  available  the 
Parties shall ensure close coordination with the measures undertaken by 
other countries and international organizations. 

tf 

TITLE VIII: COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES 

Article 84 

The  Parties  shall  establish  cooperation  aimed  at  preventing  illegal 
activities such as: 

-  illegal  immigration  and  illegal  presence  of  physical  persons  of 
their  nationality  on  their  respective  territories,  taking  into 
account the principle and practice of readmission; 
illegal  activities  in  the  sphere  of  economics,  including 
corruption; 

-  illegal transactions of various goods, including industrial waste; 
-  counterfeiting; 
-  the illicit traffic of narcotic drugs and psychotropic substances. 

The  cooperation  in  the  abovementioned  areas  will  be  based  on  mutual 
consultations  and  close  interactions  and  will  provide  technical  and 
administrative assistance including: 

-  drafting  of  national  legislation  in  the  sphere  of  preventing 

illegal activities; 

-  creation of information centres; 
-  increasing  the  efficiency  of  institutions  engaged  in  preventing 

illegal activities; 

-  training of personnel and development of research infrastructures; 
elaboration  of  mutually  acceptable  measures  impeding  illegal 
activities. 

Ç  V 

TITLE IX: CULTURAL COOPERATION 

Article 35 

1.  The parties undertake to promote cultural cooperation with the aim 
of  reinforcing  the  existing  links  between  their  peoples  and  to 
encourage  the mutual  knowledge  of  their  respective  languages  and 
cultures while respecting creative freedom and reciprocal access to 
cultural values. 

2.  Cooperation shall cover in particular the following areas: 

-  exchange  of  information  and  experience  in  the  field  of 
and  sites 

and  protection  of  monuments 

conservation 
(architectural heritage); 

cultural  exchanges  between  institutions,  artists  and  other 
persons working in the area of culture; 

translation of literary works. 

3.  The  Cooperation  council  may  make  recommendations  for  the 

implementation of this article. 

* 

( 

TITLE X: FINANCIAL COOPERATION 

Article 36 

In order  to  achieve  the  objectives  of  this Agreement,  in  particular 
Titles VT and VII thereof, and in accordance with Articles  87, 88 and 
89 Russia  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 Russia. 

Article 87 

This financial assistance shall be covered within the framework of the 
TACIS  programme  foreseen  in  the  Community's  relevant  Council 
Regulation. 

Article 88 

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 
Russia'3  needs,  sectoral  absorption  capacities  and  progress  with 
reform. The Parties shall inform the Cooperation Council thereof. 

Article 39 

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. 

ÇV 

TITLE XI : INSTITUTIONAL, GENERAL AND FINAL PROVISIONS 

Article 90 

A  Cooperation  Council  is  hereby  established  which  shall  monitor  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 representatives within the Cooperation Council of the  two 
Parties. 

Article 91 

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 the Russian Federation, 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 the Russian Federation 

Article '?2 

1.  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 
representatives of the Commission  of  the  European Communities on 
the  one  hand  and  of  representatives  of  the  Government  of  the 
Russian Federation on the other, normally  at senior civil servant 
level. The office  of President of the Cooperation Committee shall 
be  held alternately  by a representative of the Community, and by a 
representative of the Government of the Russian Federation. 

In  its rules of procedure the Cooperation Council shall determine 
the  duties  of  the  Cooperation  Committee, which  shall  include  the 
preparation  of  meetings  of  the  Cooperation  Council  and  such 
duties as are provided for in Articles  16, 17 and 53 and in annex 
2,  and how the Committee  shall  function. 

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

53 

Article 93 

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

Article 94 

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 GATT. 

Article 95 

A Parliamentary cooperation committee is hereby established.  It shall 
meet at intervals which it shall itself determine. 

Article 96 

1.  The Parliamentary Cooperation Committee shall consist of members of 
the  European  Parliament, on  the one  hand,  and  of  members  of  the 
Federal Assembly of the Russian Federation, on the other. 

2.  The Parliamentary  Cooperation  Committee  shall establish  its rules 

of procedure. 

3.  The Parliamentary  Cooperation Committee shall be presided  in turn 
by a member of the European Parliament and a member of the Federal 
Assembly of the Russian Federation respectively, in accordance with 
the provisions to be laid down in its rules of procedure. 

Article 97 

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

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

The Parliamentary Cooperation Committee may make recommendations to the 
cooperation Council. 

^a 

Article 98 

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  their  property  rights, 
including those concerning  intellectual, industrial and commercial 
property. 

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

-  shall encourage the adoption of arbitration for the settlement of 
disputes  arising  out  of  commercial  and  cooperation  transactions 
concluded  by  economic  operators 
of  the  Community  and  those  of 
Russia; 

-  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 10 June 1958. 

Article 99 

Nothing  in  this  Agreement  shall  prevent  a  Party  from  taking  any 
measures 

1.  which  it considers  necessary  for  the protection  of  its  essential 

security interests: 

(a) to  prevent  the  disclosure  of  information  contrary  to  its 

essential security interests; 

(b) which  relate  to  fissionable  materials  or  the  materials  from 

which they are derived; 

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

(d) 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  ha6  accepted  for  the  purpose  of 
maintaining peace and international security; or 

2.  which  it  considers  necessary  to  respect  its  international 
obligations  and  commitments  or  autonomous measures  taken  in  line 
with  such  generally  accepted  international  obligations  and 
commitments  in  the  control  of  dual-use  industrial  goods  and 
technology. 

Article 100 

1.  In  the  fields covered by this Agreement and without prejudice to 

any special provisions contained therein: 

the arrangements applied by Russia 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 Russia 
shall  not  give  rise  to  any  discrimination  between  Russian 
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^ in 
particular as regards their place cf residence. 

Article 101 

1.  Eacn 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  a  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 conciliators' recommendations  shall be taken by majority vote. 
Suci recommendations shall not be binding upon the Parties. 

4.  The  Cooperation  Council  may  establish  rules  of  procedure  for 

disoute settlement. 

^ 

Article 102 

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  Bhall 
prejudice to Articles 17, 18, 101 and 107. 

In  no  way  affect 

and  are without 

Article 103 

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

Article 104 

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

Article 105 

Insofar as matters covered by this Agreement are covered by the 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 application is provided for therein. 

Article 106 

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

Article 107 

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

2.  If either Party considers that the other Party has failed to fulfil 
an  obligation  under  the  Agreement,  it  may  take  appropriate 
measures.  Before so doing, 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 
see<ing a solution acceptable to the Parties. 

In  the  selection  of  these  measures,  priority  shall  be  given  to 
those which least disturb thé functioning of the Agreement.  These 
measures  shall  be notified  immediately  to the Cooperation  Council 
if the other Party so requests. 

*? 

Annexes 1, 2, 3, 4, 5, 6, 7, 8, 9 and  10 together with Protocols 1 and 
2 shall form an integral part of this Agreement. 

Article 108 

Article 109 

This  Agreement  shall not, until equivalent(4) rights  for  individuals 
and  economic  operators  have  been  achieved  hereunder,  affect  rights 
assured to them through agreements binding one or more Member states on 
the one  hand and Russia  on the  other  except  in  areas  falling  within 
community competence and without prejudice to the obligations of Member 
states  resulting  from  this  Agreement  in  areas  falling  within, their 
competence. 

Article 110 

This  Agreement  shall  apply,  on  the  one  hand,  to  the  territories  in 
which  the  treaties  establishing  the  European  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 Russia. 

Article 111 

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

Article 112 

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

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

Upon  its  entry  into  force,  and  as  far  as  relations  between  the 
Community  and  Russia  are  concerned,  this  Agreement  shall  replace, 
without prejudice to Article 22, paragraphs  1, 3 and 5, the Agreement 
between  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. 

(4) "Equivalent" will be translated into Russian as 

"Sootvetstvujuschie". 

a 

List of Annexes 

Annex 1 

indicative  list  of  advantages  granted  by  Russia  to  the 
countries  of  the  former  USSR  in  areas  covered  by  the 
present Agreement (as of January  1994). 

Annex 2 

Derogations from Article 15 (quantitative restrictions). 

Annex 3 

Community  reservations  in  accordance  with  Article  28 
paragraph 2. 

Annex 4 

Russian  reservations  in  accordance  with  Article  28, 
paragraph 3. 

Annex 5 

cross-border supply of services. 
List of  services  for which  the  Parties  shall  grant  most 
favoured-nation treatment. 

Annex 6 

Definitions in relation to financial services. 

Annex 7 

Financial services. 

Annex 8 

Provisions in relation to Articles 34 and 38 

Annex 9 

Transitional  period  for provisions  on competition  and for 
the introduction of quantitative restrictions. 

Annex 10 

Protection  of  Intellectual,  Industrial  and  Commercial 
Property  (Article 54) 

Protocols 

ProtocoL 1  on the establishment of a coal and steel contact group 
Protocol. 2  on  mutual  administrative  assistance  for  the  correct 

application of customs legislation 

7-Ï 

Annex 1 

indicative list of advantages granted by Russia to 
the countries of the former USSR  in areas covered by the Present 
Agreement 
(As of January 1994) 

Advantages  are  granted  bilaterally  by  respective  agreements  or  by 
established practice.  They provide for, inter alia: 

1.  Import/Export Taxation 

No import duties are applied. 
No export duties are applied with respect to goods delivered under 
annual  bilateral  interstate  trade  and  cooperation  arrangements 
within the nomenclature and volumes, stipulated therein, considered 
as  "exportation  for  federal  state  needs"  as  defined  by 
corresponding Russian law. 
No 7AT is applied on import. 
No excise are applied on import. 

2.  Allocation of quotas and licensing procedures 

Export  quotas  for  deliveries  of  Russian  products  under  annual 
bilateral interstate trade and cooperation agreements are opened in 
the same way as for "deliveries for state needs". 

3.  Special conditions  for  all kind  of activities  in banking  and the 
financial  sector  (including  establishment, operation) movement of 
capital and current payments, access to securities, etc. 

4.  Price  system  regarding  Russian  export  of  some  kinds  of  raw 
materials and semifinished products  (coal, crude oil, natural gas, 
ref ined oil products) 

Prices are determined  on the basis  of correspondent  average world 
price  converted  in  roubles  or  respective  national  currency  at  a 
rate  quoted  by  the  Central  Bank  of  Russia  as of  15th  date  of  a 
month previous to the month of exportation. 

5.  Conditions of transportation and transit 

As regards CIS countries parties to the multilateral agreement "on 
the  principles  and  conditions  of  relations  in  the  field  of 
transport"  and/or  on  the  basis  of  bilateral  arrangements  on 
transportation  and  transit,  no  taxes  or  fees  are  applied  on  a 
reciprocal  basis  for  the  transportation  and  customs  clearing  of 
goods (including goods in transit) and transit of vehicles. 

6.  Communications 

services, 

including 

postal, 

courier, 

telecommunications, audiovisual and other services. 

7.  Access to information systems and data bases. 

é  ° 

Annex 2 

Derogations from Article 15 (Quantitative Restrictions) 

1.  Exceptional measures which derogate from the  provisions of Article 
15 may be taken by Russia in the form of quantitative restrictions 
on  a non-discriminatory basis as provided  for  in article  XIII of 
the  GATT. Such measures  can only  be  taken  after  the  end  of  the 
first calendar year following signature of  the Agreement. 

2.  These measures may only be taken in the circumstances mentioned in 

Annex 9. 

3.  The  total  value  of  imports  of  goods which  are  subject  to  these 
measures may not exceed the following proportions of total imports 
of goods originating in the Community: 

10%  during  the  second  and  third  calendar  years  following 
signature of the Agreement; 

-  5%  during  the  fourth  and  fifth  calendar  years  following 

-signature of the Agreement; 

-  3% afterwards, until Russia's accession to the GATT/WTO. 

The abovementioned  proportions will be determined  by reference to 
the  value  of  imports  by  Russia  of  goods  originating  in  the 
Community  during  the  last  year  prior  to  the  introduction  of 
quantitative restrictions for which statistics are available. 

These  provisions  shall  not  be  circumvented  by  increased  tariff 
protection on the imported goods concerned. 

4.  These measures shall not be applied after Russia's accession to the 
GATT/WTO  unless  otherwise  provided  for  in  Russia's  accession 
protocol to the GATT/WTO. 

5.  Russia  shall  inform  the Cooperation  Committee  of  any measures  it 
intends  to  take  under  the  terms  of  the  present  Annex,  and 
consultations  shall  be  held  in  the  Cooperation  Committee  if  so 
requested by the Community on such measures before they are taken, 
and on the sectors to which they apply . 

Ç f 

Community reservations in accordance with article 28 paragraph 2 

Annex 3 

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  is  subject  to 
limitations. 

Audiovisual services including radio 

NationaL  treatment  concerning  production  and  distribution,  including 
broadcasting  and  other  forms  of  transmission  to  the  public,  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 Members states. Under 
certain conditions those persons may create companies. 

Agriculture 

In  some Member  States  national  treatment  is not  applicable  to non-EC 
control Led  companies  which  wish  to  undertake  an  agricultural 
enterprise.  The  acquisition  of  vineyards  by  non-EC  controlled 
companies is subject to notification, cr, as necessary, authorisation. 

News agency services 

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

G 

Annex 4 

Russian reservations in accordance with Article 28, Paragraph 3 

Use of subsoil and natural resources including mining 
1.  A  concession may be required  for mining  some ores  and metals  for 

non-Russian controlled companies. 

2.  Some special auctions for the use of subsoil and natural resources 
for  small  enterprises  or  defence  enterprises  undergoing  military 
conversion may be closed to non-Russian controlled companies. 

Fishing 

Authorisation  from  the  respective  governmental  body  is  necessary 
for fishing. 

Real estate (immovable property) purchase and brokerage 
(a) Non-Russian controlled  companies  are not allowed  to acquire plots 
of  land. Those companies, however, can lease plots of  land  for a 
period of no more than 49 years. 

(b) As an exception to paragraph  (a), non-Russian controlled companies 
can  acquire  plots  of  land  in the  cases  when  such  companies  are 
recognised  as  buyers  in  accordance  with  the  Law  of  the  Russian 
Federation on the privatisation of state and municipal enterprises 
in  the  Russian  Federation  and  other  respective  legislation  and 
regulations,  including  the  requirements  of  programs  of 
privatisation: 

within  the  framework  of  the  privatisation  of  state  and 
municipal  enterprises  in  the  form  of  commercial  investment 
tender and auction; 
within  the  framework  of  the  expansion  and  additional 
construction  of  enterprises  in  the  form  of  commercial 
investment tender and auction; 

' 

Telecommunications 
Telecommunication  services  including  mobile  and  satellite  services, 
construction, installation, operation and maintenance of communication 
devices is restricted. 

Mass media services 
Some limitations of foreign participation in mass media companies. 

Profess ional activities 
Some activities closed, limited or subject to special requirements for 
natural persons who are non-Russian nationals. 

Lease of Federal property 
The  lease of federal property whose value exceeds  100 million  roubles 
to non-Russian controlled companies is effected with the permission of 
the state authority empowered to manage such property.  This maximum is 
to be raised and will be expressed in hard currency. 

£  * 

Annex 5 

Cross-border supply of services 
List of services for which the Parties shall grant MFN treatment 

(a) Sectors to be covered, according to the provisional central Product 

Classification  (CPC) of the United Nations organisation: 

consultancy  services  relating  to  accounting  review  services: part  of 
CPC 86212 other than "auditing services" 
consultancy services relating to bookkeeping services CPC 86220 
Engineering services CPC 8672 
Integrated engineering services CPC 8673 
Advisory and Pre-design architectural services CPC 86711 
Architectural design services CPC 86712 
Urban planning and landscape architectural services CPC 8674 
Computer and related services: 
Consultancy  services related to the installation  of computer hardware 
CPC 841 
Software implementation services CPC 842 
Data base services CPC 844 
Advertising CPC 871 
Market research and opinion polling CPC 864 
Management consulting services CPC 866 
Technical testing and Analysis services CPC 8676 
Advisory and consulting  services relating to agriculture, hunting and 
forestry 
Advisory and consulting services relating to Fishing 
Advisor;/ and consulting services relating to mining 
Printing and publishing CPC 88442 
Convention services 
Translation services CPC 87905 
Interior design services CPC 87907 
Telecommunications : 
Value  added  services 'including  (but not  limited  to) Electronic  Mail, 
Voice  Mail,  On-line  information  and  Data  base  retrieval,  Data 
processing, EDI, Code and Protocol conversion 
Packet and Circuit switched data services 
Construction and related engineering services: site investigation work 
CPC 5111 
Franchising CPC 8929 
Adult education services by correspondence part of CPC 924 
News and press agency services CPC 962 
Rental/Leasing  services  without  operators  related  to  other  transport 
equipment  (CPC  83101  private  cars,  83102  goods  transport  vehicles, 
83105) and relating to other machinery and Equipment  (CPC 83106, 83107, 
83108, 33109) 
Commission  agents  services  and  Wholesale  trade  services  related  to 
import-export trade (part of CPC 621 and 622) 
Research and development in software 
Reinsurance and retrocession  and the services  auxiliary to insurance, 
such  as  consultancy,  actuarial, risk  assessment  and  claim  settlement 
service 3 

\ 

fy 

Insurance of risks relating to: 

(i) maritime  shipping  and commercial  aviation  and  space  launching 
and  freight  (including  satellites),  with  such  insurance  to 
cover  any or all of the following  : persons being transported, 
the goods being exported from or imported to, the same vehicle 
transporting the goods and any liability arising there from; 

goods in international transit; and 

(ii) 
(iii)  accident and health insurance;and personal motor  liability 
insurance in the case of the cross-border movement. 

(b) Data processing services CPC 843 

Provision and transfer of financial information and financial data 
processing  (see paras. B.11 and B.12 of Annex 6): 

For the services listed under (b) MFN subject to Article 38 will be 
applied, without paragraph A of Annex 8. 

G  S 

Annex 6 

Definitions  in relation to Financial Services 

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

A.  All insurance  and insurance-related  services. 

1.  Direct insurance  (including  co-insurance), 
(i) life 
(ii) non-life 
2.  Reinsurance and retrocession. 
3.  Insurance  intermediation,  such as brokerage  and  agency. 
4.  Services  auxiliary  to  insurance,  such  as  consultancy, 

actuarial, risk assessment and claim settlement services. 

B.  Ban<ing 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) money  market  instruments 

(including  cheques,  bills, 

certificates of deposits, etc.) 

(b) foreign  exchange 
(c) derivative  products  including, but  not  limited  to,  futures 

and options 

(d) exchange  rates  and  interest  rate  instruments,  including 

products  such as swaps, forward rate agreements, etc. 

(e) transferable  securities 
(f) other  negotiable 
including  bullion. 

instruments 

and  financial  assets, 

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. 

£  É 

10. Settlement  and  clearing  services  for financial  assets,  including 

securities, derivative.products, and other negotiable instruments. 

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 
pub Lie entities. 

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

0-

Annex 7 

Financial Services 

In respect of banking services referred to in Annex 6, part B, the 
most favoured nation treatment granted under Article 28, paragraph 
1, with  regard  to establishment  by means  of  the  setting  up  of a 
subsidiary only  (excluding therefore establishment by means of the 
setting up of a branch), and the national treatment  granted under 
Article  28,  paragraph  3,  by  Russia  means  treatment  no  less 
favorable than the treatment granted by Russia to its own companies 
with the following exceptions : 

1.  Russia reserves the right 

a.  to continue to apply to Russian  subsidiaries  and  branches 
of  Community  companies  the  ceiling  limiting  the  overall 
share  of  foreign  capital  in  the  Russian  banking  system 
which  is  in  operation  on  the  date  of  signature  of  the 
Agreement; 

b.  to apply  to Russian subsidiaries of Community  companies a 
minimum capital requirement higher than that applied to its 
own  companies  provided  that  this  minimum  capital 
requirement is not raised as compared with the one in force 
on the date of signature of the Agreement before  national 
treatment  is  applied  in  respect  of  the  minimum  capital 
requirement; 

c.  to restrict the number of branches of Russian subsidiaries 

of Community companies; 

d.  to  set  a  minimum  level  not  higher  than  55.000  ECU  for 
balances on accounts of each physical person with  Russian 
subsidiaries of Community companies; 

e.  to  prohibit  Russian  subsidiaries  of  community  companies 
from carrying out transactions with shares and instruments 
convertible into shares of Russian joint stock companies; 

f.  to  prohibit  Russian  subsidiaries  of  Community  companies 
from carrying out transactions with Russian residents; 

2.  The  exceptions  in  paragraph  1  may  only  apply  under  the 

following conditions 

(i)  provided  that  they  are  applied  to  subsidiaries  of 

companies of every country, and 

(ii)  for  the  exceptions  mentioned 

in  paragraph 

1, 

subparagraphs c, d and e, 

(a)  until the expiry of .-five years from signature of the 
Agreement at the latest for the exceptions mentioned 
in  subparagraphs  c  and  d  and  three  years  for  the 
exception mentioned in subparagraph e, and 

68 

(b)  where  the  proportion  of  the  share  capital  of  the 
Russian  subsidiary  of the Community  company  held by 
Russian nationals or companies does not exceed fifty 
percent  (50%), and 

(c)  to  Russian  subsidiaries  of  community  companies 
established  after  the  entry  into  force  of  these 
exceptions; 

(iii) for the exception mentioned in paragraph 1, sub paragraph 
f,  until  1st  January  1996  and  only  to  Russian 
subsidiaries  of  Community  companies  established  after 
15th  November  1993  or  which  have  not  commenced  their 
operations  with  Russian  residents  before  15th  November 
1993. 

3.  a.  After the expiry of five years from the date of  signature 

of the Agreement, Russia will consider the possibility of: 

(i)  increasing the ceiling limiting the overall share of 
foreign  capital  in the Russian  banking  system which 
is in operation on the date of the signature of this 
Agreement,  mentioned  in  subparagraph  a  of  Paragraph 
1,  taking  into  consideration  all  the  relevant 
monetary,  fiscal,  financial  and  balance  of  payments 
considerations and the state of the banking system of 
Russia; 

(ii)  reducing  the  minimum  capital  requirement,  mentioned 
in  subparagraph  b  of  Paragraph  1,  taking  into 
consideration  all  the  relevant  monetary,  fiscal, 
financial and balance of payments considerations and 
the state of the banking system of Russia. 

b.  After the expiry of three years from the signature of this 
Agreement,  Russia  will  consider  the  softening  of 
restrictions  mentioned  in  subparagraphs  c  and  d  of 
Paragraph  1,  taking  into  consideration  all  the  relevant 
monetary,  fiscal,  financial  and  balance  of  payments 
considerations  and  the  state  of  the  banking  system  of 
Russia. 

B.  In respect  of  insurance  services referred  to  in Annex  6,  part A, 
paragraphs 1 and 2 the most favoured nation treatment granted under 
Article  28, paragraph  1 with  regard  to  establishment  by means of 
the  setting  up  of  a  subsidiary  only  authorised  for  the  insurance 
operations is set out in the legislation and regulations applicable 
in  Russia  on  the  day  of  establishment  taking  into  account  the 
fol Lowing conditions: 

69 

1.  Upon the expiry of five years from signature of the Agreement 
at  the  latest,  Russia  shall  abolish  the  maximum  foreign 
shareholding limit of 49 percent in company capital. 

2.  During the transitional period of 5 years the abolition of the 
maximum foreign shareholding limit does not prevent Russia from 
introducing measures  for granting licences to EC companies in 
some classes of insurance. These measures could be taken only 
in  the  field  of  compulsory  insurance  schemes  in  the  social 
security,  or  for  public  procurement,  or  for  the  reasons 
described in Article 29, paragraph 2, and shall not nullify or 
substantially  impair  the  effects  of  the  abolition  of  the 
maximum foreign shareholding limit of 49%. 

7,n 

Annex 8 

Provisions in relation to articles 34 and 38 

Part A 

The  consultations  shall  begin  within  thirty  days  of  the  request 
therefor  by  the  first  Party.  They  shall  be  held  with  a  view  to 
reaching agreement either on: 

withdrawal  by  the  other  Party  of  the  measures  which  have 
resulted in the significantly more restrictive situation;  or 

-  adjustments of the obligations of both Parties;  or 

-  adjustments to be made by the first Party to compensate for the 

more restrictive situation created by the other Party. 

If  agreement  is  not  reached  within  sixty  days  of  the  request  for 
consultations  made  by  the  first  Party,  such  first  Party  may  make 
appropriate  compensatory  adjustments  to  its  obligations.  Such 
adjustments  shall  be  made  to  the  extent  and  for  such  time  as  is 
necessary  to  take  account  of  the  significantly  more  restrictive 
situation created by the other Party.  Priority must be given to those 
measures  which  least  disturb  the  functioning  of  the  Agreement.  The 
rights  which  economic  operators  have  acquired  under the Agreement  at 
the time  such adjustments  are made  shall nor be affected  by the said 
adjustments. 

Part B 

1.  Acting in the spirit of partnership and cooperation the Government 
of Russia shall inform the Community, during a transitional period 
of  three  years  following  the  signature  of  the Agreement, of  its 
intentions to submit new legislation or adopt new regulations which 
may  render  the  conditions  for  the  establishment  or  operation  of 
Russian  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 
Russia to communicate the drafts of such legislation or regulations 
and to enter into consultations about those drafts. 

2.  Where  new  legislation  or  regulations  introduced  in  Russia  within 
the  transitional  period  mentioned  in paragraph  1 would  result  in 
rendering the conditions  for operation of Russian subsidiaries and 
branches of Community companies more restrictive than the situation 
existing on the day of signature of the Agreement, such respective 
legislation  or  regulations  shall  not  apply  to those  subsidiaries 
and  branches  already  established  in Russia  at the  time  of  entry 
into  force  of  the  relevant  act, until the  expiry  of  a  period  of 
three years from such entry into force. 

71 

Annex 9 

Transitional period for provisions on competition and for 
the introduction of quantitative restrictions 

The circumstances mentioned  in Article 53, paragraph 2.3  and in Annex 
2,  paragraph  2  are  understood  in  respect  of  sectors  of  the  Russian 
economy which: 

-  are undergoing restructuring, or 
-  are  facing  serious  difficulties,  particularly  where  these  entail 

serious social problems in Russia, or 

-  face  the  elimination  or  a  drastic  reduction  of  the  total market 
share held by Russian companies or nationals  in a given sector or 
industry in Russia, or 

-  are newly emerging industries in Russia. 

n 

Annex 10 

Protection of Intellectual, industrial and commercial Property 
(Article 54) 

1.  Russia  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. 

2.  By  the  end  of  the  fifth  year  following  entry  into  force  of  the 
Agreement, Russia  shall accede to the multilateral  conventions on 
intellectual,  industrial  and  commercial  property  rights  to which 
Memoer States are parties or which are de facto applied by Member 
States,  according  to  the  relevant  provisions  contained  in  these 
conventions : 

-  Berne  Convention  for  the  Protection  of  Literary  and  Artistic 

Works (Paris Act, 1971); 
International  Convention  for  the  Protection  of  Performers, 
Producers  of  Phonograms  and Broadcasting  organizations  (Rome, 
1961); 

-  International Convention for the Protection of New Varieties of 

Plants (UPOV) (Geneva Act, 1991). 

3.  The  Cooperation  Council  may  recommend  that  paragraph  2  of  this 

Annex shall apply to other multilateral conventions. 

4.  From the entry  into force of this Agreement Russia 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. 

5.  The provisions of paragraph 4 shall not apply to advantages granted 
by Russia to any third country on an effective reciprocal basis and 
to  advantages granted  by Russia  to another  country  of  the former 
.USS*. 

"71 

PROTOCOL 1 

ON THE ESTABLISHMENT OF A COAL AND STEEL CONTACT 
GROUP 

1.  A contact Group is established between the Parties.  The Group is 

composed of representatives of the Community and of Russia. 

2.  The  Contact  Group  exchanges  information  on  the  situation  of  the 
coal and steel industries in both territories and on trade between 
them, particularly with the purpose of identifying such problems as 
might arise. 

3.  The Contact Group also examines the situation of the coal and steel 
industries at world level, including developments in international 
trade. 

4.  The Contact Group exchanges all useful information on the structure 
of  the  industries  concerned,  the  development  of  their  production 
capacities,  the  science  and  research  progress  in  the  relevant 
fields, and the evolution of employment.  The Group also examines 
polLution and environmental problems. 

5.  The Contact Group also examines the progress made in the framework 
of technical assistance  between the Parties, including  assistance 
to financial, commercial and technical management. 

6.  The  Contact  Group  exchanges  all  relevant  information  as  to 
attitudes taken, or to be taken, in the appropriate  international 
organisations or fora. 

7.  As  and  when  both  parties  agree  that  the  presence  and/or 
participation of representatives of the industries is appropriate, 
the Contact Group is enlarged to include them. 

8.  The  contact  Group  meets  twice  a  year,  alternately  on  the 

territories of each party. 

9.  The  chairmanship  of  the  Contact  Group  is  held  alternately  by  a 
representative  of  the  Government  of  the Russian  Federation  and a 
representative of the Commission of the European Communities. 

74 

PROTOCOL 2 

ON MUTUAL ADMINISTRATIVE  ASSISTANCE FOR THE CORRECT APPLICATION  OF 
CUSTOMS LEGISLATION 

ARTICLE 1 

Definitions 

For the purposes of this Protocol: 

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

Scope 

1.  The  Parties  shall  assist  each  other,  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  application  of  this  Protocol.  It  shall  not 
prejudice  the  rules  governing  mutual  assistance  in  criminal 
matters,  nor  shall'  it  cover  information,  including  documents 
obtained  under  powers  exercised  at  the  request  of  the  judicial 
authority, unless those  authorities  so agree. 

7S 

ARTICLE 3 

Assistance on request 

1.  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  detected  or  planned  which  are, 
appear or would be in contravention  of such  legislation. 

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) places where  stocks  of  goods  have been assembled  in such  a way 
that  there  are  reasonable  grounds  for  supposing  that  they  are 
intended  as  supplies  for  operations  contrary  to  the  customs 
legislation of the other Party; 

(c) movements  of  goods  notified  as  possibly  giving  rise  to 

contraventions  of customs  legislation; 

(d) 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  Paities  shall  within  their  competences  provide  each  other  with 
assistance  without  prior  request  where  they  consider  that  to  be 
necessary  for  the  correct  application  of  customs  legislation, 
particuLarly when they obtain  information pertaining to : 

operations  detected  or  planned,  which  are,  appear  or  would  be  in 
contravention  of such  legislation ; 
new means or methods employed  in realizing  such operations; 
goods  known  to  be  subject  to  substantial  contravention  of  customs 
legislation  on  import,  export,  transit  or  any  other  customs 
procedure. 

76 

ARTICLE 5 

Form and substance of requests for assistance 

1.  Requests pursuant to the present 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: 

(a) the applicant authority making the request; 

(b) the measure  requested; 

(c) the object of and the reason for the request; 

(d) the laws, rules and other legal elements  involved; 

(e) indications  as  exact  and  comprehensive  as  possible  on  the 
the 

being  the  target  of 

legal  persons 

natural  or 
investigations; 

(f) a summary of the relevant facts. 

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 6 

Execution of requests 

1.  Requests  for  assistance  will  be  executed  in  accordance  with  the 
laws, rules and other  legal instruments of the requested Party. 

2.  In  order  to  comply  with  a  request  for  assistance,  the  requested 
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. 

77 

3.  Duly authorized  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,  in  particular  cases, 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. 

5.  When,  in  the  circumstances  provided  for  under  this  Protocol, 
officials of one Party  are present at enquiries  carried  out  in  the 
territory  of  the  other  Party,  they  must,  at  all  times, be  able  to 
furnish  proof  of  their  official  capacity.  They  must  not  wear 
uniform nor carry  arms. 

ARTICLE 7 

Form in which information  is to be communicated 

1.  Under  the  conditions  and  within  the  limits  laid  down  in  this 
Protocol,  the  Parties  shall  communicate  each  other  information  in 
the  form  of  documents,  certified  copies  of  documents, reports  and 
the like. 

2.  Original  files and  documents may  be transmitted  on request  only  in 
cases where certified copies would be insufficient. Those  files and 
documents  shall be returned  at the earliest  opportunity. 

3.  The  documents  provided  for  in  paragraph  1  may  be  replaced  by 
computerized  information  produced  in any form for the same purpose. 
All  relevant  information  for the utilization  of  the material  shall 
be  supplied on request. 

ARTICLE 8 

Exceptions to the obligation to provide  assistance 

1.  The  Parties  may  refuse  to  give  assistance  as  provided  for  in  this 
Protocol,  provide  it  partially  or  provide  it  subject  to  certain 
conditions or requirements, where to do so would: 

(a) be  likely  to  prejudice  sovereignty, public  policy,  security  or 

other essential  interests; or 

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

78 

2.  Where  the  applicant  authority  asks  for  assistance  which  it  would 
itself be unable  to provide  if  asked  so by  another  Party,  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  in  written  form  to  the  applicant 
authority without  delay. 

ARTICLE 9 

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  legislation 
applicable  in  the  Party  which  received  it  and  the  corresponding 
provisions applying  to the Community  institutions. 

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

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 
sucn information only upon previous authorisation by the  furnishing 
authority. 

4.  The  furnishing  Party  shall  verify  the  accuracy  of  the  information 
to  be  transferred.  Whenever  it  appears  that  the  information 
supplied 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.  Witnout  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. 

79 

ARTICLE LP 

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 L1 

Experts and witnesses 

An  offi.cial  of  a  requested  authority  may  be  authorized  to  appear, 
within  the  limitations  of  the  authorization  granted,  as  expert  or 
witness in judicial or administrative 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 matter  and  by  virtue  of what  title  or 
qualification the official will be questioned. 

ARTICLE L2 

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. 

80 

ARTICLE 13 

Implementation 

1.  The management  of this Protocol  shall be entrusted to the central 
customs  authorities  of  Russia  on  the  one  hand  and  the  competent 
services of the Commission of the European Communities  and, where 
appropriate, the customs authorities of the EC Member States 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 Cooperation 
Council  amendments  which  they  consider  should  be  made  to  this 
Protocol. 

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

ARTICLE 14 

Complementarity 

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

2.  Without prejudice to Article  10, 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. 

?/ 

List of declarations and letters 

Joint declaration in relation to Title III and article 94 
joint declaration in relation to article 10 
Joint declaration in relation to article 12 
joint declaration in relation to article 17 
Joint declaration in relation to article 18 
Exchange of letters in relation to article 18 
Exchange of letters in relation to article 22 
Joint declaration in relation to article 22, paragraph 1 second indent 
Joint declaration in relation to article 24 
Joint declaration in relation to articles 26, 32 and 37 
Joint declaration in relation to article 28 
Joint declaration in relation to article 29(3) 
Exchange of letters in relation to article 29 
Joint declaration in relation to article 30 
Joint declaration in relation to article 30 a) and g) 
Joint  declaration  in  relation  to  the  notion  of  "control"  in  article 
30(b) and article 45 
Joint declaration in relation to article 30(h), 3rd subparagraph 
Joint declaration in relation to article 31 
Declaration by Russia in relation to article 34, paragraph 1 
Joint declaration in relation to articles 34 and 38 
Joint declaration in relation to article 35 
Community declaration in relation to article 36 
Declaration by Russia in relation to article 36 
Joint declaration  in relation  to  article  39(2c),  2nd  subparagraph  on 
opening ports 
Joint declaration  in  relation  to  article  39(2c),  2nd  subparagraph  on 
vessels under a third flag 
Joint declaration in relation to article 44 
Joint declaration in relation to article 46 (2) 
Joint declaration in relation to article 48 
Exchange of letters in relation to article 52 
Joint declaration in relation to article 52 
Joint declaration in relation to article 53(2.2) 
Joint declaration in relation to article 54 
Community declaration in relation to article 54 
Joint declaration in relation to article 99 
Joint declaration in relation to article 101 
Joint declaration in relation to article 107 
Joint declaration in relation to article 107 (2) 
Joint declaration in relation to articles 2 and 107 
Joint declaration in relation to article 112 
Joint declaration in relation to article 6 of Protocol 2 
Exchange  of  letters  on  the  consequences  of  enlargement  (outside  the 
agreement) 
Exchange of letters on Uruguay Round  (outside the agreement) 

82 

Joint declaration in relation to Title III and article 94 

For the purpose of Title III and Article 94, the GATT is understood to 
be the General Agreement on Tariffs and Trade signed in Geneva in 1947 
as  amended,  as  applied  at  the  date  of  signature  of  the  present 
Agreement, if the Parties do not agree otherwise within the  framework 
of the Cooperation Council established under Article 90. 

Joint declaration in relation to article 10 

The  Parties  agree,  that  the  provisions  of paragraph  1 of Article  10 
shall not apply to conditions of import of products to the territory of 
Russia  under  financial  loans  and  credits  granted  for  development  and 
humanitarian purposes, technical and humanitarian assistance and other 
similar  arrangements,  concluded  between  Russia  and  third  states  or 
international organisations  in so far as such states or  international 
organisations require special treatment for such imports. 

Joint declaration in relation to article 12 

Article 12, within Title III on trade in Goods, deals with the question 
of  transit.  It  is  the  understanding  of  the  Parties  that  Article  12 
deals  exclusively  with  the  freedom  of  transit  of  goods.  This  is 
according to normal GATT practice. The issue of transit may be taken up 
in  the  future  negotiations  on  Transport  Agreements  as  indicated  in 
Article 43. 

Joint declaration in relation to article 17 

The Community and Russia declare that the text of the safeguard clause 
(Article 17) does not grant GATT safeguard treatment. 

Joint declaration in relation to article 18 

The  Parties  agree  that,  without  prejudice  to 
their  legislation  and 
practice, when  establishing  normal  value  due  account  shall  be  taken 
overall,  in  each  case  on  its  merits,  when  natural  comparative 
advantages can be  shown by the manufacturers  involved to be held with 
regard  to factors such as -access to raw materials, production process, 
proximity of production to customers and special characteristics of the 
product. 

Exchange of letters in relation to article 18 

It  is  understood  that  the  provisions  of  this  article  and  respective 
declaration  are neither  intended  to,  nor shall, slow down, hinder or 
impede  the  procedures  provided  for  in the  respective  legislations  of 
the Parties regarding antidumping and subsidies investigations. 

•\r n 

Exchange of letters in relation to article 22 (nuclear trade) 

sir. 

The purpose of this letter is to confirm that with regard to trade in 
nuclear  materials  as  covered  by  Article  22  of  the  Partnership  and 
Cooperation  Agreement  signed  today,  we  have  reached  the  following 
understanding: 

Russia  intends to act as a stable, reliable and  long-term supplier of 
nuclear materials  to  the  Community  and  the  Community  recognises  that 
intention.  The  Russian  Government  takes  note  that  the  Community 
considers Russia, in particular  for the purposes of its supply policy 
in  the  nuclear  field,  as  a  source  of  supply  which  is  separate  and 
distinct from other suppliers. 

In order  to  avoid  any  difficulties  in trade, consultations  shall  be 
held regularly  or on  request on developments  in the trade of  nuclear 
materiaLs between Russia and the Community.  These consultations could 
include  a continuous  and  regular  dialogue  on market  developments  and 
forecasts. 

The consultations shall be held within the framework of Article 92. 

As provided in Article 13 of the Partnership and Cooperation Agreement 
the regulations referred to in article 6 of the 1989 Agreement will be 
implemented in a uniform, impartial and equitable manner. 

I  refer  to our commitment to  facilitate by all practicable means  the 
process  of  nuclear  disarmament  underway.  We  have  agreed  to  take  all 
necessary steps to conduct consultations with all countries concerned, 
if  it  appears  that  the  implementation  of  respective  bi-  and 
multilateral agreements causes or threatens to cause substantial injury 
to the facilities of the Parties. 

I  propose  that  this  letter  and  your  reply  will  establish  a  formal 
agreement between us. 

Joint declaration in relation  to  article 22, paragraph 1 
second indent 

With respect to the community the legislation and regulations, referred 
to  in Art. 6 of  the  1989 Agreement,  include, inter  alia, the  Treaty 
establishing  the  European  Atomic  Energy  Community  and  implementing 
regulations thereof, in particular the provisions of those texts, which 
specify the rights, powers and responsibilities  of the EURATOM  Supply 
Agency  and of the Commission of the European Communities. 

& 

Joint declaration in relation to article 24 

It is understood that the notion "members of their family" is defined 
in  accordance  with  the  national  legislation  of  the  host  country 
concerned. 

Joint declaration in relation to articles 26, 32 and 37 

The Parties to the Agreement shall ensure that the issuing of visas and 
residents permits in conformity with the laws and regulations of Russia 
and the Member states respectively are conducted in a manner consistent 
with  the  principles  of  the  concluding  document  of  the  CSCE  Bonn 
Conference, in particular with a view to facilitate the prompt  entry, 
stay and movement  of  businessmen  in Russia  and  in the Member  states. 
Such efforts shall apply in particular to key personnel referred to in 
Article 32 and to the sellers of cross-border services referred to in 
Article  37,  and  ensure  that  the  administrative  procedures  do  not 
nullify  or  impair  the  benefits  accruing  to  any  Party  under  these 
Articles of the Agreement. 

The  Parties  agree  that  an  important  element  in  this  context  is  the 
timely conclusion of re-admission agreements between the Member States 
and Russia. 

The  Cooperation  Council  shall  regularly  review  the  evolution  of  the 
situation in these areas. 

Joint Declaration in relation to article 28 

Without prejudice to the provisions of Articles 50 and 51, the Parties 
agree  that  the  words  "in  conformity  with  ...  legislation  and 
regulations" mentioned  in paragraphs  1 and  4 of Article  28 mean that 
each  Party  may  regulate  the  establishment  of  companies  by  means  of 
setting up subsidiaries  and branches as defined  in Article  30 and the 
operation of branches provided that this legislation and regulations do 
not create reservations  to the treatment no less favourable than that 
accorded to companies or branches of any third country respectively. 

Without prejudice to the reservations listed in Annexes 3 and 4 and to 
the provisions of Articles 50 and 51, the Parties agree that the words 
"in  conformity  with  ...  legislation  and  regulations"  mentioned  in 
paragraphs 2 and 3 of Article 28 mean that each Party may regulate the 
operation of companies on its territory, provided that this legislation 
and regulations  do  not create  for the 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  subsidiaries  of 
companies of any third country whichever is the better. 

?  f 

Joint declaration in relation to article 29 paragraph 3 

The  Parties  confirm  that  nothing  in Article  29  paragraph  3  prevent 
Russia  from  adopting  any  new  regulations  or  measures  which  would 
introduce  or  worsen  discrimination  as  compared  to  the  situation 
existing  on  the  date  of  the  signature  of  the  Agreement  as  regards 
conditions  affecting  the  establishment  of  non-Community  companies  in 
its territory in comparison to its own companies 

Exchange of letters in relation to article 29 
(conditions of establishment and operations in banking and 

insurance services) 

Letter from Russia 

Dear Sir, 

I refer to the Partnership and Cooperation Agreement initialled today. 
I  confirm  our  understanding  that  the  provisions  of  the  Agreement 
concerning  conditions  of  establishment  and  operation  of  community 
companies in Russia were agreed between us and that signature shall go 
ahead  on that  basis provided  that Russia would  not  adopt  before  the 
signature  of  the  Agreement  new  measures  or  regulations  which  would 
introduce  or  worsen  discrimination  vis  à  vis  Russian  companies  as 
compared  to  the  situation  existing  on  today's  date  as  regards 
conditions  affecting  the  establishment  and  operation  of  Russian 
subsidiaries  of  Community  companies  in  Russia  with  the  exception  of 
those which comply with  sub-paragraphs-  (d) and/or  (e) of  paragraph  1 
Part A, and/or paragraph 2 of Part B of Annex 7. 

I would be obliged if you would confirm the agreement of the Community 
to the content of this letter. 

U 

Joint Declaration in relation to article 30 

The  Parties  confirm  the  importance  of  ensuring  that  the  granting  of 
licences  referred  to  in  Article  30,  paragraphs  (a)  and  (g) of  this 
Agreement: 

-  shall be based on objective  and transparent  criteria,  such as 

competence and the ability to supply the service; 

-  shall  not  be  more  burdensome  than  necessary  to  ensure  the 

quality of the service; 

shall not in itself constitute  a restriction  on the supply of 
the service." 

Joint declaration in relation to Article 30 a) and g) 

Article  30  a), second  paragraph  and  g), second  paragraph  take  into 
account the specificity of access to financial services as it is agreed 
in the framework of this Agreement, and do not affect the definitions 
of "establishment" and  "operation" as they apply to financial services 
for other purposes than the purpose of this Agreement. 

Joint Declaration in relation to the notion of "control" 
in article 30(b) and article 45 

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 . 

Joint Declaration in relation to article 30 (h), 3rd subparagraph 

Taking  into account the restrictions existing at present concerning the 
carriage of goods and passengers by inland transport modes, the Parties 
agree  that  until  such  restrictions  are  lifted,  the  expression 
"intermodal transport operations  involving a sea-leg" is understood to 
mean the organisation of,such operations. 

s> 

Joint Declaration in relation to article 31 

The provisions of Article  31 permit the Parties to apply  any measure 
intended  to prevent  circumvention  by a company  of a third  country of 
the measures  of the Parties  concerning  establishment  of  companies  of 
that  third  country  in  its  territory  by  means  of  any  possibility 
provided for in this Agreement. 

Joint declaration in relation to Article 34, paragraph 1 

Taking  into account the explanations  given by Russia to the  Community 
that in certain respects and for certain sectors the treatment granted 
to Russian subsidiaries  and branches of Community  companies  is better 
than  the  treatment  offered  to  Russian  companies  in  general,  namely 
national treatment, the Parties agree that if measures were introduced 
by Russia to align the treatment  of Russian  subsidiaries  and branches 
of  foreign  companies  down  to  national  treatment,  this  cannot  be 
considered  to  violate  the  obligation  on  Russia  to  use  its  best 
endeavours contained in this paragraph. 

Joint declaration in relation to Articles 34 and 38 

The Parties agree that if either Party were to be of the view that the 
other  had  not  correctly  interpreted  the  terms  "significantly  more 
restrictive" in Articles 34(2) or 38(3>, such Party may have resort to 
the procedures set out in Article 101. 

Joint declaration in relation to article 35 

The Parties agree that the activities referred to in subparagraphs  (a) 
and (b) do not include acting as a carrier. 

Community declaration in relation to article 36 

The  Community  declares  that  the  cross-border  supply  of  services  as 
referred to in Article  36 does not imply the movement  of the service 
supplier  into  the  territory  of  the  country  where  the  service  is 
destined,  nor  the  movement  of the  recipient  of  the  service  into the 
territory of the country from which the service comes. 

Declaration by Russia in relation to article 36 

Russia declares that the suppliers in Community declaration in relation 
to Article  36 could  not  be considered  as  a natural persons, who are 
representatives  of  a  community  or  Russian  company  and  are  seeking 
temporary  entry  for  the  purpose  of  negotiating  the  sales  of cross-
border supply services or entering into agreements to sell cross-border 
services for that company. 

rf 

Joint declaration in relation to Article 39, para 2 (c), 2nd subpara. 

on the basis of the information provided by the Russian side concerning 
their  ports  open  to  foreign  vessels,  the  Community  takes  note  that 
Russia intends to continue  its effort to increase the number  of ports 
open to  foreign  vessels. The Russian  side also notes  the  Community's 
policy  of  maintaining  open  to  foreign  vessels  all  ports  open  to 
international  trade. The  Parties  to  this Agreement  consider  that  the 
degree of openness of ports to foreign vessels is an essential feature 
of  an  assessment  of  the  conditions  necessary  for  the  free  supply  of 
services in international maritime transport. They therefore  undertake 
to  review  the  situation  regarding  ports  open  to  foreign  vessels  at 
least every two years through consultations to be held in the framework 
of  the  Cooperation  Council.  If  serious  difficulties  arise  in 
maintaining  a  port  open  to  foreign  vessels,  the  Party  in  whose 
territory the port concerned is situated shall inform the other Party; 
at  the  request  of  the  latter,  consultations  shall  be  held  so  as  to 
ensure  that  any  action  taken  affects  as  little  as possible  the  free 
supply of international maritime services. 

Joint declaration in relation to article 39.2(c), 2nd subpara. 

The Parties agree after the expiry of five years from the date of entry 
into force of this Agreement to consider the possibility of application 
of the provisions  of Article  39.2(c),  2nd  subpara  to vessels  under a 
third  flag  operated  by  shipping  companies  or  nationals  of  a  Member 
State or Russia respectively. 

Joint declaration in relation to article 44 

For the purposes  of  this Agreement,  an economic  integration  agreement 
shall  be  an  agreement  in  accordance  with  thes principles  set  out  in 
Article V of  the General Agreement  on  Trade  in services  ("GATS"). In 
respect  of  any  aspect  of  this  Agreement  covering  areas  other  than 
service  activities  an  economic  integration  agreement  shall  be  an 
agreement  in accordance, with the principles set out in Article  XXIV of 
the GATT on the creation of free trade areas or customs unions. 

Joint declaration in relation to article 46 (2) 

The  Parties  confirm  their  mutual  understanding  that  the  question  of 
whether activities are connected, even occasionally, with the exercise 
of official authority in their respective territories, depends upon the 
circumstances  of  each  particular  case.  An  examination,  in  each 
particular case, whether such activities are connected with 

-  the right to use physical constraint; or 
-  the exercise of judicial functions; or 

the right unilaterally to enact binding regulations 

will help to determine the answer to such questions. 

Joint declaration in relation to article 48 

The  sole  fact  of  requiring  a  visa  for  natural  persons  of  certain 
Parties and not for those of others shall not be regarded as nullifying 
or impairing benefits under a specific commitment. 

Exchange of letters in relation to article 52 

Letter from Russia 

With  reference  to  Article  52  of  the  Partnership  and  Coopération 
Agreement, I confirm that nothing in this article shall be construed as 
restricting  the transfer  abroad by Community  residents of investments 
made  in  Russia  by  Community  residents,  including  any  compensation 
payments  arising  from measures  such  as expropriation,  nationalisation 
or measures of equivalent effect and of any profit stemming therefrom. 

I  propose  that  this  letter  and  your  reply  will  establish  a  formal 
agreement between us. 

7* 

Joint Declaration in relation to Article 52 (Definitions) 

"Current payments*' 

"Current payments" are payments connected with the movement of goods, 
services  or  persons  made  in  accordance  with  normal  international 
business  practice  and  do  not  cover  arrangements  which  materially 
constitute  a  combination  of  a  current  payment  and  a  capital 
transaction, such as deferrals  of payments and advances which is meant 
to circumvent respective legislation of the Parties in this field. 

This  definition  does  not  preclude  Russia  from  applying  or  enacting 
legislation  which  lays  down  that  such  payments  must  be  carried  out 
through those Russian banks which have received the respective licences 
from  the  central  Bank  of  the  Russian  Federation  to  carry  out  such 
operations in freely convertible currencies. 

"Direct investment" 

"Direct  Investment"  is  an  investment  for the  purpose  of  establishing 
lasting economic relations with an enterprise such as investments which 
give  the  possibility  of  exercising  an  effective  influence  on  the 
management thereof, in the country concerned by non-residents or abroad 
by residents, by means of: 
1.  Creation or extension of a wholly owned enterprise, a subsidiary or 
a branch, acquisition of full ownership of an existing enterprise; 

2.  Participation in a new or existing enterprise; 
3.  A loan of five years or longer. 

"Freely convertible currency" 

"A freely convertible currency"  is any currency considered as such by 
the International Monetary Fund. 

Joint Declaration in relation to Article 53(2.2) 

"Primary products" are those defined as such in the GATT. 

Joint declaration in relation to article 54 

The Parties agree that for the purpose of the Agreement, intellectual, 
industrial  and  commercial  property  includes  in  particular  copyright, 
including  the  copyright  of  computer  programmes,  and  neighbouring 
rights,  patents,  industrial  designs,  geographical  indications, 
including  appellations  of  origin,  trade  marks  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. 

91 

Community  declaration in relation to article  54 

The  provisions  of  the  Agreement  are  without  prejudice  to  the 
competences  of  the  European  Community  and  its Member  states  in matters 
of intellectual, industrial and commercial  property. 

Joint declaration  in relation to article  99 

The  Parties  agree  that  the  measures  provided  for  in  Article  99  shall 
not  be  taken  with  the  aim  to  distort  conditions  of  competition  in 
relevant markets  and thus to afford protection to domestic  production. 

Joint déclaration in relation to article  101 

The  Parties  invite  the  Cooperation  Council  to  examine  forthwith  the 
rules of procedure  that may be useful for dispute  settlement  under this 
Agreement. 

Joint Declaration  in relation to article  107 

The  Parties  agree,  by  common  consent,  for  the  purpose  of  its  correct 
interpretation  and  its  practical  application. that  the  terms  "cases  of 
special urgency"  included  in Article  107 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  element  of  the  Agreement  set  out  in 

Article 2. 

Joint declaration  in relation to article  107 paragraph  2 

The  Parties  agree  that  "appropriate  measures"  referred  to  in  Article 
107  paragraph  2  are  measures  taken  in  accordance  with  international 
law. 

If  a  Party  takes  a measure  in  a case  of  "special ^urgency"  as  provided 
for under Article  107 paragraph  2, the other  Party may  avail  itself  of 
the procedure provided  for  in Article  101. 

^2 

Joint Declaration in relation to articles 2 and 107 

The  Parties  declare  that* the  inclusion  in  the  Agreement  of  the 
reference  to  the  respect  for human  rights  constituting  an  essential 
element of the Agreement and to cases of special urgency flows from 

-  the community * s policy in the area of human rights, in conformity 
with the 11 May 1992 declaration of the Council which provides for 
the  inclusion  of  this  reference  in  cooperation  or  association 
agreements between the community and its CSCE partners, as well as 

Russia's policy in this field and 

-  the attachment of both Parties to the relevant obligations, arising 
in particular from the Helsinki Final Act and the charter of Paris 
for a new Europe. 

Joint declaration in relation to article 112 

The Parties  confirm  that  although  the present  Agreement  replaces  the 
Agreement of 18 December  1989 regarding relations between the Parties, 
the  Agreement  shall  not  prejudice  or  otherwise  affect  any  measures 
taken  before  the  entry  into  force  of  the  present  Agreement  or 
agreements made between  them  before that  date  in conformity  with the 
1989  Agreement  and  this  upon  the  conditions  and  for  the  period  of 
application contained in such measures or agreements. 

93 

Joint Declaration in relation to article 6 of Protocol 2 

1.  The Parties agree to take the necessary measures in order to assist 
each other, as provided for in this Protocol and without delay, for 
the following movements of goods: 

a)  movement of arms, ammunition, explosives and explosive devices; 

b)  movement  of  objects  of  art  and  antiquity,  which  present 
significant  historical,  cultural  or  archaeological  value  for 
one of the Parties; 

c)  movement of poisonous goods as well as the substances dangerous 

for the environment and the public health; 

d)  movement of sensitive and strategic goods subject to non-tariff 
limitations  in  accordance  with  the  lists  agreed  upon  by  the 
Parties. 

2.  The Parties agree, if permitted  by the basic  principles  of their 
respective  legal systems, to take the necessary measures to allow 
the  appropriate  use  of  the  controlled  delivery  technique  on  the 
basis of mutually agreed implementing provisions adopted by them in 
accordance with the procedures of this Protocol. 

3.  The  Parties  agree  to  take  all  necessary  measures,  in  accordance 

with their respective legislation, in order: 

- to deliver all documents, 

- to notify all decisions, 

falLing within the scope of this Protocol to an addressee, residing 
or  established  in  their  respective  territories  on  the  basis  of 
mutually  agreed  implementing  provisions  adopted  by  them  in 
accordance  with  the  procedures  of  this  Protocol. In  such  a case 
Article 5 (3) is applicable. 

4.  The Parties agree that when the requested authority cannot act on 
his  own, the  administrative  department  to  which  the  request  has 
been  addressed  by  this  authority  shall  proceed  under  the  same 
conditions applicable to the requested authority. 

94 

outside the Agreement: 

Exchange of letters on the consequences of enlargement 

Letter from the community 

Dear  Sir,  I  refer  to  the  Agreement  on  Partnership  and  cooperation 
signed today and confirm that if any amendment to this agreement might 
became  necessary as a result of an enlargement of the Community,  this 
would become the subject of consultations between the Parties pursuant 
to Article 90 and in this context account would be taken, to the extent 
possible, of  the  character  of  bilateral  trade  and  economic  relations 
between Russia and acceding States. 

I would be obliged if you could confirm the agreement of Russia to the 
content of this letter. 

Exchange of letters on Uruguay Round 

Letter from the Community 

Dear  Sir,  I  refer  to  the  Agreement  on  Partnership  and  Cooperation 
signed  today  and  confirm  our  agreement  that  one  change  of 
circumstances, within the meaning of Article 4 of the Agreement, where 
it would be appropriate to examine whether amendments should be made to 
the Agreement, would be the situation arising upon the entry into force 
of  the  Uruguay  Round  multilateral  agreements  and  the  conclusion  of 
amendments  to  the  GATT,  its  codés  and  other  agreements  relating 
thereto. 

I would be obliged if you could confirm the agreement of Russia to the 
content of this letter. 

95