Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and Georgia, of the other part
Date: 1996-03-27
Institutions: European Commission
Subjects: Georgia, cooperation agreement (EU), cooperation policy, economic development, mixed agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  27.03.1996 
COM(96)  135  final 

96/092  (AVC) 

Proposal 

for a Council  and Commission  Decision 

on the conclusion  of the Partnership and  Cooperation  Agreement 

between  the European  Communities  and their Member  States 

of the one part, and  Georgia, 

of the other part 

(presented by the  Commission) 

Explanatory  memorandum 

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

2.  Following  the  Council's  adoption  of  the  negotiating  directives  on  5  October  1992, 
negotiations  with  Georgia  were  held  in  the  course  of  1995.  After  two  rounds  of 
negotiations, the Agreement was initialled on 15/12/95. 

3.  The  Agreement  is a mixed  agreement  covering  areas for  which  both  the  Communities  and 

the Member  States are competent,  and is concluded  for an initial period often  years. 

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

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

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

Customs cooperation  is covered  by a separate protocol. 

M *\ 

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

the  European  Economic  Community  and 

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

concluding the Agreement  differ. 

In the case of the EC, account will have to be taken  of Opinion  1/94  delivered by the  Court 
of  Justice  on  15 November  1994  on  the  competence  of  the  European  Community  to 
conclude the agreements reached  during the Uruguay Round. 

For the purpose  of concluding the Agreement: 

. 

. 

. 

the  Council  will  conclude the  Agreement,  with  the  assent  of the European  Parliament  and 
having  consulted  the  Economic  and  Social  Committee,  on  behalf  of  the  European 
Community  in  accordance  with  Article  54(2),  the  closing  sentence  of  Article  57(2)  and 
Articles  73c(2),  75, 84(2),  113 and  235 in conjunction  with the  second  sentence  of  Article 
228(2)  and  the  second  subparagraph  of  Article  228(3)  of  the  EC  Treaty  by  adopting  the 
attached  decision; 

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

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

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

6.  In  view  of  the  above,  the  Commission  proposes  that  the  Council  adopt  the  annexed 

decision. 

tk> 

COUNCIL AND COMMISSION  DECISION 

OF 

on the conclusion  of the Partnership and Cooperation  Agreement 

between the European  Communities and their Member  States 

and Georgia 

(../.../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 
54(2),  the  closing  sentence  of  Article  57(2)  and  Articles  73c(2),  75,  84(2),  113  and  235  in 
conjunction  with the second  sentence of Article 228(2) and the second  subparagraph  of Article 
228(3) thereof, 

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

Having regard to the assent of the European  Parliament, 

Having  regard  to  the  approval  of  the  Council  given  in  accordance  with  Article  101  of  the 
Treaty establishing the European  Atomic Energy Community, 

Having  consulted 
Committee, and with the unanimous assent of the Council, 

the  ECSC  Consultative  Committee  and  the  Economic  and  Social 

Whereas the conclusion  of the Partnership  and Cooperation  Agreement  between the  European 
Union  and  Georgia  signed  in 
would  contribute  to  achieving  the  European 
Communities' objectives; 

on 

Whereas  that  Agreement  seeks  to  strengthen  existing  links,  notably  those  established  by  the 
Agreement  on  Trade  and  Commercial  and  Economic  Cooperation  between  the  European 
Economic Community and the European  Atomic Energy Community and the USSR,  signed on 
18 December  1989; 

Whereas  some  of  the  obligations  provided  for  in  the  Agreement  in  fields  other  than 
Community  trade  policy  affect  the  arrangements  established  by  Community  acts,  particularly 
acts relating to the right of establishment  and to  transport; 

^ 

Whereas  the  Agreement  imposes  on  the  Community  certain  obligations  relating  to  the 
movement of capital and payments between the Community and Georgia; 

Whereas  in the  case  of certain  measures  provided  for  in the Agreement  and  falling  within  the 
Community's powers the EC Treaty provides no basis for action other than Article 235, 

FIAVE DECIDED  AS FOLLOWS : 

Article 1 

The  Partnership  and  Cooperation  Agreement  between  the  European  Union  and  Georgia, 
together  with  the  Protocol,  the  declarations  and  the exchange  of letters,  are  hereby  approved 
on  behalf  of  the  European  Community,  the  European  Coal  and  Steel  Community, and  the 
European  Atomic Energy  Community. 

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 79 of the Partnership and Cooperation  Agreement,  the President 
of  the  Council  shall  chair  the  Cooperation  Council  and  shall  present  the  Community's 
position.  A  representative  of  the  Commission  shall  chair  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  100  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  Community. 

Done at Brussels, 

le*-

Final Act 

The plenipotentiaries  of: 

THE KINGDOM OF BELGIUM, 

TFIE 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 REPUBLIC  OF AUSTRIA, 

THE PORTUGUESE  REPUBLIC, 

THE REPUBLIC  OF FINLAND, 

THE KINGDOM  OF SWEDEN, 

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN  IRELAND 

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

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

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

hereinafter  referred  to as "the Community", 

of the one part, and 

the plenipotentiaries  of Georgia, 

I  c 

of the other  part, 

on 

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

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

The plenipotentiaries  of the Member  States and of the Community  and the plenipotentiaries  of 
Georgia have adopted  the texts of the Joint Declarations listed below and annexed  to this Final 
Act: 

Joint Declaration  concerning Article 5 of the Agreement 

Joint Declaration  concerning Article  14 of the Agreement 

Joint  Declaration  concerning  the  notion  of  "control"  in  Article  24  (b)  and  Article  36  of  the 
Agreement 

Joint Declaration  concerning  Article 35 of the Agreement 

Joint Declaration  concerning Article 42 of the Agreement 

Joint Declaration  concerning Article 94 of the Agreement 

The plenipotentiaries  of the Member  States and of the Community  and the Plenipotentiaries  of 
Georgia have also taken note of the exchange of letters listed below annexed  to this Final Act: 

Establishment  of companies 

The plenipotentiaries  of the Member  States and  of the Community  and  the Plenipotentiaries  of 
Georgia have also taken  note of the declaration  listed below annexed to this Final Act: 

Unilateral Declaration  by the French Republic on the Overseas Countries  Territories 

Done at 

in the year one thousand  nine hundred  and ninety six. 

For the Council  and the Commission  of the European  Communities. 

For  Georgia. 

'/ 

PARTNERSHIP  AND COOPERATION  AGREEMENT 

BETWEEN  THE EUROPEAN  COMMUNITIES 

AND THEIR MEMBER  STATES, OF THE ONE PART, 

AND GEORGIA, OF THE OTHER PART 

'» 

.

•

•) 

PARTNERSHIP  AND COOPERATION  AGREEMENT 

establishing  a  partnership  between  the  European  Communities  and  their  Member  States,  of  the 
one part, and Georgia, 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, 

AUSTRIA, 

THE PORTUGUESE  REPUBLIC, 

FINLAND, 

THE KINGDOM  OF  SWEDEN, 

THE UNITED  KINGDOM  OF GREAT BRITAIN AND NORTHERN  IRELAND, 

Contraaing  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  COAL  AND  STEEL  COMMUNITY, 
AND THE EUROPEAN  ATOMIC ENERGY  COMMUNITY, 

hereinafter  referred  to as "the Community",  of the one part, 

AND  GEORGIA  of the other part, 

CONSIDERING  the  links  between  the  Community,  its  Member  States  and  Georgia  and  the 
common values that they share, 

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

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

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

CONSIDERING  the firm  commitment  of the Community and its Member  States  and  of  Georgia 
to  the  full  implementation  of  all  principles  and  provisions  contained  in  the  Final  Act  of  the 
Conference  on  Security  and  Cooperation  in Europe  (CSCE), the  Concluding  Documents  of  the 
Madrid  and  Vienna  Follow  Up  Meetings,  the  Document  of  the  CSCE  Bonn  Conference  on 
the  CSCE  Helsinki 
Economic  Cooperation,  the  Charter  of  Paris  for  a  New  Europe  and 
Document  1992  "The Challenges of Change", and other fundamental  documents  of the OSCE, 

RECOGNIZING  in  that  context  that  support  of  the  independence,  sovereignty  and  territorial 
integrity of Georgia will contribute to safeguarding  of peace and stability in Europe, 

CONVINCED  of  the  paramount  importance  of  the  rule  of  law  and  respect  for  human  rights, 
particularly  those  of  persons  belonging  to  minorities,  the  establishment  of  a  multiparty  system 
with  free  and  democratic  elections  and  economic  liberalization  aimed  at  setting  up  a  market 
economy,  and  recognising  the  efforts  of  Georgia to create political  and  economic  systems  based 
on these principles, 

BELIEVING  that  full  implementation  of this Partnership  and  Cooperation  Agreement  will  both 
depend  on  and  contribute  to  continuation  and  accomplishment  of  the  political,  economic  and 
legal  reforms  in  Georgia,  as  well  as  the  introduction  of  the  factors  necessary  for  cooperation, 
notably in the light of the conclusions of the CSCE Bonn  Conference, 

DESIROUS  of  encouraging  the  process  of  regional  cooperation  in  the  areas  covered  by  this 
agreement with the neighbouring countries in order to promote the prosperity  and  stability  of the 
region  and  in  particular  initiatives  aimed  at  fostering  cooperation  and  mutual  confidence  among 
Independent  States of the Transcaucasus region and other neighbouring  States, 

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

RECOGNIZING  AND  SUPPORTING  the  wish  of Georgia  to  establish  close  co-operation  with 
European  Institutions, 

CONSIDERING  the  necessity  of  promoting  investment  in  Georgia,  including  in  the  energy 
sector,  and  in this context  the  importance  attached  by the  Community  and  its Member  States  to 
equitable  conditions  for  transit  for  export  of energy  products;  confirming  the  attachment  of the 
Community  and  its Member  States  and  of  Georgia  to  the European  Energy  Charter,  and  to  the 
full  implementation  of  the  Energy  Charter  Treaty  and  the  Energy  Charter  Protocol  on  energy 
efficiency  and related  environmental  aspects, 

TAKING  ACCOUNT  of the Community's  willingness  to  provide  for  economic  cooperation  and 
technical assistance as appropriate, 

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

CONSIDERING  the  commitment  of  the  Parties  to  liberalise  trade,  in  conformity  with  World 
Trade Organisation  (WTO) rules, 

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, 

RECOGNIZING  that  co-operation  for  the  prevention  and  control  of  illegal  immigration 
constitutes one of the primary objectives  of this Agreement 

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

HAVE AGREED AS FOLLOWS: 

^ 

/ 

ARTICLE  1 

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

- 

- 

- 

- 

to provide an appropriate framework  for the political dialogue between the Parties allowing 
the development  of political relations; 

to  support  Georgia's efforts  to consolidate its democracy and to develop its economy and  to 
complete the transition into a market  economy; 

to promote trade and investment  and harmonious economic relations between the Parties and 
so to foster  their sustainable economic  development; 

to provide a basis for  legislative, economic, social, financial, civil  scientific,  technological  and 
cultural  cooperation. 

•

•

^/ 

TITLE I 

GENERAL  PRINCIPLES 

ARTICLE 2 

Respect for  democracy,  principles of international law and human rights as defined  in particular in 
the United  Nations  Charter,  the Helsinki Final Act and the Charter of Paris for  a New  Europe,  as 
well  as  the  principles  of  market  economy,  including  those  enunciated  in  the  documents  of  the 
CSCE Bonn  Conference,  underpin  the internal  and  external  policies  of the Parties  and  constitute 
essential elements of partnership  and of this Agreement. 

ARTICLE 3 

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

ARTICLE 3 bis 

The Parties shall as appropriate  review changing circumstances in Georgia,  in particular  regarding 
economic conditions there and  implementation  of market-oriented  economic reforms.  The 
Cooperation  Council  may make recommendations to the Parties concerning development  of any 
part  of this Agreement  in the light  of these circumstances. 

"'71 •i 

TITLE  II 

POLITICAL  DIALOGUE 

ARTICLE 4 

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

-  will strengthen  the links of Georgia with the Community and its Member 

States, and thus with the community of democratic nations as a whole.  The economic 
convergence  achieved through this Agreement will lead to more intense political relations; 

-  will bring about  an increasing convergence of positions on international  issues of mutual 
concern thus increasing security and stability in the region and promoting the  future 
development  of the Independent  States of the Transcaucasus; 

_  shall foresee  that  the Parties endeavour to co-operate on matters pertaining to  the 

strengthening  of stability and security in Europe, the observance  of the principles of 
democracy,  and  the respect  and  promotion  of human rights, particularly those of persons 
belonging to  minorities and shall hold  consultations, if necessary,  on relevant  matters. 

Such  dialogue  may  take  place  on  a  regional  basis,  with  a  view  to  contributing  towards  the 
resolution  of regional  conflicts  and tensions . 

ARTICLE  5 

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

ARTICLE 6 

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

-  regular meetings at senior official  level between representatives of the Community and its 

- 

Member  States on the one hand, and representatives of Georgia on the other 
hand; 
taking full  advantage of diplomatic channels between the Parties including  appropriate 
contacts in the bilateral as well as the multilateral field,  such as United Nations,  OSCE 
meetings and  elsewhere; 

-  any other means, including the possibility of expert meetings which would  contribute to 

consolidating  and  developing this dialogue. 

ARTICLE 7 

Political  dialogue  at  parliamentary 
Parliamentary  Cooperation  Committee established  in Article 82. 

level  shall  take  place  within  the  framework  of  the 

/ 

TITLE  III 

TRADE  IN  GOODS 

ARTICLE  8 

1.  The Parties  shall  accord  to  one another  most-favoured-nation  treatment  in  all  areas  in  respect 

of: 

-  customs duties and charges applied to imports and  exports, including the method  of collecting 

such duties and charges, 

taxes and other internal  charges of any kind applied  directly or indirectly to imported  goods, 

-  provisions relating to customs clearance, transit, warehouses and  transhipment, 
- 
-  methods of payment and the transfer  of such payments, 
- 

the rules relating to the sale, purchase, transport,  distribution  and use of goods on the 
domestic  market. 

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

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

to the creation  of such a union or area; 

(b)  advantages  granted  to  particular  countries  in  accordance  with  the  GATT  and  with  other 

international  arrangements  in favour  of developing countries; 

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

3.  The  provisions  of  paragraph  1 shall  not  apply,  during  a  transitional  period  expiring  on  the 
date  of  Georgia  acceding  to  the  GATT  or  on  31  December  1998,  whichever  is  earlier,  to 
advantages  defined  in  Annex  I granted  by Georgia  to  other  states  which  have  emerged from 
the dissolution  of the USSR. 

ARTICLE 9 

1.  The  Parties  agree  that  the  principle  of  free  transit  is  an  essential  condition  of  attaining  the 

objectives  of this Agreement. 

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

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

between the two Parties. 

3.  The  rules  contained  in  this  Article  are  without  prejudice, to  any  special  rules  relating  to 

specific  sectors, in particular  such as transport,  or products  agreed between the Parties. 

7 

'< 

>7 

-?;-. 

ARTICLE  10 

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  Party  exemption  from  import  charges  and  duties  on  goods  admitted  temporarily,  in  the 
instances and according to the procedures stipulated by any other international  convention  on this 
matter  binding  upon  it,  in  conformity  with  its  legislation.  Account  shall  be  taken  of  the 
conditions  under  which  the obligations  stemming from such  a convention  have been  accepted  by 
the Party in question. 

ARTICLE 11 

1.  Goods  originating  in  Georgia  shall  be  imported  into  the  Community  free  of  quantitative 
restrictions without  prejudice to the provisions of Articles  13, 16 and  17 of this Agreement. 

2.  Goods  originating  in the  Community  shall  be  imported  into  Georgia  free  of  all  quantitative 
restrictions  and  measures  of  equivalent  effect,  without  prejudice  to  the  provisions  of  Article 
13 of this  Agreement. 

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

ARTICLE 12 

ARTICLE 13 

1.  Where any product  is being imported  into the territory  of one of the Parties  in such  increased 
quantities  or  under  such  conditions  as  to  cause  or  threaten  to  cause  injury  to  domestic 
producers  of  like  or  direct  competitive  products,  the  Community  or  Georgia,  whichever  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  Georgia,  as  the  case  may  be,  shall  supply  the  Cooperation 
Council  with  all  relevant  information  with  a  view  to  seeking  a  solution  acceptable  to  both 
Parties as provided  for  in Title XI. 

3. 

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

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  Contracting  Parties  shall  give  priority  to 

those which  cause least  disturbance to the achievement  of the aims of this Agreement. 

6.  Nothing  in  this  Article  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 

~ 

9 

J-y 7>~ 

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  lecislation. 

ARTICLE  14 

The  Parties  undertake  to  consider  development  of  the  provisions  in  this  Agreement  on  trade  in 
goods between  them, as circumstances allow, including the situation  arising from  the accession  of 
Georgia  to  the  WTO.  The  Cooperation  Council  may  make  recommendations  on  such 
developments  to  the  Parties  which  could  be  put  into  effect,  where  accepted,  by  virtue  of 
agreement  between  the Parties in accordance with their respective procedures. 

ARTICLE  15 

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  16 

This  Title  shall  not  apply  to  trade  in  textile  products  falling  under  Chapters  50  to  63  of  the 
Combined  Nomenclature.  Trade  in  these  products  shall  be  governed  by  a  separate  agreement, 
initialled  on  17  November  1993  and  applied  provisionally  since  1  January  1993,  and  by  any 
successor  agreements. 

ARTICLE  17 

1.  Trade in products  covered  by the Treaty establishing the European  Coal  and  Steel  Community 

shall be governed  by the provisions of this Title, with the exception  of Article  11. 

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

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

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

ARTICLE  18 

Trade  in  nuclear  materials  will  be  conducted  in  accordance  with  the  provisions  of  the  Treaty 
establishing  the  European  Atomic  Energy  Community.  If  necessary,  trade  in  nuclear  materials 
shall be subject  to  the provisions  of a specific  Agreement  to be concluded  between  the  European 
Atomic Energy  Community  and  Georgia. 

10 

TITLE  IV 

PROVISIONS  AFFECTING  BUSINESS AND  INVESTMENT 

CHAPTER  I 

Labour  Conditions 

ARTICLE  19 

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

ARTICLE  20 

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

ARTICLE  21 

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

CHAPTER  H 

Conditions  affecting  the establishment  and  operation  of  companies 

ARTICLE  22 

1.  The  Community  and  its  Member  States  shall  grant  treatment  no  less  favourable  than  that 
accorded  to  any  third  country  for  the  establishment  of  Georgian  companies  as  defined  in 
Article 24 (d). 

2.  Without  prejudice  to  the  reservations  listed  in  Annex  IV,  the  Community  and  its  Member 
States  shall  grant  to  subsidiaries  of  Georgian  companies  established  in  their  territories  a 
treatment  no  less  favourable  than  that  granted  to  any  Community  companies,  in  respect  of 
their  operation. 

> 

(• 

3.  The  Community  and  its  Member  States  shall  grant  to  branches  of  Georgian  companies 
established  in their  territories  treatment  no  less  favourable  than  that  accorded  to  branches  of 
companies of any third  country,  in respect  of their  operation. 

4.  Without  prejudice  to  the reservations  listed  in  Annex  V,  and  subject  to  the  conditions  set  but 
therein,  Georgia  shall  grant  for  the  establishment  of  Community  companies  as  defined  in 
Article  24(d)  treatment  no  less  favourable  than  that  accorded  to  Georgian  companies  or  to 
any  third  country  companies,  whichever  is  the  better,  and  shall  grant  to  subsidiaries  and 
branches  of  Community  companies  established  in  its  territory  treatment  no  less  favourable 
than  that  accorded  to  its  own  companies  or  branches  or  to  any  third  country  company  or 
branch,  whichever is the better,  in respect  of their operations. 

ARTICLE  23 

1.  Without  prejudice  to  the  provisions  of Article  96, the  provisions  of Article  22  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,  but  are not limited to: 

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

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

c)  preparation  of documentation  concerning  transport  documents,  customs  documents,  or  other 

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

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

f)  acting on bei  ;If of the companies,  inter alia in organizing  the  call of the vessel  or taking  over 

cargoes when  required. 

12 

y/J/? 

For the purpose of this Agreement: 

ARTICLE 24 

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

(b)  "Subsidiary"  of a company  shall  mean  a company  which  is effectively  controlled  by the  first 

company. 

(c)  "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. 

(d)  "Establishment"  shall  mean  the  right  of  Community  or  Georgian  companies  as  referred  to in 
point (a),  to  take  up  economic  activities  by  means  of  the  setting  up  of  subsidiaries  and 
branches in Georgia  or in the Community  respectively. 

(e)  "Operation"  shall mean the pursuit  of economic activities. 

(f) "Economic  activities"  shall  mean  activities  of  an  industrial,  commercial  and  professional 

character. 

With  regard  to  international  maritime  transport,  including  inter  modal  operations  involving  a 
sea leg, nationals  of the Member  States  or  of Georgia  established  outside  the  Community  or 
Georgia respectively,  and  shipping  companies  established  outside the  Community  or  Georgia 
and  controlled  by  nationals  of  a Member  State  or  Georgian  nationals  respectively,  shall  also 
be beneficiaries  of the provisions  of this Chapter  and Chapter III if their vessels are  registered 
in  that  Member  State  or  in  Georgia  respectively  in  accordance  with  their  respective 
legislation. 

ARTICLE 25 

Notwithstanding  any other  provisions  of the  Agreement,  a Party  shall  not  be prevented  from 
taking  measures  for  prudential  reasons,  including  for  the  protection  of  investors,  depositors, 
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.  Where  such  measures  do  not 
conform  with  the  provisions  of the  Agreement,  they  shall  not  be used  as a means of avoiding 
the obligations of a Party under the  Agreement. 

13 

/ 

7 
/J. 

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

3.  For the purpose  of this Agreement,  "financial  services" shall mean  those  activities  described in 

Annex III. 

ARTICLE 26 

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

ARTICLE 27 

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

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

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

-  directing the establishment  or a department  or subdivision  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  organization  who  possess  uncommon  knowledge  essential  to  the 
establishment's  service,  research  equipment,  techniques  or  management.  The  assessment  of 
such  knowledge  may reflect,  apart from knowledge  specific  to the  establishment,  a high level 
of  qualification  referring  to  a type  of work  or  trade  requiring  specific  technical  knowledge, 
including membership  of an accredited  profession; 

14 

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

ARTICLE 29 

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

2.  The  provisions  of  this  Article  are  without  prejudice  to  those  of  Article  37:  the  situations 
covered  by  such  Article  37  shall  be solely governed  by its provisions  to  the  exclusion  of any 
other. 

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

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

15 

CHAPTER  III 

Cross  border  supply  of services  between  the Community  and  Georgia 

ARTICLE 30 

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

2.  The Cooperation  Council  shall make recommendations for the implementation  of paragraph  1. 

ARTICLE  31 

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

ARTICLE  32 

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

international  maritime market  and traffic  on a commercial basis: 

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

(b) the Parties  affirm  their  commitment  to  a freely competitive  environment  as being  an  essential 

feature  of the dry and liquid bulk trade. 

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

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

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

(c)  prohibit  cargo  sharing  arrangements  in future  bilateral  agreements  concerning  dry  and  liquid 

bulk trade; 

16 

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

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

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

ARTICLE  33 

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

CHAPTER  IV 

General  Provisions 

ARTICLE  34 

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  35 

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

ARTICLE 36 

Companies which  are controlled  and  exclusively  owned  by Georgian  companies  and  Community 
companies jointly  shall also be beneficiaries  of the provisions of Chapters  II, III and IV. 

17 

. 

s-*.--,•;, 

ARTICLE  37 

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

ARTICLE  38 

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

ARTICLE  39 

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

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

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

ARTICLE  40 

Without  prejudice  to  Article  27,  no  provision  of  Chapters  II,  III  and  IV  shall  be  interpreted  as 
giving the right to: 

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

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

the territory  of the Community nationals of Georgia; 

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

the territory  of Georgia nationals of the Member States; 

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

-  Community companies  or Georgian  subsidiaries or branches of Community companies to 

supply workers who are nationals of the Member  States by temporary  employment  contracts. 

1R 

• 

/' 

CHAPTER V 

Current  payments and  capital 

ARTICLE  41 

1.  The  Parties  undertake  to  authorise  in  freely  convertible  currency,  any  current  payments 
between residents of the Community and of Georgia  connected  with  the movement  of goods, 
services or persons made in accordance with the provisions of this Agreement. 

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

3.  Without  prejudice  to  paragraph  2  or  to  paragraph  5,  as  from  entry  into  force  of  this 
Agreement,  no  new  foreign  exchange  restrictions  on  the  movement  of  capital  and  cuirent 
payments  connected  therewith  between  residents  of  the  Community  and  Georgia  shall  be 
introduced  and the existing arrangements  shall not become more restrictive. 

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

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

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

19 

/ 

CHAPTER VI 

Intellectual,  industrial  and commercial  property  protection 

ARTICLE 42 

1.  Pursuant to the provisions of this Article and of Annex II, Georgia 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 after  entry into force  of the Agreement,  Georgia  shall  accede  to 
the multilateral  conventions on intellectual, industrial and commercial  property rights referred 
to  in  paragraph  1 of  Annex  II  to  which  Member  States  are  parties  or  which  are  de  facto 
applied  by  Member  States,  according  to  the  relevant  provisions  contained  in  these 
conventions. 

20 

j  _ ._ 

/-

x 

' 

TITLE V 

LEGISLATIVE  COOPERATION 

ARTICLE  43 

1.  The  Parties  recognize  that  an  important  condition  for  strengthening  the  economic  links 
between  Georgia  and  the  Community  is the  approximation  of  Georgia's  existing  and  future 
legislation  to  that  of  the  Community.  Georgia  shall  endeavour  to  ensure  that  its  legislation 
will be gradually made compatible with that of the Community. 

2.  The  approximation  of  laws  shall  extend  to  the  following  areas  in  particular:  laws  and 
regulations  governing  investments  by  companies,  customs  law,  company  law,  banking  law, 
company  accounts  and  taxes,  intellectual  property,  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, 
technical  rules and  standards, nuclear laws and regulations and  transport. 

3.  The  Community  shall  provide  Georgia  with  technical  assistance  for  the  implementation  of 

these measures, which may include, inter alia : 

the exchange of experts; 
the provision  of early information  especially on relevant  legislation; 

- 
- 
-  organization  of seminars; 
- 
-  aid for translation  of Community  legislation in the relevant  sectors. 

training activities; 

ARTICLE  43 bis 

1.  Further  to  Article  43,  the  Commmunity  shall  provide  Georgia  with  technical  assistance 
regarding  the  formulation  and  implementation  of  legislation  in  the  field  of  competition,  in 
particular  as concerns: 

•  agreements  and  associations  between  undertakings  and  concerted  practices  which  may  have 

the effect  of preventing,  restricting or distorting competition, 
abuse by understandings  of a dominant position in the market, 
state aids which have the effect  of distorting competition, 
state monopolies of a commercial  character, 
public undertakings and undertakings with special or exclusive rights, 
review  and  supervision  of  the  application  of  competition  laws  and  means  of  ensuring 
compliance with them. 

The Parties  agree to  examine ways to  apply their respective  competition  laws on  a  concerted 
basis in such cases where trade between them is  affected. 

21 

7: 

TITLE VI 

ECONOMIC  COOPERATION 

ARTICLE 44 

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

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

3.  To  this  end  the  cooperation  will  concentrate,  in  particular,  on  economic  and  social 
development,  human  resources  development,  support  for  enterprises  (including  privatization, 
investment  and  development  of financial services),  agriculture  and  food,  energy,  transport, 
tourism, environmental  protection  and regional  cooperation. 

4.  Special  attention  shall  be  devoted  to  measures  capable  of  fostering  cooperation  among  the 
Independent  States  of the  Transcaucasian  region,  and  with  other  neighbouring  states,  with  a 
view to stimulating  a harmonious  development  of the region. 

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

technical  assistance 

ARTICLE 45 

Cooperation  in the field  of trade in goods and  services 

The Parties will  cooperate with  a view to ensuring that  Georgia's international  trade  is conducted 
in conformity  with the rules of the WTO. 

Such cooperation  shall include specific  issues directly relevant to trade facilitation,  including: 

• 

formulation  of  policy  on  trade  and  trade-related  questions,  including  payments  and  clearing 
mechanisms, 

•  drafting  of relevant  legislation, 
•  assistance to  prepare for  Georgia's eventual  accession to the WTO. 

22 

ARTICLE  46 

Industrial  cooperation 

1.  Cooperation  shall aim at promoting the following  in particular: 

the development  of business links between economic operators of both sides; 

- 
-  Community participation  in Georgia's efforts  to restructure its industry, 
- 
- 
-  environmental  protection. 
_  conversion  of the military - industrial  complex. 

the improvement  of management; 
the development  of appropriate commercial  rules and practices; 

2.  The  provisions  of  this  Article  shall  not  affect  the  enforcement  of  Community  competition 

rules applicable to undertakings. 

ARTICLE  46 bis 
Construction 

The Parties shall cooperate in the field of construction  industry. 

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

ARTICLE  47 

Investment  promotion  and  protection 

1.  Bearing in mind  the respective  powers  and  competences  of the  Community  and  the  Member 
States,  cooperation  shall  aim  to  establish  a  favourable  climate  for  private  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 cooperation  shall be in particular: 

- 

- 

- 

- 

- 

the* conclusion, where appropriate, between the Member  States and Georgia of agreements for 
the promotion  and protection  of investment; 
the conclusion, where appropriate, between the Member States and Georgia  of agreements to 
avoid  double taxation; 
the creation of favourable  conditions for  attracting foreign  investments into the Georgian 
economy; 
to establish stable and adequate business law and conditions, and to exchange information  on 
laws, regulations and administrative practices in the field of investment; 
to exchange information  on investment  opportunities in the form  of,  inter alia, trade fairs, 
exhibitions, trade weeks and other events. 

23 

/ •• 

ARTICLE  48 

Public  Procurement 

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

ARTICLE  49 

Cooperation  in the field of standards  and  conformity  assessment 

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

2.  To this end they shall seek to cooperate in technical  assistance projects  which will: 

•  promote appropriate  cooperation  with organizations and institutions specialized  in these  fields, 
•  promote the use of Community technical  regulations and the application  of European 

standards and  conformity  assessment  procedures, 

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

ARTICLE  50 

Mining  and  raw  materials 

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

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

-  exchange of information  on the prospects of the mining and non-ferrous  metals sectors, 
- 
- 
- 
- 
-  safety  in the mining industry. 

the establishment  of a legal framework for cooperation, 
trade matters, 
the adoption  and implementation  of environmental legislation, 
training, 

ARTICLE  51 

Cooperation  in science and  technology 

1.  The  Parties  shall  promote  cooperation 

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

24 

_ 

A 

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 52. 

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

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  and/or  production  of weapons of mass destruction. 

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

ARTICLE  52 

Education  and  training 

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

professional  qualifications  in  Georgia, 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  Georgia including the 

- 

system of certification  of higher educational  establishments and diplomas of higher  education; 
the training of public and private sector executives and civil servants in priority areas to be 
determined, 

-  cooperation between  educational  establishments and between educational  establishments and 

firms; 

-  mobility for teachers, graduates, administrators, young scientists and researchers,  and young 

people; 

teaching Community languages; 

-  promoting teaching in the field of European  Studies within the appropriate  institutions; 
- 
-  post-graduate training of conference  interpreters; 
- 
- 

training of journalists; 
training of trainers. 

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

/ 

— —• 

25 

^ 
~'-, 

ARTICLE 53 

Agriculture  and  the  agro-industrial  sector 

The  purpose  of  cooperation  in  this  area  shall  be  the  pursuance  of  agrarian  reform,  the 
modernization,  privatization  and  restructuring  of  agriculture,  the  agro-industrial  and  service 
sectors  in  Georgia,  development  of  domestic  and  foreign  markets  for  the  Georgian  products,  in 
conditions  that  ensure  the  protection  of  the  environment,  taking  into  account  the  necessity  to 
improve  security  of  food  supply  as well  as the development  of agri-business,  the  processing  and 
distribution  of  agricultural  products.  The Parties  shall  also  aim  at  the  gradual  approximation  of 
Georgian  standards  to  Community  technical  regulations  concerning  industrial  and  agricultural 
food  products including  sanitary and phytosanitary  standards. 

ARTICLE 54 

Energy 

1.  Cooperation  shall  take  place  within  the  principles  of the  market  economy  and  the  European 
Energy  Charter,  and  bearing  in mind  the Energy  Charter  Treaty  and  the  Protocol  on  Energy 
Efficiency  and  Related  Environmental  Aspects,  against  a  background  of  the  progressive 
integration  of the energy markets in Europe. 

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

-  formulation  and  development  of energy policy, 
- 

improvement  in management  and regulation  of the energy sector in line with a market 
economy, 
improvement  of energy  supply,  including security of supply, in an economic and 
environmentally  sound  manner, 

- 

-  promotion  of energy saving and energy efficiency  and implementation  of the Energy  Charter 

Protocol  on Energy Efficiency  and related  environmental  aspects, 

improvement  of energy technologies  in supply and end use across the range of energy types, 

-  modernisation  of energy  infrastructures, 
- 
-  management  and  technical  training in the energy  sector, 
- 
-  The introduction  of the range of institutional, legal, fiscal and other conditions necessary to 

transportation  and transit  of energy materials and products, 

encourage increased  energy trade and  investment. 

_  development  of hydro-electric  and other renewable energy resources. 

3.  The Parties  shall  exchange  relevant  information  relating to investment  projects  in the energy 
sector,  in particular  concerning  the construction  and  refurbishing  of oil  and  gas  pipelines  or 
other  means  of  transporting  energy  products.  They  shall  cooperate  with  a  view  to 
implementing  as  efficaciously  as  possible  the  provisions  of  Title  IV  and  of  Article  47,  in 
respect  of investments in the energy sector. 

26 

y//"* 

ARTICLE  55 

Environment 

1.  Bearing in mind the European  Energy  Charter  and the Declaration  of the Lucerne  Conference 
of  1993, and  taking  into  account  the Energy  Charter  Treaty,  and  especially  its article  19, and 
the  Energy  Charter  Protocol  on  Energy  Efficiency  and  related  environmental  aspects,  the 
Parties shall develop and  strengthen their cooperation  on environment  and human health. 

2.  Cooperation  shall aim at combating the deterioration  of the environment  and in particular: 

-  effective  monitoring of pollution  levels and assessment  of environment;  system of  information 

on the state of the  environment; 

-  combating local, regional  and transboundary air and water  pollution, 
-  ecological  restoration; 
-  sustainable, efficient  and  environmentally  effective  production  and use of energy; 
-  safety  of industrial  plants; 
-  classification  and safe handling of chemicals; 
-  water quality; 
-  waste reduction,  recycling and  safe disposal, implementation  of the Basle  Convention; 
- 
- 
- 

the environmental  impact  of agriculture,  soil erosion,  and  chemical  pollution; 
the protection  of forests; 
the conservation  of biodiversity,  protected  areas and sustainable use and  management  of 
biological  resources; 
land-use planning, including construction  and urban planning; 

- 
-  use of economic and fiscal instruments; 
-  global climate change; 
-  environmental  education  and awareness; 
- 

technical  assistance concerning rehabilitation  of zones affected  by radioactivity  and  addressing 
related  health and  social problems; 
implementation  of the 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 towards Community standards; 
-  environmental  training and institutional  strengthening; 
-  cooperation  at regional  level, including cooperation within the framework of the European 

Environment  Agency, and at international level; 

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

view of achieving sustainable  development; 

-  environmental  impact studies. 

27 

ARTICLE  56 

Transport 

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

This  cooperation  shall,  inter  alia,  aim  at  restructuring  and  modernizing  transport  systems  and 
networks  in  Georgia,  and  developing  and  ensuring,  where  appropriate,  compatibility  of 
transportation  systems  in  the  context  of  achieving  a  more  global  transport  system.  Particular 
consideration  shall be given to traditional  communications  links among Independent  States in the 
Transcaucasus region and with  other neighbouring states. 

The cooperation  shall include, inter alia: 

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

- 
-  modernization  and development  of railways, waterways, roads, ports, airports and air 

navigation  infrastructure  including the modernization  of major  routes of common interest and 
the trans-European  links for the above modes,  particularly those related  to the  TRACECA 
project; 

-  promotion  and  development  of multi-modal  transport; 
- 
-  preparation  of the legislative and  institutional  framework  for  policy development  and 

the promotion  of joint  research  and development  programmes; 

implementation  including privatization  of the transport  sector. 

ARTICLE  57 

Postal  services  and  telecommunications 

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

- 

the establishment  of policies and guidelines for the development  of the  telecommunications 
sector and postal  services; 

-  development  of principles of a tariff policy and marketing in telecommunications  and postal 

services; 

-  carry out transfer  of technology  and know how, including on European  Technical  standards 

and certification  systems; 

-  encouraging the development  of projects for telecommunications  and postal  services and 

attracting  investment; 

-  enhancing efficiency  and quality of the provision of telecommunications  and postal  services, 

amongst  others through  liberalization  of activities of sub-sectors, 

-  advanced  application  of telecommunications,  notably in the area of electronic funds  transfer, 
-  management  of telecommunications networks and their  "optimization"; 
-  an appropriate  regulatory basis for the provision  of telecommunication  and postal  services and 

- 

for the use of the radio frequency spectrum; 
training in the field of telecommunications  and postal  services for  operations in market 
conditions. 

28 

ARTICLE  58 

Financial  Services 

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

- 

- 

- 

the development  of banking and financial services, the development  of a common  market  of 
credit resources, the involvement  of Georgia in a universally accepted  system 
of mutual  settlements; 
the development  of fiscal system  and its institutions in Georgia,  exchange of 
experience and  personnel  training; 
the development  of insurance services, which would,  inter alia, create a favourable  framework 
for  Community companies participation  in the establishment  of joint ventures in the insurance 
sector in Georgia,  as well as the development  of export  credit insurance. 

This  cooperation  shall  in  particular  contribute  to  foster  the  development  of  relations  between 
Georgia and the Member  States in the financial services sector. 

ARTICLE  59 

Regional  development 

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

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

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

ARTICLE  60 

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  accident  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. 

' 

- ~" 

29 

7 

A 
^7/7V 

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

-  optimization  of the labour  market, 
-  modernization  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 
Georgia. 

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

ARTICLE  61 

Tourism 

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

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

-  training for  tourism  development. 

ARTICLE  62 

Small  and  medium-sized  enterprises 

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

associations  and  cooperation  between  SMEs in the Community and  Georgia. 
2.  Cooperation  shall include technical  assistance, in particular in the following  areas: 

- 
- 

- 

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

ARTICLE  63 

Information  and  communication 

The Parties  shall  support  the  development  of modern  methods  of information  handling,  including 
the media,  and  stimulate  the effective  mutual  exchange  of information.  Priority  shall  be given  to 

-- 

r— 

30 

. - 
, - • /-

/ 

programmes  aimed  at  providing  the  general  public  with  basic  information  about  the  Community 
and Georgia,  including, where possible, access to databases, in full  respect  of intellectual  property 
rights 

ARTICLE  64 

Consumer  Protection 

The  Parties  will  enter  into  close  cooperation  aimed  at  achieving  compatibility  between  their 
systems  of  consumer  protection.  This  cooperation  may  include  the  exchange  of  information  on 
legislative  work  and  institutional  reform,  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  compatibihty  of 
consumer protection  policies, and the organization  of seminars and training periods. 

ARTICLE  65 

Customs 

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

2.  Cooperation  shall include the following  in particular: 

the exchange of  information; 
the improvement  of working methods; 
the introduction  of the Combined Nomenclature and the single administrative  document; 
the interconnection  between the transit  systems of the Community and of Georgia; 

- 
- 
- 
- 
-  simplification  of inspections and formalities  in respect  of the carriage of goods; 
- 
- 

the support  in the introduction  of modern customs information  systems; 
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 
69,  and  71, mutual  assistance  in  customs  matters  between  administrative  authorities  of  the 
Parties  shall  take  place  in  accordance  with  the  provisions  of  the  Protocol  attached  to  this 
Agreement. 

ARTICLE  66 

Statistical  cooperation 

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

0 
/ 
-  7f7^7 

31 

The Parties, in particular,  shall cooperate in the following fields: 

-  adaptation  of the Georgian  statistical  system to international  methods, standards and 

classification; 

-  exchange of statistical  information; 
-  provision  of necessary  statistical  macro- and  microeconomic  information  to implement and 

manage economic  reforms. 

The Community  shall contribute to this end by rendering technical  assistance to  Georgia. 

ARTICLE 67 

Economics 

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.  To  this 
end, the Parties  shall exchange information  on macroeconomic performance  and  prospects. 

The Community  shall provide technical  assistance  so as to: 

-  assist  Georgia  in the process  of economic  reform  by providing expert  advisory 

and technical  assistance; 

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

ARTICLE  67 bis 

Monetary  Policy 

At the request  of the Georgian  authorities, the Union shall provide technical assistance designed 
to support  the efforts  of Georgia towards the strengthening of its monetary system and the 
introduction  of full  convertibility  of the currency. 

This will include technical  assistance for the design and application  of Georgia's monetary and 
credit policy,  in full  coordination with the international financial institutions; for the training of 
personnel:; and  for the development  of financial markets, including the stock  exchange. It shall 
also include informal  exchanges of views concerning the principles and the functioning  of the 
European  Monetary  System  and EC regulations on financial markets and capital  movements. 

32 

*-7r*y 

TITLE  VII 

. 

COOPERATION  ON  MATTERS  RELATING  TO  DEMOCRACY 
AND HUMAN  RIGHTS 

ARTICLE  68 

The Parties shall cooperate on all questions relevant to the establishment  or reinforcement  of 
democratic institutions, including those required  in order to strengthen the rule of law, and the 
protection  of human rights and fundamental  freedoms  according to international  law and  OSCE 
principles. 

This cooperation  shall take the form  of technical assistance programmes intended  to assist, inter 
alia, in the drafting  of relevant legislation and regulations,  the implementation  of such legislation; 
the functioning  of the judiciary;  the role of the State in questions of justice;  and the operation of 
the electoral  system.  They may include training where appropriate.  The Parties  shall  encourage 
contacts and  exchanges between their national, regional and judicial  authorities,  parliamentarians, 
and non-governmental  organisations. 

33 

' 

TITLE  VIII 

COOPERATION  ON  PREVENTION  OF ILLEGAL  ACTIVITIES  AND  THE 
PREVENTION  AND CONTROL  OF ILLEGAL  IMMIGRATION 

ARTICLE  69 

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

• 
• 
• 

illegal activities in the sphere of economics, including  corruption; 
illegal transactions  of various goods, including industrial waste; 
counterfeiting 

Cooperation  in  the  abovementioned  areas  will  be  based  on  mutual  consultation  and  close 
interaction.  Technical  and  administrative  assistance  may  be  provided,  including  in  the  following 
areas: 

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. 

ARTICLE  70 

Money  laundering 

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

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). 

ARTICLE  71 

Drugs 

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

34 

ARTICLE  71 BIS 

Illegal  Immigration 

1. 

The Member  States of the European  Union and Georgia agree to cooperate  in order to 
prevent and control illegal immigration.  To this end: 

-  Georgia, agrees to readmit  any of its nationals illegally present  on the territory  of a 

Member  State, upon  request  by the latter and without  further  formalities, 

-  and each Member  State agrees to readmit any of its nationals, as defined  for  community 
purposes, illegally present  on the territory of  Georgia., upon request  by .the latter and 
without  further  formalities. 

The Member  States and  Georgia.will also provide their nationals with  appropriate 
identity documents for  such  purposes. 

Georgia, agrees to conclude bilateral  agreements with Member  States which  so  request, 
regulating  specific  obligations  for  readmission  including an obligation for  the 
readmission  of nationals  of other countries and  stateless persons who have arrived  on the 
territory of any such Member  State from  Georgia  or who have arrived  on the territory of 
Georgia from  any such Member  State. 

3. 

The Cooperation  Council  shall  examine what  other joint  efforts  can be made to prevent  and 
control illegal  immigration. 

35 

*y 

TITLE  L\ 

CULTURAL  COOPERATION 

ARTICLE  72 

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

2.  Cooperation  may cover,  inter alia, the following  areas: 

-  exchange of information  and  experience in the field of conservation  and protection  of 

monuments, sites (architectural  heritage), and museum values; 

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

culture. 

- 

translation  of literary works. 

36 

y 
/ 

TITLE X 

FINANCIAL  COOPERATION  IN THE FIELD OF TECHNICAL  ASSISTANCE 

ARTICLE 73 

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

ARTICLE 74 

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

ARTICLE 75 

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

ARTICLE  76 

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

37 

/ /, 

/ \ 
S-7 

TITLE XI 

INSTITUTIONAL,  GENERAL AND FINAL  PROVISIONS 

ARTICLE 77 

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

ARTICLE 78 

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

ARTICLE  79 

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

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 how the Committee shall  function. 

2.  The  Cooperation  Council  may  delegate  any  of  its  powers  to  the  Cooperation  Committee, 

which will ensure continuity between  meetings of the Cooperation  Council. 

ARTICLE  80 

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

38 

ARTICLE 81 

When  examining  any  issue  arising  within  the  framework  of  this  Agreement  in  relation  to  a 
provision  referring  to  an  article  of  the  GATT/WTO,  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/WTO. 

ARTICLE  82 

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

ARTICLE  83 

1.  The Parliamentary  Cooperation  Committee shall consist of members of the European 

Parliament,  on the one hand, and of members of the Georgian Parliament,  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 the 

European  Parliament  and the Georgian Parliament respectively, in accordance with the 
provisions to be laid down  in its rules of procedure. 

ARTICLE 84 

The  Parliamentary  Cooperation  Committee  may  request  relevant  information  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 
Cooperation  Council. 

the 

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

ARTICLE  85 

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. 

39 

2.  Within the limits of their respective powers and competences, 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  Georgia; 

-  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. 

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

ARTICLE  86 

(a)  which  it  considers  necessary to  prevent  the  disclosure  of information  contrary  to  its  essential 

security interests; 

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

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

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

control  of dual use industrial  goods and technology. 

ARTICLE  87 

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

contained  therein: 

- 

- 

the arrangements  applied  by  Georgia 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  Georgia  shall not  give rise to any 
discrimination  between  Georgian  nationals, or its companies or firms. 

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

n 

/ 

40 

? y 

ARTICLE  88  , 

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

application  or interpretation  of this Agreement. 

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

3.  In  the  event  of  it  not  being  possible  to  settle  the  dispute  in  accordance  with  paragraph 2, 
either  Party  may  notify  the  other  of  the  appointment  of  a  conciliator;  the  other  Party  must 
then  appoint  a  second  arbitrator  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.  Such  recommendations 
shall not be binding upon the Parties. 

4.  The Cooperation  Council  may establish  rules of procedure for dispute  settlement. 

ARTICLE  89 

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

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

ARTICLE  90 

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

ARTICLE  91 

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

ARTICLE  92 

Insofar  as  matters  covered  by  this  Agreement  are  covered  by  the  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. 

41 

•i 

ARTICLE 93 

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

ARTICLE 94 

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  seeking  a  solution  acceptable  to  the 
Parties. 

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

ARTICLE 95 

Annexes  I,  II,  III,  IV  and  V  together  with  the  Protocol  shall  form  an  integral  part  of  this 
Agreement. 

ARTICLE  96 

This  Agreement  shall  not,  until  equivalent  rights  for  individuals  and  economic  operators  have 
been achieved  thereunder,  affect  rights  assured  to them through  existing  Agreements binding  one 
or  more  Member  States,  on  the  one  hand,  and  Georgia,  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  97 

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

ARTICLE 98 

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

42 

/ 

? 

/ 

ARTICLE 99 

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

ARTICLE 100 

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

This Agreement  shall  enter  into  force  on the first day of the second  month  following  the  date on 
which  the  Parties  notify  the  Secretary-General  of  the  Council  of  the  European  Union  that  the 
procedures referred  to in the first paragraph have been completed. 

Upon  its  entry  into  force,  and  as  far  as  relations  between  Georgia  and  the  Community  are 
concerned,  this  Agreement  shall  replace  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. 

ARTICLE  101 

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

43 

/V 

LIST  OF  DOCUMENTS  ATTACHED 

Annex  I 

Indicative list of advantages granted  by  Georgia to the Independent 
States in accordance with Article 8(3). 

Annex D 

Intellectual, industrial  and commercial property conventions referred  to in Article 42. 

Annex IH  Financial  services definitions,  referred  to in Article 25. 

Annex IV  Community reservations in accordance with Article 22 (2) 

Annex V  Reservations  of Georgia in accordance with Article 22 (4). 

Protocol  on mutual  assistance between  administrative authorities in customs matters. 

44 

=-  7j 

7'7 

Indicative  list  of  advantages  granted  by  Georgia  to  the  Independent  States  in  accordance 
with Article  8 (3) 

ANNEX I 

1.  All Independent States: 

No import duties are implemented. 
No VAT  on excise duties  are applied to imports 

2.  All Independent States: 

Special system of non-commercial  operations, including payments resulting from these 
operations. 

45 

C 

••- 

-Y 

INTELLECTUAL,  INDUSTRIAL AND COMMERCIAL  PROPERTY  CONVENTIONS REFERRED  TO IN 
ARTICLE  42 

ANNEX  II 

1.  Paragraph  2 of Article 42 concerns the following  multilateral  conventions: 

-  International  Convention for the Protection  of Performers,  Producers of Phonograms 

and Broadcasting Organizations (Rome,  1961); 

-  Protocol  relating to the Madrid  Agreement  concerning the International  Registration  of 

Marks (Madrid,  1989); 

-  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 Micro-organisms  for 

the purposes of Patent Procedures  (1977, modified  in 1980); 

- 

International  Convention  for  the Protection  of New Varieties of Plants (UPOV)  (Geneva 
Act,  1991). 

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

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

multilateral  conventions: 

-  Berne Convention  for the Protection  of Literary and Artistic Works (Paris Act,  1971); 

-  Paris Convention  for the Protection  of Industrial Property (Stockholm  Act,  1967 and 

amended  in  1979); 

-  Madrid  Agreement  concerning the International Registration  of Marks (Stockholm  Act, 

1967 and amended  in 1979); 

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

4.  From the entry into force of this Agreement,  Georgia 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  Georgia to any third 
country on an effective  reciprocal basis and to advantages granted  by  Georgia to  another 
country of the former  USSR. 

46 

i 

CONCERNING ARTICLE  25 
FINANCIAL SERVICES:  DEFINITIONS 

ANNEX  m 

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

A. 

B. 

All insurance and insurance-related  services; 
1. 

life 
non-life 

Direct insurance (including co-insurance), 
(i) 
(ii) 
Reinsurance and retrocession. 
Insurance intermediation,  such as brokerage and agency. 
Services auxiliary to insurance, such as consultancy,  actuarial, risk assessment and 
claim settlement  services. 

Banking and  other financial services (excluding insurance). 
1. 
2. 

Acceptance of deposits and other repayable funds  from  the public. 
Lending of all types, including, inter-alia, consumer credit, mortgage  credit, 
factoring  and financing  of commercial  transaction. 
Financial leasing. 
All payment  and money transmission  services, including credit  charge and debit 
cards, travellers cheques and bankers  drafts. 
Guarantees and commitments. 
Trading for  own account  or for the account  of customers, whether on an 
exchange, in an over the counter market or otherwise, the  following: 
(a) 
(b) 
(c) 
(d) 

money market  instruments (cheques, bills, certificates  of deposits,  etc.) 
foreign  exchange 
derivative products including, but not limited to, futures  and  options 
exchange rates and interest  rate instruments,  including products such as 
swaps, forward  rate agreements, etc. 
transferable  securities 
(e) 
(f) 
other negotiable instruments and financial  assets, including bullion. 
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. 
Money  brokering. 
Asset  management,  such as cash or portfolio  management,  all forms  of collective 
investment  management,  pension fund  management,  custodial  depository  and trust 
services. 
Settlement  and clearing services for financial  assets, including securities,  derivative 
products, and other negotiable instruments. 
Advisory  intermediation  and other auxiliary financial  services on all the activities 
listed  in points  1  to  10 above, including credit reference  and analysis, investment 
and  portfolio  research  and advice, advice on acquisitions and  on  corporate 
restructuring  and  strategy. 

2. 
3. 
4. 

3. 
4. 

5. 
6. 

7. 

8. 
9. 

10. 

11. 

47 

12. 

Provision  and transfer  of financial information,  and financial  data processing and 
related  software  by providers of other financial services. 

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

(a) 

(b) 

(c) 

Activities carried  out by central  banks or by any other public institution  in pursuit  of 
monetary  and exchange rate policies. 

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 providers in competition  with  such public 
entities. 

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

48 

;7r~A 

7/ 

COMMUNITY  RESERVATIONS  IN ACCORDANCE  WITH  ARTICLE  22  (2) 

ANNEX  IV 

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 jurisdicrion  of Member  States of the Community is 
restricted  to fishing vessels flying the flag of a Community Member  State and registered in 
Community territory unless otherwise  provided  for. 

Real  estate  purchase 

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

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 infrastructure  is 
restricted. 

Professional  services 

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

Agriculture 

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

News agency  services 

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

49 

/ 

7" 

ANNEX V 

GEORGIAN  RESERVATIONS  IN ACCORDANCE  WITH  ARTICLE  22 (4) 

1. 

Current  Georgian investment legislation requires investments by foreign  companies and 
investments by Georgian companies in which the state does not hold a controlling 
interest1  to be licensed by the competent  Georgian authorities. The conditions for the 
issue of such licenses shall not result in discrimination between private Georgian and 
foreign  companies, as set out in Georgian law. 

Such licensing may not be used in order to nullify the benefits  accorded  to  Community 
companies pursuant to Article 22 (4) of this Agreement,  nor to circumvent  any other 
provisions of this Agreement.  In particular it may not be used to impede the 
establishment  of Community Companies in any area of economic activity,  except as 
provided  for  below. No license may be revoked without due justification  and any such 
revocation  may be subject  to appeal and, if necessary,  dispute  settlement. 

At the latest by 31 December  1998, Georgia shall bring its legislation on licensing into 
conformity  with standard  international practice and in particular with  Community 
legislation.  The EU shall provide technical assistance in this area. During this transitional 
period,  Georgia shall not take any measures or actions which render the conditions  for 
establishment  and operations of Community companies more restrictive than the situation 
on the day preceding the date of initialling of this Agreement. 

2. 

Foreign  investment  is prohibited  in the following  areas: 

defence  and security of Georgia; 
preparation  and sale of narcotics and psychotropic  substances; 
cultivation  and sale of plants containing narcotic or poisonous  substances. 

A foreign  company requires special permission from  the competent  authorities in 
Georgia  if it wishes to carry out activities within 20 km. of Georgia's borders or in other 
zones designated  as vital to national security or for the protection  of Georgia's 
environment. 

4. 

In the following  areas of economic activity, Georgian legislation  requires the State to 
hold at  least  51 % of the shares of enterprises with foreign  participation.  This 
percentage  may be reduced  if the Parliament  of Georgia so determines: 

1 as defined  in the Joint  Declaration to this Agreement concerning the notion  of "control" 

50 

Operation  of gas and oil pipelines , communication  and  power  transmission 
lines, thermal  lines of national  importance and the buildings and other  facilities 
essential  for  their operation, 
Operation  of  motor  highways and railways, airports and  maritime ports of 
national  importance in Georgia, 
Issue of securities, bank notes, coins and stamps; 

Treatment  of patients suffering from highly dangerous infectious  diseases, 
including contagious skin and venereal diseases and  mental  disorders; 
Veterinary treatment  of animals suffering from dangerous diseases; 
Production  of raw spirit. 

5. 

6. 

Whereas Georgian legislation does not discriminate between  foreign  investors and 
Georgian  non-state enterprises regarding the long-term leasing of land, it does not 
currently allow them to purchase land or natural resources. 

Foreign companies willing to prospect for or to exploit  mineral deposits, as to extract 
and exploit  natural resources in Georgia or on Georgia's continental  shelf, require a 
concession from the Government  of  Georgia. 

The application  of the reservations in this annex can in no case result  in treatment  less  favourable 
than that accorded  to companies of any third  country. Any relaxation  of  these restrictions will be 
extended to Community companies on the basis of national treatment  or most-  favoured-nation 
treatment, whichever is the better. 

The future  development  of investment legislation in Georgia will take place in conformity  with 
the provisions and the spirit of this Agreement including in particular  its General Principles, the 
conditions affecting  the establishment  and operation of companies, and the provisions regarding 
legislative cooperation  (Titles I, IV and V) as well as the Exchange of Letters between the 
Community and  Georgia in Relation to the Establishment  of Companies. 

57 

1 

DRAFT PROTOCOL 

ON MUTUAL ASSISTANCE 

BETWEEN  ADMINISTRATIVE  AUTHORITIES 

IN CUSTOMS  MATTERS 

52 

ARTICLE 1 

Definitions 

For the purposes  of this Protocol : 

a) 

b) 

c) 

''customs  legislation"  shall  mean  any  legal  or  regulatory  provisions  applicable  in the 
territory of the Contracting Parties governing the import,  export, transit  of goods and 
their  placing  under  any  customs  procedure,  including  measures  of  prohibition, 
restriction  and control; 

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

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

d) 

"personal  data",  shall  mean  all  information  relating  to  an  identified  or  identifiable 
individual. 

ARTICLE 2 

Scope 

The  Contracting  Parties  shall  assist  each  other,  in the  areas  within  their jurisdiction,  in  the 
manner  and  under  the  conditions  laid  down  in  this  Protocol,  in  preventing,  detecting  and 
investigating  operations in breach  of customs legislation. 

Assistance  in  customs  matters,  as  provided  for  in  this  Protocol,  shall  apply  to  any 
administrative  authority  of the Contracting  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  obtained  under  powers exercised  at  the  request  of the judicial 
authorities, unless those authorities so agree. 

ARTICLE 3 

Assistance on request 

1.  At  the  request  of  the  applicant  authority,  the  requested  authority  shall  furnish  it  with  all 
relevant  information  which  may  enable  it  to  ensure  that  customs  legislation  is  correctly 
applied,  including  information  regarding  operations  noted  or  planned  which  are  or  could  be 
in breach  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  Contracting  Parties  have  been  properly 
imported  into  the  territory  of  the  other  Party,  specifying,  where  appropriate,  the  customs 
procedure  applied  to the goods. 

5r 

53 

•^7'i-

At the request  of the applicant  authority,  the requested  authority  shall, within  the  framework 
of its laws, take the necessary  steps to ensure that  a special watch  is kept  on : 

(a) 

(b) 

natural  or  legal  persons  of  whom  there  are  reasonable  grounds  for  believing  that 
they are breaching or have breached  customs legislation: 
places where  goods  are  stored  in a way that  gives grounds  for  suspecting  that  they 
are intended  to supply operations in breach of customs legislation; 

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

legislation; 

(d)  means  of  transport  for  which  there  are  reasonable  grounds  for  believing  that  they 
have been, are or might be used  in operations in breach of customs legislation. 

ARTICLE 4 

Spontaneous  assistance 

The  Contracting  Parties  shall  provide  each  other,  in  accordance  with  their  laws,  rules  and  other 
legal  instruments,  with  assistance  without  prior  request  if they  consider  that  to  be  necessary  for 
the  correct  application  of  customs  legislation,  particularly  when  they  obtain 
information 
pertaining to : 

-  operations which  are or appear to be in breach  of such legislation  and which  may be of 

interest  to another  Contracting  Party, 

-  new means or methods employed  in carrying out  such operations, 
-  goods known to be subject  to breaches of customs legislation. 
-  natural  or  legal  persons  of whom  there  are  reasonable  grounds  for  believing  that  they 

are or have been in breach  of customs legislation 

-  means of transport  for which there are reasonable grounds for  believing that  they  have 

been, are or might be used  in operations in breach of customs legislation 

ARTICLE 5 

Delivery/Notification 

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

- to deliver  all documents, 
- to notify  all decisions, 

falling within the scope of this Protocol to an addressee, residing or established  in its territory.  In 
such cases, Article 6(3) shall apply as far as the request  itself is concerned. 

ARTICLE 6 

Form  and substance of requests for  assistance 

Requests  pursuant  to  this Protocol  shall  be made in writing.  They  shall  be  accompanied  by 
the  documents  necessary  to  enable compliance  with  the  request.  When  required  because  of 
the urgency  of the situation,  oral  requests may be accepted,  but  must  be confirmed  in writing 
immediately. 

.. 

/ 

54 

" 

' 

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

(a) 
(b) 
(c) 
(d) 
(e) 

the applicant  authority  making the request, 
the measure  requested; 
the object  of and the reason  for the request; 
the laws, rules and  other legal elements involved; 
indications as exact  and comprehensive as possible on the natural  or  legal  persons 

who are the target  of the investigations; 

(f) 

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

cases provided  for  in Article 5. 

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

language acceptable to that  authority. 

4. 

If  a  request  does  not  meet  the  formal  requirements,  its  correction  or  completion  may  be 
requested,  precautionary  measures may, however, be ordered. 

ARTICLE 7 

Execution  of requests 

1. 

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

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

instruments  of the requested  Contracting Party. 

3.  Duly  authorized  officials  of  a  Contracting  Party  may,  with  the  agreement  of  the  other 
Contracting  Party  involved  and  subject  to 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  operations  which  are  or  may  be  in  breach  of  customs 
legislation  which the applicant  authority needs for the purposes of this Protocol. 

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

ARTICLE 8 

Form in which  information  is to be communicated 

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

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

; 

^ 

55 

/•-?<• 

The  documents  provided  for  in  paragraph  1 may  be  replaced  by  computerized  information 
produced  in any form  for the same purpose. 

ARTICLE 9 

Exceptions to the obligation to provide  assistance 

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

to do would: 

(a) 

(b) 

(c) 
(d) 

be  likely to  prejudice  the  sovereignty  of Georgia  or  that  of  a Member  State  of the 
European Union which has been asked for  assistance under this Protocol, or 
be likely to prejudice  public policy,  security or other essential  interests,  in particular 
in the cases referred  to under Article  10 (2); or 
involve currency  or tax regulations other than customs legislation,  or 
violate an industrial, commercial  or professional  secret. 

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

3. 

If assistance is refused,  the decision and the reasons therefor  must be notified  to the applicant 
authority  without  delay. 

ARTICLE  10 

Information  exchange and  confidentiality 

1.  Any  information  communicated  in  whatsoever  form  pursuant  to  this  Protocol  shall  be  of  a 
confidential  or restricted  nature, depending on the rules applicable in each  of the Contracting 
Parties.  It  shall be covered by the obligation of official  secrecy and  shall enjoy the protection 
extended  to  like information  under the relevant  laws of the Contracting Party which received 
it and the corresponding  provisions applying to the Community institutions. 

2.  Personal  data  may  be  exchanged  only  where  the  receiving  Contracting  Party  undertakes  to 
protect  such  data in at least  an equivalent  way to the one applicable to that  particular  case in 
the supplying Contracting Party. 

3. 

Information  obtained  shall  be  used  solely  for  the  purposes  of  this  Protocol.  WTiere one  of 
the  Contracting  Parties requests the use of such  information  for  other  purposes,  it  shall  ask 
for  the prior  written  consent  of the authority  which  furnished  the  information.  Moreover,  it 
shall be subject  to any restrictions laid down by that  authority. 

4.  Paragraph  3  shall  not  impede  the  use  of  information  in  any  judicial  or  administrative 
proceedings  subsequently  instituted  for  failure  to  comply  with  customs  legislation.  The 
competent  authority which supplied that information  shall be notified  of such use. 

5.  The  Contracting  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. 

56 

/ 

^ 

ARTICLE  11  . 

Experts and  witnesses 

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

2.  The authorized  official  shall enjoy  the protection  guaranteed  by  existing  legislation  to  officials 
of the applicant  authority on its territory. 

ARTICLE  12 

Assistance  expenses 

The  Contracting  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  public service employees. 

ARTICLE  13 

Application 

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

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

ARTICLE  14 

Complementarity 

Without  prejudice  to  Article  10,  any  agreements  on  mutual  assistance  which  have  been 
concluded  between  one  or  more  Member  States  of  the  European  Union  and  Georgia  shall 
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. 

7 

- ,< 

JOINT DECLARATION  IN RELATION TO ARTICLE 5 

Should the Parties agree that circumstances warrant meetings at the highest level, such meetings 
may be arranged on an ad hoc basis. 

58 

JOINT DECLARATION 
CONCERNING ARTICLE 14 

Until  Georgia  accedes  to  the  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. 

59 

JOENT  DECLARATION 
CONCERNING  THE  NOTION  OF  "CONTROL" 
IN ARTICLE  24(b) AND ARTICLE  36 

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

the factual  circumstances of the particular case. 

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

thus a subsidiary of such other company  if: 

- 

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

- 

the other company has the right to appoint  or dismiss a majority  of the administrative organ, 
of the management  organ  or of the supervisory organ  and  is at the same time a shareholder  or 
member of the  subsidiary. 

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

60 

/ 

• 

/ 

JOINT  DECLARATION 
CONCERNING  ARTICLE 35 

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. 

61 

7^ 
/  : 

JOINT  DECLARATION 
CONCERNING  ARTICLE 42 

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

/ 

62 

JOINT  DECLARATION 
CONCERNING  ARTICLE  94 

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

(a) repudiation  of the Agreement  not sanctioned by the general rules of international  law 

or 

(b) violation  of the essential  elements of the Agreement  set out in Article 2.  -

2.  The parties agree that  the  "appropriate  measures" referred  to in Article 94 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  94, the  other  party  may avail  itself  of the  procedure  relating  to 
settlement  of disputes. 

63 

DECLARATION 
BY THE FRENCH  GOVERNMENT 

The French  Republic  notes  that  the  Partnership  and  Cooperation  Agreement  with  Georgia  does 
not  apply  to  the  overseas  countries  and  territories  associated  with  the  European  Community 
pursuant to the Treaty establishing the European  Community. 

A 
•75'"7 '/ 

•  y/ 

64 

EXCHANGE  OF LETTERS 

BETWEEN  THE  COMMUNITY 

AND GEORGIA 

IN RELATION  TO THE ESTABLISHMENT  OF COMPANIES 

A. Letter  from  the  Government  of  Georgia 

Dear Sir, 

I refer to the Partnership  and  Cooperation  Agreement  initialled on 

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

With this in mind, it is my understanding that during the period between the date of initialling of 
this Agreement  and  the entry into force of the relevant articles on establishment  of companies, 
Georgia shall hot  adopt  measures  or regulations which would  introduce or worsen  discrimination 
of Community companies vis-à-vis Georgian companies or companies from any third  country as 
compared  to the situation  existing  on the date of initialling of this agreement. 

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

Please accept,  Sir, the assurance of my highest  consideration. 

For the Government  of Georgia 

•/ 

-y, 

-y^ 

66 

B. Letter from  the European  Community 

Dear  Sir, 

Thank you for  your  letter  of today's date, which reads as follows: 

"I refer to the Partnership  and Cooperation  Agreement  initialled  on . 

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

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

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

I can acknowledge receipt  of this letter. 

Please accept,  Sir, the assurance  of my highest  consideration. 

On behalf of the European  Community 

67 

Outside the Agreement: 

Declaration  by the  Community 

The  Community  undertakes  to  provide  technical  assistance  in  the  form  of  seminars  or  other 
appropriate means in order to help Georgian authorities and economic  operators to benefit  in full 
from  the advantages granted under the Community GSP as currently applied to Georgia. 

/ 

ISSN 0254-1475 

COM(96) 135  final 

DOCUMENTS 

EN 

11 

Catalogue number  : CB-CO-96-156-EN-C 

ISBN 92-78-02502-X 

Office  for Official Publications of the European Communities 

L-2985 Luxembourg 

(A