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 the Republic of Armenia, of the other part
Date: 1996-03-27
Institutions: European Commission
Subjects: Armenia, cooperation agreement (EU), cooperation policy, economic development, mixed agreement

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COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  27.03.1996 
COM(96)  136  final 

96/093  (AVC) 

Proposai 

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 the Republic  of Armenia, 

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  the  Republic  of 
Armenia, on the other. 

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

'\ 

4.  The  Agreement  will,  as far  as trade  relations  between  the  Community  and  the  Republic  of 
Armenia  are  concerned,  replace  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. 

5.  The  procedures  of  the  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. 

6 

COUNCIL AND COMMISSION  DECISION 

OF 

on the conclusion  of the Partnership  and Cooperation  Agreement 

between  the European  Communities and their Member  States 

and the Republic of Armenia 

(../.../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  Armenia  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; 

a 

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

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, 

HAVE DECIDED  AS FOLLOWS : 

Article 1 

The  Partnership  and  Cooperation  Agreement  between  the  European  Union  and  the  Republic 
of  Armenia,  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  Com 
munity 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, 

Id 

Final Act 

The plenipotentiaries  of: 

THE KINGDOM  OF BELGIUM, 

THE KINGDOM  OF DENMARK, 

THE FEDERAL  REPUBLIC  OF GERMANY, 

THE HELLENIC  REPUBLIC, 

THE KINGDOM  OF SPAIN, 

THE FRENCH REPUBLIC, 

IRELAND, 

THE ITALIAN REPUBLIC, 

THE GRAND DUCHY OF LUXEMBOURG, 

THE KINGDOM  OF THE NETHERLANDS, 

THE 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 the Republic of Armenia, 

f  e 

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  the  Republic  of 
Armenia,  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 
the  Republic  of  Armenia  have  adopted  the  texts  of  the  Joint  Declarations  listed  below  and 
annexed  to this Final  Act: 

Joint  Declaration  concerning  Article 3bis of the Agreement 

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 
the Republic  of Armenia  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 
the  Republic  of Armenia  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 the Republic of Armenia. 

u 

PARTNERSHIP  AND COOPERATION  AGREEMENT 

BETWEEN  THE EUROPEAN  COMMUNITIES 

AND THEIR MEMBER  STATES, OF THE ONE PART, 

AND THE REPUBLIC  OF ARMENIA,  OF THE OTHER  PART 

f 

PARTNERSHIP  AND COOPERATION  AGREEMENT 

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

TFIE 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, 

Contracting  Parties  to  the  Treaty  establishing  the European  Community,  the  Treaty  estabhshing 
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  THE REPUBLIC  OF ARMENIA of the other part, 

CONSIDERING  the  links  between  the  Community,  its  Member  States  and  the  Republic  of 
Armenia and the common values that they share, 

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

RECOGNIZING  in  that  context  that  support  of  the  independence,  sovereignty  and  territorial 
integrity  of  the  Republic  of  Armenia  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, 

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 the Republic  of Armenia, 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  estabhshing  and  developing  regular  political  dialogue  on  bilateral,  regional  and 
international  issues of mutual  interest, 

RECOGNIZING  AND  SUPPORTING  the  wish  of the  Republic  of  Armenia  to  establish  close 
co-operation with European  institutions; 

CONSIDERING  the  necessity  of promoting  investment  in the  Republic  of  Armenia,  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  the  Republic  of  Armenia  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 
the Republic of Armenia  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, 

WELCOMING  AND  RECOGNIZING  the  importance  of  the  Republic  of  Armenia's  efforts, 
aimed  at  transition  of  its  economy  away  from  a  state  trading  country  with  a  centrally  planned 
economy  into a market  economy; 

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 the 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 the Republic of Armenia 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 the Republic of Armenia'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  newly 
independent  states  which  have  emerged  from  the  dissolution  of  the  Union  of  Soviet  Socialist 
Republics,  hereinafter  called  "Independent  States",  should  maintain  and  develop  cooperation 
among  themselves  in  compliance  with  the  principles  of  the  Helsinki  Final  Act  and  with 
international  law  and  in  the  spirit  of  good  neighbourly  relations  and  will  make  every  effort  to 
encourage this process. 

ARTICLE 3bis 

The Parties shall as appropriate  review changing circumstances in the Republic of Armenia, 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. 

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  the  Republic  of  Armenia,  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 the Republic of Armenia 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 the Republic of Armenia 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. 

-  provisions relating  to customs clearance, transit, warehouses and  transhipment, 

- 

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

-  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 the Republic of Armenia acceding to the WTO or on 31 December  1998a whichever is 
earlier,  to  advantages  defined  in Annex  I granted  by the Republic  of  Armenia  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. 

T~^~' 

8 

. 

/ 

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  the  Republic  of  Armenia  shall  be  imported  into  the  Commumty  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  the  Republic  of  Armenia  free  of 

all  quantitative  restrictions  and  measures  of equivalent  effect. 

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  the  Republic  of  Armenia, 
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  the  Republic  of  Armenia,  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 
Agreement  on  implementation  of  Article  VI  of  the  GATT,  the  Agreement  on  interpretation 
and  application  of  Articles  VI,  XVI  and  XXIII  of the  GATT  or  related  internal  legislation. 

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 
the  Republic  of  Armenia  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 the Republic  of Armenia  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  the  Republic  of  Armenia. 

10 

TITLE  IV 

PROVISIONS  AFFECTING  BUSINESS AND  INVESTMENT 

CHAPTER  I 

Labour  Conditions 

ARTICLE  19 

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

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

11 

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  Armenian  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  Armenian  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  Armenian  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.  The Republic of Armenia shall grant for the establishment  of Community  companies as defined 
in Article 24(d) treatment  no less favourable  than that  accorded  to Armenian  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. 

12 

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 
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. 

intermodal 

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  behalf  of the  companies,  inter  alia  in organizing  the  call  of  the  vessel  or  taking  over 

cargoes  when  required. 

For  the  purpose  of this  Agreement: 

ARTICLE  24 

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

~^~~ 

13 

/  jl 

(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  Armenian  companies  as  referred  to in 
point (a),  to  take  up  economic  activities  by  means  of  the  setting  up  of  subsidiaries  and 
branches in the Republic  of Armenia 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 the Republic  of Armenia  established  outside  the 
Community  or  the  Republic  of  Armenia  respectively,  and  shipping  companies  established 
outside  the  Community  or the Republic  of Armenia  and  controlled  by  nationals  of  a Member 
State  or  Armenian  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 the Republic 
of Armenia  respectively  in accordance with their respective  legislation. 

ARTICLE 25 

1.  Notwithstanding  any other  provisions  of the  Agreement,  a Party  shall  not  be  prevented  from 
taking  measures  for  prudential  reasons,  including  for  the  protection  of  investors,  depositors, 
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. 

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. 

14 

ARTICLE  27 

1.  Notwithstanding  the  provisions  of  Chapter  I  of  this  Title,  a  Community  company  or  an 
Armenian  company  established  in  the  territory  of  the  Republic  of  Armenia  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  the  Republic  of  Armenia  and  the  Community  respectively,  employees  who  are 
nationals  of  Community  Member  States  and  the  Republic  of  Armenia  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 

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: 

in  a  senior  position  with  an  organization,  who  pnmarily  direct 

-  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, 

(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. 

15 

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  the  Republic  of  Armenia  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  the  Republic  of  Armenia  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  the  Republic  of  Armenia  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  the  Republic  of  Armenia  would  result  in 
rendering  the  conditions  for  operation  of  subsidiaries  and  branches  of  Community  companies 
established  in  the  Republic  of  Armenia  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  the  Republic  of  Armenia  at  the  time  of  entry  into  force  of  the 
relevant  act. 

Cross  border  supply  of services  between  the  Community  and  the  Republic  of  Armenia 

CHAPTER  m 

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  Armenian  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  the 
Republic  of  Armenia 

16 

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; 

(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 the 
Republic of Armenia 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. 

17 

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 Armenian  companies  and  Community 
companies jointly shall also be beneficiaries  of the provisions of Chapters II, III and IV. 

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 the Republic of Armenia pursuant  to  commitments  entered 
into  in  economic  integration  agreements  in  accordance  with  the  principles  of  Article  V  of  the 
GATS. 

18 

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  the  Republic  of  Armenia 
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 the  P^epublic of Armenia  respectively  to  enter,  or  stay  in, 

the territory  of the Republic  of Armenia  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 Armenian  companies  to  employ  or  have  employed  in 

the territory  of the  Community  nationals  of the Republic  of  Armenia; 

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

the territory  of the  Republic  of Armenia  nationals  of the Member  States; 

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

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

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

CHAPTER  V 

Current  payments  and  capital 

ARTICLE  41 

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

With  regard  to  transactions  on  the  capital  account  of  balance  of  payments,  from  entry  into 
force  of  the  Agreement,  the  free  movement  cf  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  current 
payments  connected  therewith  between  residents  of  the  Community  and  the  Republic  of 
Armenia  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  the 
Republic  of Armenia  in order  to  promote  the  objectives  of this  Agreement. 

is 

(IMF) 

introduced, 

the  Republic  of  Armenia  may 

5.  With  reference  to  the  provisions  of  this  Article,  until  a  full  convertibility  of  the  Armenian 
currency  within  the  meaning  of  Article  VIII  of the  Articles  of  Agreement  of  the  International 
in  exceptional 
Monetary  Fund 
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 
the 
Republic  of  Armenia  for  the  granting  of  such  credits  and  are  permitted  according  to  the 
Republic  of  Armenia's  status  under  the  IMF.  The  Republic  of  Armenia  shall  apply  these 
restrictions  in  a  non-discriminatory  manner.  They  shall  be  applied  in  such  a  manner  as  to 
cause  the  least  possible  disruption  to  this  Agreement.  The  Republic  of  Armenia  shall  inform 
the  Cooperation  Council  promptly  of  the  introduction  of  such  measures  and  of  any  changes 
therein. 

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

CHAPTER  VI 

Intellectual,  industrial  and  commercial  property  protection 

ARTICLE  42 

1.  Pursuant  to  the  provisions  of  this  Article  and  of  Annex  II,  the  Republic  of  Armenia  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  o i t he  fifth  year  after  entry  into  force  of the  Agreement,  the  Republic  of  Armenia 
shall  accede  u  die 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 

TITLE V 

LEGISLATIVE  COOPERATION 

ARTICLE 43 

1.  The  Parties  recognize  that  an  important  condition  for  strengthening  the  economic  links 
between the Republic of Armenia and the Community  is the approximation  of the Republic of 
Armenia's existing  and future  legislation  to that  of the Community.  The Republic  of Armenia 
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:  customs  lawy 
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  the  Republic  of  Armenia  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; 

4.  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 

TITLE VI 

ECONOMIC  COOPERATION 

ARTICLE  44 

1.  The  Community  and  the  Republic  of Armenia  shall  establish  economic  cooperation  aimed  at 
contributing  to  the  process  of economic  reform  and  recovery  and  sustainable  development  of 
the Republic  of  Armenia  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  the  Republic  of  Armenia  and  will  be 
guided  by  the  requirements  of  sustainability  and  harmonious  social  development,  they  will 
also fully  incorporate  environmental  considerations. 

3.  To  this  end  cooperation  will  concentrate  in particular,  on  economic  and  social  development, 
human  resources,  development,  support  for  enterprises  (including  privatization,  investment 
promotion  and  protection,  small  and  medium-sized  enterprises),  mining  and  raw  materials, 
science and technology,  agriculture  and food,  energy, transport,  tourism,  telecommunications, 
financial  services,  combatting  of  money  laundering,  trade,  customs,  statistical  cooperation, 
information  and  communication,  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 
Community  technical  assistance  to  the  Republic  of Armenia  and  its  established  coordination 
and implementation  procedures. 

ARTICLE 45 

Cooperation  in the field  of trade in goods and  services 

The  Parties  will  cooperate  with  a view  to  ensuring  that  the  Republic  of  Armenia'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, 

• 
•  drafting  of relevant  legislation, 
• 

continuing assistance for the Republic  of Armenia'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 the Republic of Armenia's efforts  to restructure,  and  attract 

follow-up  investment  to, its industry; 
the improvement  of management; 
the development  of appropriate  commercial rules and practices; 

- 
- 
-  environmental  protection. 

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

rules applicable to undertakings. 

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

ARTICLE 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. 

23 

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 Armenian 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). 

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 

24 

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 the Republic of Armenia, 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  the Republic of Armenia 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 the  Republic  of Armenia  in  the  Community's 
TEMPUS programme. 

25 

ARTICLE  53 

Agriculture  and  the  agro-industrial  sector 

in  this  area  shall  be  the  pursuance  of  agrarian  reform, 

The  purpose  of  cooperation 
the 
modernization,  privatization  and  restructuring  of  agriculture,  the  agro-industrial  and  service 
sectors  in  the  Republic  of  Armenia,  development  of  domestic  and  foreign  markets  for  Armenian 
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  Armenian  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  Belated  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 Hne 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 

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,  svstem 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  the  Republic  of  Armenia,  and  developing  and  ensuring,  where  appropriate, 
compatibility  of  transportation  systems  in  the  context  of  achieving  a  more  global  transport 
traditional 
system.  Particular  consideration  shall  be  given 
communications  links  among  Independent  States  in  the  Transcaucasus  region  and  with  other 
neighbouring  states. 

the  functioning  of  all 

to 

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; 

28 

/'  '/' 

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. 

ARTICLE  58 

Financial  Services 

Cooperation  shall  in  particular  aim  at  facilitating  the  involvement  of  the  Republic  of  Armenia  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 the  Republic  of  Armenia  in a universally  accepted  svstem 
of mutual  settlements, 
the  development  of  fiscal  system  and  its  institutions  in the  Republic  of Armenia,  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 the  Republic  of Armenia,  as well  as the  development  of export  credit  insurance. 

This  cooperation  shall  in  particular  contribute  to  foster  the  development  of  relations  between  the 
Republic  of Armenia  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. 

29 

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 

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 
the  Republic  of  Armenia. 

These  refonns  shall  aim  to  develop  in the Republic  of  Armenia  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  sh. 11  aim  to  develop  and  strengthen  small  and  medium-sized  enterprises  and  their 
associations  and  cooperation  between  SMEs in the  Community  and  the  Republic  of  Armenia. 

30 

2  Cooperation  shall  include  technical  assistance,  in  particular  in  the  following  area; 

- 

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.  Prioritv  shall  be  given  to 
programmes  aimed  at  providing  the  general  public  with  basic  information  about  the  Community 
and  the  Republic  of  Armenia,  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 
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  compatibility  of 
consumer  protection  policies,  and  the  organization  of seminars  and  training  periods. 

institutional 

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  the 
Republic  of  Armenia'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 the  Republic  of 
Armenia; 
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 
31 

/ 
/  J 

Technical  assistance  shall  be  provided  where  necessary. 

3.  Without  prejudice  to  further  cooperation  foreseen  in  this  agreement  and  in  particular  Articles 
in  customs  matters  between  administrative  authorities  of  the 
69,  and  71,  mutual  assistance 
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 the  Republic  of  Armenia. 

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

-  adaptation  of the  Armenian  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  the  Republic  of 
Armenia. 

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  the Republic  of Armenia  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. 

32 

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 

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

-  The Republic of Armenia, 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 the Republic of Armenia  , upon request by 
the latter  and without  further  formalities. 

The Member  States and the Republic of Armenia, will also provide their nationals with 
appropriate  identity documents for  such purposes. 

The Republic  of Armenia, 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  the Republic of Aimenia  or who have arrived 
on the territory  of the Republic of Armenia 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 

TITLE IX 

CULTURAL  COOPERATION 

ARTICLE 72 

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

36 

TITLE 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,  the  Republic  of  Armenia  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  the Republic of Armenia. 

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  the  Republic  of  Armenia'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 

TITLE XI 

INSTITUTIONAL,  GENERAL AND  FINAL  PROVISIONS 

ARTICLE 77 

It  shall  meet  at  ministerial  level  once  a  year. 

A  Cooperation  Council  is  hereby  established  which  shall  supervise  the  implementation  of  this 
Agreement. 
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  the Republic of Armenia,  on the other. 

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

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

of the Community  and by a member of the Government  of  the Republic  of Armenia. 

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  the  Republic  of  Armenia  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  the Republic of Armenia. 

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  GATTAVTO,  the  Cooperation  Council  shall  take  into 
account  to  the  greatest  extent  possible  the  interpretation  that  is generally  given  to  the  article  of 
the GATTAVTO in question by the Contracting Parties to the WTO. 

ARTICLE 82 

A Parliamentary  Cooperation  Committee  is hereby  established.  It  shall be  a forum  for  Members 
of the  Armenian  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 Armenian Parliament,  on the  other. 

2.  The Parliamentary  Cooperation  Committee shall establish its rules of procedure. 

3.  The  Parliamentary  Cooperation  Committee 
European Parliament  and  the  Armenian  Parliament  respectively, 
provisions to be laid down  in its rules of procedure. 

shall  be  presided 

in 

the 
in  accordance  with  the 

turn  by 

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  Parhamentary  Cooperation  Committee  may  make  recommendations  to  the  Cooperation 
Council. 

ARTICLE 85 

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

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 

/ 

/ 

39 

commercial  and cooperation  transactions  concluded  by economic operators of the Community 
and those of  the Republic of Armenia; 
agree that  where a dispute is submitted  to arbitration,  each  party to the dispute may, except 
where the rules of the arbitration  centre chosen by the parties provide otherwise,  choose its 
own arbitrator,  irrespective  of his nationality,  and that the presiding third  arbitrator  or the sole 
arbitrator  may be a citizen  of a third  State; 
will recommend  their economic  operators to choose by mutual  consent  the law applicable to 
their contracts; 
shall encourage recourse to the arbitration  rules elaborated  by the United  Nations  Commission 
on International  Trade Law (Uncitral) and to arbitration by any centre of a State signatory to 
the Convention  on Recognition  and Enforcement  of Foreign Arbitral  Awards done at New 
York on  10 June  1958. 

ARTICLE  86 

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

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

security interests; 

(b)  which relate to the production  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 the Republic of Armenia in respect of the Community  shall not 
give rise to any discrimination  between the Member  States, their nationals or their  companies 
or firms; 
the arrangements applied by the Community in respect of the Republic of Armenia  shall not 
give rise to any discrimination  between Armenian 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. 

40 

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  the  Republic  of  Armenia  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 the Repubhc of Armenia 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 

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,  and  III  and  IV  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 the Republic  of  Armenia,  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  the Republic of Armenia. 

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 Armenian  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  the  Republic  of  Armenia  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  the  Republic  of  Armenia,  the  Contracting 
Parties  agree  that,  in  such  circumstances,  the  term  "date  of  entry  into  force  of  the  Agreement" 
shall mean the date of entry into force  of the Interim  Agreement. 

43 

LIST  OF DOCUMENTS ATTACHED 

Annex  I 

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

Annex II 

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

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

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

Protocol  on mutual  assistance between  administrative authorities in customs matters. 

44 

/ 

/ 

Advantages  granted  by  the  Republic  of Armenia  to the  Independent  States  in  accordance 
with Article 8(3) 

ANNEX 1 

All Independent  States: 
No import duties are implemented. 

45 

/ 

••J» 

- 

r  > l . . l - . -l  -i M-  • 

, 

ANNEX  II 

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

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

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

- 

International  Convention for the Protection of Performers,  Producers  of Phonograms 
and Broadcasting  Organizations (Rome,  1961); 

-  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: 

-  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, the Republic of Armenia 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 the Republic of 

Armenia to any third country on an effective  reciprocal basis and to advantages granted by 
the Republic of Armenia to another country of the former  USSR. 

46 

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 pubhc retirement plans, 
except when those activities may be carried out by financial  service providers in 
competition  with public entities or private institutions. 

48 

/ 7' 

ANNEX  IV 

COMMUNITY  RESERVATIONS  IN ACCORDANCE  WITH ARTICLE  22 

(2) 

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 

s 

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

Agriculture 

In some Member  States national treatment is 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 

DRAFT PROTOCOL 

ON MUTUAL ASSISTANCE 

BETWEEN ADMINISTRATIVE  AUTHORITIES 

IN CUSTOMS  MATTERS 

,/ 

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 

1.  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. 

2.  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. 

51 

•

/

•

'

'; 

./  '' 

3.  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. 

-^ 

52 

' ' / // 

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. 

^ 

^ 

53 

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  the  Republic  of  Armenia  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.  Where  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. 

-----  —- 

54 

"/"''' 

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  the 
Republic  of  Armenia  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  the Republic  of 
Armenia  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. 

55 

•/  > 

JOINT DECLARATION  CONCERNING  ARTICLE 3 BIS 

In reviewing changing circumstances in the Republic of Armenia, as foreseen  in Art. 3 bis, 
the Parties shall discuss important  changes which may have a significant  bearing on 
Armenia's future  development.  This could include accession by Armenia to the WTO, the 
Council of Europe or other international bodies or accession to any regional  customs 
union or any form  of regional  integration  agreement. 

> 

ft  bh 

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. 

56 

JOINT  DECLARATION 
CONCERNING  ARTICLE 14 

Until  the  Republic  of  Armenia  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. 

R7 

/? 

JOINT  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. 

58 

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. 

59 

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. 

60 

/ 

/ 

JOINT  DECLARATION 
CONCERNING  ARTICLE  94 

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. 

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. 

61 

EXCHANGE OF LETTERS 

BETWEEN THE COMMUNITY 

AND THE REPUBLIC OF ARMENIA 

IN RELATION TO THE ESTABLISHMENT OF COMPANIES 

62 

' 

/

•' 

/ 

A. Letter  from  the  Government  of the Republic  of Armenia 

Dear  Sir, 

I refer to the Partnership and Cooperation  Agreement initialled on 

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

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, the 
Republic of Armenia shall not adopt measures or regulations which would  introduce or worsen 
discrimination  of Community companies vis-à-vis Armenian 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 the Republic of Armenia 

63 

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, the Republic of Armenia grants to  Community 
companies establishing and operating in the Republic of Armenia in certain respects a 
privileged treatment.  I explained that this reflects the Armenian policy to promote by all 
means the establishment  of Community companies in the Republic of Armenia. 

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, the Republic of Armenia shall not adopt measures or regulations which would 
introduce or worsen discrimination  of Community companies vis-à-vis Armenian  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 

64 

/ 
>  . '• / 
' 

/' 

DECLARATION 
BY THE FRENCH  GOVERNMENT 

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

65 

SIDE LETTER 
FROM THE EUROPEAN  COMMUNITIES AND .THEIR MEMBER  STATES 
TO THE GOVERNMENT  OF THE REPUBLIC  OF ARMENIA 
(OUTSIDE THE  AGREEMENT) 

Subsequent to the request by the Armenian authorities to include provisions for  assistance in the 
nuclear safety  area in the PCA, the European Communities and their Member  States make the 
following  statement: 

The European  Communities and their Member  States regret the decision  of the Armenian 
authorities to reopen Unit 2 of the Medzamor Nuclear Power Plant in November  1995, 
which they consider not to be  in line with the overall objective pursued  by the European 
Communities and their Member  States to increase nuclear safety worldwide, and in 
particular in the countries of Central and Eastern Europe and of the former  Soviet Union 
where nuclear installations exist for which significant  design deficiencies  have been 
identified, 
On the basis of the fact  that the Medzamor Nuclear Power Plant cannot be upgraded  to a 
level corresponding to internationally recognized  safety  standards, the European 
Communities and their Member  States consider that it is not suitable for  long-term  operation 
and that its shutdown in the shortest practically achievable time should be pursued. It is 
therefore  most important that alternative energy sources be identified  and used. The EC is 
willing to  support Armenia in the definition  and implementation  of a comprehensive long 
term energy strategy, in line with Article 54 of the Partnership and Cooperation  Agreement, 
through its TACIS program (in cooperation with the International Financial Institutions), 
Without prejudice to the above-mentioned  objective  of the shutdown  of the Nuclear Power 
Plant and taking into account the current  situation, the EC could  consider, upon request of 
Armenia, the possibility of limited support, compatible with the existing framework of Tacis 
resources and priorities, for  short term safety measures under its Tacis technical  assistance 
programme. 
These measures could include: 

support to the Safety  Authorities 
operational  safety  assistance to the operator 
and when this is needed for fulfilling  these tasks, limited  supply of urgently needed 
equipment. 

U -«* 

// 

ISSN 0254-1475 

COM(96)  136 final 

DOCUMENTS 

EN 

ii 

Catalogue number  : CB-CO-96-157-EN-C 

ISBN 92-78-02513-5 

Office  for Official Publications of the European Communities 

L-2985 Luxembourg 

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