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 Russian Federation, of the other part
Date: 1997-10-29
Institutions: European Commission
Subjects: Russia, cooperation agreement (EU), cooperation policy, enlargement of the Union, protocol to an agreement

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.10.1997 
COM(97) 557 final 

97/0294 (AVC) 
97/0295 (AVC) 

Proposal for a 

COUNCIL AND  COMMISSION  DECISION 

on the  conclusion  of  the  Partnership  and Cooperation  Agreement 

between  the  European  Communities 

and their  Member  States,  of  the  one  part, 

and the  Russian  Federation, of  the  other  part 

Proposal for a 

COUNCIL AND  COMMISSION  DECISION 

on the  conclusion  of  a Protocol  to  the  Partnership  and Cooperation  Agreement 

between  the  European  Communities  and their  Member  States,  of  the  one  part, 

and the  Russian  Federation, of  the  other  part 

(presented by the Commission) 

Explanatory  memorandum 

The Partnership and Cooperation Agreement between the European  Communities 
and  their  Member  States  and  the  Russian  Federation  signed  the  24  June  1994 
takes  the  Agreement  on  trade  and  commercial  and  economic  cooperation 
concluded by the EEC and Euratom with the Soviet Union on  18 December 1989 
a step further  for the Communities. 

The  PCA  is  based  on  the  Treaty  establishing  the  European  Coal  and  Steel 
Community,  the Treaty establishing  the European  Community,  and  in particular 
Article  54 (2), the last sentence of  Article 57  (2),  and  Articles 66, 73 c (2), 75, 
84  (2),  99,  100,  113  and  235,  in  conjunction  with  Article  228  (  2)  and  the 
second  subparagraph  of  Article  228  (3)  thereof,  and  the Treaty  establishing  the 
European  Atomic  Energy Community,  and  in particular  the second  paragraph of 
Article  101 thereof. 

Whereas  there  three  new  Merfiber  States  have  to  be  added  to  the  list  of 
contracting  Parties  and  the  list  of  signatories  and  authentic  texts  of  the 
Agreements,  its  Annexes  and  Protocols,  the  Final  Act  and  all  documents 
annexed  to it, have to be established  in Finnish and  Swedish. 

2. 

3. 

A need arose for a protocol to the text of the Agreement signed on 24 June 1994. 

The accession to the European  Union  and thereby  to the Eurpean  Community of 
Austria, Finland  and Sweden on  1 January  1995 means these three new Member 
States have to be added to the list of contracting parties and the list of signatories. 

4. 

^ In light of the above, the Commission proposes that the Council adopt the 

annexed  Decision. 

_  A-

COUNCIL AND  COMMISSION  DECISION 

of 

on the  conclusion  of  the  Partnership  and Cooperation  Agreement 

^  r  jo  W  4  ^Al/CJ 

between  the  European  Communities 

and their  Member  States,  of  the  one  part, 

and the  Russian  Federation, of  the  other  part 

THE COUNCIL  OF THE  EUROPEAN UNION, 

THE COMMISSION  OF THE EUROPEAN  COMMUNITIES, 

Having  regard to  the  Treaty  establishing  the  European  Community,  and in  particular 

Article  54(2), the  last  sentence  of  Article  57(2),  and Articles  66,  73c(2),  75,  84(2),  99,  100, 

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  Coal  and Steel  Community,  and  in 

particular  Article  95  thereof, 

Having  regard to  the  Treaty  establishing  the  European Atomic  Energy  Community,  and in 

particular  the  second  paragraph  of  Article  101  thereof, 

-  A(^LA 

_ 

Having regard to the  assent of the  European Parliament  C), 

Having  consulted the  ECSC Consultative  Committee  and with the  assent  of the Council, 

Having regard to the  approval of the  Council given in accordance  with Article  101  of the 

Treaty  establishing the  European Atomic  Energy Community, 

Whereas  conclusion of the  Partnership  and Cooperation  Agreement  between the  European 

Communities  and their  Member  States,  of the  one part,  and the  Russian Federation, of the 

other,  signed on 24  June  1994  in Corfu, will contribute to the  achievement  of the  objectives 

of the  European Communities; 

Whereas the  purpose of that  Agreement  is to  strengthen the  links established  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  and approved by 

Decision 90/116/EEC  (1); 

Whereas  certain  obligations,  provided for  by the  Partnership  and Cooperation  Agreement 

outside the  scope of  Community  trade  policy,  affect  or are likely to  affect  the  arrangements 

laid down  by Community  acts  adopted  in the  areas of the  right  of  establishment,  transport 

and the treatment  of enterprises; 

Whereas the  said Agreement  imposes on the  European Community  certain  obligations 

regarding  capital movements  and payments  between the  Community  and Russia; 

C) 
(2) 

OJ No C 339,  18.12.1995,  p.  45. 
OJ No L  68,  15.  3.1990,  p.  1. 

- M C-

Whereas,  in addition, insofar  as the said Agreement  affects  Council  Directive  90/434/EEC  of 

23  July  1990  on the  common system  of taxation  applicable to  mergers, divisions, transfers of 

assets and exchanges  of  shares concerning  companies  of  different  Member  States  (1), and 

Council  Directive  90/435/EEC  of  23  July  1 990  on the  common system  of taxation  applicable 

in the  case of  parent  companies  and subsidiaries of  different  Member  States  (1), which are 

based on Article  100  of the Treaty  establishing the  European Community, that  Article should 

be used as a legal basis; 

Whereas  certain  provisions of the  said Agreement  impose on the  Community  obligations  in the 

field of the  provision of  services which go beyond the  crossborder  framework; 

Whereas  certain provisions of the  said Agreement  which  are to  be implemented  by the 

Community, the Treaty  establishing the  European Community  makes no provision for  specific 

powers; whereas  it  is therefore  necessary to  resort to  Article  235  of the  Treaty, 

HAVE  DECIDED AS FOLLOWS: 

Article 1 

The  Partnership  and Cooperation Agreement  between the  European Communities  and their 

Member  States,  of the  one part,  and the  Russian Federation, of the other  part, together  with 

the  protocols  and declarations,  are hereby  approved  on behalf  of the  European  Community, 

the  European Coal and Steel Community  and the  European Atomic  Energy  Community. 

The texts  are annexed to this Decision. 

(3) 
(4) 

OJ No L 225,  20.8.1990,  p.  1. 
OJ No L 225,  20.8.1990,  p.  6. 

— Ad  -

Article  2 

1.  The position to  be adopted  by the  Community  in the  Cooperation  Council  and the 

Cooperation  Committee  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  91  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. 

3.  The decision to  publish the recommendations  of the  Cooperation  Council  and the 

Cooperation  Committee  in the Official  Journal of the  European Communities  shall be taken on 

a case-by-case  basis by the  Council  and the Commission. 

Article  3 

The President  of the Council shall give the  notification  provided for  in Article  112  of the 

Agreement  on behalf  of the  European Community.  The  President  of the  Commission shall 

give  such notification  on behalf  of the  European Coal and Steel  Community  and the  European 

Atomic  Energy  Community. 

Done  at Brussels, 

For the  Commission 

The  President 

For the  Council 

The  President 

~  At 

-

COUNCIL AND  COMMISSION  DECISION 

O^  J c%<l £ 

($V^-] 

of 

on the  conclusion  of  a Protocol to  the  Partnership  and  Cooperation  Agreement 

between the  European  Communities  and their  Member  States,  of  the  one  part, 

and the  Russian  Federation, of  the  other  part 

THE COUNCIL  OF THE  EUROPEAN UNION, 

THE  EUROPEAN COMMISSION, 

Having  regard to  the  Treaty  establishing  the  European  Community,  and  in  particular 

Article  54(2), the  last  sentence  of  Article  57(2),  and Articles  66,  73c(2),  75,  84(2),  99,  100, 

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  Coal  and  Steel  Community,  and in 

particular  Article  95  thereof, 

Having  regard  to  the  Treaty  establishing  the  European  Atomic  Energy  Community,  and in 

particular  the  second  paragraph  of  Article  101  thereof, 

-  A e 

Having regard to the  assent  of the  European Parliament  C), 

Having consulted the  ECSC Consultative  Committee  and the  Economic  and Social Committee, 

and with the  assent  of the Council, 

Having regard to the  approval of the  Council given in accordance  with Article  101  of the 

Treaty  establishing the  European Atomic  Energy  Community, 

Whereas the  Republic  of Austria, the  Kingdom of  Sweden  and the  Republic  of  Finland acceded 

to the  European  Union, and thereby to the  Communities  on  1 January  1995; 

Whereas these three  new  Member  States  have to  be added to the  list of  Contracting  Parties 

and to the  list  of  signatories  and whereas  authentic  texts  of the Agreement,  its Annexes and 

Protocols, the  Final Act  and all documents  annexed to  it,  have to  be established  in Finnish and 

Swedish; 

Whereas  conclusion of the  Partnership  and Cooperation Agreement  between the  European 

Communities  and their  Member  States,  of the  one part,  and the  Russian Federation, of the 

other,  signed on 24  June  1994  in Corfu, will contribute to the  achievement  of the  objectives 

of the  European Communities; 

Whereas the  purpose of that  Agreement  is to  strengthen the  links established  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  and approved by 

Decision 90/116/EEC  (1); 

Whereas  certain obligations,  provided for  by the  Partnership  and Cooperation  Agreement 

outside the  scope  of  Community  trade  policy,  affect  or are likely to  affect  the  arrangements 

laid down  by Community  acts adopted  in the  areas of the  right of  establishment,  transport 

and the treatment  of enterprises; 

(1)  OJ No C 200,  30.6.1997,  p.  1. 
(2)  OJ No  L  68,  15.3.1990,  p.  1. 

A  & 

Whereas the  said Agreement  imposes on the  European Community  certain  obligations 

regarding capital  movements  and payments  between the  Community  and Russia; 

Whereas, in addition, insofar  as the  said Agreement  affects  Council  Directive  90/434/EEC  of 

23  July  1990  on the common system of taxation  applicable to  mergers, divisions, transfers of 

assets and exchanges  of  shares concerning  companies  of  different  Member  States  C),  and 

Council  Directive  90/435/EEC  of  23  July  1990  on the  common system of taxation  applicable 

in the  case of  parent  companies  and subsidiaries  of  different  Member  States  (1), which are 

based on Article  100  of the Treaty establishing the  European Community,  that  Article should 

be used as a legal basis; 

Whereas certain provisions of the  said Agreement  impose on the  Community  obligations  in the 

field of the  provision of  services which go beyond the  crossborder  framework; 

Whereas  certain provisions of the  said Agreement  which are to  be implemented  by the 

Community,  the Treaty  establishing the  European Community  makes no provision for  specific 

powers; whereas  it is therefore  necessary to  resort to Article  235  of the Treaty, 

HAVE  DECIDED AS FOLLOWS: 

Article  1 

The  Protocol to the  Partnership  and Cooperation  Agreement  between the  European 

Communities  and their  Member  States, of the  one part,  and the  Russian Federation, of the 

other  part,  introducing the  name of the three  new  Member  States  -  Austria,  Finland and 

Sweden  -  which joined the  European Communities  and therefore  became  Member  States  on 1 

January  1995,  is hereby  approved  on behalf  of the  European Community, the  European Coal 

and Steel  Community,  and the  European Atomic  Energy  Community. 

(3)  OJ  No L225,  20.8.1990,  p.  1. 
(4)  OJ No L 225,  20.8.1990,  p.  6. 

A  H1 

The text  of the  Protocol and its Annexes  are attached to this Decision. 

Article  2 

The  President  of the  Council shall give the  notification  provided for  in Article  112(2)  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, 

For the  Commission 

the  President 

For the  Council 

the  President 

-  A  <  -

PROTOCOL 

TO THE AGREEMENT  ON PARTNERSHIP AND COOPERATION, 

ESTABLISHING  A  PARTNERSHIP 

BETWEEN THE EUROPEAN  COMMUNITIES 

AND THEIR  MEMBER  STATES, OF THE ONE PART, 

AND THE RUSSIAN  FEDERATION, OF THE OTHER PART 

- 

^-

P/CE/RU/en 1 

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 

P/CE/RU/en  2 

_  A  K  -

Contracting  Parties to the Treaty  establishing the  European Community, the Treaty 

establishing the  European Coal and Steel Community  and the Treaty  establishing the  European 

Atomic  Energy  Community, 

hereinafter  referred to  as the  "Member  States", and 

THE  EUROPEAN COMMUNITY,  THE EUROPEAN COAL AND  STEEL COMMUNITY  AND THE 

EUROPEAN ATOMIC  ENERGY  COMMUNITY,. 

hereinafter  referred to as  "the  Community", 

THE  RUSSIAN  FEDERATION 

of the one part, and 

of the other  part, 

Having regard to the  accession of the  Republic of  Austria, the  Republic  of  Finland and the 

Kingdom of  Sweden to the  European  Union and thereby to the Community on 

1 January  1995, 

—  Al 

- 

P/CE/RU/en  3 

HAVE AGREED AS  FOLLOWS: 

ARTICLE 1 

The  Republic  of  Austria, the  Republic of  Finland and the  Kingdom of  Sweden  shall be Parties 

to the Agreement  on Partnership and Cooperation, establishing a partnership between the 

European Communities  and their  Member  States, of the one part, and the  Russian Federation, 

of the other  part,  signed at Corfu on 24  June  1994,  hereinafter the  "Agreement",  and shall 

respectively  adopt  and take  note, in the same manner,  as the other  Member  States of the 

Community,  of the texts  of the Agreement,  as well as of the Joint  Declarations,  Exchanges of 

Letters, and Declaration  by the  Russian Federation annexed to the  Final Act  signed on the 

same date. 

ARTICLE  2 

The texts  of the  Agreement, the  Final Act  and all documents annexed to it are drawn up in 

the  Finnish and Swedish  languages.  They  are annexed to the  Protocol and are equally 

authentic  with the texts  in the other  languages  in which the Agreement, the  Final Act  and the 

documents  annexed to  it are drawn up. 

P/CE/RU/en  4 

~  Art — 

ARTICLE  3 

This  Protocol is drawn up in duplicate in the  Danish, Dutch, English, Finnish, French, German, 

Greek,  Italian, Portuguese,  Spanish, Swedish and Russian languages, each of these texts 

being equally  authentic. 

ARTICLE 4 

The Protocol will be approved  by the  Parties in accordance with their own procedures. 

This  Protocol shall enter  into force on the first  day of the second month following the day on 

which the  Parties notify  each other  of the completion of the procedures  referred to  in the first 

paragraph. 

—  A  h)  _ 

P/CE/RU/en  5 

Done at  Brussels 

on 

For the  KINGDOM  OF BELGIUM, 

For the  KINGDOM  OF DENMARK, 

For the  FEDERAL  REPUBLIC OF GERMANY, 

For the  HELLENIC REPUBLIC, 

For the  KINGDOM  OF SPAIN, 

For the  FRENCH REPUBLIC, 

For IRELAND, 

For the  ITALIAN REPUBLIC, 

For the  GRAND  DUCHY  OF LUXEMBOURG, 

For the  KINGDOM  OF THE  NETHERLANDS, 

For the  REPUBLIC  OF AUSTRIA, 

For the  PORTUGUESE REPUBLIC, 

For the  REPUBLIC OF FINLAND, 

For the  KINGDOM  OF SWEDEN, 

For the  UNITED  KINGDOM  OF GREAT BRITAIN AND  NORTHERN IRELAND 

For the  COMMUNITY 

For the  RUSSIAN  FEDERATION 

P/CE/RU/en  6 

-  £ 

AGREEMENT  ON PARTNERSHIP AND  COOPERATION 

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

the  one part, and the  Russian Federation, of the other  part. 

THE  KINGDOM  OF BELGIUM, 

THE  KINGDOM  OF DENMARK, 

THE  FEDERAL  REPUBLIC OF GERMANY, 

THE  HELLENIC REPUBLIC, 

THE  KINGDOM  OF SPAIN, 

THE  FRENCH REPUBLIC, 

IRELAND, 

THE  ITALIAN REPUBLIC, 

THE GRAND  DUCHY  OF LUXEMBOURG, 

CE/RU/en 1 

THE  KINGDOM  OF  THE  NETHERLANDS, 

THE  PORTUGUESE  REPUBLIC, 

THE  UNITED  KINGDOM  OF  GREAT  BRITAIN  AND  NORTHERN  IRELAND, 

Contracting  Parties  to  the  Treaty  establishing  the  European  Community,  the  Treaty 

establishing  the  European  Coal  and  Steel  Community,  and  the  Treaty  establishing  the 

European  Atomic  Energy  Community, 

hereinafter  referred  to  as  "Member  States",  and 

THE  EUROPEAN  COMMUNITY,  THE  EUROPEAN  COAL  AND  STEEL  COMMUNITY  AND 

THE  EUROPEAN  ATOMIC  ENERGY  COMMUNITY, 

hereinafter  referred  to  as  "the  Community", 

of  the  one  part,  and 

THE  RUSSIAN  FEDERATION, 

hereinafter  referred  to  as  "Russia", 

of  the  other  part, 

CONSIDERING  the  importance  of  the  historical  links  existing  between  the  Community,  its 

Member  States  and  Russia  and  the  common  values  that  they  share; 

CE/RU't.i  3 

RECOGNIZING  that the  Community  and Russia wish to strengthen these  links and to 

establish partnership  and cooperation  which  would deepen and widen the  relations 

established  between them in the  past in particular  by the Agreement  between the 

European  Economic  Community  and the  European Atomic  Energy  Community  and the 

Union of  Soviet  Socialist  Republics on Trade and Commercial and Economic Cooperation, 

signed on  18  December  1989,  hereinafter  referred to as the  "1989  Agreement"; 

CONSIDERING  the  commitment  of the Community  and its Member  States  acting  in the 

framework  of the  European Union established  by the Treaty  on European  Union of 

7  February  1992  and of  Russia to strengthening the  political and economic  freedoms 

which constitute  the very  basis of the  partnership; 

CONSIDERING  the commitment  of the  Parties to  promote international  peace and security 

as well  as the  peaceful  settlement  of  disputes  and to cooperate to this end in the 

framework  of the  United  Nations  and the Conference  on Security  and Cooperation in 

Europe and other fora; 

CONSIDERING  the firm commitment  of the  Community  and its Member  States  and of 

Russia to the full implementation  of  all principles and provisions contained  in the  Final Act 

of the  Conference  on Security  and Cooperation  in Europe (CSCE), the  concluding 

documents  of the  Madrid  and Vienna follow  up meetings, the document  of the  CSCE Bonn 

Conference  on Economic  Cooperation, the  Charter  of  Paris for  a New  Europe and the CSCE 

Helsinki  Document  1992,  "the  Challenges  of Change"; 

CONFIRMING  the  attachment  of the  Community  and its  Member  States  and of  Russia to 

the  aims and principles  set  out in the  European  Energy  Charter  of  17  December  1991  and 

in the  Declaration  of the  Lucerne Conference  of  April  1993; 

CE/RU/en  4 

3 

CONVINCED  of the  paramount  importance  of the  rule of  law  and respect for  human rights, 

particularly  those  of  minorities, the establishment  of  a multiparty  system  with free and 

democratic  elections  and economic  liberalization  aimed at  setting up a market  economy; 

BELIEVING that the full implementation  of  partnership  presupposes the continuation and 

accomplishment  of  Russia's  political and economic reforms; 

DESIROUS  of  encouraging the  process of  regional cooperation  in the areas covered  by this 

Agreement  between the  countries  of the former  USSR in order to  promote the  prosperity 

and stability  of the region; 

DESIROUS  of  establishing  and developing  regular  political dialogue on bilateral and 

international  issues of  mutual  interest; 

TAKING  ACCOUNT  of the Community's  willingness to  provide technical  assistance, as 

appropriate, for the  implementation  of  economic  reform in Russia and for the  development 

of  economic cooperation; 

BEARING  IN MIND  the utility  of the Agreement  in favouring a gradual  rapprochement 

between  Russia  and a wider  area of  cooperation  in Europe and neighbouring  regions and 

Russia's  progressive  integration  into the open international trading system; 

^ 

CE/RU/en 5 

CONSIDERING  the  commitment  of  the  Parties  to  liberalize trade,  based on the  principles 

contained  in the  General Agreement  on Tariffs  and Trade  hereinafter  referred to  as 

"GATT",  as  amended  by  the  Uruguay  Round Trade  Negotiations,  and taking  into  account 

the  establishment  of  the  World  Trade  Organization,  hereinafter  referred to  as  "WTO"; 

RECOGNIZING  that  Russia  is  no  longer  a state  trading  country,  that  it  is  now  a  country 

with  an economy  in transition  and that  continued  progress  towards  a market  economy  will 

be fostered  by  cooperation  between  the  Parties  in the  forms  set  out  in this  Agreement; 

CONSCIOUS  of  the  need to  improve  conditions  affecting  business  and investment,  and 

conditions  in areas  such as establishment  of  companies, labour,  provision  of  services  and 

capital  movements; 

CONVINCED  that  this  Agreement  will  create  a new  climate  for  economic  relations  between 

the  Parties  and in  particular  for  the  development  of  trade  and investment,  which  are 

essential  to  economic  restructuring  and technological  modernization; 

DESIROUS  of  establishing  close  cooperation  in the  area of  environmental  protection  taking 

into  account  the  interdependence  existing  between  the  Parties  in this  field; 

BEARING  in  mind the  intention  of  the  Parties to  develop their  cooperation  in the  space  field 

in view  of  the  complementarity  of  their  activities  in this  area; 

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

HAVE AGREED  AS  FOLLOWS: 

CE/RU/en  6 

5~ 

ARTICLE 1 

A  Partnership  is hereby established  between the  Community  and its Member  States, of the 

one part,  and Russia, of the other  part.  The objectives  of this Partnership are: 

- 

to  provide an appropriate framework for the  political dialogue between the  Parties 

allowing the development  of  close relations  between them in this field; 

- 

to  promote trade  and investment  and harmonious economic  relations  between the 

Parties  based on the principles of  market  economy  and so to foster  sustainable 

development  in the Parties; 

- 

to  strengthen  political  and economic freedoms; 

- 

to  support  Russian efforts to consolidate  its democracy  and to develop its economy and 

to  complete the transition  into a market economy; 

- 

to  provide  a basis for  economic, social, financial  and cultural cooperation founded on 

the  principles  of  mutual advantage,  mutual  responsibility  and mutual support; 

- 

to  promote  activities  of joint  interest; 

- 

to  provide  an appropriate  framework  for the gradual integration  between  Russia and a 

wider  area of  cooperation  in Europe; 

- 

to create the  necessary  conditions for the future  establishment  of a free trade area 

between  the  Community  and Russia covering  substantially  all trade in goods  between 

them,  as well  as conditions for  bringing about freedom of establishment  of  companies, 

of  cross-border  trade  in services  and of  capital  movements. 

° 

Cb/RU/en  7 

TITLE I 

GENERAL PRINCIPLES 

ARTICLE  2 

Respect for democratic  principles and human rights as defined in particular  in the  Helsinki 

Final Act  and the Charter  of  Paris for a New  Europe, underpins the  internal and external 

policies of the  Parties and constitutes  an essential  element  of  partnership  and of this 

Agreement. 

ARTICLE 3 

The  Parties  undertake to consider development  of the  relevant Titles of this Agreement, in 

particular  Title  III and Article  53,  as circumstances  allow,  with a view  to the  establishment 

of  a free trade  area  between them.  The Cooperation  Council may  make  recommendations 

on such development  to the  Parties.  Such de /elopment shall only be put  into effect  by 

virtue  of  an agreement  between the  Parties in accordance  with their  respective  procedures. 

The  Parties shall examine together  in the year  1998  whether  circumstances  allow  the 

beginning of  negotiations  on the establishment  of  a free trade area. 

ARTICLE  4 

The  Parties  undertake to examine together,  by mutual consent,  amendments  which it may 

be appropriate to  make to any  part of the Agreement  in view  of  changes in circumstances, 

and in particular  of the situation arising from  Russia's accession to the  GATT/WTO.  The 

first  examination  shall take  place three years after the entry  into force of the Agreement or 

when  Russia accedes to the GATT/WTO,  whichever  is earlier. 

CE/RU/en  8 

7-

ARTICLE 5 

1.  The most-favoured-nation treatment  granted by Russia under this Agreement  shall not 

apply during a transitional  period expiring five years after the entry  into force  of this 

Agreement  in relation to  advantages defined  in Annex  1 granted  by Russia to other 

countries  of the former  USSR.  This period may be extended  where appropriate for  specific 

sectors  by mutual consent  between the Parties. 

2.  In the  case of the  most-favoured-nation  treatment  granted under Title  III the transitional 

period referred to  in paragraph  1 shall expire three years after the entry  into force  of the 

Agreement  or when  Russia accedes to the GATT/WTO,  whichever  is earlier. 

TITLE II 

POLITICAL  DIALOGUE 

ARTICLE  6 

A  regular  political dialogue shall be established  between the  Parties which they  intend to 

develop and intensify.  It shall accompany  and consolidate the  rapprochement  between the 

European Union and Russia, support the  political and economic  changes underway  in 

Russia and contribute to the establishment  of  new forms of  cooperation.  The  political 

dialogue: 

-  shall strengthen the  links between  Russia and the  European  Union.  The economic 

convergence  achieved through this Agreement  will  lead to  more intense  political 

relations; 

$ 

CE/RU/en  9 

shall  bring  about  an increasing  convergence  of  positions  on international  issues  of 

mutual  concern  thus  increasing  security  and  stability; 

shall foresee  that  the  Parties  endeavour  to  cooperate  on  matters  pertaining  to  the 

observance  of  the  principles  of  democracy  and  human  rights,  and  hold  consultations,  if 

necessary,  on  matters  related to  their  due  implementation. 

ARTICLE 7 

1.  Meetings  shall take  place  in  principle  twice  a year  between  the  President  of  the  Council 

of  the  European  Union  and the  President  of  the  Commission  of  the  European  Communities 

on one  side  and the  President  of  Russia  on the  other. 

2.  At  ministerial  level, political  dialogue  shall take  place  within  the  Cooperation  Council 

established  in Article  90  and on other  occasions,  including  with  the  European  Union  Troika, 

by  mutual  agreement. 

ARTICLE  8 

Other  procedures  and  mechanisms  for  political  dialogue  shall  be set  up  by  the  Parties  and 

in  particular  in the  following  forms: 

-  biannual  meetings  at  senior  official  level  between  the  European  Union  Troika  on the  one 

hand,  and  officials  of  Russia  on the  other; 

- 

taking  full  advantage  of  diplomatic  channels; 

CE/RU/en  10 

_£J 

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

consolidating  and  developing  this  dialogue. 

ARTICLE  9 

Political  dialogue  at  parliamentary  level  shall  take  place  within  the  framework  of  the 

Parliamentary  Cooperation  Committee  established  in  Article  9 5. 

TITLE 

TRADE  IN  GOODS 

ARTICLE  10 

1.  The  Parties  shall  accord  to  one  another  the  general  most-favoured-nation  treatment 

described  in  Article  I,  paragraph  1  of  the  GATT. 

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

(a) advantages  accorded  to  adjacent  countries  in  order  to  facilitate  frontier  traffic; 

(b)advantages  granted  w i th  the  aim  of  creating  a  customs  union  or  a free-trade  area  or 

pursuant  to  the  creation  of  such  a  union  or  area;  the  terms  "customs  union"  and 

"free  trade  area"  shall  have  the  same  meaning  as  those  described  in  paragraph  8  of 

Article  XXIV  of  the  GATT  or  created  through  the  procedure  indicated  in  paragraph  10 

of  the  same  GATT  Article; 

(c) advantages  granted  to  particular  countries  in  accordance  with  the  GATT  and  w i th  other 

international  arrangements  in  favour  of  developing  countries. 

^O 

CE/RU/en  11 

ARTICLE  11 

1.  The products of the territory  of  one Party  imported into the territory  of the other  Party 

shall not  be subject, directly  or indirectly, to internal taxes or other  internal charges of any 

kind in excess of those applied, directly  or indirectly, to like domestic  products. 

2.  Moreover, these  products shall be accorded treatment  no less favourable than that 

accorded to  like products of  national origin in respect of  all laws, regulations and 

requirements  affecting  their internal sale, offering for sale, purchase, transportation, 

distribution or use.  The  provision of this paragraph shall not prevent the application of 

differential  internal transportation charges which are based exclusively  on the economic 

operation of the  means of transport  and not on the  nationality  of the  product. 

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

between the  Parties. 

ARTICLE  12 

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

attaining the  objectives  of this Agreement. 

In this connection  each  Party  shall provide for freedom of transit through its territory of 

goods originating  in the  customs territory  or destined for the customs territory  of the other 

Party. 

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

applicable  between the Parties. 

CE/RU/en  12 

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ARTICLE  13 

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

Parties: 

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

2)  Article  VIII; 

3)  Article  IX; 

4)  Article  X. 

ARTICLE  14 

Without  prejudice to the  rights and obligations  stemming from international  conventions on 

the temporary  admission of  goods which  bind both Parties, each Party  shall furthermore 

grant the  other  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. 

Such legislation  shall be applied on a most-favoured-nation  basis and thus subject to the 

exceptions  listed in Article  10(2)  of this Agreement.  Account  shall be taken  of  the 

conditions  under  which the obligations  stemming from such a convention  have been 

accepted  by the  Party  in question. 

yJjL 

CE/RU/en  13 

ARTICLE  15 

1.  Goods originating  in Russia shall be imported  into the Community  free of  quantitative 

restrictions  without  prejudice to the  provisions of  Articles  17,  20  and 21  of this  Agreement 

and to the  provisions of  Articles  77,  8 1, 244,  249  and 280  of the Act  of  Accession of 

Spain and Portugal to the  Community. 

2.  Goods originating/in the  Community  shall be imported  into Russia free  of  quantitative 

restrictions  without  prejudice to the  provisions of  Articles  17,  20  and 21  of  and of 

Annex  2 to this  Agreement. 

ARTICLE  16 

Until  Russia  accedes to the  GATT/WTO, the  Parties shall hold consultations  in the 

Cooperation  Committee  on their  import tariff  policies, including changes in tariff  protection. 

In particular,  such consultations  shall be offered  prior to the  increase of tariff  protection. 

ARTICLE  17 

1.  Where  any  product  is being imported  into the territory  of  one of the  Parties in such 

increased  quantities  and under such conditions  as to cause or threaten to  cause  substantial 

injury to  domestic  producers  of  like or direct  competitive  products, the  Community or 

Russia,  whichever  is concerned, may take  appropriate  measures in accordance  with the 

following  procedures  and conditions. 

CE/RU/en  14 

/<3 

2.  Before taking  any  measures, or in cases to  which  paragraph 4  applies as soon as 

possible thereafter,  the  Community  or Russia, as the case may be, shall supply the 

Cooperation  Committee  with  all relevant  information  with  a view  to  seeking a solution 

acceptable to  both Parties.  The  Parties shall commence  consultations  promptly  within the 

Cooperation  Committee. 

3.  If, as a result  of the consultations, the  Parties do not  reach agreement  within  30  days 

of  referral to the  Cooperation  Committee  on actions to avoid the situation, the  Party  which 

requested  consultations  shall be free to  restrict  imports of the  products concerned  or to 

adopt other  appropriate  measures to the  extent  and for such time as is necessary  to 

prevent  or remedy the injury. 

4.  In critical  circumstances  where delay  would  cause damage difficult  to  repair, the  Parties 

may take the  measures  before the  consultations,  on the condition that  consultations  shall 

be offered  immediately  after  taking  such action. 

5.  In the  selection  of  measures  under this Article, the  Parties shall give  priority  to those 

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

6.  Where  a safeguard  measure is taken  by one Party  in accordance  with the  provisions of 

this  Article, the  other  Party  shall be free to deviate from its obligations  under this Title 

towards the first  Party  in respect  of  substantially  equivalent trade. 

Such action  shall not  be taken  before consultations  have been offered  by such other  Party 

nor if  agreement  has been reached  within 45  days following the date these  consultations 

were  offered. 

7.  The  right  of  deviation from the obligations  referred to  in paragraph  6  shall not be 

exercised for the first three years that  a safeguard  measure is in effect,  provided that  the 

safeguard  measure  has been taken  as a result  of  an absolute increase in imports, for the 

maximum  period of  four  years, and in conformity  with the  provisions of this  Agreement. 

//<-/ 

CE/RU/en  15 

ARTICLE  18 

Nothing in this Title, and in Article  17  in particular,  shall prejudice or affect  in any way  the 

taking,  by either  Party, of  anti-dumping or countervailing  measures  in accordance  with 

Article VI  of the  GATT, the Agreement  on implementation  of  Article VI  of the  GATT, the 

Agreement  on interpretation  and application of  Articles VI, XVI  and XXIII  of the  GATT or 

related internal legislation. 

In respect  of  anti-dumping  or subsidy  investigations,  each Party agrees to  examine 

submissions  by the other  Party  and to inform the interested  parties concerned  of the 

essential facts  and considerations  on the basis of  which a final decision is to  be made. 

Before definitive  anti-dumping  and countervailing duties are imposed, the  Parties  shall do 

their  utmost  to  bring about a constructive  solution to the problem. 

ARTICLE  19 

The Agreement  shall not preclude prohibitions  or restrictions  on imports, exports  or goods 

in transit justified  on grounds of  public  morality,  public policy or public security; the 

protection  of  health and life of  humans, animals or plants; the  protection  of  natural 

resources; the  protection  of  national treasures of  artistic,  historic  or archaeological value or 

the  protection  of  intellectual, industrial and commercial  property  or rules relating to gold 

and silver.  Such prohibitions  or restrictions  shallnot,  however,  constitute  a means of 

arbitrary  discrimination  or a disguised  restriction on trade  between the Parties. 

CE/RU/en  16 

/I  S 

ARTICLE  20 

This Title shall not affect  the  provisions of the Agreement  between the  European  Economic 

Community and the  Russian Federation on trade in textile  products initialled on 

12 June  1993  and applied with  retroactive  effect  as from  1 January  1993.  Furthermore, 

Article  15  of this Agreement  shall not apply to trade  in textile  products falling under 

Chapters  50  to  63  of the  Combined  Nomenclature. 

ARTICLE  21 

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

Community shall be governed by: 

- 

the  provisions of this Title, with the exception of Article  15; and 

-  upon its entry  into force, by the provisions of the agreement  on quantitative 

arrangements  concerning exchanges of  ECSC steel products. 

2.  The establishment  of  a Contact  Group on coal and steel  matters is governed by 

Protocol  1 annexed to this Agreement. 

/ft> 

CE/RU/en  17 

ARTICLE  22 

Trade in nuclear  materials 

1.  Trade in nuclear  materials  shall be covered by: 

- 

the  provisions  of this Agreement  with the exception of  Articles  15  and  17(1)  to  (5) 

and (7); 

- 

the  provisions  of  Articles  6,  7,  14  and  15(1)(2)(3), first  sentence, and (4)  and  (5) of 

the  1989  Agreement; 

- 

the  attached  Exchange of  Letters. 

2.  Notwithstanding  the  provisions  of  paragraph  1 of this Article, the  Parties agree to take 

all necessary  steps to  arrive at  an arrangement  covering trade in nuclear  materials by 

1 January  1997. 

3.  Until such an arrangement  is reached, the  provisions of this Article  will continue to 

apply. 

4.  Steps  will  be taken to conclude  an agreement  regarding nuclear  safeguards,  physical 

protection  and administrative  cooperation in transfers  of  nuclear  materials.  Until such an 

agreement  is in force, the  respective  legislation  and international  non-proliferation 

obligations  of the  Parties will  be applicable  as regards the transfer  of  nuclear  materials. 

5.  For the  purpose of the application of the  regime provided for  in paragraph  1 : 

- 

the  reference  in Article  6 and Article  15(5)  of the  1989  Agreement to  "this Agreement" 

shall be read as meaning the  regime established  by paragraph  1 of this Article; 

CE/RU/en18 

y  •-

the  reference  in Article  17(6)  of  this  Agreement  to  "this  Article"  shall  be read as 

meaning  Article  15  of  the  1989  Agreement; 

the  reference  in Articles  6,  7,  14 and  15  of  the  1989  Agreement  to  the  "Contracting 

Parties"  shall  be read as  meaning the  Parties to  this  Agreement; 

the  reference  to  the  "Joint  Committee"  in Article  15 of  the  1989  Agreement  shall  mean 

the  Cooperation  Committee  provided for  under  Article  92  of  this  Agreement. 

TITLE IV 

PROVISIONS  ON BUSINESS AND  INVESTMENT 

CHAPTER I 

Labour  conditions 

ARTICLE  23 

1.  Subject  to  the  laws,  conditions  and  procedures  applicable  in each  Member  State,  the 

Community  and  its  Member  States  shall  ensure that  the treatment  accorded  to  Russian 

nationals,  legally  employed  in the territory  of  a Member  State  shall  be free  from  any 

discrimination  based  on nationality,  as regards  working  conditions,  remuneration  or 

dismissal,  as  compared  to  its  own  nationals. 

2.  Russia  shall, subject  to  the  conditions  and  modalities  applicable  in  Russia, accord  the 

treatment  referred  to  in paragraph  1 to  nationals  of  a Member  State  who  are  legally 

employed  in  its  territory. 

r 

CE/RU/en  19 

ARTICLE  24 

Co-ordination of  social security 

The  Parties  shall conclude agreements  in order: 

1 ) to  adopt,  subject to the conditions and modalities applicable in each Member  State, the 

provisions  necessary  for the co-ordination  of  social security  systems for  workers of 

Russian nationality,  legally employed in the territory  of  a Member  State  and where 

applicable for the  members of their family,  legally  resident there.  These  provisions 

will in particular  ensure that: 

-  all periods of  insurance, employment  or resident  completed  by such workers  in the 

various  Member  States  shall be added together  for the purpose of  pensions in 

respect  of  old age, invalidity  and death and for the  purpose of  medical care for 

such workers  and where  applicable for  such family  members; 

-  any  pensions in respect  of old age, death, industrial accident  or occupational 

disease, or of  invalidity  resulting therefrom, with the exception of the special 

non-contributory  benefits, shall be freely transferable  at the  rate applied by virtue 

of the  law  of the debtor  Member  State  or States; 

- 

the  workers  in question shall where applicable  receive family  allowances for the 

abovementioned  members of their family. 

2)  to  adopt,  subject to the conditions and modalities  applicable  in Russia, the  provisions 

necessary to  accord to  workers who are nationals  of  a Member  State  and legally 

employed  in Russia, and to  members of their families  legally  resident there,  treatment 

similar to that  specified  in the second and third indents of  paragraph  1. 

CE/RU/en  2i 

//<? 

ARTICLE  25 

The  measures to  be taken in accordance with Article  24  of this Agreement  shall not  affect 

any  rights or obligations arising from bilateral agreements  linking the  Member  States and 

Russia where those agreements  provide for  more favourable treatment  of  nationals  of the 

Member  States  or of Russia. 

ARTICLE  26 

The  Cooperation  Council shall examine  which improvements  can be made in working 

conditions for  businessmen consistent  with the  international  commitments  of the Parties, 

including those  set out in the document  of the  CSCE Bonn Conference. 

ARTICLE  27 

The  Cooperation  Council shall make recommendations  for the implementation  of  Article  23 

and Article  26  of this  Agreement. 

^O 

CE/RU/en  21 

CHAPTER  II 

Conditions  affecting  the  establishment  and 

operation  of  companies 

ARTICLE  28 

1.  The  Community  and  its  Member  States  of  the  one  part  and  Russia  of  the  other  part, 

shall  grant  to  each other  treatment  no less favourable  than that  accorded to  any  third 

country,  with  regard to  conditions  affecting  the  establishment  of  companies  in  their 

territories  and this  in conformity  with  the  legislation  and  regulations  applicable  in  each 

Party. 

2.  Without  prejudice  to  the  reservations  listed  in Annex  3, the  Community  and  its  Member 

States  shall  grant  to  Community  subsidiaries  of  Russian companies  a treatment  no  less 

favourable  than that  granted to  other  Community  companies  or to  Community  companies 

which  are  subsidiaries  of  any third  country  companies  whichever  is the  better,  in  respect 

of  their  operation  and this  in conformity  with  their  legislation  and  regulations. 

3.  Without  prejudice  to  the  reservations  listed  in Annex  4,  Russia  shall  grant  to  Russian 

subsidiaries  of  Community  companies  a treatment  no  less favourable  than  that  granted  to 

other  Russian  companies  or to  Russian companies  which  are subsidiaries  of  any  third 

country  companies  whichever  is the  better,  in  respect  of  their  operation  and this  in 

conformity  with  its  legislation  and  regulations. 

4.  The  Community  and its  Member  States  of  the  one  part  and  Russia  of  the  other  part 

shall  grant  to  branches  of  Russian  and  Community  companies  respectively  a treatment  no 

less  favourable  than that  accorded  to  branches  of  companies  of  any third  country,  in 

respect  of  their  operation  and this  in  conformity  with  their  legislation  and  regulations. 

CE/RU/en  22 

JU 

5.  The  provisions  of  paragraphs  2  and 3  cannot  be used so as to circumvent  a Party's 

legislation and regulations  applicable to access to  specific  sectors or activities by 

subsidiaries  of  companies  of the other  Party established  in the territory  of  such first  Party. 

The treatment  referred to in paragraphs  2 and 3  shall benefit  companies  established  in the 

Community  and Russia respectively  at the date of entry  into force of this Agreement and 

companies  established  after  that  date once they  are established. 

ARTICLE  29 

The  provisions  of Article  28  of this Agreement together  with the following  provisions shall 

apply  in respect  of  banking and insurance services  referred to in Annex  6. 

1.  In respect  of  banking services  referred to  in Annex  6,  Part  B, the  nature of the 

treatment  accorded  by Russia under Article  28(1),  with  regard to establishment  by means 

of the  setting  up of  subsidiaries  only and under Article  28(3),  is set out in Annex  7,  Part A. 

In respect  of  insurance services  referred to  in Annex  6,  Part A(1)  and (2), the  nature of the 

treatment  accorded  by Russia under Article  28(1),  is set out in Annex  7,  Part B. 

2.  Notwithstanding  any other  provisions of this 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.  Such 

measures  shall  not  be used as a means of  avoiding the  Party's  obligations  under the 

Agreement. 

*££ 

CE/RU/en  23 

Nothing in the Agreement  shall be construed to  require a Party to disclose  information 

relating to the affairs  and accounts of  individual customers or any confidential or 

proprietary  information  in the possession of  public entities. 

3.  Without  prejudice to the  provisions of  Part A(1)(d)  and (e) of Annex  7, the  Community 

and the  Member  States  of the one part and Russia of the other  part shall not adopt any 

new  regulations  or measures which would introduce or worsen discrimination  as compared 

to the situation  existing on the date of the signature  of the Agreement  as regards 

conditions  affecting  the establishment  of the other  Party's companies in their  respective 

territories  in comparison to their  own companies. 

The parties  agree that the terms  "worsen discrimination"  include the aggravation of 

discriminatory  conditions or their  extension or reintroduction after the current  period of 

application. 

4.  For the  purposes of this Agreement,  as regards  banking activities  a company  shall be 

regarded  as a Russian subsidiary  of  a Community  company  when more than  fifty 

percent  (50%)  of  its share capital is held by the  Community  company. 

Cc/RU/en  24 

^J 

ARTICLE  30 

For the  purposes of this Agreement: 

(a)"Establishment"  shall mean the right of  Community  or Russian companies  as referred to 

in paragraph  (h) of this article to take  up economic  activities  by means  of  the 

setting  up of  subsidiaries  and branches in Russia or in the Community  respectively. 

In respect  of financial  services  mentioned  in Article  29,  "establishment"  shall mean 

the  right  of  Community  or Russian companies as referred to in paragraph  (h) of this 

article to take  up economic  activities by means of the setting up of  subsidiaries and 

branches  in Russia or in the Community  respectively  after  receiving a licence from 

the  competent  authorities  in conformity  with the legislation and regulations  applicable 

in each Party. 

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

company. 

(c)"Economic activities"  shall mean activities  of  an industrial, commercial  or professional 

character,  including financial services. 

(d)"Branch"  of  a company  shall mean a place of  business not having legal  personality 

which  has the appearance  of  permanency,  such as the extension of  a parent  body, 

has a management  and is materially  equipped to negotiate  business with third parties 

so that  the  latter,  although  knowing that there  will if  necessary  be a legal link  with 

the  parent  body, the  head office  of  which  is abroad, do not have to  deal directly  with 

such parent  body but  may transact  business at the  place of  business constituting the 

extension. 

^ 

CE/RU/en  25 

(e)"Community  subsidiary"  or  "Russian subsidiary"  respectively  shall mean a  "Community 

company"  or a "Russian company"  respectively,  as hereafter  defined, which is also a 

subsidiary  of  a "Russian company"  or a  "Community  company"  respectively. 

(f) A  national  of  a Member  State  or of  Russia respectively  shall mean a natural  person who 

is a national  of  one of the  Member  States  or of  Russia respectively  in accordance 

with their  respective  legislation. 

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

In respect  of  financial  services  mentioned  in Article  29,  "operation"  shall mean the 

pursuit  of  all the economic  activities  authorized  by the  licence granted to the 

Company  by the  competent  authorities  in conformity  with the  laws  and  regulations 

applicable  in each  Party. 

(h)A  "Community  company"  or a "Russian company"  respectively  shall mean a company 

set  up in accordance  with the  laws  of  a Member  State  or of  Russia  respectively  and 

having its registered office  or central  administration, or principal place of  business  in 

the territory  of the  Community  or Russia  respectively.  However,  should the 

company,  set  up in accordance  with the  laws of  a Member  State  or Russia 

respectively,  have only  its registered  office  in  the territory  of the  Community  or 

Russia  respectively, the  company  shall be considered  a Community  or Russian 

company  respectively  if  its operations  possess a real and continuous  link with the 

economy  of  one of the  Member  States  or Russia  respectively. 

CE/RU/en  26 

^" 

With  regard to  international  maritime transport,  shall also be beneficiaries  of the 

provisions  of this Chapter  and Chapter  III, shipping companies established  outside the 

Community  or Russia and controlled  by nationals  of a Member  State  or of  Russia 

respectively,  if their vessels are registered  in that  Member  State  or in Russia in 

accordance  with their  respective legislation. 

For the  purposes of this  provision, international  maritime transport  shall be 

considered to include intermodal transport  operations  involving a sea leg without 

prejudice to  applicable  nationality  restrictions  concerning the carriage of  goods and 

passengers  by other transport  modes. 

For the  purpose of Article  29  and Annex  7,  with  regard to  banking services  referred 

to  in Annex  6,  Part  B,  "Russian subsidiary"  or "Community  subsidiary"  as defined in 

paragraph  (e), shall refer to  such a subsidiary  which is a bank in accordance  with the 

laws  of  Russia or a Member  State  respectively. 

For the  purpose of Article  29  and Annex  7,  with  regard to  banking services  referred 

to  in Annex  6,  Part  B,  "Community  company"  or  "Russian company"  as defined in 

paragraph  (h), shall refer to such a company  which  is a bank in accordance  with the 

laws  of  a Member  State  or Russia  respectively. 

ARTICLE  31 

Notwithstanding  Article  100,  the  provisions  of this Title  shall not  prejudice the  application 

by each  Party  of  any  measure  necessary  to  prevent the  circumvention, through the 

provisions  of this Agreement,  of  its measures  concerning third country  access to its 

market. 

?£ 

JX. 

CE/RU/en  27 

ARTICLE  32 

1.  Notwithstanding the  provisions of  Chapter  I of this Title, a Community  company  and a 

Russian company  established  in the territory  of  Russia or the Community  respectively  shall 

be entitled to employ, or have employed  by one of  its subsidiaries, branches or joint 

ventures, in accordance  with the legislation in force in the host country  of  establishment, 

in the territory  of  Russia and the Community  respectively,  employees who  are nationals of 

Member  States  and Russia respectively,  provided that  such employees are key  personnel 

as defined in paragraph  2 of this Article, and that they  are employed exclusively  by 

companies, subsidiaries,  branches or joint ventures.  The  residence and work  permits of 

such employees  shall only cover the  period of  such employment. 

2.  Key personnel of the  above  mentioned companies  herein referred to as "organizations" 

are  "intra-corporate  transferees"  as defined in (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 as majority  shareholders), for at  least the year 

immediately  preceding such movement: 

(a) Persons working in a senior  position with an organization, who  primarily direct the 

management  of the establishment  (branch, subsidiary  or joint venture), receiving 

general supervision  or direction  principally  from the  board of directors  or stockholders 

of the  business or their  equivalent, including: 

-  directing the establishment  or a department  or subdivision of the  establishment; 

-  supervising  and controlling the work  of  other  supervisory,  professional or 

managerial employees; 

-  having the authority  personally to engage and dismiss or recommend engaging, 

dismissing  or other  personnel actions. 

CE/RU/en  28 

£1-

(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  of that  organization,  effectively 

pursuing like economic  activities  in the territory  of the other  Party. 

ARTICLE  33 

The  Parties  recognize the importance  of  granting each other national treatment  with regard 

to the  establishment  and, where  not so foreseen  herein, operation of  each other's 

companies  in their territories  and agree to consider the  possibility  of  movement  towards 

this end on a mutually  satisfactory  basis, and in the  light of  any  recommendations  by the 

Cooperation Council. 

ARTICLE  34 

1.  The  Parties  shall use their  best endeavours to avoid taking any  measures  or actions 

which  render the conditions for the establishment  and operation of  each other's 

companies  more  restrictive than the  situation existing on the day  preceding the date of 

signature  of the  Agreement. 

£-Ç? 

CE/RU/en  29 

2.  By the  end  of  the  third  year  after  signature  of  the  Agreement  at  the  latest,  and 

thereafter  at  annual  intervals  the  Parties  shall  examine  within  the  Cooperation  Council: 

— measures  introduced  by  either  Party  since the  signature  of  the  Agreement  which  affect 

the  establishment  or  operation  of  companies  of  one Party  in the territory  of  the  other 

Party,  and  which  are the  subject  of  commitments  assumed  in Article  28;  and 

-  whether  it  is  possible for  the  Parties to  assume: 

=  the  obligation  not  to  take  any  measures  or  actions  which  may  render  the  conditions 

for  the  establishment  and operation  of  each other's  companies  more  restrictive 

than  the  situation  existing  at  the  time  of  such  examination,  where  not  already 

foreseen  herein, or 

=  other  obligations  affecting  their  freedom  of  action 

in areas  agreed  between  the  Parties  in  respect  of  the  commitments  assumed  in 

Article  28. 

If  after  such  examination  one  Party  is of  the  view  that  measures  introduced  by  the  other 

Party  since the  signature  of  the  Agreement  result  in a situation  which  is  significantly  more 

restrictive  in  respect  of  establishment  or  operation  of  companies  of  the  first  Party  in  the 

territory  of  the  other  Party  as compared  with  the  situation  existing  at the  date  of  signature 

of  the  Agreement,  such  Party  may  request  the  other  Party  to  enter-into  consultations.  In 

such  case the  provisions  of  Part  A  of  Annex  8  shall  apply. 

3.  In furtherance  of  the  aims  of  this  Article,  measures  shall  be taken  as  indicated  in  Part B 

of  Annex  8. 

CE/RU/en  30 

£°/ 

4.  The  provisions  of  this  Article  are  without  prejudice  to  those  of  Article  5 1.  The 

situations  covered  by  such  Article  51  shall  be  solely  governed  by  its  provisions  to  the 

exclusion  of  any  other. 

ARTICLE  35 

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

transport. 

2.  However,  in  respect  of  activities,  as  indicated  below,  undertaken  by  shipping  agencies 

for  the  provision  of  services  to  international  maritime  transport,  including  intermodal 

transport  operations  involving  a  sea-leg,  each  Party  shall  permit  to  the  companies  of  the 

other  Party  to  have  a  commercial  presence  in  its  territory  in  the  form  of  subsidiaries  or 

branches,  under  conditions  of  establishment  and  operation  no  less  favourable  than  those 

accorded  to  its  o wn  companies  or  to  subsidiaries  or  branches  of  companies  of  any  third 

country,  whichever  are  the  better,  and  this  in  conformity  with  the  legislation  and 

regulations  applicable  in  each  Party. 

3.  Such  activities  include: 

(a) marketing  and  sales  of  maritime  transport  and  related  services  through  direct  contact 

w i th  customers,  from  quotation  to  invoicing; 

(b) purchase  and  resale  of  any  transport  and  related  services,  including  transport  services 

by  any  inland  mode,  necessary  for  the  supply  of  an  intermodal  service; 

Oc> 

CE/RU/en  31 

(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  with  other shipping agencies; 

(f) acting on behalf  of the companies, inter  alia in organizing the call of the vessel or taking 

over  cargoes  when required. 

CHAPTER  III 

CROSS  BORDER SUPPLY  OF SERVICES 

ARTICLE  36 

For the  sectors  listed in Annex  5 to this Agreement, the  Parties shall grant each other 

treatment  no less favourable than that  accorded to any third country  with  regard to the 

conditions  affecting the cross border supply of  services, by Community  or Russian 

companies  into the territory  of  Russia or the  Community  respectively,  pursuant to the 

legislation  and regulations  applicable  in each Party. 

CE/RU/en  32 

Jv 

ARTICLE  37 

Subject to the  provisions of  Article 48  of this Agreement, the  Parties shalL permit for the 

sectors  listed in Annex  5 to this Agreement the temporary  movement  of  natural persons, 

who are representatives  of  a Community  or a Russian company  and are seeking temporary 

entry for the  purpose of  negotiating for the sales of  cross-border  services or entering into 

agreements to sell cross-border  services for that  company, where those  representatives 

will not  be engaged in making direct  sales to the general public or in supplying services 

themselves. 

ARTICLE  38 

1.  For the  sectors  listed in Annex  5,  each Party  may  regulate the conditions of  cross 

border  supply  of  services  into its territory.  Insofar  as these  regulations are of  general 

application they  shall be administered  in a reasonable, objective  and impartial  manner. 

2.  Paragraph  1 is without  prejudice to the provisions of Articles 36  and 50. 

3.  By the  end of the third year after  signature  of the Agreement  at the latest, the  Parties 

shall examine  within the Cooperation Council: 

-  measures  introduced  by either  Party  since the signature of the Agreement  which  affect 

the cross-border  supply of  services  covered  by Article  36; and 

3^ 

CE/RU/en 33 

-  whether  it is possible for the  Parties to assume: 

=  the  obligation  not to take any measures  or actions which may render the  conditions 

for the cross-border  supply of  services  covered  by Article  36  more restrictive than 

the  situation existing at the time of  such examination, or 

=  other  obligations  affecting their freedom of  action 

in areas agreed between the  Parties in respect  of the commitments  assumed in 

Article  36. 

If  after  such examination  one Party is of the view  that  measures  introduced  by the other 

Party  since the signature of the Agreement  result  in a situation  which is significantly  more 

restrictive  in respect  of  cross-border  supply of  services covered  by Article  36  as compared 

with the  situation existing at the date of  signature  of the Agreement,  such first  Party  may 

request the  other  Party to  enter  into consultations.  In such case the  provisions  of  Part A of 

Annex  8  shall apply. 

4.  In furtherance  of the aims of this Article,  measures shall be taken as indicated  in Part B 

of  Annex  8. 

5.  The  provisions  of this Article  are without  prejudice to those of  Article  51.  The 

situations  covered  by such Article  51  shall be solely governed  by its  provisions to the 

exclusion of  any other. 

CE/RU/en  34 

o0 

ARTICLE  39 

1.  With  regard to  maritime transport, the  Parties undertake to apply effectively  the 

principle of  unrestricted  access to the international  market  and traffic  on a commercial 

basis. 

(a)  The above  provision does not prejudice the  rights and obligations arising under the 

United  Nations  Convention  on a Code of  Conduct for  Liner Conferences, as applicable 

to the  Parties to this Agreement.  Non-conference  lines shall be free to  operate in 

competition  with  a conference  as long as they  adhere to the  principle of fair 

competition  on a commercial basis. 

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

essential feature  of the dry and liquid bulk trade. 

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

(a) not  apply,  in their  mutual trade, as from entry  into force of this Agreement,  any cargo 

sharing  provisions  of  bilateral  agreements  between  any  Member  State  and the 

former  USSR; 

(b)not  introduce  cargo sharing arrangements  in future  bilateral  agreements  with third 

countries concerning dry and liquid bulk and liner trade.  However,  this does not 

exclude the  possibility  of  such arrangements  concerning  liner  cargo in those 

exceptional  circumstances  where  liner shipping  companies from one or other  Party to 

this Agreement  would  not otherwise  have an effective  opportunity  to  ply for trade to 

and from the third country concerned; 

O _ JV 

CE/RU/en  35 

(c) abolish, upon entry  into force of this Agreement,  all unilateral measures, administrative, 

technical  and other  obstacles  which could constitute  a disguised restriction  or have 

discriminatory  effects  on the free supply of  services in international  maritime transport. 

Each Party  shall grant,  inter  alia, a treatment  no less favourable than that  accorded to a 

Party's  own vessels, for vessels used for the transport  of  goods, passengers  or both, 

and flying the flag  of the other  Party, with  respect to access to  ports open to foreign 

vessels, the  use of  infrastructure  and auxiliary  maritime services of those  ports, as well 

as related fees and charges, customs facilities  and the assignment  of  berths and 

facilities  for  loading and unloading. 

3.  The  Parties agree that,  following the entry  into force of this Agreement  and not later 

than  31  December  1996,  they  will conduct  negotiations  on the stage-by-stage  opening of 

the  inland waterways  of  each Party to the nationals  and shipping companies of the other 

Party,  in respect  of the freedom to  provide  international  sea-river  services. 

ARTICLE  40 

For the  purpose  of  establishing favourable  conditions for  rail transport  between the  Parties, 

it is agreed that  both  Parties  will,  in the framework  of this Agreement  and through 

appropriate  bilateral  and multilateral  mechanisms, promote: 

- 

the facilitation  of  customs  and other  border clearance  procedures for freight  and for 

rolling stock; 

-  cooperation  in the  creation  of  suitable  rolling stock  meeting the requirements of 

international  traffic; 

CE/RU/en 36 

J J 5 "" 

- 

the  approximation  of  regulations and procedures  which govern international transport; 

- 

the  safeguarding  and development  of  international  passenger traffic  between the 

Member  States  and Russia. 

ARTICLE  41 

Cooperation  shall ensure fair,  balanced  and competitive  conditions for the space  launching 

and transportation  market  based on sound economic factors  and, in particular,  steps  will 

be taken to  promote the  negotiation  and implementation  of  multilateral  rules regarding 

international trade  in space launching and transportation services. 

During the transitional  period to the year  2000,  conditions for the supply  of  space  launch 

services  shall be agreed upon. 

ARTICLE  42 

The  Parties  shall endeavour to  provide each other  every  assistance  possible as regards 

measures  promoting cross-border trade  in mobile satellite  communications  on their 

respective territories,  in conformity  with their  respective  legislation, practices and 

conditions.  In  1996,  the  Parties will  meet to consider the  possibilities  of  granting to each 

other  most-favoured-nation  treatment  for  mobile satellite services. 

~£ 

CE/RU/en  37 

ARTICLE  43 

With a view  to assuring a coordinated development  of transport  between the 

Parties,adapted to their  commercial  needs, the  Parties may, after the entry  into force of 

this Agreement,  conclude specific Agreements  regarding the conditions  of  mutual  market 

access and of  provision of  services in the transport  sector, to the extent that these 

conditions  are not already addressed by this Agreement.  Such Agreements  may apply to 

more than one or to  a single mode of transport. 

CHAPTER  IV 

General provisions 

ARTICLE  44 

For the  purposes of  Chapters  II, III and of Title V,  no account  shall be taken of  treatment 

accorded  by the  Community,  its Member  States or Russia pursuant to  commitments 

entered into in economic  integration agreements. 

ARTICLE 45 

Companies  which are controlled and exclusively  owned by Community  companies and 

Russian companies jointly  shall also be beneficiaries  of the  provisions of  Chapters  II and 

of this Title  and those of Title  V. 

CE/RU/en  38 

31-

ARTICLE  46 

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

public policy,  public security  or public health. 

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

even occasionally,  with the  exercise of  official  authority. 

ARTICLE  47 

The Cooperation  Council shall make recommendations  for the further  liberalization  of trade 

in services, taking into account the development  of the services sectors in the  Parties and 

the other  international  commitments  entered into by the  Parties, in particular  in the  light of 

the final  results of the  negotiations  of the  General Agreement  on Trade in Services, 

hereinafter  referred to  as "GATS". 

ARTICLE  48 

For the  purpose of 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  46. 

3? 

CE/RU/en  39 

ARTICLE  49 

1.  The  most-favoured-nation treatment  granted in accordance with the provisions of this 

Title or of Title V  shall not apply to the tax  advantages  which the  Parties are providing or 

will  provide  in the future on the  basis of  agreements to avoid double taxation, or other tax 

arrangements. 

2.  Nothing  in this Title or in Title V  shall be construed to  prevent the adoption or 

enforcement  by the  Parties of  any measure aimed at  preventing the avoidance  or evasion 

of taxes  pursuant to the tax  provisions of  agreements to  avoid double taxation and other 

tax  arrangements, or domestic  fiscal legislation. 

3.  Nothing in this Title  or in Title V  shall be construed to  prevent  Member  States  or Russia 

from distinguishing, in the  application of the  relevant  provisions of their fiscal legislation, 

between taxpayers  who are not in identical situations, in particular  as regards their  place 

of  residence. 

ARTICLE  50 

Without  prejudice to Articles  32  and 37,  no provision of  Chapters  II, III and  IV  hereof  shall 

be interpreted  as giving the  right to: 

-  nationals of the  Member  States  or of  Russia respectively to enter,  or stay  in, the 

territory  of  Russia or the  Community  respectively  in any capacity  whatsoever,  and in 

particular  as a shareholder  or partner  in a company  or manager or employed thereof  or 

supplier  or recipient  of services; 

CE/RU/en  40 

3^ 

Community  subsidiaries or branches of  Russian companies to employ or have employed 

in the territory of the Community  nationals of Russia; 

Russian subsidiaries or branches of  Community  companies to employ or have  employed 

in the territory  of  Russia nationals of the  Member States; 

Russian companies or Community  subsidiaries or branches of  Russian companies to 

supply  workers  who are Russian nationals to act for and under the control of  other 

persons by temporary  employment  contracts; 

Community  companies or Russian subsidiaries or branches of Community  companies to 

supply  workers  who are nationals  of the  Member  States to act for and under the control 

of  other  persons by temporary  employment contracts. 

ARTICLE  51 

1.  Treatment  granted  by either  Party to the other hereunder  shall, as from the day one 

month  prior to the date of  entry  into force of the relevant  obligations of the  GATS, in 

respect  of  sectors or measures covered by the GATS, in no case be more favourable than 

that  accorded  by such first  Party under the  provisions of the GATS, and this, in respect of 

each service  sector,  sub-sector  and mode of supply. 

2.  Without  prejudice to the automatic  nature of the provisions of  paragraph  1,  the  Party 

which  has assumed  obligations  under the GATS  shall inform the other of the  appropriate 

provisions  and the adaptions  resulting therefrom for this  Agreement. 

Qo 

CE/RU/en  41 

3.  Within  one month of  receipt from the  Party, which has assumed obligations  under the 

GATS,  of the  information  referred to  in paragraph  2, the other  Party  may  notify the first 

Party of  its intention to  make adjustments to  its obligations under this Title, and make 

those adjustments  as follows: 

-  where  a service  sector,  sub-sector  or mode of  supply of  a service has been excluded 

from the  Agreement,  its scope reduced or made subject to the fulfilment  of  conditions 

pursuant to  paragraph  1,  the identical sector,  sub-sector  or mode of  supply  may be 

excluded  or its scope reduced in the same way  or made subject to the fulfilment of 

identical  or similar conditions. 

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

balance of  obligations  between the Parties. 

5.  In the  case that  a Party  considers that the adjustments  made under  paragraph  3  have 

not  led to the  re-establishment  of the  balance of  obligations  between the  Parties, such 

Party  may  request the other  Party, to enter  into consultations  within 30  days in order to 

find  a satisfactory  solution by means of  any other appropriate adjustment  of  its obligations 

under this Title. 

6.  If  within  30  days of the opening of  such consultations  no satisfactory  solution  has been 

found, the  procedures of  Article  101  will be applicable  at the request of  either  Party. 

CE/RU/en  42 

,, 

TITLE V 

PAYMENTS  AND  CAPITAL 

ARTICLE  52 

1.  The  Parties undertake to authorize, in freely  convertible  currency, any current  payments 

between  residents of the  Community  and of  Russia connected  with the movement of 

goods, services  or persons  made in accordance  with the  provisions of the  present 

Agreement. 

2.  The free  movement  of  capital  between  residents  of the Community  and of  Russia in the 

form of direct  investment  made in companies formed  in accordance  with the  laws  of the 

host country  and investments  made in accordance  with the  provisions of  Chapter  II of 

Title  IV,  and the transfer  abroad of this investment,  including any compensation  payments 

arising from  measures such as expropriation, nationalization  or measures of  equivalent 

effect,  and of  any  profit  stemming therefrom^hall be ensured. 

3.  The  provisions of  paragraph  2 shall not prevent  Russia from applying restrictions on 

outward  direct  investment  by Russian residents.  Five years after  the entry  into force of 

this Agreement  the  Parties agree to  consult over the  maintenance  of these  restrictions, 

taking into account  all the relevant  monetary, fiscal and financial considerations. 

4.  Transfers  in respect  of  capital  movements  covered under  paragraph  2  shall be made on 

the  same exchange  rate conditions  as those  relating to current transactions. 

4^ 

CE/RU/en 43 

5.  Without  prejudice to  paragraphs  6  and 7,  after  a transitional  period of five years as 

from entry  into force  of this Agreement, the  Parties shall not introduce any  new 

restrictions  on the  movement  of  capital and current  payments connected  therewith 

between  residents  of the  Community  and Russia and shall not make the existing 

arrangements  more restrictive.  However,  the introduction of  restrictions during the 

transitional  period referred to in the first  sentence of this paragraph shall not affect  the 

rights and obligations  of the  Parties under paragraphs  2,  3,  4  and 9 of this Article. 

6.  After  the  prohibition in paragraph  5 has come into effect  and without  prejudice to 

paragraphs  1 and 2,  where, in exceptional  circumstances,  movements  of  capital  between 

the  Community  and the  Russia cause, or threaten to cause, serious difficulties  for the 

operation of  exchange  rate  policy or monetary  policy  in the Community  or Russia, the 

Community  and Russia, respectively,  may take  safeguard  measures with  regard to 

movements  of  capital  between the  Community  and Russia for a period not exceeding 

six  months  if  such measures  are strictly  necessary. 

7.  With  reference to the  provisions of this Article, until a full convertibility  of the  Russian 

currency  within the  meaning of Article VIII  of the Articles  of Agreement  of the  International 

Monetary  Fund (IMF)  is introduced, Russia may apply exchange  restrictions  connected  with 

the  granting  or taking up of  short and medium-term financial credits to the  extent that  such 

restrictions  are imposed on Russia for the  granting of  such credits and are  permitted 

according to  Russia's status  under the IMF. 

Russia  shall apply these  restrictions  in a non-discriminatory  manner.  They  shall be applied 

in such a manner  as to  cause the  least  possible disruption to this Agreement.  Russia shall 

inform the  Co-operation  Council promptly  of the introduction  of  such measures  and of any 

changes therein. 

CE/RU/en 44 

£/3 

8.  The  Parties shall consult  each other with a view to facilitate the movement  of  capital 

between the Community  and Russia in order to  promote the objectives of the  present 

Agreement.  The  Parties shall particularly  endeavour to further  liberalize movements of 

capital  related to  portfolio  investment  and commercial credits, and movements of  capital 

related to financial  loans and credits granted  by Community  residents to  Russian residents. 

The Cooperation  Council shall make appropriate  recommendations  within the first five 

years after  entry  into force of this Agreement. 

9.  The  Parties shall accord to one another  most-favoured-nation  treatment  in respect of 

freedom of  current  payments  and capital  movements  and in respect  of  methods of 

payment. 

TITLE VI 

COMPETITION, INTELLECTUAL,  INDUSTRIAL  AND  COMMERCIAL  PROPERTY 

PROTECTION, LEGISLATIVE  COOPERATION 

ARTICLE  53 

Competition 

1.  The  Parties agree to  work to  remedy  or remove through the application of their 

competition  laws or otherwise,  restrictions  on competition  by enterprises  or caused by 

State  intervention  insofar  as they  may affect  trade  between the Community  and Russia. 

2.  In order to  attain the objectives  mentioned in paragraph  1 : 

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

competition  by enterprises  within their jurisdiction. 

4^Y 

CE/RU/en  45 

2.2.  The  Parties shall refrain from granting export aids favouring certain undertakings or 

the  production of  products other than primary  products.  The  Parties also declare their 

readiness, as from the third year from the date of  entry  into force of this Agreement,  to 

establish for  other  aids which distort  or threaten to distort  competition insofar  as they 

affect  trade  between the  Community  and Russia, strict disciplines, including the  outright 

prohibition of  certain aids.  These categories  of  aids and the disciplines applicable to each 

shall be defined jointly  within a period of three years after  entry  into force of this 

Agreement. 

Upon request  by one Party, the other  Party shall provide information  on its aid schemes or 

in particular  individual cases of  State aid. 

2.3.  During a transitional  period expiring five years after the entry  into force  of the 

Agreement,  Russia  may take  measures inconsistent  with  paragraph  2.2,  second sentence, 

provided that these  measures are introduced  and applied in the circumstances  referred to 

in Annex  9. 

2.4.  In the case of  State  monopolies of  a commercial character,  the  Parties declare their 

readiness, as from the third year from the date of  entry  into force of this Agreement,  to 

ensure that there  is no discrimination  between  nationals and companies of the  Parties 

regarding the conditions  under which goods are procured or marketed. 

In the  case of  public  undertakings  or undertakings to  which  Member  States  or Russia grant 

exclusive  rights, the  Parties declare their  readiness, as from the third year from the date of 

entry  into force  of this Agreement, to  ensure that there is neither  enacted  nor  maintained 

any  measure distorting trade  between the Community  and Russia to an extent  contrary  to 

the  Parties'  respective  interests.  This provision shall not obstruct the  performance,  in law 

or fact,  of the  particular tasks assigned to such undertakings. 

CE/RU/en  46 

is 

2.5.  The  period defined in paragraphs  2.2  and 2.4  may be extended  by agreement  of the 

Parties. 

3.  Consultations  may take  place within the  Cooperation  Committee  at the  request  of the 

Community  or Russia on the restrictions  or distortions of  competition  referred to in 

paragraphs  1 and 2 and on the enforcement  of their  competition  rules, subject to 

limitations  imposed by laws  regarding disclosure of  information, confidentiality  and 

business secrecy.  Consultations  may also comprise questions on the interpretation of 

paragraphs  1 and 2. 

4.  The  Party with experience  in applying competition rules shall give full consideration to 

providing the  other  Party,  upon request  and within available  resources, technical  assistance 

for the development  and implementation  of competition rules. 

5.  The above  provisions  in no way  affect  a Party's  rights to apply adequate  measures, 

notably  those  referred to  in Article  18,  in order to address distortions  of trade. 

ARTICLE  54 

Intellectual, industrial and commercial  property  protection 

1.  Pursuant to the  provisions of this Article  and Annex  10, the  Parties confirm the 

importance they  attach to ensure adequate  and effective  protection and enforcement  of 

intellectual, industrial  and commercial  property rights. 

2.  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); 

9ë 

CE/RU/en  47 

-  Madrid Agreement  concerning the  International  Registration of  Marks  (Stockholm 

Act,  1967,  and amended in  1979); 

-  Nice Agreement  concerning the  International  Classification of  Goods and Services for 

the  purposes of the  Registration of  Marks  (Geneva,  1977,  and amended in  1979); 

-  Budapest Treaty  on the  International  Recognition of the  Deposit of  Microorganisms for 

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

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

and  1984); 

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

Marks  (Madrid,  1989). 

3.  The implementation  of the  provisions of this Article  and Annex  10 shall be regularly 

reviewed  by the  Parties in accordance  with Article  90.  If  problems in the  area of 

intellectual, industrial  and commercial  property  affecting trading conditions  were to  occur, 

urgent  consultations  shall be undertaken, at the  request of  either  Party, with  a view  to 

reaching  mutually  satisfactory  solutions. 

ARTICLE  55 

Legislative  Cooperation 

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

between  Russia and the Community  is the approximation of  legislation.  Russia shall 

endeavour to  ensure that  its legislation will  be gradually  made compatible  with that  of the 

Community. 

CE/RU/en48 

L/^ 

2.  The approximation  of  laws shall extend to the following areas in particular:  company 

law,  banking law,  company  accounts and taxes, protection of  workers at the  workplace, 

financial  services, rules on competition, public  procurement,  protection  of  health and life of 

humans, animals and plants, the environment,  consumer  protection, indirect taxation, 

customs law, technical  rules and standards, nuclear  laws and regulations, transport. 

TITLE VII 

ECONOMIC  COOPERATION 

ARTICLE  56 

1.  The Community  and Russia shall foster  economic  cooperation of  wide  scope in order to 

contribute to the  expansion of their  respective economies, to the creation of  a supportive 

international  economic  environment  and to the integration  between  Russia and a wider 

area of  cooperation  in Europe.  Such cooperation shall strengthen and develop economic 

links to the  benefit  of  both Parties. 

2.  Policies  and other  measures of the  Parties related to this title shall in particular be 

designed to  bring about  economic  and social reforms and restructuring in Russia  and shall 

be guided  by the  requirements  of  sustainability  and harmonious  social development; they 

shall also fully  incorporate  environmental  considerations. 

3.  The cooperation  shall, inter  alia, cover: 

-  development  of their  respective  industries and transport; 

-  exploration  of  new  sources of  supply and of  new  markets; 

-  encouragement  of technological  and scientific progress; 

L/  $ 

CE/RU/en  49 

-  encouragement  of  a stable social and human résources development  and of  local 

employment  development; 

-  promotion of the  regional cooperation  with the aim of  its harmonious and sustainable 

development. 

4.  The  Parties consider  it essential that,  alongside with establishing  a relationship of 

partnership  and cooperation  with each other, they  maintain and develop cooperation  with 

other  European states  and with the other countries of the former  USSR  with  a view  to a 

harmonious development  of the  region and shall make every  effort  to encourage this 

process. 

5.  As far  as applicable  economic  and other forms of  cooperation  provided for  in this 

Agreement  may  be supported  by the  Community  on the  basis of the relevant  Council 

regulations  on technical  assistance to the countries  of the former  USSR, taking into 

account the  priorities agreed upon by the  Parties.  Support  may also be provided through 

such other  relevant  Community  instruments  as may  be available. 

Special attention  shall  be devoted  by the  Parties to  measures capable of  fostering 

cooperation  with the  other  countries  of the former  USSR. 

6.  The  provisions  of this Title shall not affect  the enforcement  of the  Parties'  competition 

rules and of the specific  competition  provisions of this agreement  applicable to 

undertakings. 

CE/RU/en  50 

V? 

ARTICLE  57 

Industrial  cooperation 

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

- 

the  development  of  business  links  between  economic  operators,  including  small  and 

medium-size  enterprises; 

- 

the  improvement  of  management  on enterprise  level; 

- 

the  process  of  privatization  in the  context  of  economic  restructuring,  and  the 

strengthening  of  the  private  sector; 

-  efforts  in  both  public  and  private  sector,  to  restructure  and  modernize the  industry, 

during  the  transition  period  leading towards  a market  economy  and under  conditions 

ensuring  environment  protection  and  sustainable  development; 

- 

the  conversion  of  defence  industries; 

- 

the  development  of  appropriate  market-based  commercial  rules  and  practices  as well  as 

the  transfer  of  know-how. 

2.  Industrial  cooperation  initiatives  shall take  into  account  priorities  determined  by  the 

Community  and  by  Russia.  The  initiatives  should  seek  in  particular  to  establish  a suitable 

framework  for  undertakings,  to  improve  management  know-how  and to  promote 

transparency  as  regards  markets  and conditions  for  undertakings. 

S~C 

CE/RU/en  51 

ARTICLE  58 

Investment  promotion and protection 

1.  Bearing in mind the  respective  powers and competences  of the Community  and the 

Member  States, cooperation shall aim to establish a favourable  climate for  investment, 

both domestic  and foreign, especially through better  conditions for investment  protection, 

the transfer  of  capital  and the  exchange  of  information on investment  opportunities. 

2. 

The  aims of this cooperation  shall be in particular: 

- 

the  conclusion, where  appropriate,  between the  Member  States  and Russia of 

agreements for the  promotion and protection  of  investment; 

- 

the  conclusion, where  appropriate,  between the  Member  States and Russia of 

agreements to  avoid double taxation; 

- 

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

exhibitions, trade  weeks  and other events; 

- 

to  exchange  information  on laws, regulations and administrative  practices  in the field of 

investment. 

ARTICLE  59 

Public  procurement 

The  Parties shall cooperate to develop conditions for  open and competitive  award  of  public 

procurement  contracts  in particular  through calls for tenders. 

CE/RU/en  52 

S7 

ARTICLE  60 

Standards  and conformity  assessment; consumer  protection 

1.  Within the  limits of their  competence, and in accordance  with their  legislation the 

Parties'shall take  measures with a view  to reducing the differences  which  exist  between 

the  Parties in the fields of  metrology,  standardization  and certification  by encouraging the 

use of  internationally  agreed instruments  in those fields. 

The  Parties  shall closely cooperate  in the above-mentioned  areas with the  relevant 

European and other  international organisations. 

The  Parties shall, in particular,  encourage  practical  interaction  of their  respective 

organisations,  with the  aim of  starting to  negotiate  mutual recognition agreements  in the 

field of  conformity  assessment activities. 

2.  The  Parties shall enter  in close cooperation  with a view  to achieving  compatibility 

between their  systems  of  consumer protection. 

This cooperation  shall be aimed in particular  at establishment  of  permanent  systems of 

mutual  information  on dangerous  products, the improvement  of  information  provided to 

consumers  especially  on prices, characteristics  of  products and services  offered, the 

development  of  exchanges  between the  consumer  interest  representatives,  and increasing 

the  compatibility  of  consumer  protection policies. 

S~£. 

CE/RU/en  53 

ARTICLE  61 

Mining  and  raw  materials 

1.  The  Parties  shall cooperate  with  a view  to  fostering  the  development  of  the  sectors  of 

mining  and  raw  materials.  Special  attention  shall  be paid to  cooperation  in the  sector  of 

non-ferrous  metals. 

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

-  exchange  of  information  on all  matters  of  interest  to  the  Parties  concerning  the  mining 

and  raw  materials  sectors  , including trade  matters; 

- 

the  adoption  and implementation  of  environmental  legislation; 

- 

training. 

3.  Such  cooperation  shall  be regularly  reviewed  by the  Parties  in a special  committee  or 

body  to  be set  up in  accordance  with  the  provisions  of  Article  93. 

4.  This  Article  is  without  prejudice  to  Articles  dealing  more  specifically  with  raw  materials, 

in  particular  Articles  2 1, 65  and  66. 

ARTICLE  62 

Science  and  technology 

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

technological  development  (RTD)  on the  basis  of  mutual  benefit  and, taking  into  account 

the  availability  of  resources,  adequate  access  to  their  respective  programmes  and  subject 

to  appropriate  levels  of  effective  protection  of  intellectual, industrial  and  commercial 

property  rights  (IPR). 

CE/RU/en  54 

53 

2.  Science  and technology  cooperation  shall cover: 

- 

the exchange  of  scientific  and technical information; 

- 

joint  RTD activities, 

- 

training activities  and mobility  programmes for scientists,  researchers and technicians 

engaged  in RTD in both sides. 

Where  such cooperation takes the form of  activities  involving education and/or training, it 

should be carried  out  in accordance  with the  provisions of  Article  63. 

In carrying  out  such cooperation  activities, special attention  shall be devoted to the 

redeployment  of  scientists, engineers, researchers and technicians  who are or have been 

engaged  in research on/and  production of  weapons of  mass destruction. 

3.  Such cooperation  shall be implemented  according to  specific  arrangements  to be 

negotiated  and concluded  in accordance  with the  procedures  adopted  by each  Party, and 

which  shall set out,  inter alia, appropriate  IPR provisions. 

ARTICLE  63 

Education and training 

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

professional  qualifications,  both in the  public and private sectors. 

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

-  updating  higher education and training systems in Russia; 

CE/RU/en  55 

- 

the training of  public and private sector  executives and senior civil servants in priority 

areas to  be determined; 

-  cooperation  between universities, cooperation between universities and firms; 

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

young people; 

-  promoting teaching  in the field of  European Studies within the appropriate  institutions; 

- 

teaching  languages of the Community  and of Russia; 

-  post-graduate  training of  conference interpreters; 

- 

training of journalists; 

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

and technical facilities; 

-  development  of  distant  education and new training technologies; 

- 

training of trainers. 

3.  The  participation  of  one Party in the  respective  programmes  in the 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 

could then  be established  building on participation of  Russia in the Community's  TEMPUS 

programme. 

CE/RU/en  56 

ss~: 

ARTICLE  64 

Agriculture  and the  agro-industrial sector 

Cooperation shall aim at the  modernization, restructuring and privatisation of  agriculture 

and the  agro-industrial  sector  in Russia in conditions which ensure that the environment is 

respected.  This cooperation shall be through, inter alia, developing  private farms and 

distribution  channels, methods of storage, marketing and management,  modernizing the 

rural infrastructure  and improvement  of  agricultural land-use  planning, improving 

productivity,  quality  and efficiency,  and the transfer  of technology  and know-how.  The 

Parties shall aim at achieving compatibility  between their  sanitary  and phytosanitary 

standards. 

ARTICLE  65 

Energy 

1.  Cooperation shall take  place within the  principles of the market economy  and the 

European  Energy  Charter,  against a background  of the  progressive  integration  of the 

energy  markets  in Europe. 

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

- 

improvement  of the  quality  and security  of  energy  supply, in an economic and 

environmentally  sound manner; 

- 

formulation  of  energy  policy; 

- 

improvement  in management  and regulation of the energy  sector  in line with  a market 

economy; 

<- 

CE/RU/en  57 

- 

the  introduction of the range of  institutional, legal, fiscal and other  conditions  necessary 

to encourage  increased energy trade  and investment; 

-  promotion of  energy  saving and energy  efficiency; 

-  modernization  of  energy  infrastructure  including interconnection  of  gas supply and 

electricity  networks; 

- 

the environmental  impact  of  energy  production, supply and consumption, in order to 

prevent  or minimise the environmental damage  resulting from these activities; 

- 

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

types; 

-  management  and technical training in the energy  sector. 

ARTICLE  66 

Nuclear  sector 

Bearing in mind the  respective  powers  and competences  of the  Community  and its  Member 

States,  civil cooperation  in the  nuclear  sector  shall take  place, inter  alia, through the 

implementation  of two  agreements  on thermonuclear  fusion and on nuclear  safety  to be 

agreed  upon between the Parties. 

CE/RU/en  58 

S^ 

ARTICLE  67 

Space 

Without  prejudice to Article  4 1,  the  Parties shall promote  long term cooperation as 

appropriate  in the  areas of  civil space research, development  and commercial application. 

They  shall  pay  particular  attention to  initiatives  making on mutual beneficial  basis full use 

of the  complementarity  of their  respective activities. 

ARTICLE  68 

Construction 

The  Parties  shall cooperate  in the field of  construction  industry,  particularly  in the areas 

covered  by Articles  55,  57,  60,  62,  63  and 77  of this Agreement. 

This  cooperation  shall, inter  alia, aim at  modernizing and restructuring the  construction 

sector  in Russia in line with the  principles of  a market  economy  and duly taking into 

account  related  health, safety  and environmental aspects. 

ARTICLE  69 

Environment 

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

Conference  of  1993,  the  Parties shall develop  and strengthen their  cooperation on 

environment  and human health. 

<--  <p 

CE/RU/en  59 

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

particular: 

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

information on the state of the  environment; 

-  combating  local, regional and transboundary  air and water pollution; 

-  ecological restoration; 

-  sustainable, efficient  and environmentally  effective  production and use of  energy; safety 

of  industrial plants; 

-  classification  and safe handling of chemicals; 

-  water  quality; 

-  waste  reduction, recycling and safe disposal, implementation  of the  Basle Convention; 

- 

the  environmental  impact  of  agriculture, soil erosion, and chemical pollution; 

- 

the  protection  of forests; 

- 

the  conservation  of  biodiversity,  protected  areas and sustainable  use and  management 

of  biological resources; 

- 

land-use  planning, including construction and urban planning; 

-  use of  economic  and fiscal instruments; 

CE/RU/en  60 

<^  9 

-  global climate change; 

-  environmental  education and awareness; 

- 

implementation  of the  Espoo Convention on Environmental  Impact  Assessment  in a 

transboundary  context. 

3.  Cooperation  shall take  place particularly through: 

-  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; 

4  ' 

- 

improvement  of  laws towards  Community standards; 

-  cooperation  at  regional level, including cooperation within the framework  of the 

European Environment  Agency,  established  by the Community  and at  international level; 

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

in view  of  achieving sustainable  development; 

-  environmental  impact studies. 

QQ 

CE/RU/en  61 

ARTICLE  70 

Transport 

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

This cooperation  shall, inter  alia, aim at  restructuring  and modernizing transport  systems 

and networks  in Russia and developing and ensuring, where  appropriate,  compatibility  of 

transportation  systems  in the context  of  achieving a more global transportation system. 

The cooperation  shall include, inter alia: 

- 

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

airports; 

-  modernization  and development  of  railways, waterways,  road, port, airport  and air 

navigation infrastructure  including the  modernization  of  major  routes of  common  interest 

and the trans-European  links for the  above modes; 

-  promotion and development  of  multi-modal transport; 

- 

the  promotion of joint  research and development  programmes; 

-  preparation  of the  legislative  and institutional framework  for  policy development  and 

implementation  including  privatization  of the transport  sector. 

CE/RU/en  62 

£^ 

ARTICLE  71 

Postal services  and  telecommunications 

1.  The  Parties  shall expand  and strengthen  cooperation  in this  area  with  the  aim of  gradual 

integration  at the  technical  level  of  their  respective  telecommunications  and  postal 

networks.  To this  end they  shall initiate  notably  the  following  actions: 

-  exchange  information  on telecommunications  and  postal  services  and TV  and 

broadcasting  policies; 

-  exchange  technical  and other  information,  conduct  training  and advisory  operations; 

-  carry  out  transfer  of  technology  and  know-how; 

-  have the  appropriate  bodies  from  both  Parties  elaborate  and carry  out joint  projects; 

-  promote  new  communication  facilities  first  of  all for  the  needs  of  commercial  and  public 

institutions; 

-  promote  European technical  standards,  systems  of  certification  and  regulatory 

approaches; 

-  cooperate  in  securing the  communication  in critical  circumstances,  consult  each  other 

on  elaboration  of  guidelines  for  operator  cooperation  in conditions  of  catastrophes,  etc. 

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

-  development  and  modernization  of  an integrated  telecommunications  sector  in  Russia  in 

the  framework  of  market  reforms  and creation  of  an appropriate  regulatory  basis; 

££ 

Ct/RU/en  63 

modernization of  Russia's telecommunications  network  and its integration at the 

technical  level into European and world networks; 

cooperation in development  of  systems of  information exchange  and data transmission 

between  organizations of the Community  and Russia; 

integration at the technical level of transeuropean telecommunications  networks; 

modernization  of  Russia's postal and broadcasting services, including legal and 

regulatory aspects; 

the  management  of telecommunications,  postal, TV  and broadcasting services  in the 

changing economic  environments  of  both Parties, including inter alia, organizational 

structures, strategy  and planning, tariff  policy, purchasing principles. 

ARTICLE  72 

Financial services 

The  Parties shall cooperate  with the aim of establishing  and developing a suitable 

framework  for the  banking, insurance and other financial services  sector  in Russia adapted 

to the  needs of  market  economy. 

The cooperation  shall focus on: 

-  developing  accounting  standards  which are suitable for a free market  economy and 

which are compatible  with the standards adopted  by Member  States; 

-  restructuring  of the banking, insurance and financial system; 

CE/RU/en  64 

£3 

- 

improvement  of  monitoring and regulation of the banking, insurance and financial 

services  sector; 

-  developing  compatible  auditing systems; 

-  exchange  of  information  on the respective  laws in force or under preparation; 

-  modernizing the  infrastructure  of  commercial and private banks. 

ARTICLE  73 

Regional development 

The  Parties shall strengthen cooperation  between them on regional development  and 

land-use planning. 

They  shall encourage exchange of  information  by national, regional and local 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. 

6  V 

CE/RU/en 65 

ARTICLE  74 

Social cooperation 

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

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

The  cooperation  shall include notably: 

-  education and training on health and safety  issues with specific  attention to  high risk 

sectors  of  activity; 

-  development  and promotion of  preventive  measures to combat  work  related diseases 

and other  work  related ailments; 

-  prevention  of  major  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; 

CE/RU/en  66 

Q. <f 

-  exchange  of  information  on  the  programmes  of  flexible  employment,  including  those 

stimulating  self-employment  and  promoting  entrepreneurship. 

3.  The  Parties  shall  pay  special  attention  to  cooperation  in  the  sphere  of  social  protection 

which,  inter  alia,  shall  include  cooperation  in  planning  and  implementing  social  protection 

reforms  in  Russia. 

These  reforms  shall  aim  to  develop  in  Russia  methods  of  protection  intrinsic  to  market 

economies  and  shall  comprise  all  directions  of  social  security  activities. 

The  cooperation  shall  also  include  technical  assistance  to  the  development  of  social 

insurance  institutions  with  the  aim  of  promoting  gradual  transition  to  a  system  consisting 

of  a  combination  of  contributory  and  social  assistance  forms  of  protection,  as  well  as 

respective  non-governmental  organizations  providing  social  services. 

ARTICLE  75 

Tourism 

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

- 

facilitating  the  tourist  trade; 

-  cooperation  between  official  tourism  bodies 

- 

increasing  the  flow  of  information; 

- 

transferring  know-how; 

-  studying  the  opportunities  for  joint  operations. 

£g 

;  CE/RU/en  67 

ARTICLE  76 

Small and medium-sized  enterprises 

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

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

2.  The  Parties shall encourage the exchange of  information  and know-how,  inter  alia, in 

areas such as: 

- 

legal, administrative, technical, tax, financial  and other conditions  necessary for  setting 

up and expansion  of  SMEs and for cross-border  cooperation; 

- 

the  provision of the  specialized services  required  by SMEs, like management  and 

marketing training, accounting, quality  control and creation and strengthening of 

agencies  providing such services; 

-  establishment  of  continuous  and stable  links between the  Community  and Russian 

operators  in order to improve the flow  of  information to  SMEs and promoting cross-

border  cooperation, inter  alia, through access to and operation of  Business  Cooperation 

Network,  Euro-Info-Correspondence  Centres  provided the  necessary  conditions  are met 

for  any  of these  networks. 

The  Parties  shall closely  cooperate  with a view  to ensuring that the  necessary 

conditions for  access to the  networks  are met. 

CE/RU/en  68 

é ~ ^-

ARTICLE  77 

Communication, informatics  and information  infrastructure 

1.  The  Parties shall support the development  of  modem  methods of  information handling, 

including the  media.  They  shall take  appropriate  steps to stimulate the effective  mutual 

exchange  of  information.  Priority  shall be given to  programmes  aimed at  providing the 

general public  with  basic information about the  Community  and professional, inter alia, 

business  circles with specialized information. 

2.  The  Parties shall make the  necessary  efforts to expand and strengthen  cooperation in 

order to  establish the appropriate  information  infrastructure. To this end they  shall initiate 

notably the following actions: 

- 

the exchange  of  information  on policies for the establishment  of  information 

infrastructures  including  regulatory  policies; 

-  exploration  of the  possibility  for joint  projects on research and development in 

information  and communication technologies, and on the establishment  of an 

information  infrastructure  adapted to the  needs of  a market  economy, taking into 

account  the conversion  potential  of  Russian enterprises  and Russian interests for 

informatization  and allowing for  inter-operability  with  Community  information 

infrastructures; 

-  development  of joint  programmes  concerning the training of  specialists  in information 

technologies  and information services; 

-  promotion of  European technical  standards, systems  of  certification  and  regulatory 

approaches. 

£% 

CE/RU/en  69 

ARTICLE  78 

Customs 

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

Parties. 

2.  Cooperation  shall  include the following  in  particular: 

- 

the  exchange  of  information; 

- 

the  improvement  of  working  methods; 

- 

the  harmonization  and simplification  of  customs  procedures  regarding the  goods  traded 

between the  Parties; 

- 

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

- 

the  support  in the  introduction  and  management  of  modern  customs  information 

systems,  including  computer-based  systems  on the  customs  check  points; 

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

to  non-tariff  limitations; 

- 

the  organization  of  seminars  and training  periods. 

Technical  assistance  shall  be provided  where  necessary. 

3.  Without  prejudice  to  further  cooperation  foreseen  in this  Agreement  and  in  particular 

Articles  82  and  84, the  mutual  assistance  between  administrative  authorities  in  customs 

matters  of  the  Parties  shall take  place  in accordance  with  the  provisions  of  Protocol  2. 

CE/RU/en  70 

6? 

ARTICLE  79 

Statistical cooperation 

1.  The cooperation  shall aim at further  development  of  efficient  statistical systems, 

informational  and programme-technological  compatibility  of  statistical data, to  provide, in 

time,  reliable statistics  needed to support  and monitor  economic  cooperation  between the 

Parties and the  process of  economic  reform in Russia, and also to contribute to the 

development  of  private enterprise  in Russia. 

2.  The  Parties shall cooperate in particular: 

- 

to  enhance the development  of  an efficient  statistical  system in Russia, in particular to 

elaborate  an appropriate  institutional  framework; 

- 

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

personnel; 

- 

to  bring about  harmonization with international, and in particular,  Community  methods, 

standards and classifications; 

- 

to  provide  private  and public sector  economic  operators  with the appropriate  macro- and 

microeconomic data; 

- 

to guarantee the confidentiality  of data; 

- 

to  exchange  statistical  information  and to this end to build up and/or to  make 

appropriate  use of databases. 

*^ 

CE/RU/en  71 

ARTICLE  80 

Economies 

The  Parties shall facilitate the  process of  economic  reform and the coordination of 

economic  policies by cooperating to improve understanding of the fundamentals  of their 

respective  economies  and the design and implementation  of economic  policy  in market 

economies. 

The  Parties shall: 

-  exchange information on macroeconomic  performance  and prospects and on 

development  strategies; 

-  analyse economic  issues of  mutual interest,  including the framing of  economic  policies 

and implementation  instruments; 

-  encourage  extensive  cooperation  among economists and senior officials  in order to 

expedite the transfer  of information  and know-how  for the drafting  of  economic policies, 

and provide for  wide dissemination  of the  results of  policy-relevant  research. 

ARTICLE  81 

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. 

CE/RU/en  72 

"7/ 

2.  Co-operation  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  82 

Drugs 

The  Parties shall cooperate  in increasing the effectiveness  and efficiency  of  policies and 

measures to  counter the  illicit  production, supply and traffic  of  narcotic drugs and 

psychotropic  substances, including the  prevention of diversion of  precursor  chemicals, as 

well as in promoting drug demand prevention and reduction.  The cooperation  in this area 

shall be based on mutual consultation  and close coordination  between the  Parties over the 

objectives  and measures on the various drug-related fields, and shall, inter  alia, provide for 

exchange  of training  programmes  and include, where  available, technical  assistance from 

the  Community. 

ARTICLE  83 

Cooperation  in the field of 

regulation of  capital movements  and payments  in Russia 

Without  prejudice to Article  52, the  Parties, recognizing the  necessity  of  a stable 

functioning  and development  of the  Russian domestic  currency  market  shall cooperate in 

the field of  creation of  an effective  system of  regulation of  capital movements and 

payments  in Russia. 

7^ 

CE/RU/en  73 

Bearing in mind the  experience, competence  and respective  possibilities of the  Member 

States  and the  Community,  cooperation  in this field supported  by technical assistance from 

the  Community  shall cover  inter alia: 

-  establishing  links between competent  authorities of the  Community  and its  Member 

States  and of  Russia; 

-  exchanging  information on a regular basis; 

-  helping in the development  of  appropriate  regulations. 

In order to  permit  an optimal  use of the  resources available the  Parties shall ensure close 

coordination  with the  measures  undertaken  by other  countries  and international 

organizations. 

TITLE VIII 

COOPERATION  ON PREVENTION  OF ILLEGAL  ACTIVITIES 

ARTICLE  84 

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

- 

illegal  immigration  and illegal presence of  physical  persons of their  nationality  on their 

respective  territories, taking  into account the  principle and practice of readmission; 

- 

illegal activities  in the  sphere of  economics, including corruption; 

CE/RU/en  74 

<f  ^ 

- 

illegal transactions  of  various goods, including industrial waste; 

-  counterfeiting; 

- 

the illicit traffic  of  narcotic drugs and psychotropic  substances. 

The cooperation  in the  abovementioned  areas will be based on mutual consultations and 

close interactions  and will  provide technical  and administrative  assistance including: 

-  drafting  of  national  legislation in the sphere of  preventing illegal activities; 

-  creation of  information centres; 

- 

increasing the  efficiency  of  institutions  engaged  in preventing  illegal activities; 

- 

training of  personnel and development  of  research infrastructures; 

-  elaboration  of  mutually  acceptable  measures impeding illegal activities. 

TITLE IX 

CULTURAL  COOPERATION 

ARTICLE  85 

1.  The  Parties  undertake to  promote  cultural cooperation  with the  aim of  reinforcing the 

existing  links between their  peoples and to  encourage the  mutual  knowledge  of their 

respective  languages  and cultures  while  respecting creative freedom and reciprocal access 

to  cultural values. 

74* 

CE/RU/en  75 

2.  Cooperation shall cover in particular the following areas: 

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

monuments  and sites  (architectural heritage); 

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

culture; 

- 

translation of  literary works. 

3.  The  Cooperation  Council may make recommendations  for the implementation  of this 

Article. 

TITLE X 

FINANCIAL  COOPERATION 

ARTICLE  86 

In order to  achieve the  objectives  of this Agreement,  in particular Titles VI  and VII  thereof, 

and in accordance  with Articles  87,  88  and 89  Russia shall benefit from temporary 

financial  assistance from the Community  by way  of technical assistance  in the form of 

grants to  accelerate the  economic transformation  of Russia. 

CE/RU/en  76 

~f<f 

ARTICLE  87 

This financial assistance shall be covered within the framework  of the Tacis  programme 

foreseen  in the  Community's  relevant  Council Regulation. 

ARTICLE  88 

The objectives  and the areas of the Community's  financial assistance shall be laid down in 

an indicative  programme  reflecting established  priorities to  be agreed between the  Parties 

taking into account  Russia's needs, sectoral  absorption capacities  and progress  with 

reform.  The  Parties shall inform the Cooperation  Council thereof. 

ARTICLE  89 

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. 

~^~G 

CE/RU/en  77 

TITLE XI 

INSTITUTIONAL,  GENERAL AND  FINAL  PROVISIONS 

ARTICLE  90 

A  Cooperation  Council is hereby established  which shall monitor the implementation  of this 

Agreement.  It shall meet  at  ministerial  level once a year and when circumstances  require. 

It shall examine  any  major  issues arising within the framework  of the Agreement  and any 

other  bilateral or international  issues of  mutual interest for the  purpose of  attaining the 

objectives  of this Agreement.  The Cooperation Council may also make appropriate 

recommendations,  by agreement  between the  representatives  within the  Cooperation 

Council  of the Parties. 

ARTICLE  91 

1.  The  Cooperation  Council shall consist  of the  members of the  Council of the  European 

Union and  members  of the  Commission of the  European  Communities, on the one hand, 

and of  members  of the  Government  of the  Russian Federation, on the  other. 

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

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

representative  of the  Community  and by a member  of the  Government  of the  Russian 

Federation. 

CE/RU/en  78 

71/2-

ARTICLE  92 

1.  The Cooperation Council shall be assisted  in the  performance  of  its duties by a 

Cooperation  Committee  composed of  representatives  of the  members of the  Council of the 

European  Union and of  representatives  of the Commission of the  European Communities on 

the one hand and of  representatives  of the Government  of the  Russian Federation on the 

other,  normally  at  senior civil servant  level.  The office  of  President of the  Cooperation 

Committee  shall be held alternately  by a representative  of the Community  and by a 

representative  of the  Government  of the  Russian Federation. 

In its rules of  procedure the Cooperation Council shall determine the duties of the 

Cooperation  Committee, which shall include the  preparation  of  meetings  of the 

Cooperation  Council, and such duties as are provided for  in Articles  16,  17  and  53  and in 

Annex  2  and how the Committee  shall function. 

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

Committee,  which  will ensure continuity  between  meetings  of the  Cooperation Council. 

ARTICLE  93 

The  Cooperation  Council may decide to  set up any other  special committee  or body that 

can assist  it  in carrying  out its duties and shall determine the composition  and duties of 

such committees  or bodies and how they  shall function. 

~^ff 

CE/RU/en  79 

ARTICLE  94 

When examining any issue arising within the framework  of this Agreement  in relation to a 

provision  referring to an Article of the GATT, the Cooperation  Council shall take into 

account to the  greatest  extent  possible the  interpretation that  is generally  given to the 

Article of the  GATT  in question by the Contracting  Parties to the  GATT. 

ARTICLE  95 

A  Parliamentary  Cooperation  Committee  is hereby  established.  It shall meet  at  intervals 

which it  shall itself  determine. 

ARTICLE  96 

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

Parliament,  on the one hand, and of  members of the  Federal Assembly  of the  Russian 

Federation, on the  other. 

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

3.  The  Parliamentary  Cooperation  Committee  shall be presided in turn by a member  of the 

European  Parliament  and a member  of the  Federal Assembly  of the  Russian Federation 

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

CE/RU/en  80 

7? 

ARTICLE  97 

The  Parliamentary  Cooperation Committee  may request  relevant  information  regarding the 

implementation  of this Agreement  from the  Cooperation  Council, which shall then supply 

the  Committee  with the  requested information. 

The  Parliamentary  Cooperation Committee  shall be informed of the  recommendations  of 

the  Cooperation Council. 

The  Parliamentary  Cooperation  Committee  may make recommendations to the  Cooperation 

Council. 

ARTICLE  98 

1.  Within the  scope of this Agreement,  each  Party undertakes to ensure that  natural and 

legal persons of the  other  Party  have access free of discrimination  in relation to  its own 

nationals to the  competent  courts and administrative  organs of the  Parties to defend their 

individual  rights  and  their  property  rights, including  those  concerning intellectual, 

industrial  and commercial  property. 

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

-  shall encourage the adoption of  arbitration for the settlement  of  disputes  arising out of 

commercial  and cooperation transactions  concluded  by economic  operators of the 

Community  and those of Russia; 

-  agree that  where a dispute is submitted to arbitration, each Party to the dispute may, 

except  where the  rules of the arbitration  centre chosen by the  Parties provide 

otherwise,  choose its own arbitrator,  irrespective  of  his nationality,  and that  the 

presiding third arbitrator  or the sole arbitrator  may  be a citizen of  a third State; 

C) XO 

CE/RU/en  81 

will  recommend their economic  operators to choose by mutual consent the law 

applicable to their contracts; 

shall encourage  recourse to the arbitration  rules elaborated  by the  United  Nations 

Commission on International Trade  Law  (Uncitral)  and to arbitration  by any centre of a 

state signatory  to the Convention on Recognition and Enforcement  of  Foreign Arbitral 

Awards  done at  New  York on  10 June  1958. 

ARTICLE  99 

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

1 ) which it considers  necessary for the  protection  of  its essential security  interests: 

(a)  to  prevent the disclosure of  information  contrary to its essential  security interests; 

(b)  which  relate to fissionable  materials or the  materials from which they  are derived; 

(c)  which  relate to the production of,  or trade  in arms, munitions or war  materials  or to 

research, development  or production indispensable for defence  purposes, provided 

that  such measures do not impair the conditions  of  competition  in respect of 

products  not intended for specifically  military purposes; 

(d)  in the event  of  serious internal disturbances affecting the maintenance  of  law  and 

order,  in time  of  war  or serious international tension constituting threat  of  war  or in 

order to  carry  out obligations  it  has accepted for the  purpose of  maintaining peace 

and international  security; or 

CE/RU/en 32 

g yf 

2)  which it considers  necessary to  respect  its international  obligations and commitments or 

autonomous  measures taken in line with such generally  accepted  international 

obligations  and commitments  on the control of dual use industrial goods and 

technology. 

ARTICLE  100 

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

contained therein: 

- 

the arrangements  applied by Russia in respect  of the  Community  shall not  give  rise to 

any discrimination  between the  Member  States, their  nationals or their  companies or 

firms; 

- 

the arrangements  applied by the  Community  in respect  of  Russia shall not give  rise to 

any discrimination  between  Russian nationals, or its companies  or firms. 

2.  The  provisions  of  paragraph  1 are without  prejudice to the  right of the  Parties to apply 

the  relevant  provisions of their fiscal  legislation to tax  payers who are not in identical 

situations  in particular  as regards their  place of  residence. 

ARTICLE  101 

1.  Each of the  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. 

XI 

CE/RU/en  83 

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 conciliator  within two  months.  For the  application 

of this  procedure, the  Community  and its Member  States shall be deemed to  be one Party 

to the dispute. 

The  Cooperation  Council shall appoint a third  conciliator. 

The  conciliator's  recommendations  shall be taken  by majority  vote.  Such 

recommendations  shall not be binding upon the Parties. 

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

ARTICLE  102 

The  Parties  agree to  consult  promptly through appropriate  channels at the  request  of  either 

Party to discuss any  matter  concerning the  interpretation  or implementation  of this 

Agreement  and other  relevant  aspects of the  relations  between the Parties. 

The  provisions  of this Article  shall in no way  affect  and are without  prejudice to 

Articles  17,  18,  101  and  107. 

ARTICLE  103 

Treatment  granted to  Russia hereunder  shall in no case be more favourable than that 

granted  by the  Member  States to each other. 

CE/RU/en  84 

V 

ARTICLE  104 

For the purposes of this Agreement, the term  "Parties"  shall mean the Community,  or its 

Member  States, or the Community  and its Member  States, in accordance  with their 

respective  powers, of the one part, and Russia, of the other  part. 

ARTICLE  105 

Insofar  as matters  covered  by this Agreement  are covered  by the  Energy Charter  Treaty 

and Protocols thereto,  such Treaty  and Protocols shall upon entry  into force  apply to such 

matters  but only to the  extent that  such application is provided for therein. 

ARTICLE  106 

This 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  at  least  six months  before it expires. 

ARTICLE  107 

1.  The  Parties  shall take  any general or specific  measures  required to fulfil their  obligations 

under the Agreement.  They  shall see to  it that the objectives  set out in the Agreement  are 

attained. 

g/^ 

CE/RU/en  85 

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  108 

Annexes  1, 2,  3,  4,  5,  6,  7,  8,  9 and  10 together  with  Protocols  1 and 2 shall form an 

integral  part  of this Agreement. 

ARTICLE  109 

This Agreement  shall not,  until equivalent  rights for  individuals  and economic  operators 

have  been achieved  hereunder,  affect  rights assured to them through agreements  binding 

one or more  Member  States, on the one hand, and Russia, on the other,  except  in areas 

falling  within Community  competence  and without  prejudice to the obligations  of  Member 

States  resulting from this Agreement  in areas falling within their  competence. 

Cc/RU/en 86 

<9^ 

ARTICLE  110 

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 Russia. 

ARTICLE  111 

This Agreement  is drawn up in duplicate  in the  Danish, Dutch, English, French, German, 

Greek,  Italian, Portuguese; Spanish and Russian languages, each of these texts  being 

equally  authentic. 

ARTICLE  112 

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

This Agreement  shall enter  into force on the first day of the second month following the 

date on which the  Parties notify  each other that the procedures referred to  in the first 

paragraph  have been completed. 

Upon its entry  into force, and as far  as relations  between the Community  and Russia are 

concerned, this Agreement  shall replace, without  prejudice to Article  22(1),  (3)  and  (5), the 

Agreement  between the  European Economic  Community  and 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. 

*k 

CE/RU/en  87 

UST QF ANNEXES 

Annex  1 

Indicative  list of  advantages  granted  by Russia to the countries  of the former 

USSR in areas covered  by this Agreement  (as of January  1994) 

Annex  2  Derogations from Article  15  (quantitative  restrictions) 

Annex  3  Community  reservations  in accordance  with Article  28(2) 

Annex  4  Russian reservations  in accordance  with Article  28(3) 

Annex  5  Cross-border  supply of  services 

List of  services for which the  Parties shall grant  most-favoured-nation  treatment 

Annex  6  Definitions  in relation to financial  services 

Annex  7  Financial  services 

Annex  8  Provisions in relation to Articles  34  and  38 

Annex  9  Transitional  period for  provisions  on competition  and for the introduction of 

quantitative  restrictions 

Annex  10  Protection of  Intellectual, Industrial and Commercial  Property  referred to in 

Article  54 

LIST OF PROTOCOLS 

Protocol  1  on the  establishment  of  a coal and steel Contact  Group 

Protocol  2  on mutual administrative  assistance for the correct  application of  customs 

legislation 

L/CE/RU/en  1 

ANNEX  1 

Indicative  list of  advantages granted by Russia to 

the countries of the former USSR 

in areas covered  by this Agreement 

(as of January  1994) 

Advantages  are granted  bilaterally  by respective agreements or by established  practice. 

They  provide for,  inter alia: 

1. 

Import/Export  Taxation 

No import  duties are applied. 

No export duties are applied with  respect to goods delivered under annual  bilateral 

interstate trade and cooperation arrangements  within the nomenclature  and volumes, 

stipulated therein, considered  as "exportation for federal state  needs" as defined by 

corresponding  Russian law. 

No VAT  is applied on import. 

No excise duties are applied on import. 

2. 

Allocation  of  quotas and licensing procedures 

Export  quotas for deliveries  of  Russian products under annual bilateral  interstate 

trade  and cooperation  agreements  are opened in the same way  as for  "deliveries for 

state  needs". 

3. 

Special conditions for all kinds of  activities  in banking and the financial  sector 

(including establishment,  operation), movement  of  capital and current  payments, 

access to  securities, etc. 

CE/RU/Annex  1/en 1 

4. 

Price system regarding Russian export of some kinds of  raw  materials and 

semifinished  products  (coal, crude oil, natural gas, refined oil products) 

Prices are determined  on the  basis of  corresponding average  world prices converted 

in roubles or respective  national currency  at a rate quoted  by the Central  Bank of 

Russia as of the  15th day of the  month previous to the  month of exportation. 

5. 

Conditions  of transportation  and transit 

As  regards countries  of the Commonwealth  of  Independent  States, that  are Parties to 

the  Multilateral Agreement  "on the  principles and conditions of  relations in the field 

of  transport"  and/or  on the  basis of  bilateral arrangements  on transportation and 

transit,  no taxes  or fees are applied on a reciprocal  basis for the transportation and 

customs  clearing  of  goods  (including goods in transit)  and transit of vehicles. 

6. 

Communications  services, including postal, courier, telecommunications,  audiovisual 

and other services. 

7. 

Access to  information  systems  and data bases. 

CE/RU/Annex  1 /en  2 

a? 

Derogations from Article  15  (quantitative  restrictions) 

ANNEX 2 

1. 

Exceptional  measures  which derogate from the  provisions of Article  15  may be 

taken  by Russia in the form of  quantitative  restrictions  on a non-discriminatory  basis 

as provided for in Article XIII  of the GATT.  Such measures can only  be taken  after 

the  end of the first  calendar year following  signature of the Agreement. 

2. 

These  measures  may only  be taken in the circumstances  mentioned  in Annex  9. 

3. 

The total value of  imports of goods which are subject to these measures  may not 

exceed the following  proportions of total imports of  goods originating in the 

Community: 

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

Agreement; 

-  5%  during the fourth and fifth  calendar years following  signature  of the 

Agreement; 

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

The  abovementioned  proportions will be determined  by reference to the value of 

imports  by Russia of  goods originating in the Community  during the  last  year  prior to 

the  introduction  of  quantitative  restrictions for  which statistics  are available. 

These  provisions shall not  be circumvented  by increased tariff  protection  on the 

imported  goods concerned. 

9o 

CE/RU/Annex  2/en 1 

4. 

These  measures shall not be applied after  Russia's accession to the  GATT/WTO 

unless otherwise  provided for in Russia's accession protocol to the  GATT/WTO. 

5. 

Russia shall inform the Cooperation Committee  of  any  measures it intends to take 

under the terms  of the  present  Annex,  and consultations  shall be held in the 

Cooperation  Committee  if  so requested  by the Community  on such measures before 

they  are taken, and on the sectors to  which they  apply . 

CE/RU/Annex  2/en  2 

9/ 

ANNEX  3 

Community  reservations  in accordance  with  Article  28(2) 

Mining 

In some  Member  States, a concession  may  be required for  mining  and mineral  rights  for 

non-Community  controlled  companies. 

Fishing 

Access  to  and use of  the  biological  resources  and fishing  grounds  situated  in the  maritime 

waters  coming  under  the  sovereignty  or  within  the jurisdiction  of  Member  States  is 

4  * 

restricted  to  fishing  vessels flying the flag  of  a Member  State- and registered  in  Community 

territory  unless  otherwise  provided  for. 

Real estate  purchase 

In some  Member  States, the  purchase  of  real estate  is subject  to  limitations. 

Audiovisual  services  including  radio 

National  treatment  concerning  production  and distribution,  including  broadcasting  and  other 

forms  of  transmission  to  the  public,  may  be reserved to  audiovisual  works  meeting  certain 

origin  criteria. 

CE/RU/Annex  3/en  1 

Telecommunications  services including mobile and satellite services 

Reserved services. 

In some  Member  States  market  access concerning complementary  services and 

infrastructures  is restricted. 

Professional services 

Services  reserved to  natural  persons nationals of  Members  States.  Under  certain 

conditions those  persons  may create companies. 

Agriculture 

In some Member  States  national treatment  is not applicable to  non-Community  controlled 

companies  which  wish to  undertake  an agricultural  enterprise.  The acquisition of 

vineyards  by non-Community  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. 

CE/RU/Annex  3/en  2 

93 

Russian reservations  in accordance  with Article  28(3) 

ANNEX 4 

Use of  subsoil and natural resources including mining 

1. 

A concession  may be required for  mining some ores and metals for  non-Russian 

controlled companies. 

2. 

Some  special auctions for the use of  subsoil and natural resources for small 

enterprises  or defence enterprises  undergoing military  conversion  may  be closed to 

non-Russian controlled companies. 

Fishing 

Authorization  from the  respective governmental  body is necessary for fishing. 

Real estate  (immovable  property)  purchase and brokerage 

(a)  Non-Russian  controlled companies  are not allowed to  acquire  plots of  land.  Those 

companies,  however,  can lease plots of  land for  a period of  no more than 49  years. 

(b)  As an exception to  paragraph  (a), non-Russian controlled companies  can acquire plots 

of  land in the  cases when such companies are recognized as buyers in accordance 

with the  Law  of the  Russian Federation on the privatization of  state  and municipal 

enterprises  in the  Russian Federation and other  respective  legislation and regulations, 

including the  requirements  of  programmes of privatization: 

-  within the framework  of the  privatization of  state  and municipal enterprises  in the 

form of  commercial  investment tender  and auction; 

-  within the framework  of the expansion and additional construction  of  enterprises 

in the form  of  commercial  investment tender  and auction. 

Cfy 

CE/RU/Annex  4/en  1 

Telecommunications 

Telecommunication  services including mobile and satellite services, construction, 

installation, operation and maintenance of  communication devices are restricted. 

Mass media  services 

Some limitations  of foreign participation in mass media companies. 

Professional  activities 

Some activities  closed, limited or subject to  special requirements for  natural persons who 

are non-Russian nationals. 

Lease of  Federal property 

The  lease of  Federal property  whose value exceeds  100  million roubles to companies  with 

foreign  participation  is effected  with the  permission of the state authority  empowered to 

manage  such property.  This maximum is to  be raised and will be expressed in convertible 

currency. 

CE/RU/Annex  4/en  2 

^ 

_ 

List  of  services  for  which  the  Parties  shall  grant  most-favoured-nation  (MFN)  treatment 

Cross-border  supply  of  services 

ANNEX  5 

(a) 

Sectors  to  be  covered,  according  to  the  provisional  Central  Product 

Classification  (CPC)  of  the  United  Nations  Organization: 

Consultancy  services  relating  to  accounting  review  services:  part  of  CPC  8 6 2 12 

other  than  "auditing  services" 

Consultancy  services  relating  to  bookkeeping  services  CPC  8 6 2 20 

Engineering  services  CPC  8 6 72 

Integrated  engineering  services  CPC  8 6 73 

Advisory  and  Pre-design  architectural  services  CPC  86711 

Architectural  design  services  CPC  8 6 7 12 

Urban  planning  and  landscape  architectural  services  CPC  8 6 74 

Computer  and  related  services: 

Consultancy  services  related  to  the  installation  of  computer 

hardware  CPC  841 

Software  implementation  services  CPC  8 42 

Data  base  services  CPC  8 44 

Advertising  CPC  871 

Market  research  and  opinion  polling  CPC  8 64 

Management  consulting  services  CPC  866 

Technical  testing  and  Analysis  services  CPC  8 6 76 

Advisory  and  consulting  services  relating  to  agriculture,  hunting  and  forestry 

Advisory  and  consulting  services  relating  to  fishing 

Advisory  and  consulting  services  relating  to  mining 

Printing  and  publishing  CPC  8 8 4 42 

Convention  services 

Translation  services  CPC  87905 

Interior  design  services  CPC  8 7 9 07 

CE/RU/Annex  5/en  1 

Telecommunications: 

Value  added  services  including  (but  not  limited  to)  Electronic  Mail,  Voice  Mail, 

On-line  information  and  Data  base retrieval, Data  processing,  EDI, Code  and 

Protocol  conversion 

Packet  and Circuit  switched  data  services 

Construction  and  related engineering  services:  site  investigation  work  CPC  5111 

Franchising  CPC  8929 

Adult  education  services  by  correspondence  part  of  CPC  924 

News  and  press  agency  services  CPC  962 

Rental/leasing  services  without  operators  related to  other transport  equipment 

(CPC  83101  private  cars,  83102  goods  transport  vehicles,  83105)  and  relating  to 

other  machinery  and equipment  (CPC 83106,  83107,  83108,  83109) 

Commission  agents  services  and  wholesale  trade  services  related to  import-export 

trade  (part  of  CPC 621  and  622) 

Research  and development  in  software 

Reinsurance  and  retrocession  and the  services  auxiliary  to  insurance,  such as 

consultancy,  actuarial, risk  assessment  and claim  settlement  services 

Insurance  of  risks  relating  to: 

(i) 

maritime  shipping  and commercial  aviation  and space  launching  and  freight 

(including  satellites),  with  such  insurance to  cover  any  or  all  of  the  following: 

persons  being transported, the  goods  being exported  from  or  imported  to,  the 

same  vehicle  transporting  the  goods  and any  liability  arising therefrom; 

(ii)  goods  in international  transit;  and 

(iii)accident  and  health  insurance;  and  personal  motor  liability  insurance  in the  case  of 

the  cross-border  movement. 

CE/RU/Annex  5/en  2 

(b)  Data  processing services  CPC  843 

Provision and transfer  of financial information and financial data  processing  (see 

paragraphs B.11  and B.12 of Annex  6): 

For the services listed under  (b) MFN subject to Article  38  will be applied,  without 

paragraph A of  Annex  8. 

CE/RU/Annex  5/en  3 

ANNEX  6 

Definitions  in relation to  Financial  Services 

A financial  service  is any service of  a financial  nature offered  by a financial  service supplier 

of  one of the  Parties.  Financial services  include the following activities: 

A.  All insurance  and insurance-related  services 

1. 

Direct  insurance  (including  co-insurance) 

(i) 

life 

(ii)  non-life. 

2. 

Reinsurance  and retrocession. 

3. 

Insurance  intermediation, such as brokerage and agency. 

4. 

Services  auxiliary to insurance, such as consultancy,  actuarial, risk 

assessment  and claim settlement  services. 

B. 

Banking and other  financial  services  (excluding insurance). 

1. 

Acceptance  of deposits  and other  repayable funds from the public. 

2. 

Lending of  all types, including consumer  credit,  mortgage  credit, factoring and 

financing  of  commercial transaction. 

3. 

Financial leasing. 

CE/RU/Annex  6/en  1 

4. 

All payment  and money transmission services, including credit  charge and 

debit cards, travellers  cheques and bankers drafts. 

5. 

Guarantees  and commitments. 

6. 

Trading for  own account  or for the account  of  customers, whether  on an 

exchange, in an over the counter  market  or otherwise, the following: 

(a) money  market  instruments  (including cheques, bills, certificates  of 

deposits, etc.) 

(b)foreign  exchange 

(c) derivative  products including, but not  limited to, futures  and options 

(d) exchange  rates and interest  rate instruments, including products  such as 

swaps, forward  rate agreements, etc. 

(e)transferable securities 

(f) other  negotiable instruments  and financial  assets, including bullion. 

7. 

Participation  in issues of  all kinds of  securities, including under-writing  and 

placement  as agent  (whether  publicly  or privately)  and provision of  services 

related to such issues. 

8. 

Money  broking 

9. 

Asset  management,  such as cash or portfolio  management,  all forms of 

collective  investment  management,  pension fund  management,  custodial 

depository  and trust services. 

CE/RU/Annex  6/en  2 

/too 

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

products, and other  negotiable instruments. 

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

related  software  by suppliers of  other financial services. 

12.  Advisory  intermediation  and other auxiliary financial services  on all the  activities 

listed in points  1 to  11  above, including credit  reference  and analysis, investment  and 

portfolio  research and advice, advice on acquisitions and on corporate  restructuring 

and strategy. 

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

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

monetary  and exchange  rate policies. 

(b)  Activities  conducted  by central banks, government  agencies or departments, or 

public  institutions, for the account  or with the guarantee of the government,  except 

when those  activities  may  be carried out  by financial  service suppliers  in competition 

with  such public entities. 

(c)  Activities  forming part of  a statutory  system of  social security  or public  retirement 

plans, except  when those activities  may  be carried out  by financial  service  suppliers 

in competition  with  public  entities  or private institutions. 

^1€yf 

CE/RU/Annex  6/en  3 

ANNEX  7 

Financial Services 

A. 

In respect  of  banking services  referred to in Annex  6,  Part  B, the 

most-favoured-nation  treatment  granted under Article  28(1),  with regard to 

establishment  by means of the setting up of  a subsidiary  only  (excluding therefore 

establishment  by means of the setting  up of  a branch), and the  national treatment 

granted under Article  28(3),  by Russia means treatment  no less favourable than the 

treatment  granted  by Russia to its own companies  with the following exceptions: 

1.  Russia  reserves the right 

(a)  to  continue to  apply to  Russian subsidiaries and branches of  Community 

companies the ceiling limiting the overall share of foreign capital in the Russian 

banking system which is in operation on the date of  signature  of the 

Agreement; 

(b)  to  apply to  Russian subsidiaries of  Community  companies  a minimum capital 

requirement  higher than that  applied to  its own companies  provided that this 

minimum capital requirement  is not  raised as compared  with the  one in force 

'  on the date of  signature  of the Agreement  before  national treatment  is applied 

in respect  of the  minimum capital  requirement; 

(c)  to  restrict the  number of  branches of  Russian subsidiaries of  Community 

companies; 

(d)  to set a minimum level not higher than  ECU 55  000  for  balances  on accounts 

of  each physical  person with  Russian subsidiaries  of  Community  companies; 

CE/RU/Annex  7/en  1 

(e)  to  prohibit  Russian subsidiaries of  Community  companies from carrying out 

transactions  with  shares and instruments  convertible  into shares of  Russian 

joint  stock companies; 

(f)  to  prohibit  Russian subsidiaries  of  Community  companies from carrying out 

transactions  with  Russian residents. 

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

(i) 

provided that they  are applied to subsidiaries of companies of  every  country, 

and 

(ii) 

for the exceptions  mentioned  in paragraph  1,  subparagraphs  (c), (d) and (e) 

(a) until the  expiry of five years from signature  of the Agreement at the  latest 

for the  exceptions  mentioned  in subparagraphs  (c) and (d) and 

three years for the exception mentioned in subparagraph  (e), and 

(b) where the  proportion of the share capital of the  Russian subsidiary  of the 

Community  company  held by Russian nationals  or companies does not 

exceed fifty  percent  (50%), and 

(c)to  Russian subsidiaries of  Community  companies established  after  the 

entry  into force  of these exceptions; 

CE/RU/Annex  7/en  2 

(iii) 

for the exception  mentioned  in paragraph  1, subparagraph  (f), until 

1  January  1996  and only to  Russian subsidiaries of  Community  companies 

established  after  15  November  1993  or which have not commenced their 

operations  with  Russian residents  before  15  November  1993. 

. 

3.  (a)  After the expiry of five years from the date of  signature of the Agreement, 

Russia will consider the  possibility  of: 

(i) 

increasing the ceiling limiting the  overall share of foreign capital in the 

Russian banking system which is in operation on the date of the 

signature of this Agreement,  mentioned  in subparagraph  (a) of 

paragraph  1,  taking into consideration  all the relevant  monetary, fiscal, 

financial and balance of  payments considerations and the  state  of the 

banking system of Russia; 

(ii) reducing the minimum capital  requirement,  mentioned in subparagraph (b) 

of  paragraph  1,  taking into consideration all the  relevant  monetary, 

fiscal, financial and balance of  payments considerations  and the  state of 

the  banking system of Russia. 

(b)  After  the expiry  of three years from the signature of this Agreement,  Russia 

will consider the softening  of  restrictions  mentioned in subparagraphs  (c) 

and  (d) of  paragraph  1, taking into consideration  all the relevant  monetary, 

fiscal, financial and balance  of  payments  considerations  and the  state  of the 

banking system of Russia. 

CE/RU/Annex  7/en  3 

stoV 

B. 

In respect  of  insurance services referred to in Annex  6,  Part A,  paragraphs  1 and 2 

the  most-favoured-nation  treatment  granted under Article  28(1)  with  regard to 

establishment  by means of the setting up of  a subsidiary  only authorized for the 

insurance operations is set out in the legislation and regulations applicable in Russia 

on the day of  establishment  taking into account the following conditions: 

1. 

Upon the  expiry  of five years from signature of the Agreement  at the  latest, 

Russia shall abolish the maximum foreign shareholding limit of 49%  in 

company capital. 

2. 

During the transitional  period of  5 years the abolition of the maximum foreign 

shareholding  limit does not prevent  Russia from introducing  measures for 

granting  licences to  Community  companies in some classes of  insurance. 

These  measures could be taken only in the field of  compulsory  insurance 

schemes  in the  social security, or for  public procurement,  or for the  reasons 

described in Article  29(2), and shall not  nullify  or substantially  impair the 

effects  of the  abolition of the  maximum foreign shareholding  limit  of  49%. 

CE/RU/Annex  7/en  4 

Provisions in relation to Articles  34  and  38 

ANNEX 9 

Part A 

The consultations  shall begin within thirty  days of the request therefor  by the first  Party. 

They  shall be held with  a view to  reaching agreement  either on: 

withdrawal  by the other  Party of the  measures which  have resulted  in the 

significantly  more  restrictive  situation;  or 

adjustments  of the obligations  of  both Parties;  or 

adjustments to  be made by the first  Party to compensate for the more  restrictive 

4  ' 

situation  created  by the other  Party. 

If  agreement  is not  reached  within sixty  days of the  request for  consultations  made  by the 

first  Party,  such first  Party  may  make appropriate compensatory  adjustments to its 

obligations.  Such adjustments  shall be made to the extent  and for such time  as is 

necessary  to take  account  of the significantly  more restrictive situation created  by the 

other  Party.  Priority  must  be given to those  measures which  least disturb the  functioning 

of the Agreement.  The  rights which economic  operators  have acquired  under the 

Agreement  at the time  such adjustments  are made shall not  be affected  by the said 

adjustments. 

/J  06 

CE/RU/Annex  8/en  1 

Part B 

1. 

Acting in the spirit of  partnership and cooperation the Government  of  Russia shall 

inform the  Community, during a transitional  period of three years following the 

signature of the Agreement,  of  its intentions to submit  new  legislation or adopt  new 

regulations  which may  render the conditions for the establishment  or operation of 

Russian subsidiaries and branches of  Community  companies  more restrictive than the 

situation existing on the day preceding the date of  signature of the Agreement.  The 

Community  may  request  Russia to communicate the drafts  of  such legislation or 

regulations  and to enter  into consultations about those drafts. 

2.  Where  new  legislation or regulations introduced in Russia within the transitional 

period  mentioned  in paragraph  1 would  result in rendering the conditions for 

operation of  Russian subsidiaries and branches of  Community  companies more 

restrictive than the situation existing on the day of  signature of the Agreement,  such 

respective  legislation or regulations shall not apply to those subsidiaries  and branches 

already  established  in Russia at the time of  entry  into force of the  relevant  act,  until 

the  expiry  of  a period of three years from such entry  into force. 

CE/RU/Annex  8/en  2 

ANNEX 9 

Transitional  period for  provisions on competition  and for 

the introduction of quantitative  restrictions 

The  circumstances  mentioned  in Article 53(2.3)  and in Annex 2,  paragraph 2  are understood 

in respect of  sectors of the Russian economy which: 

are undergoing restructuring, or 

are facing  serious  difficulties,  particularly  where these  entail  serious  social  problems in 

Russia, or 

4  * 

face  the  elimination  or  a  drastic  reduction  of  the  total  market  share  held  by  Russian 

companies or nationals in a given sector or industry in Russia, or 

are newly  emerging industries in Russia. 

CE/RU/Annex  9/en  1 

ANNEX  10 

Protection  of  Intellectual, Industrial and Commercial  Property 

referred to  in Article  54 

1. 

Russia shall continue to improve the  protection of  intellectual, industrial and 

commercial  property  rights in order to provide, by the end of the fifth  year  after  the 

entry  into force  of the Agreement, for a level of  protection similar to that  existing in 

the  Community,  including effective  means of enforcing such rights. 

2. 

By the  end of the fifth  year following  entry  into force of the Agreement,  Russia shall 

accede to the  multilateral  conventions  on intellectual, industrial and commercial 

property  rights to  which  Member  States are parties or which are de facto  applied by 

Member  States, according to the  relevant  provisions contained  in these conventions: 

-  Berne Convention for the  Protection of  Literary  and Artistic  Works 

(Paris Act,  1971); 

- 

International  Convention for the  Protection of  Performers,  Producers of 

Phonograms  and Broadcasting  Organizations  (Rome,  1961); 

- 

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

(Geneva  Act,  1978). 

3. 

The  Cooperation  Council  may  recommend that  paragraph  2 of this Annex  shall apply 

to  other  multilateral conventions. 

CE/RU/Annex  10/en 1 

4. 

From the entry  into force of this Agreement  Russia shall grant to  Community 

companies  and nationals, in respect  of the  recognition and protection of intellectual, 

industrial and commercial  property, treatment  no less favourable than that  granted by 

it to  any third country  under bilateral agreements. 

5. 

The  provisions of  paragraph 4  shall not apply to advantages  granted  by  Russia to any 

third country  on an effective  reciprocal  basis and to  advantages  granted  by  Russia to 

another  country  of the former  USSR. 

CE/RiJ/Anr.py  10/on ? 

PROTOCOL 1 

ON THE ESTABLISHMENT  OF 

A COAL AND  STEEL CONTACT  GROUP 

P  1/CE/RU/en 1 

1.  A Contact  Group is established between the  Parties.  The Group is composed of 

representatives  of the Community  and of Russia. 

2.  The  Contact  Group exchanges  information on the situation of the coal and steel 

industries  in both territories  and on trade  between them, particularly  with the 

purpose of  identifying  such problems as might arise. 

3.  The Contact  Group also examines the situation of the  coal and steel industries  at world 

level, including developments  in international trade. 

4.  The  Contact  Group exchanges all useful information  on the structure of the  industries 

concerned, the development  of their  production capacities, the science and research 

progress  in the  relevant fields, and the evolution of employment.  The  Group also 

examines  pollution and environmental problems. 

5.  The Contact  Group also examines the progress made in the framework  of  technical 

assistance  between the  Parties, including assistance to financial, commercial and 

technical  management. 

6.  The  Contact  Group exchanges all relevant  information  as to attitudes taken, or to be 

taken,  in the  appropriate international  organizations  or fora. 

7.  As and when  both  Parties agree that the  presence and/or  participation of 

representatives  of the  industries is appropriate, the  Contact  Group is enlarged to 

include them. 

8.  The Contact  Group meets twice  a year,  alternately  on the territories  of  each  Party. 

9.  The chairmanship  of the Contact  Group is held alternately  by a representative  of the 

Commission of the  European Communities  and a representative  of the  Government 

of the  Russian Federation. 

P1/CE/RU/en  2 

A 

,„ 

PROTOCOL  2 

ON MUTUAL  ADMINISTRATIVE  ASSISTANCE 

FOR THE CORRECT APPLICATION OF 

CUSTOMS  LEGISLATION 

P 2/CE/RU/en  1 

ARTICLE 1 

Definitions 

For the  purposes of this Rrotocol: 

(a) "customs  legislation"  shall mean provisions  applicable in the territories  of the  Parties 

and governing the import, export, transit  of  goods and their  placing under any 

customs  procedure, including  measures of  prohibition, restriction and control and 

adopted  by the  said Parties; 

(b) "customs duties"  shall mean all duties, taxes, fees or any other  charges  which are 

levied and collected  in the territories  of the  Parties, in application of  customs 

legislation, but not including fees and charges which are limited in amount to the 

approximate  costs of  services rendered; 

(c)"applicant  authority",  shall mean a competent  administrative  authority  which  has been 

appointed  by a Party for this  purpose and which makes a request for  assistance in 

customs  matters; 

(d)"requested  authority",  shall mean a competent  administrative  authority  which  has been 

appointed  by a Party for this  purpose and which  receives a request for  assistance in 

customs  matters; 

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

attempted  violation of  such legislation. 

P 2/CE/RU/en  2 

ARTICLE  2 

Scope 

1.  The  Parties  shall assist  each other,  within their  competences, in the  manner  and under 

the  conditions  laid down  in this  Protocol, in ensuring that  customs  legislation is correctly 

applied, in particular  by the  prevention, detection  and investigation of  contraventions  of 

this legislation. 

2.  Assistance,  in customs  matters, as provided for  in this  Protocol, applies to any 

administrative  authority  of the  Parties which is competent  for the application  of this 

Protocol.  It  shall not prejudice the  rules governing  mutual assistance  in criminal matters. 

Nor shall it  cover  information, including documents  obtained under  powers  exercised  at the 

request  of the judicial authority,  unless those authorities  so agree. 

ARTICLE 3 

Assistance  on request 

1.  At  the  request  of the applicant  authority, the  requested  authority  shall furnish  it with all 

relevant  information to enable  it to ensure that  customs  legislation is correctly applied, 

including  information  regarding operations detected  or planned which  are, appear  or would 

be in contravention  of  such legislation. 

2.  At  the  request  of the applicant  authority, the  requested authority  shall inform it 

whether  goods exported from the territory  of  one of the  Parties  have been properly 

imported  into the territory  of the other  Party, specifying, where appropriate, the  customs 

procedure  applied to the goods. 

A\J± 

P 2/CE/RU/en  3 

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

necessary  steps to  ensure that  a surveillance  is kept on: 

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

are contravening  or «have contravened  customs legislation; 

(b) places where  stocks of  goods have been assembled  in such a way  that there are 

reasonable  grounds for supposing that they  are intended  as supplies for  operations 

contrary  to the customs  legislation of the other  Party; 

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

legislation; 

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

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

ARTICLE 4 

Spontaneous  assistance 

The  Parties  shall within their  competences  provide each other  with assistance  without  prior 

request  where they  consider that to be necessary  for the  correct  application of  customs 

legislation,  particularly  when they  obtain information  pertaining to: 

-  operations  detected  or planned, which are, appear  or would  be in contravention  of such 

legislation; 

-  new  means  or methods  employed in realizing such operations; 

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

import, export, transit  or any other  customs procedure. 

P 2/CE/RU/en  4 

ARTICLE 5 

Form and substance of  requests for  assistance 

1.  Requests  pursuant to this  Protocol shall be made in writing. Documents  necessary for 

the execution  of  such requests  shall accompany  the request. When required  because of 

the  urgency  of the  situation, oral requests  may  be accepted, but must  be confirmed in 

writing  immediately. 

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

(a) the  applicant  authority  making the  request; 

(b)the  measure requested; 

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

P 2/CE/RU/en  5 

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

(e) indications  as exact  and comprehensive  as possible on the  natural or legal persons being 

the target  of the investigations; 

(f) a summary  of the  relevant facts. 

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

language acceptable to  such authority. 

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

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

ARTICLE 6 

Execution of  requests 

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

legal instruments  of the  requested  Party. 

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

within  its competence  and available  resources, as though it were acting on its own 

account  or at the  request  of  other authorities  of that  same Party, by supplying  information 

already  possessed, by carrying out appropriate enquiries or by arranging for them to be 

carried  out. 

P 2/CE/RU/en  6 

3.  Duly  authorized  officials  of a Party  may, with the agreement  of the other  Party  involved 

and within the conditions  laid down by the latter,  obtain from the offices  of the  requested 

authority  or other  authority for which the  requested authority  is responsible,  information 

relating to the  contravention  of customs  legislation which the applicant  authority  needs for 

the  purposes of this Protocol. 

4.  Officials  of  a Party  may, in particular  cases with the agreement  of the  other  Party 

involved  and within the conditions  laid down  by the latter,  be present at enquiries carried 

out  in the  latter's territory. 

5.  When, in the  circumstances  provided for under this  Protocol, officials  of  one  Party are 

present  at  enquiries  carried out in the territory  of the other  Party, they  must, at  all times, 

be able to furnish proof  of their  official  capacity.  They  must  not wear  uniform  nor carry 

arms. 

ARTICLE 7 

Form in which information  is to  be communicated 

1.  Under the  conditions  and within the limits laid down in this Protocol, the  Parties shall 

communicate  each other  information  in the form of documents, certified  copies of 

documents,  reports and the like. 

2.  Original files and documents  may  be transmitted  on request only in cases  where 

certified  copies  would  be insufficient.  Those files and documents  shall be returned  at the 

earliest  opportunity. 

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

information  produced in any form for the same purpose.  All relevant  information for the 

utilization of the  material  shall be supplied on request. 

P 2/CE/RU/en  7 

ARTICLE 8 

Exceptions to the obligation to  provide assistance 

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

partially  or provide it subject to certain conditions or requirements, where to do so would: 

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

or 

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

2.  Where the applicant  authority  asks for assistance  which it would itself  be unable to 

provide if  asked so by another  party,  it shall draw  attention to that fact  in its  request.  It 

shall then  be left to the  requested authority to decide  how to  respond to  such a request. 

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

notified  in written form to the applicant  authority  without  delay. 

P 2/CE/RU/en  8 

Mo 

ARTICLE  9 

Obligation to observe  confidentiality 

1.  Any  information communicated  in whatsoever  form pursuant to this  Protocol shall be of 

a confidential  nature.  It shall be covered  by the obligation of  official  secrecy  and shall 

enjoy the  protection  extended to  like information under the  relevant  legislation applicable in 

the  Party  which  received  it and the corresponding  provisions applying to the  Community 

institutions. 

2.  Nominative  data  shall not be transmitted  whenever there are reasonable  grounds to 

believe that the transfer  or the use made of the date transmitted  would  be contrary to the 

basic  legal principles  of  one of the  Parties, and, in particular,  if the  person concerned 

would  suffer  a prejudice to fundamental  human rights.  Upon request, the  receiving  Party 

shall inform the furnishing  Party of the use made of the  information  supplied and of the 

results achieved. 

3.  Nominative  data  may only  be transmitted to customs  authorities  and, in the  case of 

need for  prosecution  purposes, to  public prosecution and judicial authorities.  Other  persons 

or authorities  may  obtain such information  only upon previous authorization  by the 

furnishing  authority. 

4.  The furnishing  Party  shall verify the accuracy  of the information to  be transferred. 

Whenever  it appears that the  information  supplied  was  inaccurate  or to  be deleted, the 

receiving  Party  shall  be notified  without  delay. The  latter  shall be obliged to  carry  out the 

correction  or deletion. 

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

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

P 2/CE/RU/en  9 

ARTICLE  10 

Use of  information 

1.  Information obtained shall be used solely for the purposes of this Protocol and may be 

used within  each Party for other  purposes only with the prior written consent  of the 

administrative  authority  which furnished the  information  and shall be subject to any 

restrictions  laid down  by that  authority. 

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

proceedings  subsequently  instituted for failure to comply with customs legislation. 

3.  The  Parties may,  in their  records of evidence, reports and testimonies  and in 

proceedings  and charges  brought  before the courts, use as evidence  information  obtained 

and documents  consulted  in accordance  with the provisions of this Protocol. 

ARTICLE  11 

Experts and witnesses 

An official  of  a requested authority  may  be authorized to  appear,  within the  limitations of 

the  authorization  granted, as expert  or witness  in judicial or administrative  proceedings 

regarding the  matters  covered  by this  Protocol in the jurisdiction  of another  Party, and 

produce such objects, documents  or authenticated  copies thereof,  as may  be needed for 

the  proceedings. The  request for an appearance  must indicate  specifically  on what  matters 

and by virtue  of  what  title  or qualification the official  will be questioned. 

P 2/CE/RU/en  10 

A<£L 

ARTICLE  12 

Assistance  expenses 

The  Parties shall waive  all claims on each other for the  reimbursement  of  expenses 

incurred  pursuant to this Protocol, except,  as appropriate, for expenses to  experts and 

witnesses  and to  interpreters and translators  who are not dependent  upon public services. 

ARTICLE  13 

Implementation 

1.  The  management  of this  Protocol shall be entrusted to the competent  services  of the 

Commission  of the  European Communities  and, where  appropriate, the customs  authorities 

of the  Member  States  on the one hand and the central customs authorities  of  Russia on 

the  other.  They  shall decide on all practical  measures and arrangements  necessary  for its 

application, taking into consideration  rules in the field of data  protection. They  may 

recommend to the  Cooperation  Council amendments  which they  consider  should  be made 

to this Protocol. 

2.  The  Parties shall consult each other  and subsequently  keep each other  informed  of the 

detailed  rules of  implementation  which are adopted  in accordance  with the  provisions of 

this Protocol. 

^3 

P 2/CE/RU/en  11 

ARTICLE  14 

Complementarity 

1.  This  Protocol shall complement  and not impede the application orany  agreements on 

mutual  assistance  which have been concluded between individual or several  Member 

States  and  Russia.  Nor shall it preclude more extensive  mutual assistance granted under 

such agreements  concluded or to  be concluded. 

2.  Without  prejudice to Article  10, these agreements  do not prejudice  Community 

provisions governing the communication  between the competent  services of the 

Commission  and the customs authorities  of the  Member  States  of  any information  obtained 

in customs  matters  which could be of  Community  interest. 

P 2/CE/RU/en  1 2 

FINAL ACT 

AF/CE/RU/en 1 

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  PORTUGUESE  REPUBLIC, 

THE  UNITED  KINGDOM  OF GREAT  BRITAIN AND  NORTHERN IRELAND, 

AF/CE/RU/en  2 

A/olC 

Contracting  Parties to the Treaty  establishing the  EUROPEAN COMMUNITY,  the Treaty 

establishing the  EUROPEAN COAL AND  STEEL COMMUNITY,  and the Treaty  establishing 

the  EUROPEAN ATOMIC  ENERGY  COMMUNITY, 

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

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

EUROPEAN ATOMIC  ENERGY  COMMUNITY,  hereinafter  referred to as "the  Community", 

of the one part, and 

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

of the other  part, 

meeting  at  Corfu this twenty-fourth  day of June in the year  one thousand  nine hundred 

and ninety-four  for the  signature  of the Agreement  on Partnership and Cooperation 

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

the  one part,  and the  Russian Federation, of the other  part,  hereinafter  referred to  as the 

"Agreement  on Partnership  and Cooperation", have adopted the following texts: 

The Agreement  on Partnership  and Cooperation  including its Annexes and the following 

Protocols: 

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

Protocol  2  on mutual administrative  assistance for the correct  application  of  customs 

legislation. 

A-2?-

AF/CE/RU/en  3 

The  plenipotentiaries  of the  Member  States and of the Community  and the  President of 

Russia have adopted the texts of the Joint  Declarations  listed below  and annexed to this 

Final Act: 

Joint declaration  in relation to Title  III and Article  94  of the Agreement 

Joint  declaration in relation to Article  10 of the  Agreement 

Joint  declaration  in relation to Article  12 of the Agreement 

Joint  declaration in relation to Article  17  of the  Agreement 

Joint declaration in relation to Article  18 of the  Agreement 

Joint declaration in relation to Article  22(1),  second indent of the  Agreement 

Joint declaration  in relation to Article  24  of the Agreement 

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

Joint declaration in relation to Article  28  of the  Agreement 

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

Joint declaration  in relation to Article 30  of the  Agreement 

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

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

Agreement 

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

Joint  declaration  in relation to Article  31  of the  Agreement 

Joint declaration  in relation to Article  34(1)  of the Agreement 

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

Joint  declaration  in relation to Article  35  of the  Agreement 

Joint  declaration  in relation to Article  39(2)(c), second subparagraph  of the Agreement on 

opening ports 

Joint  declaration  in relation to Article  39(2)(c), second subparagraph of the Agreement on 

vessels  under a third flag 

Joint declaration  in relation to Article 44  of the  Agreement 

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

Joint  declaration in relation to Article 48  of the  Agreement 

Joint  declaration  in relation to Article  52  of the Agreement 

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

Joint  declaration  in relation to Article  54  of the  Agreement 

Joint declaration  in relation to Article  99  of the  Agreement 

AF/CE/RU/en  4 

Joint declaration in relation to Article  101  of the  Agreement 

Joint declaration in relation to Article  107  of the Agreement 

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

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

Joint  declaration  in relation to Article  112 of the  Agreement 

Joint declaration  in relation to Article  6 of  Protocol  2. 

The  plenipotentiaries  of the  Member  States and of the Community  and the  President of 

Russia  have also taken  note of the following  Exchanges  of  Letters annexed to this 

Final Act: 

Exchange  of  Letters  in relation to Article  22  of the  Agreement 

Exchange of  Letters  in relation to Article  52  of the  Agreement 

The  President  of  Russia  has taken  note of the  Declarations  listed below  and annexed to 

this  Final Act: 

Community  declaration  in relation to Article  36  of the  Agreement 

Community  declaration  in relation to Article  54  of the Agreement. 

The  plenipotentiaries  of the  Member  States and of the Community  have taken  note of the 

Declaration  listed  below  and annexed to this  Final Act: 

Declaration  by Russia in relation to Article  36  of the  Agreement. 

AF/CE/RU/en 5 

JOINT  DECLARATION  IN RELATION TO TITLE III AND ARTICLE  94 

For the  purpose of Title  III and Article  94, the GATT  is understood to  be the  General 

Agreement  on Tariffs  and Trade signed in Geneva  in  1947  as amended, as applied at the 

date of  signature  of the present Agreement,  if the  Parties do not agree otherwise  within 

the framework  of the  Cooperation Council established  under Article  90. 

AF/CE/RU/en  6 

J3o 

JOINT  DECLARATION  IN RELATION TO ARTICLE  10 

The  Parties agree that the provisions  of  paragraph  1 of Article  10 shall not apply to 

conditions of import  of  products to the territory  of  Russia under financial loans and credits 

granted for development  and humanitarian  purposes, technical and humanitarian  assistance 

and other  similar arrangements, concluded between  Russia and third States  or international 

organizations  insofar  as such States or international  organizations  require special treatment 

for  such imports. 

X 5/ 

AF/CE/RU/en  7 

JOINT  DECLARATION  IN RELATION TO ARTICLE  12 

Article  12,  within Title  III on trade in goods, deals with the question of transit.  It  is the 

understanding  of the  Parties that  Article  12 deals exclusively  with the freedom of transit of 

goods.  This is according to  normal GATT  practice.  The issue of transit  may  be taken up 

in the future  negotiations  on Transport  Agreements  as indicated  in Article  43. 

AF/CE/RU/en  8 

y?3Z. 

JOINT  DECLARATION  IN RELATION TO ARTICLE  17 

The  Community  and Russia declare that the text  of the safeguard clause  (Article  17) does 

not grant GATT  safeguard treatment. 

••J  33 

AF/CE/RU/en  9 

JOINT  DECLARATION  IN RELATION TO ARTICLE  18 

It is understood that the provisions of Article  18 and those of the following  paragraph are 

neither  intended to,  nor shall, slow  down, hinder or impede the procedures  provided for in 

the  respective  legislation of the  Parties regarding antidumping and subsidies investigations. 

The  Parties agree that,  without  prejudice to their  legislation and practice,  when 

establishing  normal value due account  shall be taken overall, in each case on its merits, 

when natural comparative  advantages  can be shown by the manufacturers  involved to be 

held with  regard to factors such as access to  raw  materials, production process, proximity 

of  production to  customers and special characteristics  of the product. 

AF/CE/RU/en  10 

A/3L/ 

JOINT  DECLARATION  IN RELATION TO ARTICLE 22(1), SECOND INDENT 

With  respect to the  Community the  legislation and regulations, referred to  in Article  6 of 

the  1989  Agreement,  include, inter alia, the Treaty  establishing the  European Atomic 

Energy Community  and implementing  regulations thereof,  in particular the  provisions of 

those texts,  which specify the rights, powers  and responsibilities  of the  Euratom Supply 

Agency  and of the  Commission of the  European Communities: 

/73S~ 

AF/CE/RU/en  11 

JOINT  DECLARATION  IN RELATION TO ARTICLE  24 

It is understood that the  notion  "members of their family"  is defined in accordance  with 

the national legislation of the host country concerned. 

AF/CE/RU/en  12 

^3£ 

JOINT  DECLARATION  IN RELATION TO ARTICLES  26,  32  AND  37 

The  Parties shall ensure that the issuing of visas and residents'  permits in conformity  with 

the  laws  and regulations  of the Member  States  and Russia respectively  is conducted  in a 

manner  consistent  with the  principles of the concluding document  of the CSCE Bonn 

Conference,  in particular  with  a view to facilitate the  prompt  entry, stay  and movement of 

businessmen in the  Member  States  and in Russia.  Such efforts  shall apply  in particular to 

key  personnel  referred to  in Article  32  and to the  sellers of  cross-border  services  referred 

to  in Article  37,  and ensure that the  administrative  procedures do not nullify  or impair the 

benefits  accruing to  any  Party  under these Articles of the Agreement. 

The  Parties agree that  an important  element  in this context  is the timely  conclusion of 

re-admission agreements  between the  Member  States and Russia. 

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

.9-> 

AF/CE/RU/en  13 

JOINT  DECLARATION  IN RELATION TO ARTICLE  28 

Without  prejudice to the  provisions of Articles  50  and  51,  the Parties agree that the  words 

"in conformity  with  ...  legislation and regulations"  mentioned in paragraphs  1 and 4 of 

Article  28  mean that  each Party  may regulate the establishment  of  companies, by means 

of  setting  up subsidiaries and branches, as defined  in Article  30  and the operation of 

branches  provided that  this legislation and regulations do not create  reservations  resulting 

in a less favourable treatment  than that  accorded to companies or branches  of  any third 

country  respectively. 

Without  prejudice to the  reservations  listed in Annexes  3  and 4  and to the  provisions of 

Articles  50  and 5 1, the  Parties agree that the words  "in conformity  with  ...  legislation and 

regulations"  mentioned  in paragraphs  2 and 3  of  Article  28  mean that  each  Party  may 

regulate the  operation of  companies on its territory,  provided tbat this legislation and 

regulations  do not create for the operations of  companies of the other  Party  any  new 

reservations  resulting  in a less favourable treatment  than that  accorded to their  own 

companies  or to subsidiaries  of companies  of  any third country  whichever  is the  better. 

AF/CE/RU/en  14 

y/3^ 

JOINT  DECLARATION  IN RELATION TO ARTICLE  29(3) 

The  Parties confirm that  nothing in Article  29(3)  prevents  Russia from adopting any  new 

regulations or measures which would introduce or worsen discrimination as compared to 

the situation existing on the date of the signature of the Agreement  as regards conditions 

affecting the establishment  of  non-Community  companies in its territory  in comparison to 

its own companies. 

/<?? 

AF/CE/RU/en  15 

JOINT  DECLARATION  IN RELATION TO ARTICLE  30 

The  Parties confirm the importance of ensuring that the granting of  licences referred to in 

Article  30(a)  and (g): 

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

to supply the service; 

-  shall not  be more burdensome than necessary to ensure the quality of the service; 

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

AF/CE/RU/en  16 

ylWO 

JOINT  DECLARATION  IN RELATION TO ARTICLE 30(a)  AND  (g) 

Article  30(a), second subparagraph and  (g), second subparagraph take  into account the 

specificity  of  access to financial services as it is agreed in the framework  of this 

Agreement,  and do not affect the definitions  of  "establishment"  and "operation"  as they 

apply to financial services for other purposes than the  purpose of this Agreement. 

AF/CE/RU/en  17 

JOINT  DECLARATION  IN RELATION TO THE  NOTION OF "CONTROL" 

IN ARTICLE 30(b)  AND ARTICLE  45 

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

on the factual  circumstances  of the  particular case. 

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

and thus  a subsidiary  of  such other company  if: 

- 

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

- 

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

organ, of the  management  organ  or of the supervisory  organ and is at the  same time 

a shareholder  or member  of the  subsidiary. 

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

AF/CE/RU/en  18 

A/t/£ 

JOINT  DECLARATION  IN RELATION TO ARTICLE 30(h), THIRD  SUBPARAGRAPH 

Taking into account the  restrictions existing at  present concerning the carriage of goods 

and passengers  by inland transport  modes, the  Parties agree that  until such restrictions are 

lifted, the  expression  "intermodal transport  operations involving a sea-leg"  is understood to 

mean the organization of  such operations. 

A^3 

AF/CE/RU/en  19 

JOINT  DECLARATION  IN RELATION TQ  ARTICLE  31 

The provisions of  Article  31  permit the  Parties to apply any measure intended to  prevent 

circumvention  by a company of  a third country of the  measures of the Parties concerning 

establishment  of companies of that third country in their  respective territories  by means of 

any possibility  provided for in this Agreement. 

AF/CE/RU/en  20 

>,  • // 

JOINT  DECLARATION  IN RELATION TO ARTICLE  34(1 

Taking into account the explanations given by Russia to the Community that  in certain 

respects  and for certain sectors the treatment  granted to  Russian subsidiaries and 

branches  of  Community  companies  is better than the treatment  offered to  Russian 

companies  in general, namely  national treatment, the  Parties agree that  if  measures  were 

introduced  by Russia to align the treatment  of  Russian subsidiaries and branches  of foreign 

companies down to  national treatment, this cannot  be considered to violate the  obligation 

on Russia to  use its best endeavours  contained  in Article  34(1). 

AF/CE/RU/en  21 

JOINT  DECLARATION  IN RELATION TO ARTICLES  34  AND  38 

The  Parties agree that  if either  Party were to  be of the view  that the other  had not 

correctly  interpreted the terms  "significantly  more restrictive"  in Articles  34(2)  or 38(3), 

such Party  may  have resort to the  procedures set out in Article  101. 

AF/CE/RU/en  22 

J  /^ 

JOINT  DECLARATION  IN RELATION TO ARTICLE  35 

The  Parties agree that the activities  referred to in Article  35(3), subparagraphs  (a) and (b) 

do not include acting as a carrier. 

AF/CE/RU/en  23 

JOINT  DECLARATION  IN RELATION TO 

ARTICLE 39(2)(c),  SECOND  SUBPARAGRAPH 

ON OPENING PORTS 

On the  basis of the information  provided by the  Russian side concerning their  ports open to 

foreign vessels, the Community takes  note that  Russia intends to continue  its effort  to 

increase the  number of  ports open to foreign vessels.  The  Russian side also notes the 

Community's  policy of  maintaining  open to foreign vessels all ports open to  international 

trade.  The  Parties consider that the degree of  openness of  ports to foreign vessels  is an 

essential feature  of  an assessment  of the conditions  necessary for the free  supply of 

services  in international  maritime transport.  They therefore  undertake to  review  the 

situation  regarding  ports open to foreign vessels at  least  every two years through 

consultations  to  be held in the framework  of the Cooperation  Council.  If  serious  difficulties 

arise in maintaining  a port open to foreign vessels, the  Party  in whose territory the port 

concerned  is situated  shall inform the other  Party; at the request of the  latter, 

consultations  shall be held so as to ensure that  any action taken affects  as little as 

possible the free supply of  international  maritime services. 

AF/CE/RU/en  24 

/<-ft 

JOINT  DECLARATION  IN RELATION TO 

ARTICLE 39(2)(c),  SECOND  SUBPARAGRAPH 

ON VESSELS UNDER A THIRD FLAG 

The  Parties agree after  the expiry  of five years from the date of entry  into force of this 

Agreement  to consider the  possibility  of  application of the  provisions of Article  39(2)(c), 

second subparagraph to vessels  under a third flag operated  by shipping companies or 

nationals  of  a Member  State  or Russia  respectively. 

AF/CE/RU/en  25 

JOINT  DECLARATION  IN RELATION TO ARTICLE  44 

For the  purposes of this Agreement,  an economic  integration agreement  shall be an 

agreement  in accordance with the principles set out in Article V  of the General Agreement 

on Trade  in Services.  In respect  of  any aspect  of this Agreement  covering areas other 

than service  activities  an economic  integration agreement  shall be an agreement in 

accordance  with the  principles set out in Article XXIV  of the  GATT on the creation of free 

trade areas  or customs unions. 

AF/CE/RU/en  26 

A  _. 
/ISO 

JOINT  DECLARATION  IN RELATION TO ARTICLE  46(2) 

The  Parties confirm their  mutual understanding that the question of  whether  activities are 

connected, even occasionally,  with the exercise of  official  authority  in their  respective 

territories, depends upon the circumstances  of each particular  case.  An examination, in 

each particular  case, whether  such activities are connected  with 

- 

the  right to  use physical constraint; or 

- 

the exercise  of judicial functions; or 

- 

the  right unilaterally  to enact  binding regulations 

will help to determine the answer to such questions. 

__ 

AF/CE/RU/en  27 

JOINT  DECLARATION  IN RELATION TO ARTICLE 48 

The sole fact  of  requiring a visa for natural persons of  certain  Parties and not for those of 

others shall not be regarded as nullifying or impairing benefits under a specific 

commitment. 

AF/CE/RU/en  28 

JOINT  DECLARATION  IN RELATION TO ARTICLE  52  (DEFINITIONS) 

"Current payments" 

"Current  payments"  are payments  connected  with the  movement  of  goods, services or 

persons  made in accordance with  normal international  business practice  and do not cover 

arrangements  which  materially  constitute  a combination of  a current  payment  and a capital 

transaction, such as deferrals  of  payments  and advances  which is meant to  circumvent 

respective  legislation of the  Parties in this field. 

This definition does not  preclude  Russia from applying or enacting legislation which lays 

down that  such payments  must  be carried out through those  Russian banks which have 

received the  respective  licences from the Central  Bank of the  Russian Federation to carry 

out  such operations  in freely  convertible currencies. 

"Direct  investment" 

"Direct  Investment"  is an investment for the  purpose of establishing  lasting economic 

relations  with an enterprise such as investments  which give the possibility  of  exercising an 

effective  influence  on the  management thereof,  in the country  concerned  by  non-residents 

or abroad  by residents,  by means  of: 

1. 

Creation or extension of  a wholly  owned enterprise, a subsidiary  or a branch, 

acquisition  of full ownership  of  an existing enterprise; 

2. 

3. 

Participation  in a new  or existing enterprise; 

A  loan of  five years or longer. 

"Freely  convertible currency" 

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

Monetary  Fund. 

AF/CE/RU/en  29 

JOINT  DECLARATION IN RELATION TO ARTICLE  53(2.2) 

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

AF/CE/RU/en  30 

//SV 

JOINT  DECLARATION  IN RELATION TO ARTICLE  54 

The  Parties agree that for the purpose of the Agreement,  intellectual, industrial and 

commercial property includes in particular copyright, including the copyright of  computer 

programmes, and neighbouring rights, patents, industrial designs, geographical indications, 

including appellations, of  origin, trade  marks and service marks, topographies  of  integrated 

circuits as well as protection against unfair competition as referred to in Article  10 bis of 

the  Paris Convention for the  Protection of  Industrial  Property and protection  of  undisclosed 

information  on know-how. 

AF/CE/RU/en  31 

JOINT  DECLARATION  IN RELATION TO ARTICLE  99 

The Parties agree that the  measures provided for in Article  99  shall not be taken with the 

aim to distort  conditions of competition in relevant  markets and thus to afford  protection 

to domestic  production. 

AF/CE/RU/en  32 

JOINT  DECLARATION  IN RELATION TO ARTICLE  101 

The  Parties invite the Cooperation Council to examine forthwith the rules of  procedure that 

may  be useful for dispute settlement  under this Agreement. 

/fS?-

AF/CE/RU/en  33 

JOINT  DECLARATION  IN RELATION TO ARTICLE  107 

The  Parties agree, by common consent, for the purpose of  its correct  interpretation  and its 

practical  application that the terms  "cases of  special urgency"  included in Article  107  of 

the Agreement  mean cases of  material breach of the Agreement  by one of the  Parties.  A 

material  breach of the Agreement  consists in 

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

or 

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

Acr--CF/RU/en  34 

/ A3  8 

JOINT  DECLARATION  IN RELATION TO ARTICLE  107(2) 

The  Parties agree that  "appropriate measures"  referred to in Article  107(2)  are measures 

taken in accordance  with international  law. 

If  a Party takes  a measure in a case of  "special urgency"  as provided for under 

Article  107(2), the  other  Party may avail itself  of the procedure provided for  in Article  101 

s?s? 

AF/CE/RU/en  35 

JOINT  DECLARATION  IN RELATION TO ARTICLES  2 AND  107 

The  Parties declare that the inclusion in the Agreement  of the reference to the  respect for 

human rights constituting  an essential element  of the Agreement  and to cases of  special 

urgency flows from 

the  Community's  policy in the area of  human rights, in conformity  with the  Declaration 

of the  Council of  11  May  1992  which provides for the inclusion of this  reference in 

cooperation or association agreements  between the Community  and its CSCE partners, 

as well as 

Russia's  policy  in this field and 

the  attachment  of  both Parties to the relevant  obligations, arising in particular  from the 

Helsinki  Final Act  and the Charter  of  Paris for a new  Europe. 

AF/CE/RU/en  36 

yfGo 

JOINT  DECLARATION  IN RELATION TO ARTICLE  112 

The  Parties confirm that  although the present Agreement  replaces the Agreement of 

18 December  1989  regarding relations between the Parties, the Agreement  shall not 

prejudice  or otherwise  affect  any measures taken  before the entry  into force of this 

Agreement  or agreements  made between them before that  date in conformity  with the 

1989  Agreement  and this upon the conditions and for the period of  application  contained 

in such measures  or agreements. 

. /- 

. 

AF/CE/RU/en  37 

JOINT  DECLARATION  IN RELATION TO ARTICLE 6  OF PROTOCOL  2 

1.  The  Parties agree to take the necessary  measures in order to assist each other, as 

provided for  in this  Protocol and without  delay, for the following  movements  of goods: 

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

(b)  movement  of  objects of art and antiquity,  which  present  significant  historical, 

cultural  or archaeological  value for  one of the Parties; 

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

environment  and the  public health; 

(d)  movement  of  sensitive and strategic  goods subject to  non-tariff  limitations in 

accordance  with the  lists agreed upon by the Parties. 

2.  The  Parties agree, if  permitted  by the  basic  principles of their  respective  legal systems, 

to take  the  necessary  measures to allow the appropriate  use of the controlled  delivery 

technique  on the  basis of  mutually  agreed implementing  provisions adopted  by them in 

accordance  with the  procedures  of this Protocol. 

AF/CE/RU/en  38 

/)f6' JL 

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

legislation, in order: 

- 

to  deliver  all documents, 

- 

to  notify  all decisions, 

falling within the  scope of this  Protocol to an addressee, residing or established  in their 

respective territories  on the basis of  mutually  agreed implementing  provisions adopted 

by them  in accordance  with the  procedures  of this Protocol.  In such a case 

Article  5(3)  is applicable. 

4.  The  Parties agree that  when the requested authority  cannot  act on his own, the 

administrative  department to which the  request  has been addressed  by this  authority 

shall proceed under the same conditions applicable to the  requested  authority. 

A/61 

AF/CE/RU/en  39 

EXCHANGE  OF LETTERS 

IN RELATION TO ARTICLE  22 

AF/CE/RU/en  40 

Jê<f 

A.  Letter from Russia 

Sir, 

The  purpose of  this  letter  is to confirm that  with  regard to trade  in nuclear  materials as 

covered  by Article  22  of the Agreement  on Partnership  and Cooperation  signed today, 

we  have  reached the following understanding: 

Russia  intends to  act  as a stable, reliable  and long-term supplier of  nuclear  materials to 

the  Community  and the  Community  recognizes that  intention.  The Russian 

Government  takes  note that the Community  considers  Russia, in particular  for the 

purposes  of  its supply  policy in the  nuclear field, as a source of  supply  which is 

separate  and distinct  from other suppliers. 

In order to  avoid any difficulties  in trade, consultations  shall be held regularly  or on 

request  on developments  in the trade of  nuclear  materials  between  Russia and the 

Community.  These consultations  could include a continuous  and regular dialogue on 

market  developments  and forecasts. 

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

AF/CE/RU/en  41 

As provided in Article  13 of the Agreement  on Partnership and Cooperation the 

regulations  referred to in Article  6 of the  1989  Agreement  will be implemented  in a 

uniform,  impartial and equitable  manner. 

I  refer to  our common desire to facilitate  by all practicable  means the process of 

nuclear  disarmament  underway.  We  have agreed to take all necessary  steps to 

conduct  consultations  with all countries concerned, if  it appears that the 

implementation  of  respective  bi- and multilateral agreements  causes or threatens to 

cause substantial  injury to the facilities  of the Parties. 

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

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

For the  Government of 

the  Russian Federation 

AF/CE/RU/en  42 

Â  ^^ 

B. 

Letter from the  Community 

Sir, 

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

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

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

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

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

y^  -n 

AF/CE/RU/en  43 

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

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

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

I confirm that  your  letter  and my reply establish a formal agreement  between us. 

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

On behalf  of the 

European Communities 

AF/CE/RU/en  44 

Aies 

EXCHANGE  OF LETTERS 

IN RELATION TO ARTICLE  52 

..^ 

AF/CE/RU/en  45 

A.  Letter from Russia 

Sir, 

With  reference to Article  52  of the Agreement  on Partnership and Cooperation, I 

confirm that  nothing in this Article shall be construed as restricting the transfer  abroad 

by Community  residents of  investments  made in Russia by Community  residents, 

including any compensation  payments arising from measures such as expropriation, 

nationalization  or measures of  equivalent  effect  and of  any profit  stemming therefrom. 

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

us. 

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

For the  Government 

of the  Russian Federation 

AF/CE/RU/en  46 

y?© 

B.  Letter from the  Community 

Sir, 

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

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

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

I confirm that  your  letter  and my reply establish a formal agreement  between us. 

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

On behalf of 

the  European Communities 

sti-i 

AF/CE/RU/en  47 

COMMUNITY  DECLARATION  IN RELATION TO ARTICLE  36 

The  Community  declares that the cross-border  supply of  services as referred to in 

Article  36  does not imply the movement  of the service supplier into the territory  of the 

country  where the service is destined, nor the  movement  of the  recipient  of the  service 

into the territory  of the country from which the service comes. 

AF/CE/RU/en  48 

y _, 

COMMUNITY  DECLARATION  IN RELATION TO ARTICLE  54 

The  provisions  of the Agreement  are without  prejudice to the competences  of the 

European Community  and its Member  States  in matters  of  intellectual, industrial and 

commercial  property. 

.  -,  _ 
/I  f3 

AF/CE/RU/en  49 

DECLARATION  BY RUSSIA  IN RELATION TO ARTICLE  36 

Russia declares that the suppliers in Community  declaration  in relation to Article  36  could 

not  be considered  as natural persons, who  are representatives  of  a Community or 

Russian company  and are seeking temporary  entry  for the  purpose of  negotiating the sales 

of  cross-border  services or entering into agreements to sell cross-border  services for that 

company. 

AF/CE/RU/en  50 

^ ?^ 

ISSN 0254-1475 

COM(97) 557 final 

DOCUMENTS 

EN 

11  12  15 

Catalogue number  : CB-CO-97-574-EN-C 

ISBN 92-78-26340-0 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg