Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States and Turkmenistan
Date: 1998-02-06
Institutions: European Commission
Subjects: Turkmenistan, cooperation agreement (EU), cooperation policy, economic cooperation, trade relations

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  06.02.1998 
COM(97) 693  final 

98/0031 (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 

and Turkmenistan 

(presented by the Commission) 

SUMMARY 

Negotiations  on  a  Partnership  and  Cooperation  Agreement  with  Turkmenistan  were 
concluded  on  24 May  1997.  This  is a mixed  agreement  with  an initial  duration  of ten  years, 
establishing  a  political  dialogue  and  covering  trade  in  goods,  investment-related  questions 
It  contains  a  clause  allowing  it  to  be 
and  cooperation  in  a  wide  range  of  civil  areas. 
suspended  if there  is a breach of the essential elements underlying the Agreement,  i.e.  respect 
for democracy, human rights and the principles of the market economy. 

This  Communication  proposes  the  formal  signature  and  conclusion  of the  Agreement  by  the 
Council  and  Commission.  It  is  intended  that  the  signature  take  place  in  the  margins  of  the 
General Affairs  Council  in February  or March 1998. 

A 

Explanatory  mc mo rand inn 

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

2.  Following 

the  Council's  adoption  of  the  negotiating  directives  on  5  October  1992, 
negotiations  with  Turkmenistan  were  held  in  the  course  of  1997.  After  two  rounds  of 
negotiations,  the  Agreement  was  initialled  on  24  May  1997. 

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

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

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

in  combatting  illegal  activities  and 

illegal 

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

implementation  with  a 
The  Agreement  sets  out  an 
Cooperation  Council,  a  Cooperation  Committee  and  a  Parliamentary  Cooperation 
Committee. 

institutional  framework 

lor 

its 

Customs  cooperation  is covered  by  a separate  protocol. 

4.  The  Agreement  will,  as  far  as  trade  relations  between  the  Community  and  Turkmenistan 
the  Agreement  on  Trade  and  Commercial  and  Economic 
are  concerned, 
Cooperation  between  the  European  Economic  Community  and  the  European  Atomic 
Enerev  Community,  and  the  USSR,  siened  on  18  December  l^Sl\ 

replace 

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

concluding  the  Agreement  differ. 

In  the  case  of  the  EC.  account  will  have  to  be taken  of  Opinion  1 94  delivered  by  the  Court 
of  Justice  on  15 November  1994  on  the  competence  of  the  European  Community 
to 
conclude  the  aureements  reached  durinu  the  Urimuav  Round. 

'1  CL 

For the purpose of concluding the Agreement: 

the Council will conclude the Agreement,  with the assent of the European Parliament  and 
having  consulted  the  Economic  and  Social  Committee,  on  behalf  of  the  European 
Community  in  accordance  with  Article  54(2),  the  closing  sentence  of  Article  57(2)  and 
Articles  73c(2), 75, 84(2),  113 and 235 in conjunction  with the second  sentence of Article 
228(2)  and  the  second  subparagraph  of  Article  228(3)  of  the  EC  Treaty  by  adopting  the 
attached decision taking into account opinion  1/94  of the European Court of Justice; 

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

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

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

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

decision. 

4  Or 

PROPOSAL FOR A 
COUNCIL AND COMMISSION DECISION 

on the conclusion of the Partnership and Cooperation  Agreement 

between the European Communities and their Member States 

and Turkmenistan 

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

THE COUNCIL  OF THE EUROPEAN UNION, 

THE COMMISSION  OF THE EUROPEAN  COMMUNITIES 

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

Having  regard  to the  Treaty  establishing  the European  Community,  and  in particular  Article 
54(2),  the  closing  sentence  of  Article  57(2)  and  Articles  73c(2),  75,  84(2),  113  and  235  in 
conjunction  with  the  second  sentence  of  Article  228(2)  and  the  second  subparagraph  of 
Article 228(3) thereof, 

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

Having regard to the assent of the European Parliament, 

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

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

Wliereas the conclusion of the Partnership and Cooperation Agreement between the European 
Communities  and their Member  States and Turkmenistan  signed  in 
would 
contribute to achieving the European Communities' objectives; 

on 

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

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

A.  C 

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

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

HAVE DECIDED AS FOLLOWS : 

Article 1 

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

Article 2 

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

2.  In accordance  with Article  79 of the  Partnership and Cooperation Agreement, the  President 
oï  the  Council  shall  chair  the  Cooperation  Council  and  shall  present  the  Community's 
position.  A  representative  of  the  Commission  shall  chair  the  Cooperation  Committee  in 
accordance  with its rules of procedure  and shall present  the Community's  position. 

Article 3 

The  President  of  the  Council  shall  give  the  notification  provided  for  in  Article  100  of  the 
Agreement  on  behalf  of  the  European  Community.  The  President  of  the  Commission  shall 
give  such  notification  on  behalf  o\'  the  European  Coal  and  Steel  Community  and  the 
European  Atomic  Energy  Community. 

Done at  Brussels, 

d 

Final Act 

The plenipotentiaries  of: 

THE  KINGDOM  OF BELGIUM, 

THE  KINGDOM  OF  DENMARK, 

THE FEDERAL  REPUBLIC OF GERMANY, 

THE  HELLENIC  REPUBLIC, 

THE  KINGDOM  OF SPAIN, 

THE  FRENCH  REPUBLIC, 

IRELAND. 

THE  ITALIAN  REPUBLIC, 

THE GRAND  DUCHY  OF LUXEMBOURG, 

THE  KINGDOM  OF THE NETHERLANDS, 

THE  RHPl'BLIC  OF  AUSTRIA, 

THE  PORTUGUESE  REPUBLIC, 

THE  REPUBLIC  OF FINLAND, 

THE  KINGDOM  OF  SWEDEN, 

THE  I ;NH ED KINGDOM  OF GREAT BRITAIN  AND NORTHERN  IRELAND 

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

hereinafter  referred  to as "the Member  States", and 

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

hereinafter  referred  to as "the  Community", 

of the one part, and 

the plenipotentiaries  of  TURKMENISTAN, 

A  Q-

of the other part, 

on 

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

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

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

Joint Declaration  concerning  personal  data 

Joint Declaration  concerning  Article  5 of the  Agreement 

Joint Declaration concerning Article  13 of the Agreement 

Joint  Declaration  concerning  the  notion  of  "control"  in  Article  23  (h) ami  Article  34  of  the 
Agreement 

Joint Declaration  concerning Article  33 of the Agreement 

Joint Declaration  concerning Article  40 of the Agreement 

Joint Declaration  concerning Article  94 of the  Agreement 

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

Establishment  of  companies 

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

Unilateral  Declaration  by the French  Republic on the Overseas  Countries  Territories 

Done at 

in the year one thousand  nine hundred  and ninety  seven. 

For the Council  and  the Commission  of the European  Communities. 

For Turkmenistan. 

A 

PARTNERSHIP AND COOPERATION AGREEMENT 

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

THE KINGDOM OF BELGIUM, 

THE KINGDOM OF DENMARK, 

THE FEDERAL REPUBLIC OF GERMANY, 

THE HELLENIC REPUBLIC, 

THE KINGDOM OF SPAIN, 

THE FRENCH REPUBLIC, 

IRELAND, 

THE ITALIAN REPUBLIC, 

THE GRAND DUCHY OF LUXEMBOURG, 

THE KINGDOM OF THE NETHERLANDS, 

THE REPUBLIC OF AUSTRIA^ 

THE PORTUGUESE REPUBLIC, 

THE REPUBLIC OF FINLAND, 

THE KINGDOM OF SWEDEN, 

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, 

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  TURKMENISTAN, 

of the other part, 

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

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

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

RECOGNIZING 
in  that  context  that  support  of  the  independence,  sovereignty  and  territorial 
integrity  of  Turkmenistan  will  contribute  to  the  safeguarding  of  peace  and  stability  in  Central 
Asia, 

ACKNOWLEDGING  that  the  United  Nations  General  Assembly  has  recognised,  and  expressed 
its support  for,  the status of permanent  neutrality  declared  by Turkmenistan, 

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

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

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

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

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

/ 
' . 
./•  C(^<X^ 

.  . 

'y 
/ 

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

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

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

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

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

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

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

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

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

RECOGNIZING  that  cooperation  for  the  prevention  and  control  of  illegal 
immigration, 
international  organised  crime and  drug  trafficking  constitute  one of the  primary  objectives  of this 
Agreement, 

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

HAVE  AGREED  AS FOLLOWS: 

*¥: 

ARTICLE  1 

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

to support the independence and  sovereignty of Turkmenistan, 
to  support  Turkmenistan's  efforts  to  consolidate  its democracy,  to  develop  its  economy  and 
to achieve transition to a market  economy, 
to assist in the construction  of a civil society in Turkmenistan based upon the rule of law, 
to  provide  an  appropriate framework  for  the political  dialogue between  the Parties  allowing 
the development  of political relations, 
to promote trade and investment,  in particular  in the energy  sector,  and  harmonious  economic 
relations between the Parties and  so to foster  their sustainable economic  development, 
to  provide  a  basis  for  legislative,  economic,  social,  financial,  civil,  scientific,  industrial, 
technological  and cultural  cooperation, 

TITLE I 

GENERAL  PRINCIPLES 

ARTICLE 2 

Respect  for  democratic  principles  and  fundamental  and  human  rights,  as  defined  in  particular  in 
the  Universal  Declaration  of  Human  Rights,  the  United  Nations  Charter,  the  Helsinki  Final  Act 
and  the  Charter  of  Paris  for  a  New  Europe,  as  well  as  the  principles  of  market  economy, 
including those enunciated  in the documents of the CSCE Bonn Conference,  underpin  the  internal 
and external  policies of the Parties and constitute an essential  element  of this  Agreement. 

ARTICLE 3 

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

TITLE II 

POLITICAL  DIALOGUE 

ARTICLE 4 

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

-  will strengthen the links of Turkmenistan  with the Community and its 

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

-  will bring about an increasing convergence of positions on international  issues of mutual 

- 

concern thus increasing security and  stability in the region, 
shall foresee that the Parties endeavour to cooperate on matters pertaining to the observance 
of the principles of democracy, and the respect,  protection  and promotion  of human rights, 
including those of persons belonging to minorities and shall hold consultations,  if necessary, 
on relevant matters. 

Such dialogue may take place on a regional basis. 

ARTICLE  5 

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

ARTICLE 6 

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

- 

- 

- 

regular meetings at senior official  level between  representatives of the Community  and its 
Member  States on the one hand, and representatives of Turkmenistan  on the 
other  hand; 
taking full  advantage  of diplomatic channels between  the parties including  appropriate 
contacts in the bilateral  as well as the multilateral fields, including at United Nations,  OSCE 
meetings and  elsewhere; 
any other means, including the possibility of expert  meetings which would  contribute to 
consolidating  and  developing this dialogue. 

/£.&, 

TITLE  m 

TRADE IN GOODS 

ARTICLE 7 

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

of: 

- 

customs duties and charges applied to imports and exports, including the method  of 
collecting 
such duties and charges; 
provisions relating to customs clearance, transit, warehouses and  transhipment; 
taxes and other internal charges of any kind applied directly or indirectly to imported  goods; 

- 
- 
-  methods of payment and the transfer  of such payments; 
- 

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

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

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

to the creation  of such a union or area; 

(b)  advantages  granted  to  particular  countries  in  accordance  with  WTO  rules  and  with  other 

international  arrangements  in favour  of developing countries; 

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

3. 

The  provisions  of  paragraph  1  shall  not  apply,  during  a  transitional  period  expiring  on 
31 December  1998,  to  advantages  defined  in  Annex I  granted  by  Turkmenistan  to  other 
states which  have emerged  from  the dissolution  of the USSR. 

ARTICLE 8 

1. 

The  Parties  agree  that  the  principle  of  free  transit  is  an  essential  condition  of  attaining  the 
objectives  of this  Agreement. 

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

2.  The  rules described  in Article V, paragraphs  2, 3, 4 and  5 of the  GATT  1994  are  applicable 

between  the Parties. 

3. 

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

fr-  &,--

ARTICLE 9 

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

ARTICLE 10 

1.  Goods  originating  in  Turkmenistan  shall  be  imported 

into  the  Community  free  of 
quantitative  restrictions  and  measures  of  equivalent  effect,  without  prejudice  to  the 
provisions of Articles  12,  15 and  16 of this Agreement. 

2. 

Goods  originating  in  the  Community  shall  be  imported  into  Turkmenistan  free  of 
quantitative  restrictions  and  measures  of  equivalent  effect,  without  prejudice  to  the 
provisions of Articles  12,  15 and  16 of this  Agreement. 

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

ARTICLE 11 

ARTICLE  12 

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

2.  Before  taking  any  measures,  or  in  cases  to  which  paragraph  4  applies  as  soon  as  possible 
the  case  may  be  shall  supply  the 
relevant  information  with  a  view  to  seeking  a  solution 

thereafter, 
Cooperation  Council  with  all 
acceptable to the Parties as provided  for in Title XI. 

the  Community  or  Turkmenistan  as 

3. 

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

Cc.  LQA 

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.  Nothing  in  this  Article  shall  prejudice  or  affect  in  any  way  the  taking,  by  either  Party,  of 
anti-dumping  or countervailing  measures in accordance with  Article  VI  of the  GATT  1994, 
the  Agreement  on  implementation  of  Article  VI  of  the  GATT  1994,  the  Agreement  on 
Subsidies and Countervailing Measures or related  internal  legislation. 

ARTICLE  13 

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

ARTICLE  14 

This  Agreement  shall  not  preclude  prohibitions  or  restrictions  on  imports,  exports  or  goods  in 
transit justified  on  grounds  of  public  morality,  public  policy  or  public  security;  the  protection  of 
health  and  life of humans, animals or plants; the protection  of natural  resources,  the  protection  of 
national  treasures  of  artistic,  historic  or  archaeological  value  or  the  protection  of  intellectual, 
industrial  and  commercial  property  or  rules  relating  to  gold  and  silver.  Such  prohibitions  or 
restrictions  shall  not,  however,  constitute  a  means  of  arbitrary  discrimination  or  a  disguised 
restriction  on trade between  the Parties. 

ARTICLE  15 

This  Title  shall  not  apply  to  trade  in  textile  products  falling  under  Chapters  50  to  63  of  the 
Combined  Nomenclature.  Trade  in  these  products  shall  be  governed  by  a  separate  agreement, 
initialled  on 30 December  1995 and applied provisionally  since  1  January  1996. 

tf\  c 

ARTICLE  16 

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 10. 

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

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

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

ARTICLE  17 

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

10 

TITLE IV 

PROVISIONS AFFECTING  BUSINESS AND  INVESTMENT 

CELAPTER I 

Labour  conditions 

ARTICLE  18 

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

to  nationals  of  Turkmenistan, 

legally  employed 

to 

the 

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

ARTICLE 19 

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

ARTICLE 20 

The Cooperation  Council  shall  make  recommendations  for  the  implementation  of  Articles  18 and 
19. 

11 

U-UU. 

CHAPTER  n 

Conditions affecting  the establishment  and operation  of companies 

ARTICLE 21 

1.  The  Community  and  its  Member  States  shall  grant,  for  the  establishment  of  Turkmen 
companies  as  defined  in  Article  23  (d),  treatment  no  less  favourable  than  that  accorded  to 
any third country companies. 

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

3. 

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

4.  Without  prejudice  to  the  reservations  listed  in  Annex  III,  Turkmenistan  shall  grant,  for  the 
establishment  of  Community  companies  as  defined  in  Article  23  (d),  treatment  no  less 
favourable  than  that  accorded  to  Turkmen  companies  or  to  any  third  country  companies, 
whichever  is the better. 

5.  Turkmenistan  shall grant  to  subsidiaries  and  branches  of Community  companies  established 
in  its  territory  treatment  no  less  favourable  than  that  accorded  to  Turkmen  companies  or 
branches  or  to  any third  country  company  or  branch,  whichever  is the  better,  in  respect  of 
their  operations. 

ARTICLE 22 

1.  The  provisions  of  Article 21  shall  not  apply to  air transport,  inland  waterways  transport  and 

maritime transport. 

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

Such  activities include but  are not  limited  to: 

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

^ 

^ 

12 

fc 

cty 

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

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

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

(d)  provision  of  business  information  by  any  means,  including  computerized 

information 
systems  and  electronic  data  interchange  (subject  to  any  non-discriminatory  restrictions 
concerning  telecommunications); 

(e) 

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

(f) 

acting  on  behalf  of  the  companies,  organizing  the  call  of  the  ship  or  taking  over  cargoes 
when  required. 

For the purpose of this Agreement: 

ARTICLE 23 

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

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

(c)  "Branch"  of a company  shall  mean  a place of business  not  having  legal  personality  which  has 
the  appearance  of  permanency,  such  as the extension  of a parent  body,  has  a management  and  is 
materially  equipped  to  negotiate  business  with  third  parties  so  that  the  latter,  although  knowing 
that  there will if necessary be a legal link with the parent body, the head  office  of which  is abroad, 
do  not  have  to  deal  directly  with  such  parent  body  but  may  transact  business  at  the  place  of 
business constituting the extension. 

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

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

13 

£&/. 

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

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

ARTICLE  24 

1.  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.  Where  such 
measures do not  conform  with the provisions  of this Agreement,  they  shall  not  be used  as a 
means of avoiding the obligations of a Party under this Agreement. 

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

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

in Annex IV. 

ARTICLE  25 

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

ARTICLE  26 

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

Key  personnel  of  the  abovementioned  companies  herein  referred  to  as  "organizations"  are 
"intra-corporate  transferees"  as  defined  in (c)  in the  following  categories,  provided  that  the 

14 

^J\  CtS r 

organization  is a  legal  person  and  that  the  persons  concerned  have  been  employed  by  it  or 
have been  partners in it (other  than  majority  shareholders),  for  at  least  the year  immediately 
preceding such  movement: 

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

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

- 

supervising and controlling the work of other supervisory,  professional  or  managerial 
employees, 

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

personnel actions; 

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

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

ARTICLE  27 

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

2.  The  provisions  of  this  Article  are  without  prejudice  to  those  of  Article  35;  the  situations 
covered  by  Article  35  shall  be  solely  governed  by  its  provisions  to  the  exclusion  of  any 
other. 

15 

3.  Acting  in  the  spirit  of  partnership  and  cooperation  and  in  the  light  of  the  provisions  of 
Article 41,  the Government  of Turkmenistan  shall inform  the Community  of its intentions  to 
submit.new  legislation  or  adopt  new  regulations  which  may  render  the  conditions  for  the 
establishment  or  operation  in  Turkmenistan  of  subsidiaries  and  branches  of  Community 
companies  more  restrictive  than  the  situation  existing  on  the  day  preceding  the  date  of 
signature  of the  Agreement.  The  Community  may  request  Turkmenistan  to  communicate 
the  drafts  of  such  legislation  or  regulations  and  to  enter  into  consultations  about  those 
drafts. 

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

CHAPTER  III 

Cross  border  supply  of services  between  the  Community 
and  Turkmenistan 

ARTICLE  28 

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

2.  The  Cooperation  Council  shall  make  recommendations  for 

the 

implementation  of 

paragraph  1. 

ARTICLE  29 

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

ARTICLE  30 

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

international  maritime market  and traffic  on a commercial basis: 

(a) 

from 
the  above  provision  does  not  prejudice 
the United Nations  Convention  on  a Code  of  Conduct  for  Liner  Conferences,  as  applicable 
to  one  or  other  Party  to  this  Agreement.  Non-conference  lines  will  be  free  to  operate  in 

the  rights  and  obligations  arising 

16 

competition with a conference  as long as they adhere to the principle of fair competition  on 
a commercial basis; 

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

feature of the dry and liquid bulk trade. 

2. 

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

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

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

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

bulk trade; 

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

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

ARTICLE 31 

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

17 

CHAPTER  IV 

General  Provisions 

ARTICLE 32 

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  the  Parties  are  connected,  even 

occasionally, with the exercise of official  authority. 

ARTICLE 33 

For  the  purpose  of this  Title,  nothing  in this  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  this  Agreement.  The  above  provision  does  not  prejudice  the  application  of  Article 

ARTICLE 34 

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

ARTICLE 35 

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  General  Agreement  on  Trade  in 
Services  (GATS),  in  respect  of  sectors  or  measures  covered  by  the  GATS,  in  no  case  be  more 
favourable  than  that  accorded  by  such  first  Party  under  the  provisions  of  GATS  and  this  in 
respect  of each  service sector,  sub-sector  and  mode of supply. 

ARTICLE 36 

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

18 

Û. <4\ 

ARTICLE 37 

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

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

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

ARTICLE 38 

Without  prejudice  to  Article 26,  no  provision  of  Chapters II,  III  and IV  shall  be  interpreted  as 
giving the right to: 

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

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

the territory  of the Community nationals of Turkmenistan; 

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

the territory  of Turkmenistan  nationals of the Member  States; 

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

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

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

CHAPTER V 

Current  payments  and  capital 

ARTICLE 39 

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

19 

^ r-

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

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

4.  The  Parties  shall  consult  each  other  with  a  view  to  facilitating  the  movement  of  forms  of 
the  Community  and 

in  paragraph  2  between 
capital  other  than 
Turkmenistan  in order to promote the objectives of this Agreement. 

those  referred 

to 

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

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

20 

CHAPTER  VI 

Intellectual,  industrial  and commercial  property  protection 

ARTICLE 40 

Pursuant  to  the  provisions  of  this  Article  and  of  Annex  V,  Turkmenistan  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 this  Agreement,  for  a  level 
of  protection  similar  to  that  existing  in  the  Community,  including  effective  means  of 
enforcing  such rights. 

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

21 

4. tf-f 

TITLE V 

LEGISLATIVE  COOPERATION 

ARTICLE 41 

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

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

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

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

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

-  the exchange of experts; 
-  the provision  of early information  especially on relevant  legislation; 
-  organization  of seminars; 
-  training of personnel  involved  in the drafting  andimplementation of legislation; 
-  aid for translation  of Community  legislation  in the relevant  sectors. 

4.  The Parties  agree to examine ways to apply their respective competition  laws on a concerted 

basis in such  cases where trade between them is  affected. 

22 

L(Au 

TITLE VI 

ECONOMIC  COOPERATION 

ARTICLE 42 

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

2. 

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

3.  To  this  end  the  cooperation  will  concentrate,  in  particular,  on  economic  and  social 
development,  human 
(including 
privatization,  investment  and  development  of  financial  services),  agriculture  and  food, 
energy  and  civil  nuclear  safety,  transport,  postal  services  and  telecommunications,  tourism, 
environmental  protection  and regional  cooperation. 

resources  development, 

enterprises 

support 

for 

4. 

Special  attention  shall be devoted  to measures capable of fostering  regional  cooperation. 

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

ARTICLE  43 

Cooperation  in  the field of trade  in  goods  and  services 

The  Parties  will  cooperate  with  a  view  to  ensuring  that  Turkmenistan's  international  trade  is 
conducted  in conformity  with the rules of the WTO.  The Community  shall  provide  Turkmenistan 
with technical  assistance for this purpose. 

Such  cooperation  shall  include  specific  issues  directly  relevant  to  trade  facilitation,  in  particular 
with  a  view  to  assisting  Turkmenistan  to  harmonise  its  legislation  and  regulations  with  WTO 
rules  and  so  to  fulfil  as soon  as  possible  the  conditions  of  accession  to  that  Organisation.  These 
include: 

- 

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

mechanisms, 

-  drafting  of relevant  legislation. 

23 

ARTICLE 44 

Industrial  cooperation 

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

-  the development  of business links between  economic operators  of both  sides; 
-  Community participation  in Turkmenistan's  efforts  to restructure  its industry; 
-  the improvement  of management; 
-  the improvement  of the quality of industrial  products; 
-  the development  of efficient  production  and processing  capacity in the raw materials  sector; 
-  the development  of appropriate commercial  rules and practices including product  marketing; 
-  environmental  protection; 
-  defence  conversion; 
- 

training  of management  personnel. 

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

rules applicable to undertakings. 

ARTICLE 45 

Investment  promotion  and  protection 

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

2.  The aims of cooperation  shall be in particular: 

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

Turkmenistan  of agreements for  the promotion  and protection  of investment; 

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

Turkmenistan  of agreements to avoid  double taxation; 

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

economy; 

-  to establish  stable and adequate business law and conditions,  and to exchange information  on 

laws, regulation's and  administrative  practices in the field of investment; 

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

exhibitions, trade weeks and other events. 

24 

ARTICLE 46 

Public  Procurement 

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

ARTICLE 47 

Cooperation  in the field of standards  and  conformity  assessment 

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

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

-  promote appropriate cooperation  with organizations and institutions  specialized  in these 

fields; 

-  promote the use of Community technical  regulations and the application  of European 

standards and conformity  assessment  procedures; 

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

ARTICLE 48 

Mining and raw  materials 

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

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

-  exchange of information  on the prospects of the mining and non-ferrous  metals sectors; 
-  the establishment  of a legal framework  for  cooperation; 
-  trade matters; 
-  the adoption  and  implementation  of environmental legislation; 
-  training; 

-  safety  in the mining  industry. 

ARTICLE 49 

Cooperation  in science and  technology 

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

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

2.  Science and-technology cooperation  shall cover: 

25 

UMi 

- 
- 
- 

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 50. 

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

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

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

ARTICLE  50 

Education  and  training 

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

professional  qualifications  in Turkmenistan,  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 Turkmenistan including the 

system of certification  of higher educational  establishments and diplomas of higher 
education; 

-  the training of public and private sector  executives and civil servants in priority areas to be 

determined; 

-  cooperation  between  educational  establishments and between  educational  establishments and 

firms; 

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

people; 

-  promoting teaching in the field of European  Studies within the appropriate  institutions; 
-  teaching Community  languages; 
-  post-graduate training of conference  interpreters; 
-  training of journalists; 
-  training of trainers. 

26 

U , to 

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

ARTICLE  51 

Agriculture  and the agro-industrial  sector 

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

ARTICLE  52 

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.  Cooperation  shall  concentrate,  inter  alia,  upon  the  formulation  and  development  of  energy 

policy.  It shall include among others the following  areas: 

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

economy; 

-  improvement  of energy supply, including security of supply,  in an economic and 

environmentally  sound  manner; 

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

Protocol  on Energy Efficiency  and related  environmental  aspects; 

-  modernisation  of energy  infrastructures; 
-  improvement  of energy technologies in supply and end use across the range of energy types; 
-  management  and technical training in the energy  sector; 
-  transportation  and transit  of energy materials and  products. 
-  the introduction  of the range of institutional, legal, fiscal  and other conditions necessary  to 

encourage increased  energy trade and  investment; 

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

27 

The Parties shall exchange relevant  information  relating to  investment  projects  in the  energy 
sector,  in particular  concerning the production  of energy resources  and the construction  and 
refurbishing  of  oil  and gas  pipelines  or  other  means  of  transporting  energy  products.  The 
Parties  attach  particular  importance  to  cooperation  regarding  investments  in  the  energy 
sector  and the  manner  in  which  these  are  regulated.  They  shall  cooperate  with  a  view  to 
implementing  as  efficaciously  as  possible  the  provisions  of  Title  IV  and  of  Article  45,  in 
respect  of investments in the energy  sector. 

ARTICLE 53 

Environment 

1.  Bearing  in mind the European  Energy  Charter,  the Declarations  of the Lucerne  Conference 
of April  1993, and the of the Sofia  Conference  of October  1995, and taking  into account  the 
Energy  Charter  Treaty  and  especially  its  Article  19,  and  the  Energy  Charter  Protocol  on 
Energy  Efficiency  and  related  environmental  aspects,  the  Parties  shall  develop  and 
strengthen their cooperation  on environment  and human health. 

2.  Cooperation  shall aim at protecting the environment  and in particular: 

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

information  on the state of the environment; 

-  combating local,  regional  and transboundary  air and water  pollution; 
-  ecological  restoration; 
-  sustainable,  efficient  and environmentally  effective  production  and use of energy; 
-  safety  of industrial plants; 
-  classification  and  safe handling of chemicals; 
-  water quality; 
-  waste reduction,  recycling and safe disposal, implementation  of the Basle  Convention; 
-  the environmental  impact of agriculture, soil erosion,  and chemical  pollution; 
-  the protection  of  forests; 
-  the conservation  of biodiversity,  protected  areas and sustainable use and management  of 

biological  resources; 

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

transboundary  context. 

3.  Cooperation  shall take place particularly through: 

-  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; 

28 

u ay 

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

Environment  Agency, and at international level; 

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

view to achieving sustainable  development; 

-  environmental  impact studies. 

4.  The Parties  shall  seek to develop their cooperation  on  questions  of human  health,  in  particular 
through  technical  assistance  on  the  prevention  and  combatting  of  infectious  diseases  and  the 
protection  of mothers and young children. 

ARTICLE 54 

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  Turkmenistan;  developing  and  ensuring,  where  appropriate,  compatibility  of 
transportation  systems  in the context  of achieving a more global transport  system; and  identifying 
and elaborating  priority  projects  and seeking to attract  investment  for their  implementation. 

The cooperation  shall  include, inter alia: 

-  the modernisation  of management  and operations of road transport,  railways, ports and 

airports ; 

-  modernization  and  development  of railways, waterways,  roads, airport  and  air  navigation 

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

-  promotion  and  development  of multi-modal  transport; 
-  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. 

ARTICLE 55 

Postal  services  and  telecommunications 

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

-  the establishment  of policies and guidelines for the development  of the  telecommunications 

sector  and  postal  services; 

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

services; 

-  transferring  technology  and  know-how,  particularly  regarding European  technical  standards 

and  certification  systems; 

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

29 

' 

iX LL{ 

attracting  investment, 

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

amongst  others through  liberalization  of activities of sub-sectors; 

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

for the use of the radio frequency  spectrum; 

-  training in the field of telecommunications  and postal  services for  operations  in market 

conditions. 

ARTICLE 56 

Financial  Services and  fiscal  institutions 

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

the development  of a stock  market  and a securities  market; 
the development  of banking services, the development  of a common  market  of credit 
resources and the involvement  of Turkmenistan  in a universally  accepted 
system  of mutual settlements; 
the development  of insurance services, which would  inter alia create a favourable  framework 
for  Community companies' participation  in the establishment  of joint ventures  in the  insurance 
sector  in Turkmenistan,  as well as the development  of export  credit  insurance. 

This cooperation  shall in particular  contribute to foster  the development  of relations  between 
the Parties in the financial  services  sector. 

The  Parties  shall  cooperate  in  developing  the  fiscal  system  and  fiscal  institutions  in 
Turkmenistan.  This  cooperation  shall  include  the  exchange  of  information  and  experience 
on  fiscal  matters  and 
in  the  formulation  and 
implementation  of fiscal  policy. 

training  of  personnel 

involved 

the 

ARTICLE  57 

Enterprise  restructuring  and  privatisation 

Recognizing  that  privatisation  is  of  fundamental  importance  to  a  sustainable  economic  recovery', 
the  Parties  agree  to  cooperate  in  the  development  of  the  necessary  institutional,  legal  and 
methodological  framework.  Particular  attention  will be paid  to  the  orderly  and  transparent  nature 
of the privatisation  process. 

Technical  assistance shall focus  on,  inter alia : 

- 

the  further  development  of  an  institutional  base  within  the  Government  of  Turkmenistan  to 
assist with defining  and managing the privatisation  process; 
the further  development  of the privatisation  strategy  of the government  of  Turkmenistan, 
including the legislative framework,  and implementation  mechanisms; 

30 

0 

- ,-U 

furthering  market  approaches to land use and ownership, and the privatisation  of land; 
the restructuring  of those enterprises not yet ready for  privatisation; 
the development  of private enterprise, particularly in the small and  medium enterprise  sector; 
the development  of investment  funds. 

The objective  of this cooperation  is also to contribute to the promotion  of Community  investment 
in Turkmenistan. 

ARTICLE 58 

Regional  development 

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

2.  To  this  end,  the  Parties  shall  encourage  the  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,  of 
exchanging  information  regarding means to foster  regional  development. 

ARTICLE 59 

Social  cooperation 

1.  With  regard  to  health  and  safety,  the Parties  shall  develop  cooperation  between  them  with 
the aim of improving inter alia 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  on developing  information  and understanding  of the working environment  and  on the 

health and  safety  of workers. 

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

-  optimization  of the labour  market; 
-  modernization  of the job-finding  and consulting services; 
-  planning and  management  of the restructuring  programmes; 
-  encouragement  of local employment  development; 
-  exchange of information  on the programmes of flexible  employment,  including  those 

stimulating  self-employment  and  promoting  entrepreneurship. 

31 

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 Turkmenistan. 

These  reforms  shall  aim  to  develop  in  Turkmenistan  methods  of  protection 
economies and shall comprise all relevant forms of social  protection. 

intrinsic  to  market 

ARTICLE 60 

Tourism 

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

-  facilitatingThe tourist trade; 
-  increasing the flow  of  information; 
-  transferring  know-how; 
-  studying the opportunities for joint operations; 
-  cooperation between  official  tourism bodies, including the preparation  of promotional  material; 
-  training for tourism  development. 

ARTICLE  61 

Small  and  medium-sized  enterprises 

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

and their associations and cooperation  between  SMEs in the Community and Turkmenistan 

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

-  the development  of a legislative framework  for  SMEs; 
-  the development  of an appropriate infrastructure  to support  SMEs, to promote  communication 
and business cooperation  between  SMEs both within Turkmenistan  and further  afield,  and  to 
train  SMEs in the skills necessary to access  funding; 

-  training in the areas of marketing, accounting and control  of the quality of products. 

ARTICLE  62 

Information  and  communication 

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

32 

ARTICLE 63 

Consumer Protection 

The  Parties  will  enter  into  close  cooperation  aimed  at  achieving  compatibility  between  their 
systems  of  consumer  protection.  This  cooperation  may  include  the  exchange  of  information  on 
legislative  work  and  institutional  reform,  the  establishment  of  permanent  systems  of  mutual 
information  on  dangerous  products,  the  improvement  of  information  provided  to  consumers 
the  development  of 
especially  on  prices,  characteristics  of  products  and  services  offered, 
exchanges  between  the  consumer  interest  representatives,  and  increasing  the  compatibility  of 
consumer protection  policies, and the organization  of seminars and training  periods. 

ARTICLE 64 

Customs 

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

2.  Cooperation  shall include the following  in particular: 

-  the exchange of  information; 
-  the improvement  of working methods; 
-  the introduction  of the Combined Nomenclature and the single administrative  document; 
-  the simplification  of inspections and formalities  in respect  of the carriage of goods; 
-  support  for the introduction  of modern  customs information  systems; 
-  the organization  of seminars and training periods. 

Technical  assistance  shall be provided  where necessary. 

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

33 

ARTICLE  65 

Statistical  cooperation 

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

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

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

classification; 

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

manage economic  reforms. 

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

ARTICLE  66 

Economics 

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

The Community  shall provide technical  assistance so as to: 

-  assist Turkmenistan  in the process  of economic reform  by providing  expert 

advisory and technical  assistance; 

-  encourage cooperation  among economists in order to expedite the transfer  of know-how  for 

the drafting  of economic policies, and provide for wide dissemination  of policy-relevant 
research; 

-  improve Turkmenistan's  capacity to formulate  economic models. 

34 

kUfr 

TITLE VD 

COOPERATION ON MATTERS RELATING TO DEMOCRACY 
AND HUMAN RIGHTS 

ARTICLE 67 

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

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

35 

TITLE VIII 

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

ARTICLE 68 

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

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

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

drafting  of national  legislation  in the sphere of preventing illegal activities; 
creation of information  centres; 
increasing the efficiency  of institutions engaged  in preventing  illegal activities; 
training of personnel  and development  of research  infrastructures; 
elaboration  of mutually acceptable measures impeding illegal, activities. 

ARTICLE  69 

Money  laundering 

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

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

ARTICLE 70 

Drugs 

Within  the  framework  of  their  respective  powers  and  competences  the  Parties  shall  cooperate  in 
increasing  the  effectiveness  and  efficiency  of  policies  and  measures  to  counter  the  illicit 
production,  supply  and  traffic  in  narcotic  drugs  and  psychotropic  substances,  including  the 
prevention  of  diversion  of  precursor  chemicals,  as  well  as in  promoting  drug  demand  prevention 
and  reduction.  As regards the control  of precursor  chemicals and  other  essential  substances  used 
for  the  illicit  production  of narcotic  drugs  and  psychotropic  substances,  this  cooperation  shall  be 
on  the  basis  of  the  standards  adopted  by  the  Community  and  the  international  authorities 
concerned,  such  as  those  of  the  Chemical  Action  Task  Force  (CATF).  Cooperation  in  this  area 

36 

&'•  CC/ 

shall  be  based  on  mutual  consultation  and  close  coordination  between  the  Parties  on  objectives 
and  measures to be taken  in the various drug-related fields. 

ARTICLE 71 

Illegal  Immigration 

1.  The  Member  States  and  Turkmenistan  agree  to  cooperate  in  order  to  prevent  and  control 

illegal immigration. To this end: 

Turkmenistan  agrees to readmit  any of its nationals illegally present  on the 
territory of a Member  State, upon  request by the latter and without  further  formalities;  and 

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

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

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

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

control  illegal  immigration. 

37 

TITLE IX 

CULTURAL  COOPERATION 

ARTICLE 72 

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

38 

k-U< 

TITLE X 

FINANCIAL  COOPERATION 

ARTICLE  73 

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

ARTICLE 74 

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

ARTICLE 75 

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

ARTICLE 76 

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

39 

TITLE XI 

INSTITUTIONAL,  GENERAL AND FINAL PROVISIONS 

ARTICLE 77 

It  shall  meet  at  ministerial  level  once  a  year. 

A  Cooperation  Council  is  hereby  established  which  shall  supervise  the  implementation  of  this 
It  shall  examine  any  major  issues 
Agreement. 
arising within  the  framework  of this  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 Parties. 

ARTICLE 78 

1.  The  Cooperation  Council  shall  consist  of  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 Turkmenistan,  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 Turkmenistan. 

ARTICLE 79 

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

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

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

40 

ARTICLE 80 

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

ARTICLE 81 

When  examining  any  issue  arising  within  the  framework  of  this  Agreement  in  relation  to  a 
provision  referring  to  an  Article  of  one  of  the  Agreements  constituting  the  WTO,  the 
Cooperation  Council  shall take into account to the greatest  extent  possible the  interpretation  that 
is generally given to the Article in question by the Members of the WTO. 

ARTICLE 82 

A Parliamentary  Cooperation  Committee  is hereby  established.  It  shall  be  a forum  for  Members 
of  the  Turkmen  Parliament  and  the European  Parliament  to  meet  and  exchange  views,  including 
on  matters concerning  political  dialogue  at  parliamentary  level.  It  shall  meet  at  intervals  which it 
shall itself determine. 

ARTICLE 83 

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

2. 

The Parliamentary  Cooperation  Committee shall establish  its rules of procedure. 

3. 

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

ARTICLE 84 

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

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

^ 

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

41 

U-\ ûy 

ARTICLE  85 

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

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

-  shall encourage the adoption  of arbitration  for the settlement  of disputes arising out  of 

commercial  and cooperation transactions concluded by economic operators of the Community 
and those of Turkmenistan; 

-  agree that where a dispute is submitted  to arbitration,  each party to the dispute may, except 
where the rules of the arbitration  centre chosen by the parties provide otherwise, choose its 
own arbitrator,  irrespective of his nationality,  and that the presiding third  arbitrator  or the sole 
arbitrator  may be a citizen of a third  State; 

-  will recommend  their economic operators to choose by mutual consent  the law applicable to 

their contracts; 

-  shall encourage recourse to the arbitration  rules elaborated  by the United Nations  Commission 
on International  Trade Law (Uncitral) and to arbitration by any centre of a State signatory to 
the Convention  on Recognition  and Enforcement  of Foreign Arbitral  Awards done at New 
York on  10 lune  1958. 

ARTICLE 86 

Nothing  in  this  Agreement  shall  prevent  a  Party,  within  the  limits  of  its  respective  powers  and 
competences,  from  taking any measures: 

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

security interests; 

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

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

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

control  of dual use industrial goods and technology. 

42 

**. 

ARTICLE 87 

1. 

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

contained  therein: 

-  the arrangements applied by Turkmenistan  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 Turkmenistan  shall 

not give rise to any discrimination between Turkmen  nationals, or Turkmen  companies  or 
firms. 

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

ARTICLE 88 

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

application  or interpretation  of this  Agreement. 

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

3. 

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

The Cooperation  Council  shall appoint  a third  conciliator. 

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

ARTICLE 89 

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

The  provisions  of this  Article  shall  in  no  way affect  and  are  without  prejudice  to  Articles  12,  88 
and 94. 

43 

ARTICLE 90 

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

ARTICLE 91 

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

ARTICLE 92 

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

ARTICLE 93 

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

ARTICLE 94 

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

2. 

If  either  Party  considers  that  the  other  Party  has  failed  to  fulfil  an  obligation  under  this 
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 this  Agreement.  These measures  shall be notified  immediately  to  the  Cooperation 
Council  if the other Party  so requests. 

ARTICLE 95 

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

44 

\0  , 

ARTICLE 96 

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

ARTICLE 97 

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

ARTICLE  98 

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

ARTICLE  99 

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

ARTICLE  100 

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

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

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

45 

4. ^ 

ARTICLE  101 

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

46 

M? 

List of Documents  attached 

Annex  I 

Indicative list of advantages granted  by Turkmenistan  to  the 
Independent  States in accordance with Article 7(3). 

Annex  II 

Community reservations in accordance with  Article 21(2). 

Annex  III 

Turkmen  reservations in accordance with Article 21(4) 

Annex  IV 

Financial  services, referred  to in Article 24(3). 

Annex  V 

Intellectual, industrial  and commercial  property  conventions referred  to  in Article 
40. 

Protocol  on mutual  administrative  assistance in customs matters. 

47 

C/. ia 

Indicative list of advantages granted  by Turkmenistan  to 
the Independent  States  in accordance with Article  7(3) 

ANNEX 1 

1.  Import/export taxation 

No import or export duties are levied. 
Services such as customs clearance, commissions and other duties levied by the State Customs, 
the  State Commodity Exchange and the State Tax Inspection  are not payable in the case of the 
following  goods: 

• 

import of grain, baby food,  food  stuffs  which are sold to the population  at state controlled 
prices; 

•  good  imported  on a contract  basis and financed by the Turkmenistan  state budget. 

2.  Conditions of transportation  and  transit 

In respect  of the CIS countries which 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  agreements 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. 

Vehicles from  CIS  States are exempted  from  paying any duties when in transit through  the 
territory  of Turkmenistan. 

48 

Community  reservations in accordance with Article  21(2) 

ANNEX  n 

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

Real estate  purchase 

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

Audio-visual  services  including  radio 

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

Telecommunications  services  including  mobile and satellite  services 

Reserved  services 

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

Professional  services 

Services reserved  to natural  persons who are nationals of Member  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 exist on foreign  participation  in publishing companies and 
broadcasting  companies. 

49 

Reservations  of Turkmenistan  in accordance with Article 21(4) 

ANNEX  ni 

1.  Under current Turkmen legislation, a licence in required by companies or natural  persons 

wishing to invest in certain economic activities in Turkmenistan.  The conditions for the issue 
of such licenses may not result in discrimination between Turkmen and foreign  companies. 

Such licensing may therefore  not be used in order to nullify  the benefits  accorded  to 
Community companies pursuant to Article 21(4) of this Agreement,  nor to circumvent  any 
other provisions of this Agreement.  In particular it may not be used to impede the 
establishment  of Community companies in any area of economic activity, except as provided 
for  in paragraph  2 below.  No  license may be revoked  without  due justification  and any such 
revocation  may be subject to appeal and, if necessary,  dispute  settlement. 

2.  The following  reservations are currently applied: 

Real  estate (immovable  property)  purchase 
Foreign persons and  companies are not allowed to acquire plots of land.  They may, however, 
lease plots of land on a long term basis. 

Agriculture 
There are limitations for  foreigners  regarding the breeding of horses and "sardzhin" sheep. 

Historical  sites  and  monuments 

The application  of the reservations in paragraph 2 above can in no case result in treatment  less 
favourable  than that accorded  to companies of any third  country.  Any relaxation  of these 
restrictions will be extended  to Community companies on the basis of national treatment  or 
most-favoured-nation  treatment,  whichever is the better. 

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

50 

ANNEX  IV 

Financial  services  referred  to in Article  24(3) 

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

A.  All insurance and insurance-related  services; 
1.  Direct  insurance (including co-insurance), 

(i) 
(ii) 

life 
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, inter-alia, consumer  credit,  mortgage  credit, 

factoring  and financing of commercial  transaction. 

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

cards, travellers cheques and bankers  drafts. 

5  Guarantees  and  commitments. 
6.  Trading for  own account  or for  the account  of customers,  whether  on an 
exchange,  in an over the counter  market  or otherwise, the  following. 
(a) 
(b) 
(c) 
(d) 

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

(e) 
(f) 

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

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

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

products,  and  other negotiable instrument's. 

11.  Advisory  intermediation  and  other  auxiliary financial  services on all the activities 
listed  in points  1  to  10 above, including credit  reference  and  analysis,  investment 
and  portfolio  research  and  advice, advice on acquisitions  and  on  corporate 
restructuring  and  strategy. 

51 

I ' - t it 

12. Provision and transfer of financial information,  and financial  data processing and 

related software by providers of other financial services. 

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

(a)  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 providers 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 providers in 
competition with public entities or private institutions. 

52 

tj 

f 

ANNEX V 

Intellectual,  industrial  and commercial  property  conventions 
referred  to in Article 40 

1. 

Article 40(2) concerns the following  multilateral  conventions: 

- 

- 

- 

- 

- 

Berne Convention for the Protection  of Literary and  Artistic Works 
(Paris Act,  1971); 
International  Convention for the Protection  of Performers,  Producers  of 
Phonograms and Broadcasting Organizations (Rome,  1961); 
Madrid  Agreement  concerning the International  Registration  of Marks 
(Stockholm  Act,  1967 and amended  in  1979); 

*  Protocol  relating to the Madrid  Agreement  concerning  the  International 

Registration  of Marks (Madrid,  1989); 
Nice Agreement  concerning the International  Classification  of Goods and 
Services 
for the purposes of the Registration  of Marks (Geneva  1977 and  amended 
in  1979); 
Budapest  Treaty on the International  Recognition  of the Deposit  of 
Micro Organisms for the purposes of Patent  Procedures  (1977, modified  in  1980); 
International  Convention  for the Protection  of New Varieties of Plants 
(UPOV) (Geneva  Act,  1991 ); 

2.  The Cooperation  Council  may recommend  that  Article 40(2)  shall apply to  other  multilateral 
conventions.  If problems in the area of intellectual,  industrial  and  commercial  property 
affecting  trading conditions were to occur, urgent  consultations will be undertaken,  at the 
request  of either Party, with a view to reaching mutually  satisfactory  solutions. 

3. 

The Parties confirm  the importance they attach  to the obligations arising from  the  following 
multilateral  conventions: 

- 

- 

Paris Convention  for  the Protection  of Industrial  Property  (Stockholm  Act,  1967 
and  amended  in  1979); 
Patent  Cooperation  Treaty (Washington,  1970, amended  in  1979 and  modified 
in  1984). 

4. 

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

53 

^ Uj 

PROTOCOL 

ON  MUTUAL  ADMINISTRATIVE  ASSISTANCE 

IN  CUSTOMS  MATTERS 

54 

U  sLC{ 

ARTICLE  1 

Definitions 

For the purposes  of this Protocol : 

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

b)  "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; 

c)  "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; 

d)  "personal  data",  shall  mean  all  information  relating  to  an  identified  or 

identifiable 

individual; 

e)  "operation  in  breach  of  the  customs  legislation" shall  mean  any  violation  or  attempted 

violation  of customs  legislation. 

ARTICLE  2 

Scope 

The  Parties  shall  assist  each  other,  in the  areas  within  their  competence,  in  the  manner  and 
under the conditions laid down in this Protocol, to  ensure the correct  application  of  customs 
legislation,  in  particular  by  preventing,  detecting  and  investigating  operations  in  breach  of 
that  legislation. 

Assistance  in  customs  matters,  as  provided  for  in  this  Protocol,  shall  apply  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  obtained  under  powers exercised  at the  request  of  the judicial 
authorities,  except  where  communication  of  such  information  is  authorised  by  the  said 
authorities. 

ARTICLE  3 

Assistance  on  request 

At  the  request  of  the  applicant  authority,  the  requested  authority  shall  furnish  it  with  all 
relevant  information  which  may  enable  it  to  ensure  compliance  with  customs  legislation, 
including  information  regarding  operations  noted  or planned  which  are or might  be  in breach 
of such  legislation. 

55 

U  .u< 

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. 

At the request  of the applicant  authority, the requested  authority  shall,  within the  framework 
of its laws, take the necessary steps to ensure special surveillance of : 

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

or have been involved  in operations in breach of customs legislation; 

(b)  places  where  goods  are  stored  in  a way  that  gives  grounds  for  suspecting  that  they  are 

intended to be used  in operations in breach of customs legislation; 

(c)  movements  of  goods  notified  as  possibly  giving  rise  to  operations  in  breach  of  customs 

legislation; 

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

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

ARTICLE  4 

Spontaneous  assistance 

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

operations which are or appear to be in breach of such legislation  and which may be of 
interest to another Party; 
new means or methods employed  in carrying out  such operations; 
goods known to be subject  to operations in breach of customs  legislation; 
natural  or legal persons concerning whom there are reasonable grounds for  believing  that 
they are or have been  involved  in operations in breach of customs  legislation; 
means of transport  concerning which there are reasonable grounds for  believing that  they 
have been, are or may be used in operations in breach  of customs  legislation. 

ARTICLE  5 

Delivery /Notification 

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

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

falling  within the scope of this Protocol to an addressee,  residing or established  in its territory.  In 
such a case, Article 6(3) shall apply to the requests for communication  or  notification. 

56 

ARTICLE 6 

Form and substance of requests  for  assistance 

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

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

(a)  the applicant authority making the request; 
(b)  the measure requested; 
(c)  the object  of and the reason for the request; 
(d)  the laws, rules and other legal elements involved; 
(e)  indications as exact and comprehensive as possible on the natural  or  legal persons  who 

are the target  of the investigations; 

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

provided for  in Article 5. 

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

acceptable to that  authority. 

4. 

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

ARTICLE  7 

Execution  of  requests 

1. 

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

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

instruments of the requested  Party. 

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

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

57 

U.u 

ARTICLE 8 

Form in which  information  is to be communicated 

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

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

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

produced  in any form for the same purpose. 

3.  Original  files  and  documents  shall  be  requested  only  in  cases  where  certified  copies  would 
be  insufficient.  Originals  which  have  been  transmitted  shall  be  returned  at  the  earliest 
opportunity. 

ARTICLE 9 

Exceptions  to the obligation  to provide  assistance 

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

would: 

(a)  be likely to prejudice the sovereignty  of Turkmenistan  or that of a 

Member  State of the European  Union which has been asked to provide  assistance 
under this Protocol; or 

(b)  be likely to  prejudice  public policy, security or other essential interests, in particular in 

the cases referred  to under Article  10 (2); or 

(c)  involve currency or tax regulations other than customs legislation; or 
(d)  violate an industrial,  commercial  or professional  secret. 

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

3. 

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

ARTICLE  10 

Information  exchange and  confidentiality 

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

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

58 

3. 

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

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

5.  The 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 an expert  or  witness  in judicial  or  administrative  proceedings  regarding 
the  matters  covered  by  this  Protocol  in  the jurisdiction  of  the  other  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 officiaf  will be questioned. 

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  public service employees. 

ARTICLE  13 

Application 

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

2.  The  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. 

59 

ARTICLE 14 

1.  Taking into account the respective competences of the European  Community and the Member 

States, the provisions of this Protocol shall: 

•  not affect  the obligations of the Contracting Parties under any other  international  agreement  or 

convention; 

•  be deemed  complementary with agreements on mutual assistance which have been or may be 
concluded  between individual Member  States of the European Union and Turkmenistan;  and 
•  not affect  the provisions governing the communication between the competent  services of the 
Commission  and the customs authorities of the Member  States of any information  obtained 
under this agreement which could be of interest to the  Community. 

2.  Notwithstanding  the provisions of paragraph  1, the provisions of this agreement  shall  take 
precedence over the provisions of the bilateral agreement  on mutual  assistance which  have 
been or may be concluded  between  individual Member  States of the European  Union  and 
Turkmenistan  insofar  as the provisions of the latter are incompatible with those of this 
Protocol. 

3.  In respect  of questions relating to the applicability of this Protocol, the Contracting  Parties 

shall consult  each other to resolve the matter in the framework  of the Cooperation  Committee 
established  under  Article 79 of this Agreement. 

60 

JOINT  DECLARATION 

In applying  this Agreement,  the  parties  are aware  of the  necessity  of  an adequate  protection  of 
individuals with regard to the processing of personal data and on the free movement of such data. 

61 

JOINT  DECLARATION 
IN RELATION TO ARTICLE 5 

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

62 

^  * LU. 

JOINT  DECLARATION 
CONCERNING  ARTICLE  13 

Until  Turkmenistan accedes to the WTO, the Parties shall  hold  consultations  in the  Cooperation 
Committee  on  Turkmenistan's  import  tariff  policies,  including  changes  in  tariff  protection.  In 
particular, such consultations shall be offered  prior to the increase of tariff protection. 

63 

U, 

\.LJ 

JOINT  DECLARATION 
CONCERNING  THE  NOTION  OF  "CONTROL" 
IN ARTICLE  23(b) AND ARTICLE  34 

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

64 

JOINT  DECLARATION 
CONCERNING ARTICLE 33 

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. 

65 

JOINT  DECLARATION 
CONCERNING ARTICLE 40 

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

66 

JOINT  DECLARATION 
CONCERNING  ARTICLE 94 

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

(a) repudiation of the Agreement not sanctioned by the general rules of international law 
or 
(b) violation of the essential elements of the Agreement set out in Article 2. 

2.  The parties agree that the "appropriate measures" referred to in Article 94 are measures 

taken in accordance with international law.  If a party takes a measure in a case of special 
urgency as provided for under Article 94, the other party may avail itself of the procedure 
relating to settlement of dispute. 

67 

<^y 

EXCHANGE OF LETTERS 

BETWEEN THE COMMUNITY 

AND TURKMENISTAN 

IN RELATION TO THE ESTABLISHMENT OF COMPANIES 

68 

A. Letter from  the Government  of Turkmenistan 

Dear  Sir, 

I refer  to the Partnership and Cooperation Agreement  initialled  on 

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

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

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

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

For the Government  of Turkmenistan 

69 

B.  Letter from  the European  Community 

Dear Sir, 

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

"I refer to the Partnership and Cooperation Agreement initialled on 

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

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

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

I acknowledge receipt  of the letter. 

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

On behalf of the European  Community 

70 

LC| 

DECLARATION 
BY THE FRENCH  GOVERNMENT 

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

71 

Declaration  bv the Council  and  Commission 
(for the minutes) 

The  Council  and  Commission  confirm  that  the  definition  of  "personal  data"  contained  in 
Article  1 of  the  Customs  Protocol  does  not  constitute  an  obligation  to  transmit  all  personal 
data. 

"-)  L 

ISSN 0254-1475 

COM(97) 693 final 

DOCUMENTS 

EN 

06  10  11 

Catalogue number  :  CB-C0-97-716-EN-C 

ISBN  92-78-29160-9 

Office  for  Official  Publications  of the European  Communities 

L-2985  Luxembourg 

Is