Proposal for a Council Decision on the Community position to be adopted in the Cooperation Council established by the Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part, in relation to the establishment of rules of procedure for the settlement of disputes under that Agreement
Date: 2003-01-17
Institutions: European Commission
Subjects: Russia, commercial arbitration, common commercial policy, cooperation agreement (EU), trade dispute

EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 17.01.2003
COM(2003) 13 final

Proposal for a

COUNCIL DECISION

on the Community position to be adopted in the Cooperation Council established by the
Partnership and Cooperation Agreement between the European Communities and their
Member States, of the one part, and the Russian Federation, of the other part, in
relation to the establishment of rules of procedure for the settlement of disputes under
that Agreement

(presented by the Commission)

 
1.

2.

3.

4.

5.

EXPLANATORY MEMORANDUM

The  Partnership  and  Cooperation  Agreement 
the  European
Communities and their Member States, of the one part, and the Russian Federation, of
the other part, entered into force on 1 December 1997.

(PCA)  between 

Since the PCA entered into force, a number of disputes have arisen between the EC and
Russia  concerning  implementation  of  the  Agreement.  Certain  of  these  disputes,  inter
alia concerning access to the markets for financial services and alcoholic beverages as
well  as  the  imposition  of  export  duties  on  ferrous  waste  and  scrap,  have  caused
significant  injury  to  the  Community  industry.  The  Community  has  had  difficulty  in
seeking  to  redress  these  situations  due  to  the  absence  of  effective  PCA  dispute
settlement procedures 

The issue of how best to settle such disputes has been discussed at length by the Parties.
The PCA provides, in Article 101 (4) thereof, that the Cooperation Council established
by Article 90 of the Agreement may establish rules of procedures for dispute settlement.
In addition, a Joint Declaration in relation to Article 101 annexed to the Final Act of the
PCA  invites  the  Cooperation  Council  to  examine  the  rules  of  procedure  that  may  be
useful for dispute settlement under the Agreement.

Establishing  PCA  dispute  settlement  procedures  will  reinforce  the  PCA  as  the  legal
foundation of EC-Russia relations, introduce greater transparency and predictability and
give  a  more  judicial  character  to  the  settlement  of  disputes.  Both  the  Community  and
Russia  are  agreed  on  the  desirability  of  this  and  the  Parties  have  therefore  elaborated
relevant rules of procedure for dispute settlement.

It is appropriate for the Cooperation Council to establish such rules of procedure. The
text  of  the  proposal  for  a  Council  Decision  on  the  position  to  be  taken  by  the
Community in the Cooperation Council, as provided for by Article 2 paragraph 1 of the
Council  and  Commission  Decision  of  30  October  1997  on  the  conclusion  of  the
aforementioned  Partnership  and  Cooperation  Agreement,  is  attached.  These  rules  of
procedure are without prejudice to the rights and obligations of the Parties established
under the PCA. The Council is asked to adopt this text.

2

Proposal for a

COUNCIL DECISION

on  the  Community  position  to  be  adopted  in  the  Cooperation  Council  established  by  the
Partnership  and  Cooperation  Agreement  between  the  European  Communities  and  their
Member States, of the one part, and the Russian Federation, of the other part, in relation to
the establishment of rules of procedure for the settlement of disputes under that Agreement

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Article 2 paragraph 1 of Council and Commission Decision of 30 October 1997
on  the  conclusion  of  the  Partnership  and  Cooperation  Agreement  between  the  European
Communities and their Member States, of the one part, and the Russian Federation, of the other
part1 

Having regard to the proposal from the Commission2,

Whereas:

(1)

(2)

(3)

Article  101(4)  of  the  Partnership  and  Cooperation  Agreement  provides  that  the
Cooperation  Council  may  establish  rules  of  procedures  for  dispute  settlement  and  the
Joint  Declaration  in  relation  to  Article  101  annexed  to  the  Final  Act  of  the  Partnership
and  Cooperation  Agreement  invites  the  Cooperation  Council  to  examine  the  rules  of
procedure that may be useful for dispute settlement under the Agreement; 

The  European  Community  and  the  Russian  Federation  have  decided  to  establish  such
rules of procedure, in order to enhance the security and predictability of bilateral relations
under the Partnership and Cooperation Agreement; 

These rules of procedures are without prejudice to the rights and obligations established
under the Partnership and Cooperation Agreement, 

1

2

OJ L 327, 28.11.1997, p.1.
OJ C , , p. .

3

                                                
HAS DECIDED AS FOLLOWS

Sole Article

The position to be adopted by the Community in the Cooperation Council established by Article
90 of the Partnership and Cooperation Agreement between the European Communities and their
Member States, of the one part, and the Russian Federation, of the other part, in relation to the
establishment of rules of procedure for the settlement of disputes under that Agreement, shall be
in accordance with the annex to the present Decision.

Done at Brussels, 

For the Council
The President

4

THE COOPERATION COUNCIL,

ANNEX

Having  regard  to  the  Agreement  on  Partnership  and  Cooperation  establishing  a  partnership
between the European Communities and their Member States, of the one part,  and  the  Russian
Federation,  of  the  other  part,  hereinafter  referred  to  as  the  Partnership  and  Cooperation
Agreement, and in particular Article 101(4) thereof, 

Whereas:

(1) 

(2) 

Article  101(4)  of  the  Partnership  and  Cooperation  Agreement  provides  that  the
Cooperation  Council  may  establish  rules  of  procedures  for  dispute  settlement  and  the
Joint  Declaration  in  relation  to  Article  101  annexed  to  the  Final  Act  of  the  Partnership
and  Cooperation  Agreement  invites  the  Cooperation  Council  to  examine  the  rules  of
procedure that may be useful for dispute settlement under the Agreement; 

The  European  Community  and  the  Russian  Federation  have  decided  to  establish  such
rules of procedure, in order to introduce greater transparency and predictability and give a
more  judicial  character  to  the  settlement  of  disputes  under  the  Partnership  and
Cooperation Agreement; 

(3) 

These rules of procedures are without prejudice to the rights and obligations established
under the Partnership and Cooperation Agreement, 

HAS  ESTABLISHED  THE  FOLLOWING  RULES  OF  PROCEDURE  FOR  DISPUTE
SETTLEMENT:

Article 1

Scope and coverage

The provisions of these Rules for Dispute Settlement determine the procedure for the settlement
of  disputes  relating  to  the  application  and  interpretation  of  the  Partnership  and  Cooperation
Agreement, except in cases of special urgency as provided for in Article  107(2) of Partnership
and Cooperation Agreement.

Article 2

Consultation

1. The Parties shall at all  times  endeavour  to  agree  on  the  interpretation and  application of the
Partnership and Cooperation Agreement and shall make every attempt through cooperation and
consultations  to  arrive  to  a  mutually  satisfactory  resolution  of  any  matter  that  might  affect  its
functioning.

5

2.  Each  of  the  Parties  may  refer  to  the  Cooperation  Committee  any  dispute  relating  to  the
application  or  interpretation  of  the  Partnership  and  Cooperation  Agreement  by  requesting
consultations. 

3.  The  Cooperation  Committee  shall  convene  within  30  days  of  delivery  of  the  request  for
consultations  and  shall  endeavour  to  arrive  at  a  mutually  satisfactory  resolution  of  the  dispute
promptly.  It  shall  convene  within  10  days  in  case  of  urgency,  including  those  involving
perishable goods.

Article 3

Request for the establishment of a conciliation panel

1. In case a Party has referred to the Cooperation Committee any dispute relating to the violation
of the Partnership and Cooperation Agreement by the other Party and such matter has not been
resolved within 15 days after the Cooperation Committee has convened pursuant to Article 2(3)
or 45 days after the delivery of the request for consultations within the Cooperation Committee,
the complaining Party shall request in writing the establishment of a conciliation panel.

2. The complaining Party shall state in the request the measure or practice it considers to be in
breach  of  the  Partnership  and  Cooperation  Agreement  and  indicate  the  provisions  that  it
considers relevant, and shall deliver the request together with the notification of the appointment
of its conciliator to the other Party and to the Cooperation Council.

Article 4

Appointment of conciliators

1.  The  Cooperation  Committee  shall,  no  later  than  3  months  after  the  entry  into  force  of  this
Rules,  establish  an  indicative  list  of  up  to  15  individuals  who  are  willing  and  able  to  serve  as
conciliators,  five  of  whom  must  not  be  national  of  either  Party.  Those  individuals  shall  have
specialised  knowledge  or  experience  in  law,  international  trade,  other  matters  relating  to  the
Partnership and Cooperation Agreement or the resolution of disputes deriving from international
trade  agreements.  They  shall  act  in  complete  independence  and  not  be  affiliated  with  or  take
instruction from any Party. At least three of these individuals shall have demonstrated expertise
in the field of trade defence instruments.

Such indicative list may be amended every three years. 

2.  The  complaining  Party  shall  notify  the  other  Party  of  the  appointment  of  a  conciliator,  and
propose  up  to  3  candidates  to  serve  as  a  chair.  The  other  Party  must  then  appoint  a  second
conciliator within 15 days, and propose up to 3 candidates to serve as a chair.

3. Both Parties shall endeavour to agree on the chair within 15 days after the second conciliator
has been appointed.

4.  The  date  of  establishment  of  the  conciliation  panel  shall  be  the  date  on  which  the  chair  is
appointed.

6

5.  If  a  Party  fails  to  appoint  its  conciliator  pursuant  to  paragraph  2,  such  conciliator  shall  be
selected by lot, within two months from the date of the appointment of the first conciliator, by
the  President  of  the  Cooperation  Committee  among  the  nationals  of  that  Party  figuring  on  the
indicative list referred to in paragraph one. The Parties shall be represented at the drawing.

If the Parties are unable to agree on the chair within the time period referred to in paragraph 3, it
shall be selected by lot by the President of the Cooperation Committee within one week among
the individuals figuring on the indicative list referred to in paragraph one which are not national
of either Party. The Parties shall be represented at the drawing.

6. If a conciliator dies, withdraws or is removed, a replacement shall be selected within 15 days
in accordance with the selection procedure followed to select him or her. In such case, any time
period applicable to the conciliation panel proceeding shall be suspended for a period beginning
on the date the conciliator dies, withdraws or is removed and ending on the date the replacement
is selected.

7. When a dispute concerns an alleged breach by one Party of its obligations under Article 18 of
the  Partnership  and  Cooperation  Agreement,  the  Parties  shall  ensure  that  the  conciliators
appointed for the dispute have a demonstrated experience in trade defense instruments.

Article 5

Conciliation panel reports

1. The conciliation panel should, as a general rule, submit an initial report containing its findings,
conclusions  and  recommendations  to  the  Parties  not  later  than  three  months  from  the  date  of
establishment of the conciliation panel. In no case should it do so later than five months from this
date. Any Party may submit written comments to the conciliation panel on its initial report within
15 days of circulation of the report.

2. The conciliation panel shall present to the Parties and to the Cooperation Council a final report
within 30 days of presentation of the initial report.

3. In  cases of urgency,  including  those  involving  perishable  goods, the conciliation panel  shall
make  every  effort  to  issue  its  final  report  to  the  Parties  within  three  months  from  the  date  of
establishment of the conciliation panel. In no case should it do so later than four months. 

The conciliation panel may give a preliminary ruling on whether a case is urgent.

4. All decisions of  the conciliation  panel, including  the  adoption  of the final  report and of  any
preliminary ruling, shall be taken by majority vote, each conciliator having one vote.

5.  The  complaining  Party  may  withdraw  its  complaint  at  any  time  before  the  final  report  is
issued. Such withdrawal is without prejudice to its right to introduce a new complaint regarding
the same matter at a later point in time.

6.  The  conciliation  panel  may  suspend  its  work  at  any  time  at  the  request  of  the  complaining
Party for a period not to exceed 12 months. In the event of such a suspension, the time-frame set
out in paragraphs 1 to 3 of this Article shall be extended by the amount of time that the work was

7

suspended. If the work of the panel has been suspended for more than 12 months, the authority
for establishment of the panel shall lapse.

Article 6

Application of appropriate measures

1. Unless the final report referred to in Article 5(2) concludes that the Party complained against
has  not  fulfilled  its  obligations  under  the  Partnership  and  Cooperation  Agreement,  the
complaining  Party  shall  not  take  measures  under  Article  107(2)  of  the  Partnership  and
Cooperation Agreement in regard to the violation referred to the Cooperation Committee.

2. If the final report concludes that the Party complained against has not fulfilled its obligations
under  the  Partnership  and  Cooperation  Agreement,  the  Party  concerned  shall  inform  the  other
Party  within  30  days  after  the  final  report  has  been  issued  of  the  implementing  measures  it
intends  to  take  to  put  an  end  to  the  violation  of  its  obligations  and,  where  relevant,  of  the
duration  of  the  reasonable  period  of  time  which  it  considers  necessary  to  implement  those
measures.

3. The Parties shall endeavour to agree on the specific implementing measures that are required.

4.  The  Party  concerned  shall  promptly  put  an  end  to  the  violation  of  its  obligations  under  the
Partnership and Cooperation Agreement. If it is impracticable to comply immediately, the Parties
shall endeavour to agree on a reasonable period of time to do so.

In  the  absence  of  such  agreement  within  45  days  after  the  final  report  has  been  issued,  either
Party may request the original conciliation panel to determine the length of the reasonable period
of time, in light of the particular circumstances of the case. The report of the conciliation panel
shall  be  given  within  15  days  from  that  request.  If  compliance  with  the  final  report  can  be
achieved through administrative or regulatory measures, the duration of the reasonable period of
time shall not exceed 6 months. In other cases, the duration of such period shall not exceed 15
months.

5.  The  Party  concerned  shall  notify  to  the  other  Party  the  implementing  measures  adopted  in
order  to  put  an  end  to  the  violation  of  its  obligations  under  the  Partnership  and  Cooperation
Agreement  before  the  expiry  of  the  reasonable  period  of  time  determined  in  accordance  with
paragraph 4. Upon that notification, any of the Parties may request the original conciliation panel
to  rule  on  the  conformity  of  those  measures  with  the  Partnership  and  Cooperation  Agreement.
The report of the conciliation panel shall be given within 60 days from that request.

6. If the conciliation panel rules that the implementing measures notified by the Party concerned
do  not  put  an  end  to  the  violation  of  the  Partnership  and  Cooperation  Agreement,  the  Parties
shall hold further  consultations to reach a  mutually acceptable  agreement  on  the  implementing
measures.

If  the  Party  concerned  fails  to  notify  the  implementing  measures  before  the  expiry  of  the
reasonable period of time determined in accordance with paragraph 4, or if the conciliation panel
rules that the implementing measures notified  by the Party concerned  are  inconsistent with the

8

Partnership and Cooperation Agreement and no mutually acceptable agreement has been reached
within 30 days from the date of the ruling of that conciliation panel, the complaining Party shall
be entitled to take appropriate measures in accordance with Article 107(2) of the Partnership and
Cooperation Agreement.

7.  In  the  selection  of  these  measures  priority  must  be  given  to  those  which  least  disturb  the
functioning of the Agreement.

8.  The  complaining  Party  shall  notify  the  other  Party  and  the  Cooperation  Council  of  the
measures which it intends to take no later than 60 days before the date on which those measures
are due to take effect. Within 15 days from that notification, any of the Parties may request the
original conciliation panel to rule on whether the effects of the measures which the complaining
Party intends to take  are  equivalent to those of the  measure of the  other Party  found  to  be  in
violation of its obligations and whether the measures proposed by the complaining Party are in
accordance with paragraphs 6 and 7. 

The report of the conciliation panel shall be given within 45 days from that request. Appropriate
measures shall not be taken until the conciliation panel has issued its ruling.

9.  The  appropriate  measures  shall  be  temporary  and  shall  only  be  applied  by  the  complaining
Party  until  the  measure  found  to  violate  the  Partnership  and  Cooperation  Agreement  has  been
withdrawn  or  amended  so  as  to  bring  it  into  conformity  with  the  Partnership  and  Cooperation
Agreement, or the Parties have reached agreement on a resolution of the dispute.

10.  At  the  request  of  any  of  the  Parties,  the  original  conciliation  panel  shall  report  on  the
conformity  with  the  Partnership  and  Cooperation  Agreement  of  any  implementing  measures
adopted  after  the  application  of  appropriate  measures  and,  in  light  of  such  ruling,  whether  the
measures  taken  under  Article  107(2)  of  the  Partnership  and  Cooperation  Agreement  should  be
terminated or modified. The report of the conciliation panel shall be given within 30 days from
the date of that request.

Article 7

General provisions

1.  Without  prejudice  to  the  time  limits  established  under  the  Partnership  and  Cooperation
Agreement, any time period mentioned in these Rules of Procedure for Dispute Settlement may
be extended by mutual agreement of the Parties.

2. Unless  the Parties otherwise  agree,  the  conciliation  panel  proceedings  shall  be  conducted  in
accordance with the Model Rules set out in Annex. The Cooperation Committee may amend the
Model Rules. The Cooperation Committee shall also complement the Model Rules with a Code
of Conduct guaranteeing the independence and impartiality of conciliators. 

3.  Upon  accession  of  the  Russian  Federation  to  the  World  Trade  Organisation,  and  taking
account of Article 4 of the Partnership and Cooperation Agreement, a Party shall have recourse
exclusively  to  the  dispute  settlement  mechanism  of  the  World  Trade  Organisation  when  it
considers  that  the  other  Party  has  failed  to  fulfil  an  obligation  under  the  Partnership  and

9

Cooperation  Agreement  that  incorporates  or  refers  to  a  provision  under  the  Agreement
establishing  the  World  Trade  Organisation,  or  an  obligation  under  the  Agreement  establishing
the World Trade Organisation.

4. Pending the accession of the Russian Federation to the World Trade Organisation, conciliation
panels  shall  adopt  an  interpretation  that  is  fully  consistent  with  the  relevant  decisions  of  the
Dispute Settlement Body of the World Trade Organisation when ruling on the alleged violation
of  a  provision  of  the  Partnership  and  Cooperation  Agreement  that  incorporates  or  refers  to  a
provision under the Agreement establishing the World Trade Organisation.

5. Conciliation panels will take account of the relevant judicial practice of the one of the Parties
when  ruling  on  the  alleged  violation  of  a  provision  of  the  Partnership  and  Cooperation
Agreement that  refers to application and  interpretation of  the  national  legislation  of  one  of  the
Parties.

MODEL RULES OF PROCEDURE

(REFERRED TO IN ARTICLE 7)

Definitions

1.

In these rules:

“Rules for Dispute Settlement” means the Rules for Dispute Settlement adopted under
Article 101(4) of the Partnership and Cooperation Agreement

“adviser” means a person retained by a party to advise or assist the Party in connection
with the conciliation panel proceeding;

“complaining  Party” means  any Party that  requests the establishment of a  conciliation
panel under the Rules for Dispute Settlement;

“conciliation panel” means a conciliation panel established pursuant to Article 3 of the
Rules for Dispute Settlement;

“representative of a Party” means an employee of a government department or agency
or of any other government entity of a Party;

2.

3.

The  Parties  may  designate  a  specialised  entity  to  administer  the  dispute  settlement
proceedings.

Unless  the  parties  otherwise  agree,  the  Parties  shall  meet  with  the  conciliation  panel
within  15  days  of  the  date  of  establishment  of  the  conciliation  panel  in  order  to
determine matters such as:

(a)

(b)

remuneration  and  expenses  that  will  be  paid  to  the  conciliators  which  normally
shall conform to the WTO standards;

the  administration  of  proceedings,  where  the  Parties  have  not  designated  a
specialised entity pursuant to rule 2; and

10

(c)

such other matters that the Parties deem appropriate.

Qualification of Conciliators

Conciliators  shall  serve  in  their  individual  capacities  and  not  as  government
representatives,  nor  as  representatives  of  any  organisation.  They  shall  act  in  complete
independence and shall not receive any guidance or instructions from any Party or any
person having an interest, directly or indirectly, in the matter referred to the conciliation
panel. They shall strictly respect the degree of confidentiality that the fulfilment of their
task requires during and after the termination of their offices.

Terms of reference

Unless  the  Parties  otherwise  agree  within  20  days  from  the  date  of  delivery  of  the
request for the establishment of the conciliation panel, the terms of reference shall be:

“To examine, in the light of the relevant provisions of the Partnership and Cooperation
Agreement, the matter referred to the Cooperation Committee (as set out in the request
for  consultations  within  the  Cooperation  Committee  meeting),  and  to  rule  on  the
consistency of the measures at issue with the Partnership and Cooperation Agreement.”

The  parties  shall  promptly  deliver  any  agreed  terms  of  reference  to  the  conciliation
panel.

Written submissions and other documents

Where  the  Parties  have  designated  an  entity  pursuant  to  rule  2,  a  Party  or  the
conciliation panel, respectively, shall deliver any request, notice, written submissions or
other  document  to  that  entity  within  the  time  frame  established  by  the  Parties  when
designating  that  entity.  An  entity  designated  under  rule  2  that  receives  a  written
submission shall forward it to the recipients by the most expeditious means practicable.

Where  the  Parties  have  not  designated  an  entity  pursuant  to  rule  2,  a  Party  or  the
conciliation panel, respectively, shall deliver any request, notice, written submission or
other document in accordance with the agreement reached under rule 3.

A  Party  shall,  to  the  extent  practicable,  provide  a  copy  of  the  document  in  magnetic
format. 

Unless otherwise agreed  pursuant to  rule 3  a  Party  shall provide  a copy of  each  of its
written submissions for the other Party and each of the conciliators.

A  complaining  Party  shall  deliver  its  initial  written  submission  no  later  than  25  days
after the date of establishment of the conciliation panel. The Party complained against
shall  deliver  its  written  counter-submission  no  later  than  20  days  after  the  date  of
delivery of the initial written submission.

Unless  otherwise  agreed  pursuant  to  rule  3  in  the  case  of  any  request,  notice  or  other
document related to the conciliation panel proceeding that is covered by rule 10 or 11,

4.

5.

6.

7.

8.

9.

10.

11.

12.

11

13.

14.

15.

16.

17.

18.

19.

20.

21.

the Party  shall deliver  to  the  other  Party  and  to  each  of  the  conciliators  a  copy  of  the
document by facsimile or other means of electronic transmission.

Minor  errors  of  a  clerical  nature  in  any  request,  notice,  written  submission  or  other
document related to the conciliation panel proceeding may be corrected by delivery of a
new document clearly indicating the changes.

If the last day for delivery of a document falls on a legal holiday or on any other day on
which  the  offices  are  closed  by  order  of  the  government  or  by  force  majeure,  the
document may be delivered on the next business day.

Operation of conciliation panels

The chair of the conciliation panel  shall preside  at all  of its meetings. An conciliation
panel  may  delegate  to  the  chair  authority  to  make  administrative  and  procedural
decisions.

Except  as  otherwise  provided  in  these  Rules,  the  conciliation  panel  may  conduct  its
business  by  any  means,  including  by  telephone,  facsimile  transmissions  or  computer
links.

Only  conciliators  may  take  part  in  the  deliberations  of  the  conciliation  panel  but  the
conciliation  panel  may  permit  assistants,  administration  personnel,  interpreters  or
translators  to  be  present  during  any  such  deliberations.  Any  person  attending  such
deliberations  shall  respect  the  degree  of  confidentiality  that  the  fulfilment  of  this  task
requires during and after the termination of their offices.

Where  a  procedural  question  arises  that  is  not  covered  by  these  rules,  a  conciliation
panel  may  adopt  an  appropriate  procedure  that  is  not  inconsistent  with  the  Rules  for
Dispute Settlement. 

When  the  conciliation  panel  considers  there  is  a  need  to  modify  any  time  period
applicable  in  the  proceeding  or  to  make  any  other  procedural  or  administrative
adjustment in the proceeding, it shall inform the Parties in writing of the reasons for the
modification or adjustment with an estimate of the period or adjustment needed.

Hearings

Where  the  Parties  have  designated  an  entity  pursuant  to  rule  2,  the  chair  shall  fix  the
date and time of the hearing in consultation with the Parties, the other members of the
conciliation panel and such entity. That entity shall notify in writing to the Parties of the
date, time and location of the hearing.

Where the Parties have not designated an entity pursuant to rule 2, the chair shall fix the
date and time of the hearing in consultation with the Parties and the other members of
the  conciliation  panel,  in  accordance  with  the  agreement  reached  under  rule  3.  The
Parties  shall  be  notified  in  writing  of  the  date,  time  and  location  of  the  hearing  in
accordance with the agreement reached under rule 3.

12

22.

23.

24.

25.

26.

27.

28.

29.

30.

Unless  the  Parties  otherwise  agree  the  hearing  shall  be  held  in  Brussels,  where  the
complaining  Party  is  the  Russian  Federation,  or  in  Moscow,  where  the  complaining
Party is the Community.

The conciliation panel may convene additional hearings if the Parties so agree.

All conciliators shall be present at hearings.

The following persons may attend a hearing:

(a)

representatives of a Party;

(b)

advisers  to  a Party, provided that  they  do  not  address  the  conciliation  panel  and
provided further that neither they or their employers, partners, business associates
or family members have a financial or personal interest in the proceeding;

(c)

administration personnel, interpreters, translators and court reporters; and

(d)

conciliators’ assistants;

No later than five days before the date of a hearing, each Party shall deliver a list of the
names of those persons who will make oral arguments or presentations at the hearing on
behalf  of that  Party  and of other  representatives or  advisers  who will  be  attending  the
hearing.

The  hearing  shall  be  conducted  by  the  conciliation  panel  in  the  following  manner,
ensuring that the complaining Party and the Party complained against are afforded equal
time;

Argument

(a) Argument of the complaining Party.

(b) Argument of the Party complained against.

Rebuttal Argument

(a)

Reply of the complaining Party

(b) Counter-reply of the Party complained against.

The conciliation panel may direct questions to either Party at any time during a hearing.

Where the parties have designated an entity pursuant to rule 2, such entity shall arrange
for a transcript of each hearing to be prepared and shall, as soon as possible after it is
prepared, deliver a copy of the transcript to the Parties and the conciliation panel.

Where the Parties have not designated an entity pursuant to rule 2, a transcript of each
hearing  shall  be  prepared  in  accordance  with  the  agreement  reached  under  rule  3  and

13

31.

32.

33.

34.

35.

36.

37.

shall,  as  soon  as  possible  after  it  is  prepared,  be  delivered  to  the  Parties  and  the
conciliation panel.

The conciliation panel may at any time during a proceeding address questions in writing
to one or both Parties. The conciliation panel shall deliver the written questions to the
Party or Parties to whom the questions are addressed.

A Party to whom the conciliation panel addresses written questions shall deliver a copy
of  any  written  reply.  Each  Party  shall  be  given  the  opportunity  to  provide  written
comments on the reply within five days after the date of delivery. 

Within  10  days  after  the  date  of  the  hearing,  each  Party  may  deliver  a  supplementary
written submission responding to any matter that arose during the hearing.

Rules of interpretation and burden of proof

Conciliation  panels  shall  interpret  the  provisions  of  the  Partnership  and  Cooperation
Agreement in accordance with rules of customary international public law.

A Party asserting that a measure of the other party is inconsistent with the provisions of
the  Partnership  and  Cooperation  Agreement  shall  have  the  burden  of  proof  of  such
inconsistency.

A  Party  asserting  that  a  measure  is  subject  to  an  exception  under  the  Partnership  and
Cooperation Agreement shall have the burden of proof that the exception applies.

Confidentiality

The Parties, the conciliators, any experts involved in the preparation and the conduct of
the proceedings, and any participants to the hearings shall  maintain the  confidentiality
of  the  panel’s  hearings,  deliberations  and  initial  report,  and  all  written  submissions  to
and communications with the conciliation panel. 

The conciliation panel may request information. Neither Party is required, however, to
provide  information  if  disclosure  of  that  information  to  the  requesting  authority  is
prohibited by law of the Party who possesses the information or would be incompatible
with important interests of that Party.

Confidential information whose dissemination is not prohibited, but legally restricted, or
which,  if  disseminated,  could  adversely  affect  the  interest  of  a  Party,  shall  not  be
provided without written consent of the source of this information.

The  conciliation  panel  shall  maintain  and  ensure  confidentiality  of  any  information
provided  to  it  in  confidence  by  a  Party  under  the  proceedings,  and  refuse  any
application for disclosure of such information by a third party that is not authorised by
the Party that supplied the information.

Ex parte contacts

14

38.

39.

40.

41.

42.

43.

44.

45.

46.

The  conciliation panel  shall  not  meet  or  contact  one  Party  in  the  absence  of  the  other
Party.

No  conciliator  may  discuss  an  aspect  of  the  subject  matter  of  the  proceeding  with  a
Party or both Parties in the absence of the other conciliators.

Role of Experts

On  request  of  a  Party  or  on  its  own  initiative,  the  conciliation  panel  may  seek
information  and  technical  advice  from  any  person  or  body  that  it  deems  appropriate,
provided that the Parties so agree and subject to such terms and conditions as the Parties
may agree.

Where  in  accordance with rule  40  a request is made  for  a  written  report  of  an  expert,
any time period applicable to the conciliation panel proceeding shall be suspended for a
period beginning on the date of delivery of the request and ending on the date the report
is delivered to the conciliation panel.

Conciliation Panel Reports

Unless  the  Parties  otherwise  agree,  the  conciliation  panel  shall  base  its  report  on  the
submissions and arguments of the Parties and on any information before it pursuant to
rule 40.

After considering written comments to the initial report by the Parties, the conciliation
panel, on its own initiative or on the request of either Party may:

(a)

request the views of either Party;

(b)

reconsider its report; and

(c) make any further examination that it considers appropriate.

Conciliators  may  furnish  separate  opinions  on  matters  not  unanimously  agreed.  A
conciliation panel may not, either in its initial report or its final report, disclose which
conciliators are associated with majority or minority opinions.

Cases of Urgency

In cases of urgency, the conciliation panel shall appropriately adjust the time periods for
submission of the initial report and comments by the Parties to such report.

Translation and interpretation

Where the  Parties  have  designated  an  entity pursuant to  rule  2,  a Party shall, within a
reasonable  period  of  time  before  it  delivers  its  initial  written  submission  in  a
conciliation panel proceeding, advise such entity in writing of the language in which its
written and oral submissions will be made.

15

47.

48.

49.

50.

51.

52.

53.

54.

Where the Parties have not designated an entity pursuant to rule 2, a Party shall advise
in writing of the language in which its written ad oral submissions will be made, no later
than at the meeting provided for in rule 3.

Each  Party  shall  arrange  for,  and  bear  the  costs  of,  the  translation  of  its  written
submissions into the language chosen by the other Party in accordance with rule 46 or
47.  Upon  request  of  a  Party  that  has  filed  a  submission,  the  conciliation  panel  may
suspend  the  proceeding  for  the  time  necessary  to  allow  that  Party  to  complete  the
translation.

The  Parties  shall  arrange  for  the  interpretation  of  oral  submissions  into  the  language
chosen by both Parties.

Conciliation  panel  reports  shall  be  issued  in  the  language  or  languages  chosen  by  the
Parties in accordance with rule 46 or 47.

The costs incurred to prepare a translation of a conciliation report shall be borne equally
by the Parties.

Any Party may provide comments on a translated version of a document that is prepared
in accordance with these Rules.

Computation of time

Where anything under the Rules for Dispute Settlement or these rules is to be done, or
the  conciliation  panel  requires  anything  to  be  done,  within  a  number  of  days  after,
before  or  of  a  specified  date  or  event,  the  specified  date  or  the  date  on  which  the
specified event occurs shall not be included in calculating that number of days.

Where, by reason of the operation of rule 14 a Party receives a document on a date other
than the date on which the same document is received by the other Party any period of
time the calculation of which is dependent on such receipt shall be calculated from the
date of receipt of the last such document.

Other proceedings

55.

These rules shall apply to the proceedings established under paragraphs 4, 5, 8, and 10
of Article 6 of the Rules for Dispute Settlement except that :

(a)

(b)

the Party making a request under paragraph 4 of Article 6 shall deliver its initial
written  submission  within  3  days  after  the  date  the  request  is  submitted  and  the
responding Party  shall deliver its  written  counter-submission  within  4  days  after
the date of delivery of the initial written submission ;

the Party making a request under paragraph 5 of Article 6 shall deliver its initial
written submission within 10 days after the date the request is submitted and the
responding Party shall deliver its counter-submission within 20 days after the date
of delivery of the initial written submission ;

16

(c)

(d)

the Party making a request under paragraph 8 of Article 6 shall deliver its initial
written submission within 10 days after the date the request is submitted and the
responding Party shall deliver its written counter-submission within 15 days after
the date of delivery of the initial written submission ; and

the Party making a request under paragraph 10 of Article 6 shall deliver its initial
written submission within 5 days after the date the request is submitted is selected
and  the  responding  Party  shall  deliver  its  written  counter-submission  within  10
days after the date of delivery of the initial written submission.

If  appropriate, the  conciliation panel shall fix  the  time  limit  for  delivering  any  further
written submissions, including rebuttal written submissions, so as to provide each Party
with the opportunity to make an equal number of written submissions subject to the time
limits for conciliation panel proceedings set out in the Agreement and these Rules.

Unless the Parties disagree, the conciliation panel may decide not to convene a hearing.

The expenses of conciliation proceedings shall be borne equally by the Parties. All other
expenses of any Party shall be covered by this Party.

56.

57.

58.

Done [by written procedure],

For the Cooperation Council

The Chairman

The Secretaries:

For the Russian Federation

For the European Community

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