Proposal for a COUNCIL DECISION on the conclusion, on behalf of the European Union, of the Agreement in the form of an Exchange of Letters between the European Union and the Russian Federation regarding the preservation of commitments on trade in services contained in the current EU-Russia Partnership and Co-operation Agreement
Date: 2011-11-10
Institutions: European Commission
Subjects: GATS, Russia, World Trade Organisation, provision of services, trade agreement (EU)

EUROPEAN COMMISSION 

Brussels, 10.11.2011 
COM(2011) 724 final 

2011/0328 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the conclusion, on behalf of the European Union, of the Agreement in the form of an 
Exchange of Letters between the European Union and the Russian Federation regarding 
the preservation of commitments on trade in services contained in the current EU-
Russia Partnership and Co-operation Agreement 

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EXPLANATORY MEMORANDUM 

Upon accession to the WTO, the Russian Federation will accede to the General Agreement on 
Trade  in  Services  (GATS),  thus  undertaking  comprehensive  multilateral  commitments 
relating to trade in services with all WTO Members. These commitments largely replicate or 
exceed their existing commitments regarding trade in services with the EU, which are defined 
in the current Partnership and Co-operation Agreement between the European Communities, 
and their Member States, of the one part, and the Russian Federation, of the other part, of 24 
July  1994  (PCA).  Nonetheless,  there  remain  certain  commitments,  notably  with  regard  to 
international maritime transport services and the temporary movement of natural persons for 
business  purposes,  where 
the  Russian  Federation  has  undertaken  more  substantial 
commitments through the existing PCA as compared to multilateral commitments upon WTO 
accession.  In  order  to  ensure  that  the  existing  market  access  commitments  of  the  Russian 
Federation will not be made more restrictive for EU service suppliers than those currently in 
force,  it  has  been  agreed  between  the  Parties  that  Russia  would  take  an  appropriate  Most 
Favoured Nation (MFN) exemption from its GATS schedule and preserve these commitments 
exclusively with the EU. 

The  preservation  of  these  commitments  would  take  the  form  of  a  bilateral  agreement, 
(hereinafter referred to as the "Agreement"), negotiated between the EU and the Government 
of  the  Russian  Federation  through  an  exchange  of  letters  with  the  Russian  Federation.  The 
Agreement does not require the EU to undertake any commitments.  

In order to ensure these commitments will continue to apply from the time that the Russian 
Federation accedes to the WTO, the Agreement should be applied provisionally from the date 
of such accession. 

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2011/0328 (NLE) 

Proposal for a 

COUNCIL DECISION 

on the conclusion, on behalf of the European Union, of the Agreement in the form of an 
Exchange of Letters between the European Union and the Government of the Russian 
Federation regarding the preservation of commitments on trade in services contained in 
the current EU-Russia Partnership and Co-operation Agreement 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles  91  and  100(2)  and  Article  207(4)  first  subparagraph,  in  conjunction  with  Article 
218(6)(a) thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the consent of the European Parliament, 

Whereas: 

(1) 

(2) 

In accordance with Council Decision XXX of […]1, the Agreement in the form of an 
Exchange of Letters between the European Union and the Government of the Russian 
Federation regarding the preservation of commitments on trade in services contained 
in the current EU-Russia Partnership and Co-operation (hereinafter referred to as "the 
Agreement") was signed on […], subject to their conclusion at a later date.  

The Agreement was negotiated and signed in view of the economic importance for the 
European  Union  of  the  access  of  European  service  providers  to  the  market  of  the 
Russian Federation.  

(3) 

The Agreement should be approved on behalf of the European Union, 

HAS ADOPTED THIS DECISION: 

Article 1 

The Agreement in the form of an Exchange of Letters between the European Union and the 
Government of the Russian Federation regarding the preservation of commitments on trade in 
services contained in the current EU-Russia Partnership and Co-operation is hereby approved 
on behalf of the Union. 

The text of the Agreement is attached to this Decision. 

1 

OJ L […], […], p. […] 

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Article 2 

The President of the Council shall designate the person empowered to proceed, on behalf of 
the European Union, to make the notification provided for in the Agreement and in order to 
express the consent of the European Union to be bound by the Agreement. 

Article 3 

This Decision shall enter into force on the date of its adoption. 

Done at Brussels,  

For the Council 
The President 

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AGREEMENT 

in the form of an exchange of letters between the European Union and the Government of the 
Russian Federation relating to the preservation of commitments on trade in services contained 
in the current EU-Russia Partnership and Co-operation Agreement (PCA) 

Letter No 1 

[Letter from the Government of the Russian Federation] 

…………, ……….. 

Sir,  

Following  negotiations  between  the  European  Union  and  the  Government  of  the  Russian 
Federation,  with  regard  to  trade  in  services,  the  two  Parties  have  reached  the  following 
understanding: 

I.  Notwithstanding  the  provisions  of  Article  51  of  the  Agreement  on  Partnership  and  Co-
operation Establishing a Partnership Between the European Communities and Their Member 
States,  of  One  Part,  and  the  Russian  Federation,  of  the  Other  Part,  of  24  June  1994 
(hereinafter referred to as "PCA"), after the accession of the Russian Federation to the WTO, 
Articles  35  and  paragraphs  1  and  2  of  Article 39, in conjunction with Article 30 (h), of the 
PCA will continue to apply between the Parties. 

II. Notwithstanding the provisions of Article 51 of the PCA, after the accession of the Russian 
Federation to the WTO, the Parties shall extend the benefits of their GATS commitments on 
intra-corporate transferees being transferred to commercial presences (as defined hereunder) 
other  than  representative  offices  in  their  respective  territories  to  any  person  fulfilling  the 
conditions  set  out  in  items  (a)  and  (b)  of  paragraph  2  of  Article  32  of  the  PCA.  For  the 
purpose  of  this  article,  the  words  “organizations”  used  in  Article  32  of  the  PCA  shall  be 
deemed to cover the commercial presence as defined in the respective GATS schedules of the 
Parties.  

III. 1. 

Intra-corporate  transferees  of  Russian  juridical  persons  being  transferred  to  their 
representative  offices  in  the  European  Union  shall  be  accorded  treatment  no  less 
favorable  than  that  accorded  by  the  European  Union  to  like  intra-corporate 
transferees of any juridical person of a third country. 

III. 2.  Treatment granted under other agreements than the PCA concluded by the European 
Union with a third Party which are notified under Article V of the GATS or which 
benefit  from  the  coverage  of  the  EC  GATS  list  of  MFN  exemptions  shall  be 
excluded  from  paragraph  III.1.  Treatment  deriving  from  the  harmonization  of 
regulations  based  on  agreements  concluded  by  the  European  Union  providing  for 
mutual  recognition  in  accordance  with  Article  VII  of  the  GATS,  shall  also  be 
excluded from paragraph III.1. 

III. 3.  Treatment  accorded  by  the  Russian  Federation  to  intra-corporate  transferees  of 
juridical  persons  of  the  European  Union  being  transferred  to  their  representative 
offices  in  the  Russian  Federation  shall  be  no  less  favourable  than  that  accorded  to 
like  intra-corporate  transferees  by  the  European  Union  in  accordance  with  this 

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provision.  The  Russian  Federation  might  however  limit  the  number  of  such  intra-
corporate  transferees  to  a  maximum  of  five  per  representative  office  (two  for 
banking). 

IV. 1.  For the purpose of paragraph IV:  

(a)  A  final  consumer  of  a  Party  is  a  juridical  person,  established  in  accordance 

with the legislation of this Party on its territory.  

(b)  A natural person is a citizen of a Party (in the case of the European Union, a 
citizen of one of its Member States) residing on the territory of this Party, who 
temporarily  enters  the  other  Party  as  an  employee  of  the  contractual  service 
supplier with the purpose of provision of services, as provided by the contract 
to provide services.  

(c)  A contractual service supplier is a juridical person of one Party established in 
accordance  with  the  legislation  of  this  Party  on  its  territory  which  has  no 
commercial presence in the form of subsidiary, dependent company or branch 
constituted  in  the  territory  of  the  other  Party  and  which  has  concluded  a 
contract  to  supply  services  with  a  final  consumer  in  the  latter  Party  requiring 
the  presence on  a  temporary  basis  of natural persons in that Party in order to 
fulfil the contract to provide services. 

IV. 2.  Treatment  accorded  by  the  European  Union  to  contractual  service  suppliers  of  the 
Russian  Federation  shall  be  no  less  favorable  than  that  accorded  to  contractual 
service suppliers of any third country. 

IV. 3.  Treatment granted under other agreements concluded by the European Union with a 
third Party which have been notified under Article V of the GATS or which benefit 
from the coverage of the EC GATS list of MFN exemptions shall be excluded from 
this  provision.  Treatment  deriving  from  the  harmonization  of  regulations  based  on 
agreements  concluded  by  the  European  Union  providing  for  mutual  recognition  in 
accordance with Article VII of the GATS, shall also be excluded from this provision. 

IV. 4.  The  Russian  Federation  shall  allow  the  supply  of  services  into  its  territory  by 
contractual  service  suppliers  of  the  European  Union  through  presence  of  natural 
persons subject to the following conditions:  

(a)  The contract to provide services: 

i. 

ii. 

has been concluded directly between the contractual service supplier and 
the final consumer: 

requires  the  temporary  presence  on  the  territory  of  the  Russian 
Federation  of  natural  persons  of  the  European  Union  to  provide  the 
service and  

iii. 

complies  with  the  laws,  regulations  and  requirements  of  the  Russian 
Federation.  

(b)  The temporary entry and stay of natural persons within the Russian Federation 
pursuant to the fulfillment of this contract shall be for a period of not more than 

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six  successive  months  in  any  twelve  month  period  or  for  the  duration  of  the 
contract, whichever is less. 

(c)  The  natural  persons  entering  the  Russian  Federation  must  possess  (i)  a 
university  degree  or  a  technical  qualification  demonstrating  knowledge  of  an 
equivalent  level  and  (ii)  professional  qualifications  where  this  is  required  to 
exercise an activity in the sector concerned pursuant to the law, regulations or 
requirements of the Russian Federation.  

(d)  The natural person shall not receive remuneration for the provision of services 
other than the remuneration paid by the contractual service supplier during its 
stay in the Russian Federation.  

(e)  The natural persons entering the Russian Federation must have been employed 
by  the  contractual  service  supplier  for  at  least  the  year  preceding  the  date  of 
submission of an application for entry into the Russian Federation. In addition, 
the natural person must possess, at the date of submission of an application for 
entry into the Russian Federation, at least  three years professional experience 
in the sector of activity which is the subject of the contract. 

(f)  The  contract  to  provide  services  has  to  be  obtained  in  one  of  the  following 
sectors of activity which are included and defined in Russia’s GATS schedule 
of commitments: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Legal services  

Accounting and bookkeeping services  

Taxation services 

Architectural services 

Engineering services 

Integrated Engineering services 

Urban planning and landscape architecture services  

Computer and related services  

Advertising services  

10.  Market research services  

11.  Management consulting services  

12. 

Services related to management consulting 

13. 

Technical testing and analysis services  

14. 

Advisory and consulting services incidental to mining  

15. 

Related scientific and technical consulting services  

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16. 

Translation and Interpretation services  

17.  Maintenance  and  repair  of  equipment, 
equipment  

including 

transportation 

18. 

Environmental services  

(g)  The  subject  of  the  contract  shall  not  be  “placement  and  supply  services  of 

personnel” as defined in CPC 872. 

Access  accorded  under  the  provisions  of  paragraph  IV.4  relates  only  to  the  service 
activity which is the subject of the contract; it does not confer entitlement to exercise 
the professional title of the Russian Federation. 

The Russian Federation might establish an annual quota of work permits reserved to 
European Union natural persons gaining access to the Russian services market under 
the  provisions  of  paragraph  IV.4.  In  the  first  year  in  which  the  provisions  of 
paragraph IV.4 enter into force, this annual quota shall be no lower than 16000. In 
the  following  years,  the  annual  quota  shall  be  no  lower  than  the  quota  of  the 
preceding year. 

IV. 5.  Upon  entry  into  effect  of  the  results  of  the  current  multilateral  round  of  trade 
negotiations  in  the  field  of  services,  the  Parties  will  review  the  provisions  of 
paragraph  IV.3  with  a  view  to  its  extension  to  self-employed  persons  being 
contractual service suppliers. 

V. 1. 

V. 2. 

This  understanding  shall  not  apply  to  measures  affecting  natural  persons  seeking 
access to the employment market of a Party, nor shall it apply to measures regarding 
citizenship, residence or employment on a permanent basis 

This understanding shall not prevent a Party from applying measures to regulate the 
entry of natural persons into, or their temporary stay in, its territory, including those 
measures necessary to protect the integrity of, and to ensure the orderly movement of 
natural  persons  across  its  borders,  provided  that  such  measures  are  not  applied  in 
such a manner as to nullify or impair the benefits accruing to the other Party under 
the terms of paragraphs II, III and IV. 

In case the European Union confirms its agreement with the set forth in this letter, I propose 
that  this  letter  and  the  reply  letter  of  the  European  Union  will  establish  the  Agreement 
between  the  Government  of  the  Russian  Federation  and  the  European  Union  relating  to  the 
preservation of commitments on trade in services contained in the PCA, and this Agreement 
shall enter into force on the date in which the Parties exchange written notifications certifying 
that  they  have  completed  their  respective  internal  procedures.  This  Agreement  shall  be 
applied provisionally from the date of the Russian Federation’s accession to the World Trade 
Organization. 

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

[On behalf of the Government of the Russian Federation] 

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Letter No 2 

[Letter from the European Union] 

………….., .……. 

Sir, 

I have the honour to acknowledge receipt of your letter of today’s date, worded as follows: 

"Following  negotiations  between  the  European  Union  and  the  Government  of  the  Russian 
Federation,  with  regard  to  trade  in  services,  the  two  Parties  have  reached  the  following 
understanding: 

I.  Notwithstanding  the  provisions  of  Article  51  of  the  Agreement  on  Partnership  and  Co-
operation Establishing a Partnership Between the European Communities and Their Member 
States,  of  One  Part,  and  the  Russian  Federation,  of  the  Other  Part,  of  24  June  1994 
(hereinafter referred to as "PCA"), after the accession of the Russian Federation to the WTO, 
Articles  35  and  paragraphs  1  and  2  of  Article 39, in conjunction with Article 30 (h), of the 
PCA will continue to apply between the Parties. 

II. Notwithstanding the provisions of Article 51 of the PCA, after the accession of the Russian 
Federation to the WTO, the Parties shall extend the benefits of their GATS commitments on 
intra-corporate transferees being transferred to commercial presences (as defined hereunder) 
other  than  representative  offices  in  their  respective  territories  to  any  person  fulfilling  the 
conditions  set  out  in  items  (a)  and  (b)  of  paragraph  2  of  Article  32  of  the  PCA.  For  the 
purpose  of  this  article,  the  words  “organizations”  used  in  Article  32  of  the  PCA  shall  be 
deemed to cover the commercial presence as defined in the respective GATS schedules of the 
Parties.  

III. 1. 

Intra-corporate  transferees  of  Russian  juridical  persons  being  transferred  to  their 
representative  offices  in  the  European  Union  shall  be  accorded  treatment  no  less 
favorable  than  that  accorded  by  the  European  Union  to  like  intra-corporate 
transferees of any juridical person of a third country. 

III. 2.  Treatment granted under other agreements than the PCA concluded by the European 
Union with a third Party which are notified under Article V of the GATS or which 
benefit  from  the  coverage  of  the  EC  GATS  list  of  MFN  exemptions  shall  be 
excluded  from  paragraph  III.1.  Treatment  deriving  from  the  harmonization  of 
regulations  based  on  agreements  concluded  by  the  European  Union  providing  for 
mutual  recognition  in  accordance  with  Article  VII  of  the  GATS,  shall  also  be 
excluded from paragraph III.1. 

III. 3.  Treatment  accorded  by  the  Russian  Federation  to  intra-corporate  transferees  of 
juridical  persons  of  the  European  Union  being  transferred  to  their  representative 
offices  in  the  Russian  Federation  shall  be  no  less  favourable  than  that  accorded  to 
like  intra-corporate  transferees  by  the  European  Union  in  accordance  with  this 
provision.  The  Russian  Federation  might  however  limit  the  number  of  such  intra-
corporate  transferees  to  a  maximum  of  five  per  representative  office  (two  for 
banking). 

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IV. 1.  For the purpose of paragraph IV:  

(a)  A  final  consumer  of  a  Party  is  a  juridical  person,  established  in  accordance 

with the legislation of this Party on its territory.  

(b)  A natural person is a citizen of a Party (in the case of the European Union, a 
citizen of one of its Member States) residing on the territory of this Party, who 
temporarily  enters  the  other  Party  as  an  employee  of  the  contractual  service 
supplier with the purpose of provision of services, as provided by the contract 
to provide services.  

(c)  A contractual service supplier is a juridical person of one Party established in 
accordance  with  the  legislation  of  this  Party  on  its  territory  which  has  no 
commercial presence in the form of subsidiary, dependent company or branch 
constituted  in  the  territory  of  the  other  Party  and  which  has  concluded  a 
contract  to  supply  services  with  a  final  consumer  in  the  latter  Party  requiring 
the  presence on  a  temporary  basis  of natural persons in that Party in order to 
fulfil the contract to provide services. 

IV. 2.  Treatment  accorded  by  the  European  Union  to  contractual  service  suppliers  of  the 
Russian  Federation  shall  be  no  less  favorable  than  that  accorded  to  contractual 
service suppliers of any third country. 

IV. 3.  Treatment granted under other agreements concluded by the European Union with a 
third Party which have been notified under Article V of the GATS or which benefit 
from the coverage of the EC GATS list of MFN exemptions shall be excluded from 
this  provision.  Treatment  deriving  from  the  harmonization  of  regulations  based  on 
agreements  concluded  by  the  European  Union  providing  for  mutual  recognition  in 
accordance with Article VII of the GATS, shall also be excluded from this provision. 

IV. 4.  The  Russian  Federation  shall  allow  the  supply  of  services  into  its  territory  by 
contractual  service  suppliers  of  the  European  Union  through  presence  of  natural 
persons subject to the following conditions:  

(a)  The contract to provide services: 

i. 

ii. 

has been concluded directly between the contractual service supplier and 
the final consumer: 

requires  the  temporary  presence  on  the  territory  of  the  Russian 
Federation  of  natural  persons  of  the  European  Union  to  provide  the 
service and  

iii. 

complies  with  the  laws,  regulations  and  requirements  of  the  Russian 
Federation.  

(b)  The temporary entry and stay of natural persons within the Russian Federation 
pursuant to the fulfillment of this contract shall be for a period of not more than 
six  successive  months  in  any  twelve  month  period  or  for  the  duration  of  the 
contract, whichever is less. 

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(c)  The  natural  persons  entering  the  Russian  Federation  must  possess  (i)  a 
university  degree  or  a  technical  qualification  demonstrating  knowledge  of  an 
equivalent  level  and  (ii)  professional  qualifications  where  this  is  required  to 
exercise an activity in the sector concerned pursuant to the law, regulations or 
requirements of the Russian Federation.  

(d)  The natural person shall not receive remuneration for the provision of services 
other than the remuneration paid by the contractual service supplier during its 
stay in the Russian Federation.  

(e)  The natural persons entering the Russian Federation must have been employed 
by  the  contractual  service  supplier  for  at  least  the  year  preceding  the  date  of 
submission of an application for entry into the Russian Federation. In addition, 
the natural person must possess, at the date of submission of an application for 
entry into the Russian Federation, at least  three years professional experience 
in the sector of activity which is the subject of the contract. 

(f)  The  contract  to  provide  services  has  to  be  obtained  in  one  of  the  following 
sectors of activity which are included and defined in Russia’s GATS schedule 
of commitments: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

Legal services  

Accounting and bookkeeping services  

Taxation services 

Architectural services 

Engineering services 

Integrated Engineering services 

Urban planning and landscape architecture services  

Computer and related services  

Advertising services  

10.  Market research services  

11.  Management consulting services  

12. 

Services related to management consulting 

13. 

Technical testing and analysis services  

14. 

Advisory and consulting services incidental to mining  

15. 

Related scientific and technical consulting services  

16. 

Translation and Interpretation services  

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17.  Maintenance  and  repair  of  equipment, 
equipment  

including 

transportation 

18. 

Environmental services  

(g)  The  subject  of  the  contract  shall  not  be  “placement  and  supply  services  of 

personnel” as defined in CPC 872. 

Access  accorded  under  the  provisions  of  paragraph  IV.4  relates  only  to  the  service 
activity which is the subject of the contract; it does not confer entitlement to exercise 
the professional title of the Russian Federation. 

The Russian Federation might establish an annual quota of work permits reserved to 
European Union natural persons gaining access to the Russian services market under 
the  provisions  of  paragraph  IV.4.  In  the  first  year  in  which  the  provisions  of 
paragraph IV.4 enter into force, this annual quota shall be no lower than 16000. In 
the  following  years,  the  annual  quota  shall  be  no  lower  than  the  quota  of  the 
preceding year. 

IV. 5.  Upon  entry  into  effect  of  the  results  of  the  current  multilateral  round  of  trade 
negotiations  in  the  field  of  services,  the  Parties  will  review  the  provisions  of 
paragraph  IV.3  with  a  view  to  its  extension  to  self-employed  persons  being 
contractual service suppliers. 

V. 1. 

V. 2. 

This  understanding  shall  not  apply  to  measures  affecting  natural  persons  seeking 
access to the employment market of a Party, nor shall it apply to measures regarding 
citizenship, residence or employment on a permanent basis 

This understanding shall not prevent a Party from applying measures to regulate the 
entry of natural persons into, or their temporary stay in, its territory, including those 
measures necessary to protect the integrity of, and to ensure the orderly movement of 
natural  persons  across  its  borders,  provided  that  such  measures  are  not  applied  in 
such a manner as to nullify or impair the benefits accruing to the other Party under 
the terms of paragraphs II, III and IV. 

In case the European Union confirms its agreement with the set forth in this letter, I propose 
that  this  letter  and  the  reply  letter  of  the  European  Union  will  establish  the  Agreement 
between  the  Government  of  the  Russian  Federation  and  the  European  Union  relating  to  the 
preservation of commitments on trade in services contained in the PCA, and this Agreement 
shall enter into force on the date in which the Parties exchange written notifications certifying 
that  they  have  completed  their  respective  internal  procedures.  This  Agreement  shall  be 
applied provisionally from the date of the Russian Federation’s accession to the World Trade 
Organization." 

The  European  Union  has  the  honour  of  confirming  its  agreement  with  the  contents  of  this 
letter. 

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

[On behalf of the European Union] 

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