Source: EURLEX
Language: en
Format: md

##### **COMMISSION OF THE EUROPEAN COMVIUNITIES**

```
                        C0M(94) 226 final

                        Brussels, 01.06.1994

                         94/ 0136(AVC)

```

**Proposal**

**for a Council and Commission Decision**

**on the conclusion of the Partnership and Cooperation Agreement**

**between the** **European** **Communities and their Member States**

**of the one part, and Ukraine, of the other part**

**(presented by the** **Commission)**

**Explanatory memorandum**

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

**the other.**

**2.** **Following the Council's adoption of the negotiating directives on 5 October 1992,**
**negotiations with Ukraine were held in the course of 1993 and 1994. After four rounds**
**of negotiations, the Agreement was initialled on 23 March 1994.**

**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 of ten**

**years.**

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

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

**economy.**

**The Agreement sets out an institutional framework for its implementation with a**
**Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation**
**Committee.**

**The Agreement refers to the prospect of a future free trade area. In 1998,**
**circumstances will be assessed in order to see whether negotiations can begin in view**
**of a free trade agreement.**

**Customs cooperation is covered by a separate protocol.**

**4.** **The Agreement will, as far as relations between the Community and Ukraine are**
**concerned, replace the Agreement on Trade and Commercial and Economic**
**Cooperation between the European Economic Communities and USSR, signed on** **18**
**December 1989.**

**5.** **The procedures of the three Communities (EC, EAEC and ECSC) for signing and**
**concluding the Agreement differ.**

**For the purpose of concluding the Agreement :**

**the Council will conclude the Agreement, with the assent of the European**
**Parliament, on behalf of the European Community in accordance with Articles** **113**
**and 235 and in** **conduction** **with Article 228 (3), second sub paragraph of the EC**
**treaty by adopting the attached decisions;**

**the Commission will conclude the Agreement on behalf of the ECSC in**
**accordance with Article 95 of the ECSC, after consulting the Consultative**
**Committee and with the unanimous assent of the Council, ;**

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

**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 asks the Council to adopt the annexed decision.**

### **.1 6-/tt**

**COUNCIL AND COMMISSION DECISION**

**OF**

**on the conclusion of the Partnership and Cooperation Agreement**

**between the European Communities and their Member States**

**of the one part,** **and** **Ukraine, of the other part**

**(../..** **./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** **113** **and** **235** **in conjunction with Article 228 (3), second subparagraph** **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,**

**Whereas, the Partnership and Cooperation Agreement between the European**
**Communities and their Member States, of the one part, and Ukraine, of the other part,**
**signed** **, should be approved,**

**Having consulted the Consultative Committee and with the unanimous agreement of the**
**Council,**

**HAVE DECIDED AS FOLLOWS :**

**Article 1**

**The Partnership and Cooperation Agreement between the European Communities and**
**their Member States of the one part, and Ukraine, of the other part, together with the**
**Protocol, the exchanges of letters and the declarations are hereby approved on behalf of**
**the European Community, the European Coal and Steel Community, and the European**
**Atomic Energy Community.**

**These texts are attached to this Decision.**

**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 78 of the Partnership and Cooperation Agreement, the**
**President of the Council shall preside over the Cooperation Council and shall present**
**the Community's position. A representative of the Commission shall preside over 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 99 of the**
**Agreement on behalf of the European Community. The President of** **the** **Commission shall**
**give such notification on behalf of the European Coal and Steel Community and the**
**European Atomic Energy Committee.**

**Done at Brussels,**

#### **_AC_**

**Final act**

**The plenipotentiaries of** **:**

**THE KINGDOM OF** **BELGIUM,**
**THE KINGDOM OF DENMARK,**
**THE REPUBLIC OF GERMANY,**
**THE HELLENIC REPUBLIC,**
**THE KINGDOM OF** **SPAIN,**
**THE** **FRENCH** **REPUBLIC,**
**IRELAND,**
**THE ITALIAN REPUBLIC,**
**THE GRAND DUCHY OF LUXEMBOURG,**
**THE** **KINGDOM OF THE NETHERLANDS,**
**THE PORTUGUESE REPUBLIC,**
**THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,**

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

**hereinafter referred to as** **"the** **Member States", and of**

**the** **EUROPEAN** **COMMUNITY,** **THE** **EUROPEAN** **ATOMIC** **ENERGY**
**COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY, hereinafter**
**referred to as "the Community",**

**of the one part, and**

**the plenipotentiaries of Ukraine,**

**of** **the other part,**

**meeting** **in the year one thousand nine hundred and ninety-four 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 Ukraine, 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 Ukraine have adopted the texts of** **the** **Joint declarations Usted below**
**and annexed to this Final Act :**

**Joint Declaration concerning Article** **13** **of the Agreement**

**Joint Declaration concerning Article 23 of the Agreement**

**Joint Declaration concerning Article 24 of the Agreement**

**Joint Declaration concerning the notion of** **"control"** **in Article 25(b) and Article 36 of the**
**Agreement**

**Joint Declaration concerning Article 42 of the Agreement**

**Joint Declaration concerning Article 94 of the Agreement**

**The plenipotentiaries of the Member States and of the Community and the**
**plenipotentiaries of Ukraine have also taken note of the following exchanges of letters**
**annexed to this Final Act :**

**Agreement in the form of an exchange of letters concerning Article** **13bis** **of the**
**Agreement**

**Agreement in the form of an exchange of letters concerning the Chapter on establishment**
**of companies, Title IV, Chapter 2 of the Agreement**

**Done at** **in the year one thousand nine hundred and**
**ninety four.**

**For the Council and the Commission of the European Communities.**

**For Ukraine.**

###### **_/i $_**

**PARTNERSHIP AND COOPERATION AGREEMENT**

**BETWEEN THE EUROPEAN COMMUNITIES AND**

**THEIR MEMBER STATES, AND UKRAINE**

**PARTNERSHIP AND COOPERATION AGREEMENT**

Establishing a partnership between the European **Communities and their Member** States, of the
one part, and Ukraine, 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 PORTUGUESE REPUBLIC,**

**THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,**

**contracting parties to the Treaty establishing the European Community, the Treaty estabUshing**
**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 ATOMIC ENERGY COMMUNITY** **and** **the**
**EUROPEAN COAL AND STEEL COMMUNITY,**

hereinafter referred to as "the Community",

of the one part,

and UKRAINE

of the other part,

TAKING ACCOUNT of the wish of the Parties to establish close relations building upon the
existing historical links between them,

CONSIDERING the importance of developing cooperative links between the Union, its Member
States and Ukraine and the common values that they share,

RECOGNIZING that the Community and Ukraine 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 Ukraine to
strengthening the political and economic freedoms which constitute the very basis of the
partnership,

CONSIDERING the commitment of the Parties to promote international peace and security as
well as the peaceful settlement of disputes and to cooperate to this end in the framework of the
United Nations and the Conference on Security and Cooperation in Europe,

CONSIDERING the firm commitment of the Community and its Member States and of Ukraine
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 [1] *,

RECOGNIZING in that context that support of independence, sovereignty and territorial integrity
of Ukraine will contribute to safeguarding of peace and stability in the region of Central and
Eastern Europe and on the European Continent as a whole,

CONFIRMING the attachment of the Community and its Member States and of Ukraine to the
European Energy Charter and to the Declaration of the Luzem Conference, April 1993,

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

BELIEVING that there is a necessary connection between full implementation of partnership on
the one hand, and continuation of the actual accomphshment of Ukraine's pohtical, economic and
legal reforms on the other hand, as well as the introduction of the factors necessary for
cooperation, notably in the light of the conclusions of the CSCE Bonn Conference,

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

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

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

TAKING ACCOUNT of the Union's willingness to develop economic cooperation and provide
technical assistance, as appropriate, for the implementation of economic reform in Ukraine,

. / / - 

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

CONSIDERING the commitment of the Parties to liberalise trade, based on the principles
contained in the General Agreement on Tariffs and Trade, as amended by the Uruguay Round,

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

WELCOMING AND RECOGNISING the importance of Ukraine's efiforts, aimed at transition of
its economy away from a state trading country with centrally planned economy into a market

economy,

CONVINCED that continued progress towards a market economy will be fostered by cooperation
between the Parties in the forms set out in this Agreement,

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

BEARING in mind the intention of the Parties to develop their cooperation in the field of civil
science and technologies, including space research, in view of the complementarity of their
activities in this area,

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 Ukraine of the other part The objectives of this partnership are:

to provide an appropriate framework for the political dialogue
between the Parties allowing the development of close pohtical relations,
to promote trade and investment and harmonious economic relations between the Parties
and so to foster their sustainable development
to provide a basis for mutually advantageous economic, social, financial, civil scientific
technological and cultural cooperation,
to support Ukrainian efforts to consolidate its democracy and to develop its economy and to

complete the transition into a market economy.

**. /** _**[//. ]**_

**TITLE I ; GENERAL PRINCIPLES**

**Article** **2**

**Respect for the democratic principles and human rights as defined in particular in the Helsinki**
**Final Act and the** **darter** **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**
**partnership and of the present Agreement.**

**Article 3**

**The Parties consider that it is essential for the future prosperity and stability of the region of the**
**former Soviet Union 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 spirit of good neighbourly relations and will**
**make every effort to encourage this process.**

**In view of the above the Parties consider that the development of their relations should take due**
**account of Ukraine's wish to maintain cooperative relations with other Independent States.**

**Article 3 bis**

**The Parties undertake to consider, in particular when Ukraine has further advanced in the process**
**of economic** **reform,** **developments of the relevant Titles of this** **Agreement,** **in particular Title** **in**
**and Article 4** **Ibis,** **with a view to the establishment of a free trade area between** **them.** **The**
**Cooperation Council may make** **iecommendations** **on such developments to the Parties. Such**
**developments shall only be put into effect by virtue of an agreement between the Parties in**
**accordance with** **their respective** **procedures,** **l i e Parties shall consult each other in the year** **1998**
**whether circumstances, and in particular Ukraine's advances in market oriented economic reforms**
**and the economic conditions prevailing there at that time, allow the beginning of negotiations on**
**the establishment of a free trade area.**

**Article 3 ter**

**The Parties undertake to examine together, by mutual** **consent,** **amendments which it may be**
**appropriate to make to any part of the Agreement in view of changes in circumstances, and in**
**particular of the situation arising from** **Ukraines** **accession to GATT. The first examination shall**
**take place three years after the entry into force of the Agreement or when Ukraine becomes a**
**Contracting Party of GATT, whichever is earlier.**

**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
Ukraine, support the political and economic changes underway in that country and contribute to
the establishment of new forms of cooperation. The political dialogue:

shall strengthen the links of Ukraine with the Community, and thus with the community of
democratic nations. The economic convergence achieved through this Agreement will lead to
more intense political relations;

shall bring about an increasing convergence of positions on international issues of mutual
concern thus increasing security and stability.

shall foresee that the Parties endeavour to cooperate on matters pertaining to the
strengthening of stability and security in Europe, the observance of the principles of
democracy, the respect and promotion of human rights, particularly those of minorities and
shall hold consultations, if necessary, on the relevant matters.

Article 5

Consultations as appropriate shall be held between the Parties at the highest political level.

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

Article 6

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

regular meetings at the level of the senior officials between representatives of Ukraine
and representatives of the Union;

taking full advantage of all diplomatic channels between the parties, including
appropriate contacts in the bilateral as well as the multilateral field, such as United
Nations, CSCE meetings and elsewhere;

exchanging regular information on matters of mutual interest concerning political
cooperation in Europe ;

any other means which would contribute to consolidating and developing political dialogue.

Article 7

Pohtical dialogue at parliamentary level shall take place within the framework of the
Parliamentary Cooperation Committee which shall be established under Article 82 of the
Agreement.

**TITLE** **III:** **TRADE IN GOODS**

Article **8**

1. The Parties shall accord to one another most-favoured-nation treatment according to Article
1, paragraph 1 of the GATT.

_2._ The provisions of paragraph 1 shall not apply to:

(a) advantages granted with the aim of creating a customs union or a free-trade area or
pursuant to the creation of such a union or area;
(b) advantages granted to particular countries in accordance with the General Agreement on
Tarifis and Trade and with other international arrangements in favour of developing
countries;
(c) advantages accorded to adjacent countries in order to facilitate frontier traffic.

Article 9

1. The parties agree that the principle of freedom of transit of goods is an essential condition of
attaining the objectives of this Agreement

In this connection each Party shall provide for 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 are applicable
between the two Parties.

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

Article 9bis

The provisions of Article 8 paragraph 1 and Article 9 paragraph 2 shall not apply, during a
transitional period expiring on the 31.12.1998 or the accession of Ukraine to GATT, whichever is
earlier, to advantages defined in Annex I granted by Ukraine to other Independent States as from
the day preceding the date of entry into force of the Agreement.

Article 10

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

**Article 11**

**Goods originating in Ukraine and the Community respectively shall be imported into the**
**Community and Ukraine respectively free of quantitative restrictions without prejudice to the**
**provisions of Article 13, 16, 17, annex II, and to the provisions of Article 77, 81, 244, 249 and**
**280 of the Acts of Accession of Spain and Portugal to the European Community.**

**Article 11 bis**

**1.** **The products of the territory of one Party imported into the territory of the other Party shall**
**not be** **subject,** **directly or indirectly, to internal taxes or other internal charges of any kind in**
**excess of those** **applied,** **directly or indirectly, to like domestic products.**

**2.** **Moreover, these products shall be accorded treatment no less favourable than that accorded**
**to like products of national origin in respect of all laws, regulations and requirements**
**affecting their internal sale, offering for sale, purchase,** **transportation,** **distribution or use.**
**The provision of this paragraph shall not prevent the application of differential internal**
**transportation charges which are based exclusively on the economic operation of the means**
**of transport and not on the nationality of the product.**

**Article 11 ter**

**The following Articles of the GATT shall be applicable mutatis mutandis between the two**
**Parties.**

**(i)** **Article VII, paragraphs** **1,2,** **3,4a,** **4b, 4d, 5;**

**(ii)** **Article** **VIE;**

**(iii) Article EX;**

**(iv)** **Article** **X.**

**Article 12**

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

**Article 13**

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

**2.** **Before taking any measures, or in cases to which paragraph 4 applies as soon as possible**
**thereafter, the Community or Ukraine as the case may be shall supply the Cooperation**
**Committee with all relevant information with a view to seeking a solution acceptable to**
**both Parties.**

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

**4.** **In critical circumstances where delay would cause damage difficult to repair, the Parties**
**may take the measures before the consultations, on the condition that** **consultations** **shall be**
**offered immediately after taking such action.**

**5.** **In the selection of measures under this Article, the Contracting** **Parties** **shall give priority to**
**those which cause least disturbance to the achievement of the aims of this Agreement.**

**Article 13 bis**

**Nothing in this Title, and in Article 13 in particular shall prejudice or affect in any way the**
**taking, by either Party, of** **anti-dumping** **or countervailing measures in accordance with Article VI**
**of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on**
**interpretation and application of Articles** **VI,** **XVI and XXIII of the GATT or related internal**
**legislation.**

**In respect of** **anti-dumping** **or subsidies investigations, each** **Parry** **agrees to examine submissions**
**by the other Party and to** **inform** **the interested parties concerned of the essential facts and**
**considerations on the basis of which a final decision is to be made. Before definitive anti-**
**dumping and countervailing duties are** **imposed,** **the Party shall do the utmost to bring about a**
**constructive solution to the problem.**

**Article 15**

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

Article 16

This Title III 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,
initialed on 5th May 1993 and applied provisionally since 1st January 1993.

Article 17

1. Trade in products covered by the Treaty establishing the European Coal and Steel
Community shall be governed by the provisions of this Title III, with the exception of
Article 11 and upon entry into force, by the provisions of an agreement on quantitative
arrangements conœming exchanges of ECSC steel products.

2. A contact group on coal and steel matters is set up, comprising representatives of the
Community on the one hand, and representatives of Ukraine on the other.

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

Article 18

Trade in nuclear materials shall be subject to the provisions of a specific Agreement to be
concluded between the European Atomic Energy Community and Ukraine.

10

**TITLE IV: PROVISIONS AFFECTING** BUSINESS AND INVESTMENT

**Chapter I: Labour conditions**

Article **19**

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

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

Article 19 bis

Coordination of Social Security

The Parties shall conclude agreements in order:

(i) to adopt, subject to the conditions and modalities applicable in each Member State, the
provisions necessary for the coordination of Social Security systems for workers of
Ukrainian nationality, legally employed in the territory of a Member State. These provisions
will in particular ensure that:

all periods of insurance, employment or resident completed by such workers in the
various Member States shall be added together for the purpose of pensions in respect of old
age, invalidity and death and for the purpose of medical care for such workers;

any pensions in respect of old age, death, invalidity, industrial accidents or
occupational disease, with the exception of the special non-contributory benefits, shall be
freely transferable at the rate applied by virtue of the law of the debtor Member State or
States;

(ii) to adopt, subject to the conditions and modalities applicable in Ukraine, the provisions
necessary to accord to workers who are nationals of a Member State and legally employed in
Ukraine, treatment similar to that specified in the second indent of paragraph (i).

Article 19 ter

The measures to be taken in accordance with Article 19 bis shall not affect any rights or
obhgations arising from bilateral agreements linking Ukraine and the Member States where those
agreements provide for more favourable treatment of nationals of Ukraine or of the Member
States.

11

**Article 20**

The Cooperation Council shall examine which joint efforts can be made to control illegal
immigration taking into account the principle and practice of readmission.

**Article** 21

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 22

The Cooperation Council shall make recommendations for the implementation of Articles 19, 20
and 21.

**12**

**Chapter H:** **Conditions** **affecting the establishment and operation of companies**

Article 23

1. a) The Community and its Member States shall grant for the establishment of Ukrainian

companies in their territories treatment no less favourable than that accorded to
companies of any third country, and this in conformity with their legislation and
regulations.

b) Without prejudice to the reservations listed in Annex IV, the Community and its Member
States shall grant to subsidiaries of Ukrainian companies established in their territories a
treatment no less favourable than that granted to any Community companies, in respect of
their operation, and this in conformity with their legislation and regulations.

c) The Community and its Member States shall grant to branches of Ukrainian 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, and this in
conformity with their legislation and regulations.

2. a) Without prejudice to the reservations listed in Annex V, Ukraine shall grant for the
establishment of Community companies in its territory, a treatment no less favourable
than that accorded to its own companies or to companies of any third country whichever
is the better, and this in conformity with its legislation and regulations.

b) Ukraine shall grant to subsidiaries and branches of Community companies, established in
its territory, treatment no less favourable than that accorded to its own companies or
branches respectively or to companies or branches of any third country respectively,
whichever is the better, in respect of their operations, and this in conformity with its
legislation and regulations.

3. The provisions of paragraphs 1 and 2 cannot be used so as to circumvent a Party's
legislation and regulations applicable to access to specific sectors or activities by
subsidiaries of companies of the other Party established in the territory of such first Party.

The treatment referred to in paragraph 1 and 2 shall benefit companies established in the
Community and Ukraine respectively at the date of entry into force of this Agreement and
companies established after that date once they are established.

Article 24

1. The provisions of Article 23 shall not apply to air transport, inland waterways transport and
maritime transport, without prejudice to the provisions of Article 96.

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 to 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.

**13**

Such activities include, but are not limited to:

(a) marketing and sales of maritime transport and related services through direct contact with
customers, from quotation to invoicing, whether these services are operated or offered by the
service supplier itself or by service suppliers with which the service seller has established
standing business arrangements;
(b) purchase and use, on their own account or on behalf of their customers (and the resale to their
customers) of any transport and related services, including inward transport services by any
mode, particularly inland waterways, road and rail, necessary for the supply of an integrated
service;

(c) preparation of documentation conœrning transport documents, customs documents, or other
documents related to the origin and character of the goods transported;
(d) provision of business information of any means, including computerised information systems
and electronic data interchange (subject to any nonKhscriminatory 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, organising the call of the ship or taking over cargoes when
required.

Article 25

For the purposes of this Agreement:

a) A "Community company" or a "Ukrainian company" respectively shall mean a company set
up in accordance with the laws of a Member State or of Ukraine respectively and having its
registered office or central administration or principal place of business in the territory of the
Community or Ukraine respectively. However, should the company, set up in accordance
with the laws of a Member State or Ukraine respectively, have only its registered office in the
territory of the Community or Ukraine respectively, the company shall be considered a
Community or Ukrainian company respectively if its operations possess a real and
continuous link with the economy of one of the Member States or Ukraine 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 Ukrainian companies as referred to in
Article 25 a) to take up economic activities by means of the setting up of subsidiaries and
branches in Ukraine or in the Community respectively.
e) "Operation" shall mean the pursuit of economic activities.
f) "Economic activities" shall mean activities of an industrial, commercial and professional
character.

**14**

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

Article 26

1. Notwithstanding any other provisions of the Agreement, a Party shall not be prevented from
taking measures for prudential reasons, including for the protection of investors, depositors,
pohcy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or
to ensure the integrity and stability of the financial system. Where such measures do not
conform with the provisions of the Agreement, they shall not be used as a means of avoiding
the obligations of a Party under the Agreement.

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

Article 27

The provisions of the present Agreement shall not prejudice the apphcation 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 28

1. Notwithstanding the provisions of Chapter I of this Title, a Community company or a
Ukrainian company established in die territory of Ukraine 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 Ukraine and the Community respectively, employees who are nationals of Community
Member States and Ukraine respectively, provided that such employees are key personnel as
defined in paragraph 2 of this Article, and that they are employed exclusively by companies,
subsidiaries or branches. The residence and work permits of such employees shall only
cover the period of such employment.

2. Key personnel of the above mentioned companies herein referred to as "organisations" are
"intra-corporate transferees" as defined in (c) of this Article in the following categories,
provided that the organisation is a juridical person and that the persons concerned have been
employed by it or have been partners in it (other than as majority shareholders), for at least
the year immediately preceding such movement:

(a) Persons working in a senior position with an organisation, 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:

15

     - directing the establishment or a department or sub-division 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 organisation 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
organisation 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 organisation
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 organisation, effectively
pursuing like economic activities in the territory of the other Party.

Article 30

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

2. The provisions of this Article are without prejudice to those of Article 37: the situations
covered by such Article 37 shall be solely governed by its provisions to the exclusion of any
other.

3. Acting in the spirit of partnership and cooperation and in hght of provisions contained in
Article 43 the Government of Ukraine 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 Ukraine 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 Ukraine 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 Ukraine would result in rendering the
conditions for establishment of Community companies into its territory and for the operation
of subsidiaries and branches of Community companies established in Ukraine more

  - restrictive than the situation existing on the day of signature of the Agreement, such
respective legislation or regulations shall not apply during three years following the entry into
force of the relevant act to those subsidiaries and branches already established in Ukraine at
the time of entry into force of the relevant act.

16

**Chanter** **M ;** **Cross-border supply of services between the Community and** Ukraine

Article 31

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 Ukrainian 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 services sectors in the Parties.

2. The Cooperation Council shall make recommendations for the implementation of paragraph
1 of this Article.

Article 32

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

Ukraine.

Article 33

1. The Parties undertake to apply effectively the principle of unrestricted access to the
international maritime market and traffic on a commercial basis.

a) The above provision does not prejudice the rights and- obhgations arising from the
United Nations Code of Conduct for Liner Conferences, as applicable to one or other
Contracting Party to the present Agreement. Non-conference lines will be free to
operate in competition with a conference as long as they adhere to the principle of fair
competition on a commercial basis.

b) The Parties affirm their commitment to a freely competitive environment as being an
essential feature of the dry and liquid bulk trade.

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

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

b) not introduce cargo sharing clauses in future bilateral agreements with third countries,
other than in those exceptional circumstances where liner shipping companies from one
or other Party to the present 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;

**17**

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.

Each Party shall grant, inter alia, no less favourable treatment, than that accorded to a
Party's own ships for the ships flying the flag of the other Party 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.

The same treatment shall also be accorded by each Party in respect of ships operated
by the other Party's nationals and companies, which fly the flag of a third country,
after a transitional pericKi expfrmg not later than 1 July 1997.

Nationals and companies of the Community providing international maritime transport
services shall be free to provide international sea-river services in the inland waterways of
Ukraine and vice versa.

Article 33 bis

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 as defined in Article 91
after entry into force of this Agreement.

18

**Chapter IV; General Provisions**

Article **34**

1. The provisions of this Title shall be applied subject to limitations justified on grounds of
public pohcy, public security or pubhc health.

2. They shall not apply to activities which in the territory of either Party are connected, even
occasionally, with the exercise of official authority.

Article 35

For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties
from applying their laws and regulations regarding entry and stay, work, labour conditions and
establishment of natural persons and supply of services, provided that - in so doing - they do not
apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms
of a specific provision of the Agreement. The above provision does not prejudice the application
of Article 34.

Article 36

Companies which are controlled and exclusively owned by Ukrainian companies and Community
companies jointly shall also be beneficiaries of the provisions of Chapters H, HI and IV of this
Title.

Article 37

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

Article 38

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

**19**

Article 39

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

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

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

Article 40

Without prejudice to Article 28, no provision of Chapters II, HI and IV hereof shall be interpreted
as giving the right to:

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

- Community subsidiaries or branches of Ukrainian companies to employ or have employed in
the territory of the Community nationals of Ukraine;

- Ukrainian subsidiaries or branches of Community companies to employ or have employed in
the territory of Ukraine nationals of the Member States;

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

- Community companies or Ukrainian subsidiaries or branches of Community companies to
supply workers who are nationals of the Member States by temporary employment contracts.

**20**

**TITLE** **V:** **CURRENT PAYMENTS AND CAPITAL**

Article **41**

**1.** 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 Ukraine
connected with the movement of goods, services or persons made in accordance with the
provisions of the present Agreement.

2. With regard to transactions on the capital account of balance of payments, from entry into
force of the 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 of this Tide IV, and the liquidation or
repatriation of these investments and of any profit stemming therefrom shall be ensured.

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

4. The Parties shall consult each other with a view to facilitate the movement of forms of
capital other than those referred to in paragraph 2 above between the Community and
Ukraine in order to promote the objectives of the present Agreement.

5. With reference to the provisions of this Article, until a full convertibihty of the Ukrainian
currency within the meaning of Article VHI of the articles of agreement of the International
Monetary Fund is introduced, Ukraine 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 Ukraine for the granting of such
credits and are permitted according to Ukraine's status under the IMF. Ukraine 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. Ukraine shall inform the
Cooperation Council promptly of the introduction of such measures and of any changes
therein.

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

**21**

**TITLE VI: COMPETITION. INTELLECTUAL. INDUSTRIAL AND COMMERCIAL**

**PROPERTY PROTECTION AND LEGISLATIVE COOPERATION**

Article 41bis

1. The parties agree to work to remedy or remove through the application of their competition
laws or otherwise, restrictions on competition by enterprises or caused by State intervention
insofar as they may affect trade between the Community and the Ukraine.

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

2.1 The Parties shall ensure that they have and enforce laws addressing restrictions on
competition by enterprises within their jurisdiction.

2.2 The Parties shall refrain from granting State aids favouring certain undertakings or the
production of goods other than primary products as defined in the General Agreement on
Tariffs and Trade, or the provision of services, which distort or threaten to distort competition
insofar as they affect trade between the Community and the Ukraine.

2.3 Upon request by one Party, the other Party shall provide information on its aid schemes or on
particular individual cases of State aid. No information needs to be provided which is
covered by legislative requirements of the Parties on professional or commercial secrets.

2.4 In the case of State monopolies of a commercial character, the Parties declare their readiness,
as from the fourth year from the date of entry into force of their Agreement, to ensure that
there is no discrimination between nationals of the Parties regarding the conditions under
which goods are procured or marketed.

2.5 In the case of pubhc undertakings or undertakings to which Member States of the European
Union or the Ukraine grant exclusive rights, the Parties declare their readiness, as from the
fourth year from the date of entry into force of this Agreement, to ensure that there is neither
enacted nor maintained any measure distorting trade between the Community and the Ukraine
to an extent contrary to the Parties* respective interests. This provision shall not obstruct the
performance, in law or fact, of the particular tasks assigned to such undertakings.

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

3. Consultations may take place within the Cooperation Committee at the request of the
Community or Ukraine on the restrictions or distortions of competition referred to in
paragraphs 1 and 2 and on the enforcement of their competition rules, subject to limitations
imposed by laws regarding disclosure of information, confidentiality and business secrecy.
Consultations may also comprise questions on the interpretation of paragraphs 1 and 2.

4. The Parties with experience in applying competition rules shall give full consideration to
providing other Parties, upon request and within available resources, technical assistance for
the development and implementation or competition rules.

5. The above provisions in no way affect the Parties' rights to apply adequate measures, notably
those referred to in Article 13 bis, in order to address distortions of trade in goods or services.

**22**

**Article 42**

**Pursuant to the provisions of this Article and of Annex HI, Ukraine shall continue to**
**improve the protection of intellectual, industrial and commercial property rights in order to**
**provide, by the end of the fifth year after the entry into force of the Agreement for a level of**
**protection similar to that existing in the Community, including effective means of enforcing**
**such rights.**

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

**Article 43**

**1.** **The Parties recognize that an important condition for strengthening the economic links**
**between Ukraine and the Community is the approximation of Ukraine's existing and future**
**legislation to that of the Community. Ukraine 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 foUowing areas in particular: customs law,**
**company law, banking law, company accounts and taxes, intellectual property, protection**
**of workers at the workplace, financial services, rules on** **competition,** **pubhc** **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.**

**3.** **The Community shall provide Ukraine with technical assistance as appropriate 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 activities;**

**aid for translation of Community legislation in the relevant sectors.**

**23**

TITLE VII: ECONOMIC COOPERATION

Article 44

1. The Community and Ukraine shall establish economic cooperation aimed at contributing to
the process of economic reform and recovery and sustainable development of Ukraine.
Such cooperation shall strengthen and develop economic links, to the benefit of both parties.

2. Policies and other measures will be designed to bring about economic and social reforms and
restructuring of the economic system in Ukraine 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, on industrial cooperation, investment promotion
and protection, pubhc procurement, standards and conformity assessments, mining and raw
materials, science and technology, education and training, agriculture and agro-industrial
sector, energy, civil nuclear sector, environment, transport, space, telecommunications,
financial services, money laundering, monetary policy, regional development, social
cooperation, tourism, small and medium sized entreprises, information and communication,
consumer protection, customs, statistical cooperation, economics and drugs.

4. Special attention shall be devoted to measures capable of fostering cooperation between the
Independent States and other neighbouring countries with a view to stimulating a
harmonious development of the region.

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

6. The Cooperation Council shall make recommendations as to the development of cooperation
in fields identified in paragraph 3 of this Article.

Article 45

Industrial cooperation

Cooperation shall aim at promoting the following in particular:

the development of business links between economic operators of both sides, e.g. in view of
the transfer of technologies and know-how;

Community participation in Ukraine's efforts to restructure and technically upgrade its
industry;
the improvement of management;
the development of appropriate commercial rules and practices, including product
marketing;
environmental protection.
adaptation of the structure of industrial production to the standards of an advanced market

economy;
the conversion of the military-industrial complex

**24**

2. The provisions of this article shall not affect the enforcement of Community competition
rules applicable to undertakings.

Article 46

Investment promotion and protection

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

2. The aims of this cooperation shall be in particular:

    - the conclusion, where appropriate, between the Member States and Ukraine, of
agreements for the promotion and protection of investment;

    - the conclusion, where appropriate, between the Member States and Ukraine, of
agreements to avoid double taxation;

     - the creation of favourable conditions for attracting foreign investments into the
Ukrainian economy;

     - to establish stable and adequate business law and conditions, and to exchange
information on laws, regulations and administrative practices in the field of
investment;

     - to exchange information on investment opportunities in the form of inter alia trade
fairs, exhibitions, trade weeks and other events.

Article 47

Public Procurement

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

Article 48

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 Ukrainian product quality.

**25**

2. To this end they shall seek:

to promote appropriate cooperation with organisations and institutions specialised in these
fields;

to promote the use of Community technical regulations and the application of European
standards and conformity assessment procedures;

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

Article 49

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 developments in the mining and non-ferrous metals

sectors,
the establishment of a legal framework for cooperation,
trade matters,
the development of legislative and other measures in the field of environmental
protection
training

safety in the mining industry

Article SO

Cooperation in science and technology

1. The Parties shall promote cooperation in civil scientific research and technological
development (RTD) on the basis of mutual benefit and, taking into account the availability of
resources, adequate access to their respective programmes and subject to appropriate levels of
effective protection of intellectual, industrial and commercial property rights (IPR).

2. Science and technology cooperation shall cover:

the exchange of scientific and technical information;
joint RTD activities,

training activities and mobility programmes for scientists, researchers and technicians
engaged in RTD 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 5 i.

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

26

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 51

Education and training

1. The Parties shall cooperate with the aim of raising the level of general education and
professional qualifications in Ukraine, 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 Ukraine 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 cooperation, 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 journalists;
training of trainers.

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

Article 52

Agriculture and the agro-industrial sector

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

**27**

Article 53

Energy

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.

The cooperation shall include among others the following areas :

the environmental impact of energy production supply and consumption, in order to
prevent or minimise the environmental damage resulting from these activities;
improvement of the quality and security of energy supply, including diversification of
suppliers, in an economic and environmentally sound manner;
formulation of energy policy;
improvement in management and regulation of the energy sector in line with a market

economy;
the introduction of the range of institutional, legal, fiscal and other conditions
necessary to encourage increased energy trade and investment;
promotion of energy saving and energy effectiveness;
modernisation, development and diversification of energy infrastructure;
improvement of energy technologies in supply and end use across the range of energy
types;
management and technical training in the energy sector.

Article 54

Cooperation in the civil nuclear sector

1. Bearing in mind the respective powers and competences of the Community and its Member
States, cooperation in the civil nuclear sector shall take place through the implementation of
specific agreements on i.e. trade in nuclear materials, nuclear safety and thermonuclear
fusion and in accordance with the legal procedures of each Party.

2. The parties shall cooperate, including in international fora, in addressing the problems
which have arisen as a consequence of the Chernobyl disaster; cooperation could involve in
particular:

a joint study of the scientific problems related to the accident at Chernobyl;
combating the radioactive contamination of air, soil and water;
monitoring and supervision of the radioactive condition of the environment;
dealing with emergency nuclear/radioactivity situations;
de-contamination of radioactively polluted land and handing of nuclear waste;
medical problems related to the impact of nuclear accidents on the population health;
solution of the safety problem of the destroyed 4th power unit at Chernobyl;
economic and administrative aspects of efforts to overcome the disaster;
ti^ining in the area of preventing and mitigating nuclear accidents;

scientific and technical aspects of the remedial activities relating to the eradication of the
consequences of the Chernobyl disaster;
Other areas subject to agreement of the parties.

28

Article 55

Environment

1. Bearing in mind the European Energy Charter and the Declaration of the Luzem Conference
1993, the Parties shall develop and strengthen their cooperation on environment and human
health.

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

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

   planning for the handling of disasters and other emergency situations;

   - exchange of information and experts, including information and experts dealing with the
transfer of clean technologies and the safe and environmentally sound use of
biotechnologies;

   - joint research activities;

   - improvement of laws towards Community standards;

   - cooperation at regional level, including cooperation within the framework of the European
Environment Agency, and at international level;

   - development of strategies, particularly with regard to global and climatic issues and also
in view of achieving sustainable development;

   - environmental impact studies.

29

Article 56

Transport

The Parties shall develop and strengthen their cooperation in the field of transport.

This cooperation shall, inter alia, aim at restructuring and modernising transport systems and
networks in Ukraine and developing and ensuring, where appropriate, compatibility of
transportation systems in the context of achieving a more global transport system.

The cooperation shall include, inter alia :

- the modernising of management and operations of road transport, railways, ports and airports

- modernisation and development of railways, waterways, road, port, airport and air navigation
infrastructure including the modernisation of major routes of common interest and the transEuropean links for the above modes;

- promotion and development of multi-modal transport;

- the promotion of joint research and development programmes;

- preparation of the legislative and institutional framework for pohcy development and
implementation including privatisation of the transport sector.

Article 57

Space

Bearing in mind the respective competences of the Community, its Member States and the
European Space Agency the Parties shall promote where appropriate long term cooperation
in the areas of civil space research, development and commercial applications. The Parties
will pay particular attention to initiatives making full use of the complementarity of their
respective space activities.

Article 58

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;
encourage the development of projects for telecommunications and postal services and
attracting investment;
enhancing efficiency and quality of the provision of telecommunications and postal services,
amongst others through liberalization of activities of sub-sectors;
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 telecommunicational and postal services
and for the use of a radio frequency spectrum;

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

**30**

Article 59

Financial Services

Cooperation shall in particular aim at facihtating the involvement of Ukraine in universally
accepted systems of mutual settlements. Technical assistance shall focus on:

the development of banking and financial services, the development of common market of
credit resources, the involvement of Ukraine in universally accepted system of mutual
settlements;

the development of fiscal system, institutions in Ukraine, exchange of experience and
personnel training;

the development of insurance services, which would inter aha create a favourable framework
for the Community's companies' participation in the establishment of joint ventures in the
insurance sector in Ukraine, as well as the development of export credit insurance.

this cooperation shall in particular contribute to foster the development of relations between
Ukraine and the EC Member States in the financial services sector.

Article 60

Money laundering

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.

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 61

Monetary policy

At the request of the Ukrainian authorities, the Community shall provide technical assistance
designed to support the efforts of Ukraine towards the creation and strengthening of its own
monetary system and the introduction of a new monetary unit which is to become a convertible
currency and the gradual adjustment of its policies to those of the European Monetary System.
This will include informal exchange of views concerning the principles and the functioning of the
European Monetary System.

31

Article 62

Regional development

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

2. To this end, they shall encourage exchange of information by national, regional and local
authorities on regional and land-use planning policy and on methods of formulation of
regional policies with special emphasis on the development of disadvantaged areas.

They shall also encourage direct contacts between the respective regions and public
organizations responsible for regional development planning with the aim, inter alia, to
exchange methods and ways of fostering regional development.

Article 63

Social cooperation

1. With regard to health and safety, the parties shall develop cooperation between them with the
aim of improving the level of protection of the health and safety of workers.

The cooperation shall include notably:

education and training on health and safety issues with specific attention to high risk
sectors of activity;
development and promotion of preventive measures to combat work related diseases
and other work related ailments;
prevention of major accidents hazards and the management of toxic chemicals;
research to develop the knowledge base in relation to working environment and the
health and safety of workers.

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

optimization of the labour market;
modernisation of the job-finding and consulting services;
planning and management of the restructuring programmes;
encouragement of local employment development;
exchange of information on the programmes of flexible employment, including those
stimulating self-employment and promoting entrepreneurship.

3. The Parties shall pay special attention to cooperation in the sphere of social protection which,
inter alia, shall include cooperation in planning and implementing social protection reforms in
Ukraine.

These reforms shall aim to develop in Ukraine methods of protection intrinsic to market
economies and shall comprise all directions of social protection.

**32**

**Article 64**

**Tourism**

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

**facilitating the tourist trade;**
**cooperation between official tourism bodies**
**increasing** **the** **flow of information;**
**transferring know-how;**
**studying the opportunities for joint operations;**
**training** **for** **tourism** **development;**

**Article 65**

**Small and medium-sized enterprises**

**1.** **The Parties shall aim to develop and strengthen small and** medium-sized enterprises and
**their associations and cooperation between SMEs in the Community** and Ukraine.

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 (an agency to support SMEs,**
**communications, assistance to the creation of a fund for SMEs);**
**the development of technology parks.**

**Article 66**

**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 pubhc with basic information about the Community,**
**and Ukraine including, where possible, mutual access to databases in full respect of intellectual**
**property rights.**

**Article 67**

**Consumer Protection**

**The Parties will enter into close cooperation aimed at achieving** compatibility between tiieir
**systems of consumer protection. This cooperation shall comprise in particular the provision of**
**expertise on legislative and institutional** **reform,** **the establishment of** permanent systems **of** mutual
**information on dangerous products, the improvement of** information provided to consumers
especially on prices, characteristics of products and services offered, training activities for
administration officials **and** other consumer interest representatives, the development of exchanges
between the consumer interest representatives, and increasing the compatibility of consumer
protection policies.

**33**

Article 68

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
Ukraine's customs system to that of the Community.

2. Cooperation shall include the following in particular:

the exchange of information
the improvement of working methods
the introduction of the combined nomenclature and the single administrative document
the interconnection between the transit systems of the Community and Ukraine
the simplification of inspections and formalities in respect of the carriage of goods;
the support in the introduction of modern customs information systems
the organisation of seminars and training periods

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

Article _69_

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 Ukraine.

The Parties, in particular, shall cooperate in the following fields:
adaptation of Ukrainian 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;
To this end the Community shall contribute through rendering technical assistance to
Ukraine.

**34**

**Article 70**

**Economies**

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

**The Community shall provide technical assistance as to;**

**assist Ukraine 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.**

**Article 71**

**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 of narcotic drugs and psychotropic substances, including the**
**prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention**
**and reduction. The cooperation in this area shall be based on mutual consultation and close**
**coordination between the Parties over the objectives and measures on the various drug-related**
**fields.**

**35**

**TITLE VIII:** **CULTURAL COOPERATION**

**Article 72**

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

**36**

TITLE IX : FINANCIAL COOPERATION

Article 73

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

Article 74

This financial assistance shall be covered within the framework ofthe~Opcratien TACIS foreseen
in the Community's relevant Council Regulation.

Article 75

The objectives and the areas of the Community's financial assistance shall be laid down in an
indicative programme reflecting established priorities to be agreed between the two Parties taking
into account Ukraine'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 organisations such
as the International Bank for Reconstruction and Development and the European Bank for
Reconstruction and Development as well as UNDP and IMF.

**37**

TITLE X: INSTITUTIONAL. GENERAL AND FINAL PROVISIONS

Article 77

A Cooperation Council is hereby established which shall supervise the implementation of this
Agreement. It shall meet at ministerial level once a year and when circumstances require. It shall
examine any major issues arising within the framework of the Agreement and any other bilateral
or international issues of mutual interest for the purpose of attaining the objectives of this
Agreement. The Cooperation Council may also make appropriate recommendations, by agreement
between the two Parties.

Article 78

1. The Cooperation Council shall consist of the members of the Council of the European Union
and members of the Commission of the European Communities, on the one hand, and of
members of the Government of Ukraine, 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 Ukraine.

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 thé Government of Ukraine 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 Ukraine.

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.

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

38

Article 82

A Parhamentary Coopération Committee is hereby established. It shall be a forum for Members
of the Ukrainian Parliament and the European Parliament to meet and exchange views. It shall
meet at intervals which it shall itself determine.

Article 83

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

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

3. The Parliamentary Cooperation Committee shall be presided in turn by the European
Parliament and the Ukrainian 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 Parhamentary Cooperation Committee may make recommendations to the Cooperation
Council.

Article 85

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

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

s\iall encourage the adoption of arbitration for the setdement of disputes arising out of
commercial and cooperation transactions concluded by economic operators of the
Community and those of Ukraine;
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 10th June 1958.

39

Article 86

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

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

(b) which relate to the production o£ 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 on the
control of dual use industrial goods and technologies.

Article 87

1. In the fields covered by this Agreement and without prejudice to any special provisions
contained therein:

the arrangements applied by Ukraine 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 Ukraine shall not give rise to any
Œscrimination between Ukrainian nationals, or its companies or firms.

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

Article 88

1. Each of the two Parties may refer to the Cooperation Council any dispute relating to the
application or interpretation of this Agreement.

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

3. In the event of it not being possible to settle the dispute in accordance with paragraph 2 of this
Article, either Party may notify the other of the appointment of an 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 conciliator's recommendations shall be taken by majority vote. Such recommendations
shall not be binding upon the Parties.

**40**

Article 89

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

The provisions of this Article shall in no way affect and are without prejudice to Articles 13,
13bis, 88 and 94.

Article 90

Treatment granted to Ukraine 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 Ukraine 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 European 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 apphcation is provided for therein.

Article 93

This Agreement is concluded for an initial period of 10 years. The Agreement shall be
automatically renewed year by year provided that neither Party gives the other Party written
notice of denunciation of the Agreement six months before it expires.

41

Article 94

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

If either Party considers that the other Party has failed to fulfil an obligation under the
Agreement, it may take the appropriate measures. Before so doing, except in cases of special
urgency, it shall supply the Cooperation Council with all relevant information required for a
thorough examination of the situation with a view to seeking a solution acceptable to the
Parties.

In the selection of these measures, priority must be given to those which least disturb the
functioning of the Agreement. These measures shall be notified immediately to the
Cooperation Council if the other Party so requests.

Article 95

Annexes I, D, III, IV, V, V bis and the Protocol shall form an integral part of this Agreement.

Article 96

This Agreement shall not, until equivalent rights for individuals and economic operators have
been achieved hereunder, affect rights assured to them through existing Agreements binding one
or more Member States on the one hand and Ukraine on the other except in areas railing within
Community competence and without prejudice to the obhgations 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 Economic Community, the European Atomic Energy Community and the
European Coal and Steel Community are applied and under the conditions laid down in those
Treaties and, on the other hand, to the territory of Ukraine.

Article 97 bis

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

Article 98

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

**42**

Article 99

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 this paragraph have been completed.

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

Article 100

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 in 1994 by
means of an interim agreement between the Community and Ukraine, the Contracting Parties
agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean
the date of entry into force of the interim Agreement.

**43**

LIST OF ANNEXES

Annex I Indicative list of advantages granted by Ukraine to the Independent States in
accordance with Article 9bis.

Annex II Exceptional measures which derogate from the provisions of Article 11.

Annex III Intellectual, Industrial and Commercial Property conventions (Article 42).

Annex IV Community reservations in accordance with Article 23 paragraph lb

Annex V Ukrainian reservations in accordance with Article 23 paragraph 2a

Annex Vbis Financial services: definitions

List of Protocols

Protocol on mutual assistance in customs matters.

**44**

ANNEX I

Indicative list of advantages granted by Ukraine to the Independent States in accordance with
Article 9bis.

1. Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan, Russia
No import duties are implemented.
No export duties are implemented as regards goods delivered under clearing and interstate
agreements within the volumes stipulated in these agreements.
No VAT is applied on export and import. No excise is applied on export.

All Independent States - export quotas for deliveries of products under annual interstate trade
and cooperation agreements are opened in the same way as for deliveries for state needs.

2. Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan, Payments could be made in roubles
Russia - payments could be made in roubles or karbovanets.
All Independent States - special system of non-commercial operations, including payments

resulting from these operations.

3. All Independent States - special system of current payments.

4. All Independent States - special price system in trade with some raw materials and semifinished products.

5. All Independent States - special conditions of transit.

6. All Independent States - special conditions of customs procedures.

**45**

ANNEX 17

Exceptional measures which derogate from the provisions of Article 11

Exceptional measures which derogate from the provisions of Article 11 may be taken by
Ukraine in the form of quantitative restrictions on a non-discriminatory basis.

Ilicse measures may only concern infant industries, or certain sectors undergoing
restructuring or facing serious difficulties, particularly where these difficulties produce
important social problems.

The total value of imports of the products which are subject to these measures may not
exceed 15 % of total imports from the Community during the last year, prior to the
introduction of any quantitative restrictions for which statistics are available.

These measures may only be applied during a transitional period ending 31st December

! 998 unless parties agree otherwise, or when Ukraine becomes a contracting Party to GATT
whichevci is earlier.

( Jkrainc shall inform the Cooperation Council of any measures it intends to take under the
terms of the present annex, and, at the request of the Community, consultations shall be held
in the Cooperation Council on such measures and the sectors to which they apply before
they enter into force.

ANNEX **m**

Intellectual. Industrial and Commercial Property conventions (Article 42)

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

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

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

Protocol relating to the Madrid Agreement concerning the International
Registration of Marks (Madrid, 1989);

Nice Agreement concerning the International Classification of Goods and Services for
the purposes of the Registration of Marks (Geneva 1977, amended 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, 1978)**

**2.** **Ukraine shall make its** best endeavours to accede, without undue delay, to the 1991 Act of
the International Convention for the Protection of New Varieties of Plants (UPOV).

3. **The** **Cooperation** Council may recommend that paragraph 2 of Article 42 shall apply to
other multilateral conventions. If problems in the area of intellectual, industrial and
commercial property affecting trading conditions were to occur, urgent consultations will be
**undertaken,** at the request of either Party, with a view to reaching mutually satisfactory'
**solutions.**

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

**Paris Convention for** the Protection of Industrial Property (Stockholm Act, 1967 and
**amended in** **1979);**

**Madrid** Agreement concerning the International Registration of Marks (Stockholm Act,
**1967, and amended in** 1979);

**Patent** Cooperation Treaty (Washington 1970, amended and modified in 1979 and
1984);

5. From the entry into force of this Agreement Ukraine 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.

6. The provisions of paragraph 5 shall not apply to advantages granted by Ukraine to any third
country on an effective reciprocal basis or to advantages granted by Ukraine to another
country of the former USSR.

**47**

ANNEX IV

Community reservations in accordance with Article 23 paragraph lb

Mining

In some Member States, a concession may be required for mining and mineral rights for non-EC
controlled companies.

Fishing

Access to and use of the biological resources and fishing grounds situated in the maritime waters
coming under the sovereignty or within the 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-EC companies is subject to
restrictions.

Audiovisual services including radio

National treatment concerning production and distribution, including broadcasting and other
forms of tramission to the pubhc, 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 nationals of Member States. Under certain conditions those
persons may create companies.

Agriculture

In some Member States national treatment is no apphcable to non-EC controlled companies which
wish to undertake an agricultural enterprise. The acquisition of vineyards by non-EC controlled
companies is subject to notification, or, as necessary, authorisation.

News agency services

In some Member States limitations of foreign participation in publishing companies and
broadcasting companies.

48

ANNEXV

Ukrainian reservations in accordance, with Article 23 paragraph 2a

The application of the reservations in this annex shall in no case result in treatment less
favourable than that accorded to companies of any third country.

1. Financial services (as defined in Annex V bis)

1-1 Banking and related financial services ;

During a transitional period not exceeding five years from the date of signature of this
Agreement, Ukraine may, in respect of the establishment of subsidiaries and branches of
Community companies in Ukraine, continue to apply the provisions of the Ukrainian laws:

"on the system of currency regulation and currency control"
"on banks and banking activities"
   - "on collateral"

"on stocks and stock exchange"
"on privatization papers" (related to the distribution and trading of privatization
vouchers)

During the transitional period referred to above, no new regulations or measures shall be
introduced which increase the level of discrimination applying to subsidiaries or branches of
Community companies as compared to Ukrainian companies.

1.2 Insurance (as defined in Annex V bis) :

No later than five years following the date of signature of this Agreement Ukraine shall create
the necessary conditions for the establishment of Community insurance companies as well as
joint insurance companies in accordance with Article 23.2 a.

During the transitional period referred to above, no new regulations or measures shall be
introduced which increase the level of discrimination applying to subsidiaries or branches of
Community companies as compared to Ukrainian companies.

Insurance activities in some sectors for foreigners are closed, limited or are subject to special
requirements during the transitional period.

2. Other areas:

Brokerage of immovable property including land

Ownership and use of natural resources
Use of subsoil and natural resources including mining.
Acquisition and sale of natural resources

49

Fishing
Access to and use of the biological resources and fishing grounds situated in Ukrainian
territorial waters and in Ukraine's exclusive economic zone is subject to restrictions.

Hunting is restricted in accordance with the legislation of Ukraine.

Agriculture
Acquisition and sale of agricultural land and forests.

Lease of state property
The lease of state property may be required to be paid in freely convertible currency.

Telecommunications

Authorisation may be required for companies controlled by foreigners in respect of
establishment.

Mass media companies
Some limitation of foreign participation in mass media activities.

Some professional activities
Professional activities in some sectors are reserved to Ukrainian nationals or are subject to
special requirements (medicine, education, legal services not including business consultancy
involving relevant legal aspects).

Historical buildings and monuments

50

ANNEX V bis

Financial Services : Definitions:

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

A. All insurance and insurance-related services.

1. Direct insurance (including co-insurance),
(i) life
(ii) non-life

2. Reinsurance and retrocession.

3. Insurance intermediation, such as brokerage and agency.
4. Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim
settlement services.

B. Banking and other financial services (excluding insurance).

1. Acceptance of deposits and other repayable funds from the public.
2. Lending of all types, including consumer credit, mortgage credit, factoring and financing
of commercial transaction.

3. Financial leasing.
4. All payment and money transmission services, including credit charge and debit cards,
travellers cheques and bankers drafts.
5. Guarantees and commitments.

6. Trading for own account or for the account of customers, whether on an exchange, in an
over the counter market or otherwise, the following:
a) money market instruments (including cheques, bills, certificates of deposits, etc.)
b) foreign exchange
c) derivative products including, but not limited to, futures and options
d) exchange rates and interest rate instruments, including products such as swaps,
forward rate agreements, etc.
e) transferable securities
f) other negotiable instruments and financial assets, including bullion.

7. Participation in issues of all kinds of securities, including under-writing and placement as
agent (whether publicly or privately) and provision of services related to such issues.

8. Money broking

9. Asset management, such as cash or portfolio management, all forms of collective
investment management, pension fund management, custodial depository and trust
services.

10. Settlement and clearing services for financial assets, including securities, derivative
products, and other negotiable instruments.

51

**11.** **Provision and transfer of** **financial** **information,** **and** **financial** **data processing and related**
**software by suppliers of other** **financial** **services.**

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

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

**(a) Activities carried out by central banks or by any other public institution in pursuit of**
**monetary and exchange** **rate** **policies.**

**(b) Activities conducted by central banks, government agencies or departments, or public**
**institutions, for the account or with the guarantee of the** **government,** **except when those**
**activities may be carried out by financial service suppliers in competition with such public**
**entities.**

**(c) Activities forming part of a statutory system of social security or public retirement plans,**
**except when those activities may be carried out by financial service suppliers in competition**
**with public entities or private institutions.**

**52**

**PROTOCOL**

**ON MUTUAL ASSISTANCE**

**BETWEEN ADMINISTRATIVE AUTHORITIES**

**IN CUSTOMS MATTERS**

**53**

Article 1

Definitions

For the purposes of this Protocol :

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

b) "customs duties" shall mean all duties, taxes, fees or any other charges which are levied and
collected in the territories of the Parties, in application of customs legislation, but not including
fees and charges which are limited in amount to the approximate costs of services rendered;

c) "applicant authority", shall mean a competent administrative authority which has been
appointed by a Party for this purpose and which makes a request for assistance in customs

matters;

d) "requested authority", shall mean a competent administrative authority which has been
appointed by a Party for this purpose and which receives a request for assistance in customs

matters;

e) "contravention", shall mean any violation of _the_ customs legislation as well as any attempted
violation of such legislation.

Article 2

Scone

1. The Parties shall assist each other, within their competences, in the manner and under the
conditions laid down in this Protocol, in ensuring that customs legislation is correctly applied,
in particular by the prevention, detection and investigation of contraventions of this legislation.

2. Assistance, in customs matters, as provided for in this Protocol, applies to any administrative
authority of the Parties which is competent for the apphcation 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 authority, unless
those authorities so agree.

Article 3

Assistance on request

At the request of the applicant authority, the requested authority shall furnish it with all
relevant information to enable it to ensure that customs legislation is correctly applied,
including information regarding operations noted or planned which contravene or would
contravene such legislation.

**54**

2. At the request of the applicant authority, the requested authority shall inform it whether goods
exported from the territory of one of the Parties have been properly imported into the territory
of the other Party, specifying, where appropriate, the customs procedure applied to the goods.

3. At the request of the applicant authority, the requested authority shall take the necessary steps
to ensure that a surveillance is kept on :

(a) natural or legal persons of whom there are reasonable grounds for believing that they are
contravening or have contravened customs legislation;

(b) movements of goods notified as possibly giving rise to substantial contraventions of
customs legislation;

(c) means of transport for which there are reasonable grounds for believing that they have
been, are or may be used in the contravening of customs legislation.

Article 4

Spontaneous assistance

The Parties shall provide each other, 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 have contravened, contravene or would contravene such legislation and
which may be of interest to other Parties;

- new means or methods employed in realizing such operations;

- goods known to be subject to substantial contravention of customs legislation.

Article S

Delivery/Notification

At the request of the apphcant 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, point 3 is applicable.

55

Article 6

Form and substance of requests for assistance

1. Requests pursuant to this Protocol shall be made in writing. Documents necessary for the
execution of such requests shall accompany the request. When required because of the urgency
of the situation, oral requests may be accepted, but must be confirmed in writing immediately.

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

(a) the apphcant 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
being 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 such authority.

4. If a request does not meet the formal requirements, its correction or completion may be
demanded ; the ordering of precautionary measures may, however, take place.

Article 7

Execution of requests

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

2. Requests for assistance will be executed in accordance with the laws, rules and other legal
instruments of the requested Party.

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

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

**56**

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.

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 so
would :

(a) be likely to prejudice sovereignty, public policy, security or other essential interests;

or

(b) involve currency or tax regulations other than regulations concerning customs duties;

or

(c) violate an industrial, commercial or professional secret.

2. Where the apphcant authority asks for 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 withheld or denied, the decision and the reasons therefore must be notified to
the apphcant authority without delay.

Article 10

Obligation to observe confidentiality

1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a
confidential nature. It shall be covered by the obligation of official secrecy and shall enjoy the
protection extended to like information under the relevant laws of the Party which received it
and the corresponding provisions applying to the Community authorities.

2. Nominative data shall not be transmitted whenever there are reasonable grounds to believe that
the transfer or the use made of the date transmitted would be contrary to the basic legal
principles of one of the Parties, and, in particular, if the person concerned would suffer undue
disadvantages. Upon request, the receiving Party shall inform the furnishing Party of the use
made of the information supplied and of the results achieved.

3. Nominative data may only be transmitted to customs authorities and, in the case of need for
prosecution purposes, to public prosecution and judicial authorities. Other persons or
authorities may obtain such information only upon previous authorisation by the furnishing
authority.

**57**

4. The furnishing Party shall verify the accuracy of the information to be transferred. Whenever
it appears that the information supphed was inaccurate or to be deleted, the receiving Party
shall be notified without delay. The latter shall be obliged to carry out the correction or
deletion.

5. Without prejudice to cases of prevailing public interest, the person concerned may obtain,
upon request, information on the data stores and the purpose of this storage.

Article 11

Use of information

1. Information obtained shall be used solely for the purposes of this Protocol and may be used
within each Party for other purposes only with the prior written consent of the administrative
authority which furnished the information and shall be subject to any restrictions laid down by
that authority.

2. Paragraph 1 shall not impede the use of information in any judicial or administrative
proceedings subsequently instituted for failure to comply with customs legislation.

3. The Parties may, in their records of evidence, reports and testimonies and in proceedings and
charges brought before the courts, use as evidence information obtained and documents
consulted in accordance with the provisions of this Protocol.

Article 12

Experts and witnesses

An official of a requested authority may be authorized to appear, within the limitations of the
authorization granted, as expert or witness in judicial or adrninistrative proceedings regarding the
matters covered by this Protocol in the jurisdiction of another Party, and produce such objects,
documents or authenticated copies thereof, as may be needed for the proceedings. The request for
an appearance must indicate specifically on what matters and by virtue of what title or
qualification the official will be questioned.

Article 13

Assistance expenses

The Parties shall waive all claims on each other for the reimbursement of expenses incurred
pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to
interpreters and translators who are not dependent upon public services.

**58**

Article 14

Implementation

1. The management of this Protocol shall be entrusted to the central customs authorities of
Ukraine on the one hand and 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 rules in the field of data protection.
They may recommend to the competent bodies amendments which they consider be made to
this Protocol.

2. The Parties shall consult each other and subsequentiy keep each other informed of the detailed
rules of implementation which are adopted in accordance with the provisions of this Protocol.

Article 15

Complementarity

1. This Protocol shall complement and not impede the application of any agreements on mutual
assistance which have been concluded or may be concluded between individual or several
Member States of the European Union and Ukraine. Nor shall it preclude more extensive
customs cooperation granted under such agreements.

2. Without prejudice to Article 11, these agreements do not prejudice Community provisions
governing the communication between the competent services of the Commission and the
customs authorities of the Member States of any information obtained in customs matters
which could be of Community interest.

59

JOINT DECLARATION CONCERNING ARTICLE 13

The Community and Ukraine declare that the text of the safeguard clause does not grant GATT
safeguard treatment.

**60**

JOINT DECLARATION CONCERNING ARTICLE 23

Without prejudice to the reservations listed in Annexes IV and V and to the provisions of Articles
37 and 40, the Parties agree that the words [ M] in conformity with their legislation and regulations"
mentioned in paragraphs 1 and 2 of Article 23 mean that each Party may regulate the
establishment and operation of companies on its territory, provided that these regulations do no _V_
create for the establishment and operations of companies of the other Party any new reservations
to the treatment no less favourable than that accorded to their own companies or to companies or
branches or subsidiaries companies of any third country.

**61**

**JOINT DECLARATION** CONCERNING ARTICLE 23

Without prejudice to the reservations listed in Annexes IV and V and to the provisions of Articles
37 and 40, the Parties agree that the words "in conformity with their legislation and regulations"
mentioned in paragraphs 1 and 2 of Article 23 mean that each Party may regulate the
establishment and operation of companies on its territory, provided that these regulations do no _"t_
create for the establishment and operations of companies of the other Party any new reservations
to the treatment no less favourable **than that** accorded to their own companies or to companies or
branches or subsidiaries companies of any third country.

**61**

**JOINT DECLARATION CONCERNING THE NOTION OF** "CONTROL"
**IN** ARTICLE 25(b) AND ARTICLE 36

1. The Parties confirm their mutual understanding that the question of control shall depend on
the factual circumstances of the particular case.

2. A company shall, for example, be considered as being "controlled" by another company, and
thus a subsidiary of such other company if :

the other company holds directly or indirectly a majority of the voting rights, or

the other company has the right to appoint or dismiss a majority of the administrative
organ, of the management organ or of the supervisory organ and is at the same time a
shareholder or member of the subsidiary.

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

63

JQINTDECLARATION CONCERNING ARTICLE 42

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

The Parties declare that the term "intellectual, industrial and commercial property" shall be
translated into Ukrainian as "intelektualna vlasnist".

**64**

JOINT DECLARATION CONCERNING ARTICLE 94

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

a) repudiation of the Agreement not sanctioned by the general rules of international law

or

b) violation of the essential elements of the Agreement set out in Article 2.

**(O**

**EXCHANGE OF LETTERS CONCERNING ARTICLE 13 bis**

**It is understood that the provisions of Article 13 bis are neither intended to, nor shall slow down,**
**hinder or impede the procedures provided for in the respective legislations of the Parties regarding**
**anti-dumping and** **subsidies investigations.**

**66**

Exchange of letters in relation to _the_ chapter on establishment of companies. Title IV
Chapter 2

Letter from Deputy Foreign Minister Makarenko to the negotiator of the Community

Dear Sir,

I refer to the Partnership and Cooperation Agreement initialled on 23rd March 1994.

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

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,
Ukraine shall not adopt measures or regulations which would introduce or worsen discrimination
of Community companies vis-à-vis Ukrainian companies or companies from any third country as
compared to the situation existing on the date of initialling of this agreement.

1 would be obliged if you could acknowledge receipt of this letter.

Mr Makarenko
Deputy Foreign Minister of Foreign Affairs

Letter of reply

Dear Sir,

Thank you for letter of (date), which read :

"Dear Sir,

I refer to the Partnership and Cooperation Agreement initialled on 23rd March 1994.

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

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,
Ukraine shall not adopt measures or regulations which would introduce or worsen discrimination
of Community companies vis-à-vis Ukrainian companies or companies from any third country as
compared to the situation existing on the date of initialling of this agreement.

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

I can acknowledge receipt of this letter.

67

**,** **/ /**

**ISSN 0254-1475**

### **COM(94) 226 final**

# **DOCUMENTS**

## **EN u**

### **Catalogue number : CB-CO-94-240-EN-C** **ISBN 92-77-69549-8**

**Office for Official Publications of tbe European Communities**

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