CELEX: 51992PC0177
Language: en
Date: 1992-05-04
Title: Proposal for a COUNCIL DECISION on the conclusion by the European Community of an Agreement between the European Economic Community and Estonia on trade and commercial and economic cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                         C0M(92) 177 final
                                                         Brussels, 4 May 1992
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                                         Proposal for a
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                                        COUNCIL DECISION
                on the conclusion by the European Economic Community of an
            Agreement between the European Economic Community and Estonia on
                       trade and commercial and economic cooperation
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                                 (presented by the Commission)
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                         EXPLANATORY MEMORANDUM
1. The attached proposal for a Council Decision is the legal instrument
for the conclusion of the Agreement on Trade and Commercial and
Economic Cooperation between the European Economic Community and the
European Atomic Energy Community and the Republic of Estonia.
2. Exploratory talks between Commission and Estonian experts took place
between November 1991 and February this year in Brussels.
3. On the basis of directives adopted by the Council on 4 November 1991
there were a number of informal meetings between Community and Estonian
representatives, which resulted in a formal negotiating session in
Brussels on 27 February this year, at which the Agreement was
initialled.
Regarding the initialled text, which is attached to the proposal for a
Decision, the following should be noted:
(a)  it contains no financial protocol or financial undertakings;
(b)  the respect for democratic principles and human rights is an
     essential aspect of the Agreement (Article 1 ) ;
(c)  ECSC products and textile and clothing products falling within
     Section XI of the Harmonized System are not covered by the
     Agreement (Article 3 ) ;
(d)  the Community and Estonia reaffirm their undertaking to accord
     each other most-favoured-nation treatment under the GATT, and the
     Community also undertakes to abolish quantitative restrictions
     specific to Estonia (Article 8 ) ;
(e)  as regards commercial cooperation, Estonia also undertakes to
     guarantee effective, suitable protection of intellectual and
     commercial property and to accede to the relevant international
     conventions (Article 13(3));
(f)  economic cooperation is focused on the sectors listed non-
     exhaustively in Article 15 with a view to establishing economic
     links and increasing trade between the two parties: it is also
     designed to support structural changes in the Estonian economy;
(g)  the Community undertakes to support Estonia's applications to
     accede to international organizations and conventions
     (Article 17);
(h)  Article 18 sets up a Joint Committee and lays down its
     responsibilities: the Committee will monitor the proper working of
     the Agreement and recommend measures that it deems appropriate to
     achieve the aims of the Agreement.
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  (i)  the Agreement is concluded for an initial period of ten years,
       tacitly renewable each year: it may be denounced by means of the
       usual procedure, and suspended with immediate effect, totally or
       partially, should there be serious infringement of essential
       provisions of the Agreement.
4. Since Articles 113 and 235 of the Treaty provide the legal basis for
the Agreement, the opinion of Parliament is required.
5. It is proposed to sign a joint declaration on political dialogue
when the Agreement is signed.
6. The Council is asked to adopt the attached proposal for a Council
Decision on the conclusion of an Agreement on Trade and Commercial and
Economic Cooperation between the Community and Estonia.
 ---pagebreak---                                                                   1
                                 PROPOSAL FOR
                             A COUNCIL DECISION
                              of
        on the conclusion by the European Economic Community of an
    Agreement between the European Economic Community and Estonia on
               trade and commercial and economic cooperation
THE COUNCIL OF THE EUROPEAN COMMUNITIES
Having regard to the Treaty establishing          the European   Economic
Community, and in particular Articles 113 and 235 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas the conclusion of the Agreement between the European Economic
Community and on trade and commercial and economic cooperation is
necessary for the achievement of the Community's objectives in the field
of external economic relations; whereas this Agreement should be
approved on behalf of the European Economic Community;
Whereas it appears that certain measures of economic cooperation
provided for by the Agreement exceed the powers of action provided for
in the Treaty, and in particular those specified in the field of the
common commercial policy,
HAD DECIDED AS FOLLOWS:
                                  Article 1
The Agreement between the European Economic Community and Estonia on
trade and commercial and economic cooperation is hereby approved on
behalf of the European Economic Community.
The text of that Agreement is attached to this decision.
                                  Article 2
The President of the Council shall give the notification, provided for
in Article 21 of the Agreement.
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                                                              X
                               Article 3
The Commission assisted by representatives of the Member States, shall
represent the Community in the joint committee set up by Article 18 of
the Agreement.
Done at Brussels,
                                       For the Council
                                        The President
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                                          Brussels, 27  February 1992
                             DRAFT AGREEMENT
between the European Economic Community and the Republic of Estonia on
trade and commercial and economic cooperation
THE EUROPEAN ECONOMIC COMMUNITY,
hereinafter called the "Community, of the one part, and
THE REPUBLIC OF ESTONIA,
hereinafter called "Estonia", of the other part,
CONSIDERING the importance of establishing     and expanding  trade   links
between the Community and Estonia,
DESIROUS of creating favourable conditions for a substantial and
harmonious development and diversification of trade and the promotion of
commercial and economic cooperation in areas of mutual interest on the
basis of equality, non-discrimination, mutual benefit and reciprocity,
AWARE of the particular importance of foreign trade and other forms of
international   economic  cooperation   for   the  economic   and   social
development of each of the Contracting Parties,
AWARE of the importance of giving full effect to all the provisions and
principles of the CSCE process, and in particular those set out in the
Helsinki Final Act, the concluding documents of the Madrid, Vienna and
Copenhagen meetings, and those of the Charter of Paris for a new Europe,
particularly with regard to the rule of law, democracy and human rights,
as well as those of the Bonn CSCE Conference on Economic Co-operation,
RECOGNIZING the importance of guaranteeing the rights of ethnic and
national groups and minorities, in accordance with the undertakings made
within the context of the CSCE,
AWARE of the importance of strengthening their democratic institutions
and of supporting the process of economic reform in Estonia,
BELIEVING that a further impetus should be given to the trading and
economic relationship between the Community and Estonia by establishing
contractual links which will contribute to progress towards the
objective of an association agreement in due course, when conditions are
met, and to further development of relations between them,
TAKING INTO ACCOUNT the favourable implications for trade and economic
cooperation between the Contracting Parties of reform under way in
Estonia,
                                                                     i — J
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HAVE DECIDED to conclude this Agreement and to this end have designated
as their Plenipotentiaries:
THE EUROPEAN ECONOMIC COMMUNITY:
THE REPUBLIC OF ESTONIA:
WHO, having exchanged their full powers, found in good and due form,
HAVE AGREED AS FOLLOWS:
                                  TITLE I
                                  Genera 1
                                 Article 1
Respect for the democratic principles and     human rights established by
the Helsinki Final Act and the Charter        of Paris for a new Europe
inspires the domestic and external policies   of the Community and Estonia
and constitutes an essential element of the   present agreement.
                                 Article 2
Within the framework of their respective laws and regulations,          the
Contracting Parties undertake to facilitate and promote:
     the harmonious  development   and  diversification  of  trade  between
     them;
     the development   of  various    types  of  commercial   and  economic
     cooperation.
They therefore confirm their resolve to consider favourably, each for
 its own part, suggestions made by the other Party with a view to
attaining these aims.
                                  TITLE II
                     Trade and commercial cooperation
                                 Article 3
 1. This Agreement shall apply to trade in all products originating in
 the Community and in Estonia with the exception of products covered by
 the Treaty establishing the European Coal and steel Community and of the
 textiles and apparel covered by Section XI of the Harmonized System.
 2. The provisions of this Agreement may be supplemented if necessary by
 sectoral agreements or arrangements concluded between the Community and
 Estonia. In particular, a separate agreement for textile products will
 be negotiated.
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                                 Article 4
Unless otherwise specified in this Agreement, trade and other commercial
cooperation between the Contracting Parties shall be conducted in
accordance with their respective laws and regulations.
                                 Article 5
 1. The Contracting Parties shall accord each other most-favoured-nation
treatment in all matters regarding:
-    customs duties and charges of any kind imposed on or in connection
    with importation or exportation,
-    the method of levying such duties and charges,
    all rules and formalities in connection        with importation and
    exportation, including provisions relating     to customs clearance,
    transit, warehousing and transhipment,
    taxes and other internal charges levied directly or indirectly       on
     imported products,
-    methods of payment and the transfer of such payments,
-    the   regulations   affecting    the   sale,   purchase,    transport,
    distribution and use of goods on the domestic market.
2.  The provisions of paragraph 1 shall not apply to:
(a) advantages accorded   to adjacent   countries in order   to  facilitate
    frontier traffic;
(b) advantages accorded with the aim of creating a customs union or a
    free trade area or pursuant to the creation of such a union or area;
(c) advantages accorded to particular countries in accordance with the
    General Agreement on Tariffs and Trade and other international
    arrangements in favour of developing countries.
                                Article 6
Without   prejudice   to  the  rights and obligations       stemming   from
international conventions on the temporary admission of goods which bind
both sides,
the Contracting Parties shall furthermore grant each other reciprocal
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 only one of them.
Account shall be taken of the conditions under which the obligations
stemming from such a convention have been accepted by the Contracting
Party in question.
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                                                             9
                                 Article 7
Estonia shall grant imports of products originating in the Community
treatment   which   is   non-discriminatory  in  relation   to   products
originating   in other    countries, as regards     the application    of
quantitative restrictions, the granting of licences and access to the
foreign currency needed to pay for such imports.
                                  Article 8
1. Without prejudice to Article 7, each of the Contracting Parties
shall grant imports of products originating in the other the highest
degree of liberalization generally extended to third countries. To that
end, the specific quantitative restrictions applying to imports from
Estonia into the Community shall be eliminated-
2. For    the   purposes   of   this Agreement,  "specific   quantitative
restrictions" shall mean those quantitative restrictions applied by the
Community to imports originating in Estonia under Regulation (EEC)
No 3420/83, which     concerns   products other   than  those   to  which
quantitative restrictions are applied under Regulation (EEC) No 288/82.
                                  Article 9
The Parties shall inform each other of any changes in their tariff or
statistical nomenclature or of any decision taken in accordance with the
procedures in force concerning the classification of products covered by
this Agreement.
                                  Article 10
Goods shall be traded between the contracting Parties at market-related
 prices.
                                  Article 11
 1. The Contracting Parties shall consult each other if any product is
 being imported into the territory of one of them in such increased
 quantities or on such terms as to cause or threaten to cause serious
 injury to domestic producers of like or directly competing products.
 2. The Contracting Party claiming serious injury or threat thereof
 shall request consultations by notification in writing and shall provide
 the other Party with all the relevant information required for a
 detailed examination of the situation.
 3. The consultations requested pursuant to paragraph 1 shall be held
 with a view to seeking mutually satisfactory solutions and with due
 regard for the fundamental aims of the Agreement; they shall be
 completed not later than 30 days from the date of notification of the
 request by the Party concerned, unless the Parties agree otherwise.
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4. If, as a result of such consultations, it is agreed that the
situation referred to in paragraph 1 exists, exports shall be limited or
such other action taken, possibly with regard to the price at which
these exports are sold, as will prevent or remedy the injury.
5. If, following action under paragraphs 1 to 4, agreement is not
reached between the Contracting Parties, the Contracting Party which
requested the consultations shall be free to restrict the imports of the
products concerned to the extent and for such time as is necessary to
prevent or remedy the injury. The other Contracting Party shall then be
free to deviate from its obligations towards the first Party in respect
of substantially equivalent trade.
6. In critical circumstances, where delay would cause damage difficult
to repair, such preventive or remedial action may be taken provisionally
without prior consultation, provided consultations are held immediately
after such action is taken.
7. In the selection of measures under this Article, the Contracting
Parties shall give priority to those which cause the least disturbance
to the functioning of this Agreement.
8. Where necessary the Contracting Parties may hold consultations to
determine when the measures adopted pursuant to paragraphs 4 to 6 shall
cease to apply.
                                Article 12
1. This Agreement shall not preclude prohibitions or restrictions on
imports, exports or goods in transit justified on grounds of public
morality, public policy or public security, the protection of life and
health of humans, animals or plants, the protection of industrial,
commercial and intellectual property, or rules relating to gold or
silver or imposed for the protection of national treasures of artistic,
historic or archaeological value.
Such prohibitions and restrictions must not, however, constitute a means
of arbitrary discrimination or disguised restrictions on trade between
the Contracting Parties.
2. This Agreement shall not preclude the taking of action justified on
grounds of protection of essential security interests:
 (a) relating to fissionable materials or the materials from which they
     are derived;
 (b) relating to traffic in arms, ammunition and implements of war and to
     such traffic in other goods and materials as is carried on directly
     or indirectly for the purpose of supplying a military establishment;
 (c) taken in time of war or other emergency in international relations
     or to allow it to comply with obligations it has accepted in
     connection with the maintenance of international peace and security.
                                                                      LJh
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                                Article 13
1. The Contracting Parties shall make every effort to promote, expand
and diversify their trade on the basis of non-discrimination and
reciprocity. In the spirit of this Article, the Joint Committee
established under Title V of this Agreement will attach special
importance to examining ways of encouraging          the reciprocal and
harmonious expansion of trade.
2. In furtherance of the aims of this Article and within the limits of
their respective powers, the Contracting Parties agree on the necessity
to improve favourable business regulations and facilities for each
other's firms or companies on their respective markets, inter alia by
taking steps:
    to ensure the publication and facilitate exchanges of commercial and
    economic   information on all matters which would assist the
    development of commercial and economic cooperation, for example:
    -    general and sectoral import arrangements,
         economic and commercial law, including regulations on markets,
         companies and investment,
         macroeconomic information and statistics, including production,
         consumption and foreign trade statistics,
    to facilitate    the  establishment  and  operation of  each  other's
    companies,
-    to encourage trade promotion activities,
    to provide natural and legal persons of the other Party with
    guarantees of their individual and property rights, such as
    non-discriminatory access for that purpose to courts and appropriate
    administrative bodies of the Community and Estonia.
                                                                       I-
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3. Estonia will take measures guaranteeing an effective and adequate
protection of intellectual, industrial and commercial property, at a
level similar to that which exists in the Community, and will adhere to
international Conventions on intellectual, industrial and commercial
property.
4. The Contracting Parties undertake to facilitate, within the limits
of their respective powers, administrative cooperation between the
appropriate authorities in matters relating to customs, in particular in
the following areas:
    vocational training,
    simplification of customs documentation and procedures, and
    prevention and detection of infringements of the rules on customs
    matters, including the rules governing import quotas.
                                 Article 14
Within the limits of their respective powers, the Contracting Parties:
     shall encourage the adoption of arbitration for the settlement of
     disputes arising out of commercial and cooperation transactions
     concluded by companies, enterprises or economic organizations of the
     Community and those of Estonia,
     agree that when a dispute is submitted to arbitration, each party to
     the dispute may freely choose its own arbitrator, irrespective of
     nationality, and that the presiding third arbitrator or the sole
     arbitrator may be a citizen of a third state, •
     shall encourage recourse to the arbitration rules developed 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 concluded
     in New York on 10 June 1958.
                                  TITLE III
                            Economic cooperation
                                  Article 15
 1. In the light of their respective economic policies and objectives,
 the Contracting Parties, within the limits of their existing powers,
 shall foster economic cooperation on as broad a base as possible in all
 fields deemed to be in their mutual interest.
 The objectives of such cooperation shall be, inter alia:
      to reinforce and diversify economic links between the Contracting
      Parties,
                                                                          UJi
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    to contribute to the development of their respective economies and
    standards of living,
-    to open up new sources of supply and new markets,
    to encourage cooperation between economic operators with a view to
    promoting joint ventures, licensing agreements, and other forms of
    industrial cooperation to develop their respective industries,
-   to encourage scientific and technological progress,
    to support structural changes in the Estonian economy which will
    increase and diversify trade in goods and services with the
    Community,
-   to encourage the participation of small and medium-sized enterprises
    in trade and industrial cooperation.
2. In order to achieve these objectives, the Contracting Parties shall
make efforts to encourage and promote economic cooperation in areas of
mutual interest, in particular in the following sectors:
    industry, including the textiles and apparels'' sectors,
    agriculture, including agro-industry,
    fisheries,
-   science and technology in areas in which the Contracting Parties are
    active and which they consider to be of mutual interest,
-   telecommunications,
    energy, including the saving of energy and the development of new
    sources of energy,
    m ining and production of building materials,
    environmental protection, including   protection from water and air
    pollution and industrial accidents,    and the management of natural
    resources; also taking into account     environmental requirements in
    other policy areas such as industry,  agriculture, energy, transport,
    transport, communications and the running of ports,
    tourism and other service activities,
    economic, monetary, banking, insurance and financial services,
    development of human resources and training,
    health,
                                                                          L-A I
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    economic policy,
    standards,
    statistics.
3. To give effect to the objectives of economic cooperation and within
the limits of their respective powers, the Contracting Parties shall
encourage the adoption of measures aimed at creating           favourable
conditions for economic and industrial cooperation, including:
    the   facilitation   of   exchanges   of   commercial  and   economic
    information,
    the development of a favourable climate for investment, notably by
    the extension by the Member States of the Community and Estonia of
    arrangements for investment promotion and protection, in particular
    for the transfer of profits and the repatriation of invested
    capital, and also of agreements on the avoidance of double taxation,
    exchanges and contacts between persons and delegations representing
    commercial or other appropriate organizations,
    the organization of   seminars, fairs or exhibitions, symposia    and
    business weeks.
-   the encouragement of activities contributing to technical competence
    in specific fields, notably commercialization.
                                Article 16
Without   prejudice   to  the   relevant   provisions   of the   Treaties
establishing the European Communities, this Agreement and any action
taken pursuant to it shall in no way affect the powers of the Member
States of the Community to undertake bilateral activities with Estonia
in the field of economic cooperation and to conclude, where appropriate,
new economic cooperation agreements with Estonia.
                                 TITLE IV
        Accession to international organizations and conventions
                                Article 17
The Community undertakes, within the limits of its powers, to support
the accession of Estonia to international organizations and conventions
to which the Community is a party, in order to enable Estonia to become
more active in the world economic system.
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                                 TITLE V
                            Joint Committee
                               Article 18
1. A Joint Committee shall be set up, comprising representatives of the
   Community, on the one hand, and representatives of Estonia on the
   other.
   The Joint Committee shall formulate recommendations        by  mutual
   agreement between the Contracting Parties.
   The Joint Committee shall, as necessary, adopt      its own rules of
   procedure and programme of work.
   The Joint Committee shall meet once a year in   Brussels and Tallinn
   alternately. Special meetings may be convened   by mutual agreement,
   at the request of either Contracting Party.     The Joint Committee
   shall be chaired alternately by each of the     Contracting Parties.
   Wherever possible, the agenda for meetings of    the Joint Committee
   shall be agreed beforehand.
   The Joint Committee may decide to set up working parties to assist
   it in carrying out its duties.
2. The Joint Committee shall ensure the proper functioning of this
   Agreement and shall devise and recommend practical measures for
   achieving its objectives, keeping in view the economic and social
   policies of the Contracting Parties.
3. The Joint committee shall endeavour to find ways of encouraging the
   development of trade and commercial and economic cooperation between
   the Contracting Parties. in particular, it shall:
           examine the various aspects of trade between the Parties,
           notably its overall pattern, rate of growth, structure and
           diversification, the trade balance and the various forms of
           trade and trade promotion,
           make recommendations on any trade or economic     cooperation
           problem of mutual concern;
           seek appropriate means of avoiding possible difficulties in
           the fields of trade and cooperation and encourage various
           forms of commercial and economic cooperation in areas of
           mutual interest;
           consider measures likely to develop and diversify trade and
           economic   cooperation,     notably  by    improving   import
           opportunities in the Community and in Estonia;
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             exchange information on macroeconomic plans and forecasts
             for the economies of the Contracting Parties which have an
             impact on trade and cooperation and, by extension, on the
             scope   for   developing   complementarity   between    their
             respective economies and also on proposed programmes of
             economic reform;
            examine the situation concerning the procedures       for the
            award of contracts for supplying goods and            services
             following an international invitation to tender;
            exchange information on amendments to and developments in
            the laws, regulations and formalities of the Contracting
            Parties in the areas covered by this Agreement;
            examine favourably ways of improving conditions for the
            development of direct contacts between firms established in
            the Community and those established in Estonia;
            formulate and submit to the authorities of both Contracting
            Parties recommendations for resolving any problems that
            arise, where appropriate by means of the conclusion of
            arrangements or agreements.
                                 TITLE VI
                       General and final provisions
                                Article 19
Subject to the provisions of Article 16, the * provisions of this
Agreement shall replace the provisions of agreements concluded between
Member States of the Community and Estonia where the latter provisions
are either incompatible with or identical to the former.
                                Article 20
This Agreement shall apply, on the one hand, to the territories in which
the Treaty establishing the European Economic Community is applied and
under the conditions laid down in that Treaty and, on the other, to the
territory of the Republic of Estonia.
                                Article 21
This Agreement shall enter into force on the first day of the second
month following* the date on which the Contracting Parties notify each
other that the legal procedures necessary to this end have been
completed. The Agreement is concluded for an initial period of ten
years. The Agreement shall be automatically renewed year by year
provided that neither Contracting Party gives the other Party written
notice of denunciation of the Agreement six months before it expires.
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However, the two Contracting Parties may amend the Agreement by mutual
consent in order to take account of new developments, notably the
situation which would arise from the accession of Estonia to the General
Agreement on Tariffs and Trade. In the latter case, the Contracting
Parties shall prepare together the amendments to this Agreement
necessary to take account of the protocol of accession of Estonia to the
General Agreement. If the Parties are unable to agree on this subject
they reserve the right to denounce this Agreement.
The parties reserve the right to suspend this Agreement in whole or in
part with immediate effect if a serious violation occurs of the
essential provisions of the present agreement.
                               Article 22
This Agreement is drawn up in duplicate in the Danish, Dutch, English,
French,    German,    Greek,    Italian,   Portuguese,    Spanish    and
Estonian languages, each text being equally authentic.
 ---pagebreak---                              FICHE D'INCIDENCE
                                                                -1 s
                 IMPACT DE LA PROPOSITION SUR LES P.M.E
                       ET SUR LE MARCHE DE L'EMPLOI
L'incidence économique éventuelle du présent accord ne saurait être
qu'indirecte et tributaire des recommandations du Comité Mixte institué
dans le cadre de celui-ci. Il n'est donc pas possible de procéder à une
évaluation précise des effets économiques de l'accord.
                             FICHE FINANCIERE
Le présent accord n'a pas d'implications budgétaires directes.
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                                                                     ISSN 0254-1475
                                                              COM (92) 177 final
                                                      DOCUMENTS
EN                                                                          02 l i
                                 Catalogue number: CB-CO-92-192-EN-C
                                                             ISBN 92-77-43808-8
Office for Official Publications of the European Communities
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