CELEX: 51996PC0613(01)
Language: en
Date: 1996-11-27
Title: Proposal for a COUNCIL DECISION ON THE CONCLUSION BY THE EUROPEAN COMMUNITY OF THE INTERIM AGREEMENT BETWEEN THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, OF THE ONE PART, AND THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART, ON TRADE AND TRADE-RELATED MATTERS

COMMISSION OF THE EUROPEAN COMMUNITIES
                                         Brussels, 27.11.1996
                                         COM(96) 613 final
                                         96/0299 (ACC)
                             Proposal for a
                        COUNCIL DECISION
   ON THE CONCLUSION BY THE EUROPEAN COMMUNITY OF THE
 INTERIM AGREEMENT BETWEEN THE EUROPEAN COMMUNITY, THE
   EUROPEAN COAL AND STEEL COMMUNITY AND THE EUROPEAN
ATOMIC ENERGY COMMUNITY, OF THE ONE PART, AND THE REPUBLIC
    OF AZERBAIJAN, OF THE OTHER PART, ON TRADE AND TRADE-
                       RELATED MATTERS
                    (presented by the Commission)
                                 Draft
                      COMMISSION DECISION
CONCERNING THE CONCLUSION ON BEHALF OF THE EUROPEAN COAL
   AND STEEL COMMUNITY AND THE EUROPEAN ATOMIC ENERGY
COMMUNITY OF THE INTERIM AGREEMENT BETWEEN THE EUROPEAN
COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY AND THE
  EUROPEAN ATOMIC ENERGY COMMUNITY, OF THE ONE PART, AND
THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART, ON TRADE AND
                  TRADE-RELATED MATTERS
 ---pagebreak---  ---pagebreak---                                Explanatory memorandum
1. The attached proposals for Decisions constitute the legal instrument for the conclusion
   of the Interim Agreement between the European Community, the European Atomic
   Energy Community and the European Coal and Steel Community, on the one hand,
   and the Republic of Azerbaijan, on the other.
2. Pending ratification of the Partnership and Cooperation Agreement with the Republic
   of Azerbaijan, signed in Luxembourg on 22 April 1996, the Commission has, in
   accordance with the negotiating directives adopted by the Council on 18 July 1994,
   negotiated an Interim Agreement with the Republic of Azerbaijan.
3. The Interim Agreement providing for provisional implementation of the part of the
   Partnership and Cooperation Agreement on trade and trade-related measures was
   initialled in Brussels on 20 September 1996, and will be concluded for the period
   ending with the entry into force of the Partnership and Cooperation Agreement.
4. The Interim Agreement replaces, as far as the Republic of Azerbaijan is concerned, the
   relevant provisions of the Agreement on Trade and Commercial and Economic
   Cooperation signed on 18 December 1989 between the European Economic
   Community and the European Atomic Energy Community, of the one part, and Union
   of Soviet Socialist Republics, of the other part.
5. The procedures for signing and concluding the Agreement differ between the EC, the
   ECSC and the EAEC.
   The Agreement will be concluded as follows :
   - the Council, will conclude the Agreement on behalf of the European Community
   under Article 113, in conjunction with Article 228 (2), first sentence of the EC Treaty
   by adopting the Decision attached at I;
   - the Commission will conclude the Agreement on behalf of the European Coal and
   Steel Community by adopting the Decision attached at II in accordance with Article
   95 of the ECSC Treaty, with the unanimous assent of the Council and following
   consultation of the Consultative Committee;
   - the Commission will conclude the Agreement on behalf of the European Atomic
   Energy Community by adopting the Decision attached at II, in accordance with the
   second paragraph of Article 101 of the EAEC Treaty, with the approval of the Council
   acting by qualified majority.
6. The Commission accordingly requests the Council to adopt the proposal attached at I
   and to give its assent and approval to the decision attached at II.
                                                                                           /
 ---pagebreak--- Proposal for a Council Decision concerning the conclusion by the European
Community of the Interim Agreement between the European Community, the
European Coal and Steel Community and the European Atomic Energy
Community, of the one part, and the Republic of Azerbaijan, of the other part, on
trade and trade-related matters.
                                                                                  A
 ---pagebreak---                                        Proposal for
                                  COUNCIL DECISION
                                        0F
                                                                          96/0299 (ACC)
      ON THE CONCLUSION BY THE EUROPEAN COMMUNITY OF THE
    INTERIM AGREEMENT BETWEEN THE EUROPEAN COMMUNITY, THE
       EUROPEAN COAL AND STEEL COMMUNITY AND THE EUROPEAN
                ATOMIC ENERGY COMMUNITY, OF THE ONE PART,
        AND THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART,
                  ON TRADE AND TRADE-RELATED MATTERS
                                         ( /EC)
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 in conjunction with Article 228 (2), first sentence thereof,
Having regard to the proposal from the Commission,
Whereas, pending the entry into force of the Partnership and Cooperation Agreement
between the European Communities and their Member States, of the one part, and the
Republic of Azerbaijan, of the other part, signed in Luxembourg on 22 April 1996, it is
necessary to approve on behalf of the European Community, the Interim Agreement on
trade and trade-related matters between the European Community, the European Coal
and Steel Community and the European Atomic Energy Community, of the one part, and
the Republic of Azerbaijan, of the other part,
HAS DECIDED AS FOLLOWS :
                                         Article 31
The Interim Agreement on trade and trade-related matters between the European
Community, the European Coal and Steel Community and the European Atomic Energy
Community, of thé one part, and the Republic of Azerbaijan, of the other part, together
with its Annexes, the Protocol and the declarations, are hereby approved on behalf of the
European Community.
These texts are attached to this Decision.
                                         Article 2
 The President of the Council is hereby authorised to designate the persons empowered to
 sign the Interim Agreement on behalf of the European Community.
                                          Article 3
 The President of the Council shall give the notification provided for in Article 32 of the
 Interim Agreement on behalf of the European Community.
 Done at Brussels,
                                                                                            5
 ---pagebreak---                                                                            II
Draft Commission Decision concerning the conclusion on behalf of the European
Coal and Steel Community and of the European Atomic Energy Community of the
Interim Agreement between the European Community, the European Coal and
Steel Community and the European Atomic Energy Community, of the one part,
and the Republic of Azerbaijan, of the other part, on trade and trade-related
matters.
                                      /f                                      (>7
 ---pagebreak---                                              Draft
                                COMMISSION DECISION
                                          OF
 CONCERNING THE CONCLUSION ON BEHALF OF THE EUROPEAN C O A L
      AND STEEL C O M M U N I T Y AND THE EUROPEAN ATOMIC ENERGY
C O M M U N I T Y OF THE INTERIM AGREEMENT BETWEEN THE EUROPEAN
COMMUNITY, THE EUROPEAN COAL AND STEEL C O M M U N I T Y AND THE
      EUROPEAN ATOMIC ENERGY COMMUNITY, OF THE O N E PART,
         AND THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART,
                    O N TRADE AND TRADE-RELATED MATTERS
                                     (../.../ECSC/EAEC)
THE EUROPEAN COMMISSION,
Having regard to the Treaty establishing the European Coal and Steel Community, and in
particular the first paragraph of Article 95 thereof,
Having regard to the Treaty establishing the European Atomic Energy Community and in
particular the second paragraph of Article 101 thereof,
Whereas, pending the entry into force of the Partnership and Cooperation Agreement
between the European Communities and their Member States, of the one part, and the
Republic of Azerbaijan of the other part, signed in Luxembourg on 22 April 1996, it is
necessary to approve the Interim Agreement between the European Community, the
European Coal and Steel Community and the European Atomic Energy Community, of
the one part, and the Republic of Azerbaijan, of the other part, on trade and trade-related
matters initialled on 20 September 1996,
Whereas the conclusion of the Interim Agreement is necessary to attain the objectives of
the Community set out in particular in Articles 2 and 3 of the Treaty establishing the
European Coal and Steel Community and whereas the Treaty did not make provision for
all the cases covered by this Decision;
Having consulted the Consultative Committee and with the assent and approval of the
Council,
HAS DECIDED AS FOLLOWS :
                                           Article I
The Interim Agreement between the European Community, the European Coal and Steel
Community and the European Atomic Energy Community, of the one part, and the
Republic of Azerbaijan, of the other part, on trade and trade-related matters, together with
the its Annexes, the Protocol and the declarations, are hereby approved on behalf of the
European Coal and Steel Community and of the European Atomic Energy Community.
These texts are attached to this Decision.
                                                                                             b
 ---pagebreak---                                       Arlickl
The President of the European Commission is hereby authorised to designate the persons
empowered to sign the Interim Agreement on behalf of the European Coal and Steel
Community and the European Atomic Energy Community.
                                      Article 3
The President of the Commission shall give the notification provided for in Article 32 of
the Interim Agreement on behalf of the European Coal and Steel Community and the
European Atomic Energy Community.
Done at Brussels,
                                         <«                                               G
 ---pagebreak---                                          FINAL ACT
The plenipotentiaries of the EUROPEAN COMMUNITY, the EUROPEAN COAL AND
STEEL COMMUNITY and the EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as "the Community", of the one part, and
the plenipotentiaries of THE REPUBLIC OF AZERBAIJAN, of the other part,
meeting at         on         for the signature of the Interim Agreement on trade and trade-
related matters between the European Community, the European Coal and Steel
Community and the European Atomic Energy Community, of the one part, and the
Republic of Azerbaijan, of the other part, hereinafter referred to as the Agreement, have
adopted the following texts :
the Interim Agreement and the Protocol on mutual assistance in customs matters.
The plenipotentiaries of the Community and the plenipotentiaries of the Republic of
Azerbaijan have adopted the texts of the Joint declarations listed below and annexed to
this Final Act :
Joint Declaration concerning Title II of the Agreement
Joint Declaration concerning Article 7 of the Agreement
Joint Declaration concerning Article 8 of the Agreement
Joint Declaration concerning Article 15 of the Agreement
Joint Declaration concerning Article 28 of the Agreement
The plenipotentiaries of the Community have taken note of the declarations listed below
and annexed to this Final Act :
 Declaration by the Republic of Azerbaijan concerning the protection of intellectual,
 industrial and commercial property rights.
 Done at Brussels on
 For the European Community, the European Coal and Steel Community and the
 European Atomic Energy Community
 For the Republic of Azerbaijan
                                                                                             7-
 ---pagebreak---                              INTERIM AGREEMENT
      ON TRADE AND TRADE RELATED MATTERS BETWEEN THE
     EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL
 COMMUNITY AND THE EUROPEAN ATOMIC ENERGY COMMUNITY
   OF THE ONE PART AND THE REPUBLIC OF AZERBAIJAN OF THE
                                  OTHER PART
The EUROPEAN COMMUNITY, the EUROPEAN COAL AND STEEL
COMMUNITY AND THE EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as "THE COMMUNITY"
of the one part,
and THE REPUBLIC OF AZERBAIJAN
of the other part,
Whereas an Agreement on Partnership and Cooperation between the European
Communities and their Member States, of the one part and the Republic of
Azerbaijan of the other part was signed on 22 April 1996;
Whereas the aim of the Partnership and Cooperation Agreement is to strengthen and
widen the relations established previously, notably by the Agreement on Trade and
Commercial and Economic Cooperation between the European Economic
Community, the European Atomic Energy Community, and the USSR signed on
18 December 1989;
Whereas it is necessary to ensure the rapid development of trade relations between
the Parties;
Whereas to this end it is necessary to implement as speedily as possible, by means
of an Interim Agreement, the provisions of the Partnership and Cooperation
Agreement concerning trade and trade-related matters;
Whereas the said provisions should, accordingly, replace the relevant provisions of
the Trade and Commercial and Economic Cooperation Agreement;
Whereas it is necessary to ensure that pending the entry into force of the Partnership
and Cooperation Agreement and the establishment of the Cooperation Council, the
Joint Committee set up under the Agreement on Trade and Commercial and
 Economic Cooperation may exercise the powers assigned by the Partnership and
 Cooperation Agreement to the Cooperation Council, which are necessary in order to
 implement the Interim Agreement;
 Have decided to conclude this Agreement and to this end have designated as their
 plenipotentiaries:
                                                                                       r
 ---pagebreak---  THE EUROPEAN COMMUNITY :
THE EUROPEAN COAL AND STEEL COMMUNITY :
THE EUROPEAN ATOMIC ENERGY COMMUNITY :
THE REPUBLIC OF AZERBAIJAN :
Who, having exchanged their Full Powers, found in good and due form,
Have agreed as follows :
                          TITLE I : GENERAL PRINCIPLES
                                [PCA Azerbaijan; Title I]
                                          Article _A.
                              [PCA Azerbaijan ; Article 2]
Respect for democracy, principles of international law and human rights as defined in
particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris
for a New Europe, as well as the principles of market economy, including those
enunciated in the documents of the CSCE Bonn Conference, underpin the internal and
external policies of the Parties and constitute an essential element of partnership and of
this Agreement.
                             TITLE II : TRADE IN GOODS
                               [PCA Azerbaijan : Title III]
                                          Arikki
                              [PCA Azerbaijan i Article 9]
 1. The Parties shall accord to one another most-favoured-nation treatment in all areas in
    respect of :
    - customs duties and charges applied to imports and exports, including the method of
      collecting such duties and charges;
    - provisions relating to customs clearance, transit, warehouses and transhipment;
    - taxes and other internal charges of any kind applied directly or indirectly to imported
      goods;
    - methods of payment and the transfer of such payments related to trade in goods;
    - the rules relating to the sale, purchase, transport, distribution and use of goods on the
      domestic market.
                                                 *r                                             a1
 ---pagebreak--- 2. The provisions of paragraph 1 shall not apply to :
   (a) advantages granted with the aim of creating a customs union or a free-trade area
         or pursuant to the creation of such a union or area;
   (b) advantages granted to particular countries in accordance with WTO rules and
         with other international arrangements in favour of developing countries;
   (c) advantages accorded to adjacent countries in order to facilitate frontier traffic.
3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on
   the date of the Republic of Azerbaijan acceding to the WTO or on the 31.12.1998,
   whichever is earlier, to advantages defined in Annex I granted by the Republic of
   Azerbaijan to other states which have emerged from the dissolution of the USSR.
                                         Article 3
                             [PÇA Azerbaijan ; Article IQ]
1. The Parties agree that the principle of free transit is an essential condition of attaining
   the objectives of this Agreement.
   In this connection each Party shall secure unrestricted transit via or through its
   territory of goods originating in the customs territory or destined for the customs
   territory of the other Party.
2. The rules described in the Article V, paragraphs 2, 3, 4 and 5 of the GATT are
    applicable between the Parties.
3. The rules contained in this Article are without prejudice to any special rules relating to
    specific sectors, in particular such as transport, or products agreed between the Parties,
    or to the provisions of Article 21.
                                         Article 4
                              [PCA Azerbaijan ; Article 11]
Without prejudice to the rights and obligations 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 5
                              [PCA Azerbaijan : Article 12]
 1. Goods originating in the Republic of Azerbaijan shall be imported into the
    Community free of quantitative restrictions without prejudice to the provisions of
    Articles 7, 10 and 11 of this Agreement.
 2. Goods originating in the Community shall be imported into the Republic of
    Azerbaijan free of all quantitative restrictions and measures of equivalent effect,
    without prejudice to Articles 7, 10 and 11 of this Agreement.
                                                                                               /©
 ---pagebreak---                                         Article 6
                            [PCA Azerbaijan ; Article 113]
Goods shall be traded between the Parties at market-related prices.
                                        Article 7
                            [PCA Azerbaijan ; Article 14]
1. Where any product is being imported into the territory of one of the Parties in such
   increased quantities or under such conditions as to cause or threaten to cause injury to
   domestic producers of like or directly competitive products, the Community or the
   Republic of Azerbaijan, 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 the Republic of Azerbaijan as the case may be
   shall supply the Joint Committee with all relevant information with a view to seeking
   a solution acceptable to both Parties as provided for in Title IV.
3. If, as a result of the consultations, the Parties do not reach agreement within 30 days
   of referral to the Joint 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 Parties shall give priority to those
   which cause least disturbance to the achievement of the aims of this Agreement.
6. Nothing in this Article shall prejudice or affect in any way the taking, by either Party,
   of anti-dumping or countervailing measures in accordance with Article VI of the
   GATT, the Agreement on implementation of Article VI of the GATT, the Agreement
   related on interpretation and application of Articles VI, XVI and XXIII of the GATT
   or related internal legislation.
                                        Article S
                            [PCA Azerbaijan ; Article 15]
The Parties undertake to consider development of the provisions in this Agreement on
trade in goods between them, as circumstances allow, including the situation arising from
the accession of the Republic of Azerbaijan to the World Trade Organisation. The Joint
Committee referred to in Article 17 may make recommendations on such developments
to the Parties which could be put into effect, where accepted, by virtue of agreement
between the Parties in accordance with their respective procedures.
                                                                                             / /
 ---pagebreak---                                         Article 9
                             [PCA Azerbaijan : Article 16]
The Agreement shall not preclude prohibitions or restrictions on imports, exports or
goods in transit justified on grounds of public morality, public policy or public security;
the protection of health and life of humans, animals or plants; the protection of natural
resources; the protection of national treasures of artistic, historic or archaeological value
or the protection of intellectual, industrial and commercial property or rules relating to
gold and silver. Such prohibitions or restrictions shall not, however, constitute a means
of arbitrary discrimination or a disguised restriction on trade between the Parties.
                                       Article 10
                             [PCA Azerbaijan ; Article 171
This Title II shall not apply to trade in textile products falling under chapters 50 to 63 of
the Combined Nomenclature. Trade in these products shall be governed by a separate
agreement, initialled on 18 December 1995 and applied provisionally since 1st January
 1996.
                                       Article 11
                             [PCA Azerbaijan ; Article 18]
 1. Trade in products covered by the Treaty establishing the European Coal and
    Steel Community shall be governed by the provisions' of this Title II, with the
    exception of Article 5.
 2. A contact group on coal and steel matters shall be set up, comprising representatives
    of the Community on the one hand, and representatives of the Republic of Azerbaijan
    on the other.
    The contact group shall exchange, on a regular basis, information on all coal and
    steel matters of interest to the Parties.
                              [PCA Azerbaijan ; Article 19]
 Trade in nuclear materials will be conducted in accordance with the provisions of
 the Treaty establishing the European Atomic Energy Community. If necessary,
 trade in nuclear materials shall be subject to the provisions of a specific Agreement
 to be concluded between the European Atomic Energy Community and the
 Republic of Azerbaijan.
                                               ^T                                             fi-
 ---pagebreak---                                      TITLE III •
  PAYMENTS. COMPETITION AND OTHER ECONOMIC PROVISIONS
                              [PCA Azerbaijan : Title IV]
                                      Article 13
                           [PCA Azerbaijan ; Article 41 (1Ï]
The Parties undertake to authorize, in freely convertible currency, any current
payments between residents of the Community and of the Republic of Azerbaijan
connected with the movement of goods, made in accordance with the provisions of
the present Agreement.
                                       Article 14
                           [PCA Azerbaijan : Article 43 (4)]
The Parties agree to examine ways to apply their respective competition laws on a
concerted basis in such cases where trade between them is affected.
                                       Article 15
                           [PCA Azerbaijan ; Article 42 (1)]
Pursuant to the provisions of this Article and of Annex II, the Republic of Azerbaijan
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 provided in the Community by
Community acts, in particular the ones referred to in Annex II, including comparable
means of enforcing such rights.
                                       Article 16
 Mutual assistance in customs matters between administrative authorities of the
 Parties shall take place in accordance with the Protocol annexed to this agreement.
                                              ^                                                 /2
 ---pagebreak---     TITLE IV ; INSTITUTIONAL, GENERAL ANP FINAL PROVISIONS
                               [PCA Azerbaijan ; Title XII
                                       Article 17
The Joint Committee set up by the Agreement on Trade and Commercial and
Economic Cooperation signed between the European Economic Community and the
USSR on 18 December 1989 shall perform the duties assigned to it by this
Agreement until the Cooperation Council provided for in Article 81 of the
Partnership and Cooperation Agreement is established.
                                       Article 13
The Joint Committee may, for the purposes of attaining the objectives of the
Agreement, make recommendations in the cases provided for therein.
It shall draw up its recommendations by agreement between the Parties.
                                       Article 19
                              [PCA Azerbaijan ; Article 85]
When examining any issue arising within the framework of this Agreement in relation to
a provision referring to an article of the GATT/WTO, the Joint Committee shall take into
account to the greatest extent possible the interpretation that is generally given to the
article of the GATT/WTO in question by the members of the WTO.
                                        Article 20
                              [PCA Azerbaijan : Article 89]
 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 :
      - shall encourage the adoption of arbitration for the settlement of disputes
      arising out of commercial and cooperation transactions concluded by economic
      operators of the Community and those of the Republic of Azerbaijan;
      - 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.
                                                                                           h
 ---pagebreak---                                           Article 21
                               [PCA Azerbaijan : Article 90]
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 of, or trade in arms, munitions or war materials
       or to research, development or production indispensable for defence purposes,
       provided that such measures do not impair the conditions of competition in
       respect of products not intended for specifically military purposes;
(c) which it considers essential to its own security in the event of serious internal
       disturbances affecting the maintenance of law and order, in time of war or
       serious international tension constituting threat of war or in order to carry out
       obligations it has accepted for the purpose of maintaining peace and
       international security;
(d) which it considers necessary to respect its international obligations and
       commitments in the control of dual use industrial goods and technologies.
                                           Article 22
                               [PÇA Azerbaijan ; Article 91]
1.     In the fields covered by this Agreement and without prejudice to any special
       provisions contained therein :
       - the arrangements applied by the Republic of Azerbaijan 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 the Republic of
       Azerbaijan shall not give rise to any discrimination between Azerbaijani
       nationals, or Azerbaijani 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.
 1. Each Party may refer to the Joint Committee any dispute relating to the
     application or interpretation of this Agreement.
2. The Joint Committee 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, either Party may notify the other of the appointment of a
     conciliator; the other Party must then appoint a second conciliator within two
     months.
     The Joint Committee shall appoint a third conciliator.
   ' The conciliators' recommendations shall be taken by majority vote. Such
     recommendations shall not be binding upon the Parties.
 4. The Joint Committee may establish rules of procedure for dispute settlement.
                                                                                          /r
 ---pagebreak---                                        Article 24
                            [PCA Azerbaijan Î Article 93]
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 7, 23 and 28.
                                       Article 25
                            [PCA Azerbaijan : Article 94]
Treatment granted to the Republic of Azerbaijan hereunder shall in no case be more
favourable than that granted by the Member States to each other.
                                       Article 26
                            [PCA Azerbaijan : Article 96]
Insofar as matters covered by this Agreement are covered by the Energy Charter
Treaty and Protocols thereto, such Treaty and Protocols shall upon entry into force
apply to such matters but only to the extent that such application is provided for
therein.
                                       Article 27
1. This Agreement shall be applicable until the entry into force of the Partnership
    and Cooperation Agreement signed on 22 April 1996.
2. Either Party may denounce this Agreement by notifying the other Party. This
    Agreement shall cease to apply six months after the date of such notification.
                                       Article 28
                            [PCA Azerbaijan : Article 98]
 1. The Parties shall take any general or specific measures required to fulfil their
    obligations under the Agreement. They shall see to it that the objectives set out
    in the Agreement are attained.
2. 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 Joint Committee 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 Joint Committee if the other Party so requests.
                                       Article 29
                            [PCA Azerbaijan : Article 99]
 Annexes I and II and the Protocol on mutual assistance in customs matters between
 administrative authorities shall form an integral part of this Agreement.
                                                                                      fC,
 ---pagebreak---                                       Aiîkklû
                          [PCA Azerbaijan î Article 101]
This Agreement shall apply, on the one hand, to the territories in which the treaties
establishing the European 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 the Republic of
Azerbaijan.
                                      Article 31
This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish,
French, German, Italian, Spanish, Swedish, Greek, Portuguese, and Azerbaijani
languages, each of these texts being equally authentic.
                                      Article 32
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 that the procedures referred to in the first paragraph
have been completed.
Upon its entry into force, and as far as. relations between the Republic of Azerbaijan
and the Community are concerned, this Agreement shall replace Article 2, Article 3,
except for the fourth indent thereof, and Articles 4 to 16 of 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.
                                           /«r
                                                                                            /?
 ---pagebreak---                                 LIST OF DOCUMENTS ATTACHED
Annex I    Indicative list of advantages granted by the Republic of Azerbaijan to the
           Independent States in accordance with Article 2(3).
Annex II Intellectual, industrial and commercial property conventions referred to in
           Article 15.
Protocol on mutual assistance in customs matters between administrative authorities.
                                             JJK'
                                                                                      rf
 ---pagebreak---                                     ANNEXI
  Advantages granted by the Republic of Azerbaijan to the Independent States in
                             accordance with Article 2 (3)
1. No import duties are applied.
2. No export duties are applied with respect to goods delivered under annual bilateral
   interstate trade and cooperation arrangements, within the nomenclature stipulated
   therein.
3. No VAT is applied on import.
4. No excise duties are applied on import.
                                         S*                                            fc?
 ---pagebreak---                                      ANNEX II
          Intellectual, Industrial and Commercial Property conventions
                              referred to in Article 15
1. Community acts referred to in Article 15.
   - First Council Directive 89/104/EEC of 21 December 1988 to approximate the
     laws of the Member States relating to trade marks.
   - Council Directive 87/54/EEC of 16 December 1986 on the legal protection of
     topographies of semi-conductor products.
   - Council Directive 91/250/EEC of 14 May 1991 on the legal protection of
     computer programs.
   - Council Regulation (EEC) No 1768/92 of 18 June 1992 concerning the
     creation of a supplementary protection certificate for medicinal products.
   - Council Regulation (EEC) No 2081/92 of 14 July 1992 on the protection of
     geographical indications and designations of origin for agricultural products
   and
     foodstuffs.
   - Council Directive 93/83/EEC of 27 September 1993 on the coordination of
     certain rules concerning copyright and rights related to copyright applicable to
     satellite broadcasting and cable retransmission.
   - Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of
     protection of copyright and certain related rights.
   - Council Directive 92/100/EEC of 19 November 1992 on rental right and
     lending right and on certain rights related to copyright in the field of
   intellectual
     property.
2. If problems in the area of intellectual, industrial and commercial property as
   addressed in the above Community acts and affecting trading conditions were to
   occur, urgent consultations will be undertaken, at the request of the Community
   or the Republic of Azerbaijan, with a view to reaching mutually satisfactory
   solutions.
                                            J*T
 ---pagebreak---             PROTOCOL
      ON MUTUAL ASSISTANCE
BETWEEN ADMINISTRATIVE AUTHORITIES
       IN CUSTOMS MATTERS
               s&~                 cH(
 ---pagebreak---                                           ià£$JLtkscJLJCu,L
                                           Munitions
For the purposes of this Protocol :
        a)   "customs legislation" shall mean any legal or regulatory provisions
             applicable in the territory of the Parties governing the import, export, transit
             of goods and their placing under any customs procedure, including measures
             of prohibition, restriction and control;
        b) "applicant authority", shall mean a competent administrative authority which
             has been appointed by a Party for this purpose and which makes a request for
             assistance in customs matters;
        c)   "requested authority", shall mean a competent administrative authority which
             has been appointed by a Party for this purpose and which receives a request
             for assistance in customs matters;
        d) "personal data", shall mean all information relating to an identified or
             identifiable individual.
                                          ARILCLO
                                               SÊÛPÊ
1. The Parties shall assist each other, in the areas within their jurisdiction, in the
     manner and under the conditions laid down in this Protocol, in preventing, detecting
     and investigating operations in breach of customs legislation.
2.   Assistance in customs matters, as provided for in this Protocol, shall apply to any
     administrative authority of the Parties which is competent for the application of this
     Protocol. It shall not prejudice the rules governing mutual assistance in criminal
     matters. Nor shall it cover information obtained under powers exercised at the
     request of the judicial authorities, unless those authorities so agree.
                                           ARTICLED
                                      Assistance on. request
1. At the request of the applicant authority, the requested authority shall furnish it with
     all relevant information which may enable it to ensure that customs legislation is
     correctly applied, including information regarding operations noted or planned which
     are or could be in breach of such legislation.
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
                                                                                           &SÀ
 ---pagebreak---        imported into the territory of the other Party, specifying, where appropriate, the
       customs procedure applied to the goods.
      At the request of the applicant authority, the requested authority shall, within the
      framework of its laws, take the necessary steps to ensure that a special watch is kept
      on :
          (a)    natural or legal persons of whom there are reasonable grounds for believing
                 that they are breaching or have breached customs legislation;
          (b)    places where goods are stored in a way that gives grounds for suspecting
                 that they are intended to supply operations in breach of customs legislation;
          (c)    movements of goods notified as possibly giving rise to breaches of customs
                 legislation;
          (d)    means of transport for which there are reasonable grounds for believing that
                 they have been, are or might be used in operations in breach of customs
                 legislation.
                                           ARTICLE 4
                                      Spontaneous assistance
The Parties shall provide each other, as far as their national laws, rules and other legal
instruments allow, with assistance without prior request if they consider that to be
necessary for the correct application of customs legislation, particularly when they obtain
information pertaining to :
          - operations which are or appear to be in breach of such legislation and which
              may be of interest to the other Party;
          - new means or methods employed in carrying out such operations;
          - goods known to be subject to breaches of customs legislation.
          - natural or legal persons of whom there are reasonable grounds for believing
              that they are or have been in breach of customs legislation
          - means of transport for which there are reasonable grounds for believing that
              they have been, are or might be used in operations in breach of customs
              legislation
                                            AKJUvLfc «>
                                       Pelivery/Notifieation
At the request of the applicant authority, the requested authority shall, in accordance with
 its legislation, take all necessary measures in order :
          - to deliver all documents,
          - to notify all decisions,
 falling within the scope of this Protocol to an addressee, residing or established in its
territory. In such cases, Article 6(3) shall apply as far as the request itself is concerned.
                                               ^f                                             di
 ---pagebreak---                                        ARTICLED
1. Requests pursuant to this Protocol shall be made in writing. They shall be
   accompanied by the documents necessary to enable compliance with the request.
   When required because of the urgency of the situation, oral requests may be
   accepted, but must be confirmed in writing immediately.
2. Requests pursuant to paragraph 1 shall include the following information :
       (a)    the applicant authority making the request;
       (b)    the measure requested;
       (c)    the object of and the reason for the request;
       (d)    the laws, rules and other legal elements involved;
       (e)    indications as exact and comprehensive as possible on the natural or legal
            persons who are the target of the investigations;
       (f)    a summary of the relevant facts and of the enquiries already carried out,
            except in cases provided for in Article 5.
3. Requests shall be submitted in an official language of the requested authority or in a
   language acceptable to that authority.
4. If a request does not meet the formal requirements, its correction or completion may
   be requested; precautionary measures may, however, be ordered.
                                       ARTICLE 7
                                  Execution of requests
1. In order to comply with a request for assistance, the requested authority shall
   proceed, within the limits of its competence and available resources, as though it
   were acting on its own account or at the request of other authorities of that same
   Party, by supplying information already possessed, by carrying out appropriate
   enquiries or by arranging for them to be carried out. This provision shall also apply
   to the administrative department to which the request has been addressed by the
   requested authority when the latter cannot act on its own.
2. Requests for assistance shall be executed in accordance with the laws, rules and
   other legal instruments of the requested Party.
3. Duly authorized officials of a Party may, with the agreement of the other Party
   involved and subject to the conditions laid down by the latter, obtain from the offices
   of the requested authority or other authority for which the requested authority is
   responsible, information relating to operations which are or may be in breach of
   customs legislation which the applicant authority needs for the purposes of this
   Protocol.
                                           rrr                                           aj^
 ---pagebreak---     Officials of a Party may, with the agreement of the other Party involved and subject
    to the conditions laid down by the latter, be present at enquiries carried out in the
    latter's territory.
                                          ARTICLED
                      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.
                                          ARTICLED
                       Exceptions to the obligation to provide assistance
1. The Parties may refuse to give assistance as provided for in this Protocol, where to
    do would:
        (a)    be likely to prejudice the sovereignty of the Republic of Azerbaijan or that
               of a Member State of the European Union which has been asked for
               assistance under this Protocol; or
        (b)    be likely to prejudice public policy, security or other essential interests, in
               particular in the cases referred to under Article 10 (2); or
        (c)    involve currency or tax regulations other than customs legislation; or
        (d)    violate an industrial, commercial or professional secret.
2.  Where the applicant authority requests assistance which it would itself be unable to
    provide if so asked, it shall draw attention to that fact in its request. It shall then be
    left to the requested authority to decide how to respond to such a request.
3.  If assistance is refused, the decision and the reasons therefor must be notified to the
    applicant authority without delay.
                                          ARTICLE 10
                           Information exchange and confidentiality
 1. Any information communicated in whatsoever form pursuant to this Protocol shall
     be of a confidential or restricted nature, depending on the rules applicable in each of
     the Parties. It shall be covered by the obligation of official secrecy and shall enjoy
     the protection extended to like information under the relevant laws of the Party
     which received it and the corresponding provisions applying to the Community
     institutions.
                                                1ST
                                                                                           6>s
 ---pagebreak--- 2.   Personal data may be exchanged only where the receiving Party undertakes to
     protect such data in at least an equivalent way to the one applicable to that particular
     case in the supplying Party.
3.   Information obtained shall be used solely for the purposes of this Protocol. Where
     one of the Parties requests the use of such information for other purposes, it shall ask
     for the prior written consent of the authority which furnished the information.
     Moreover, it shall be subject to any restrictions laid down by that authority.
4.   Paragraph 3 shall not impede the use of information in any judicial or administrative
     proceedings subsequently instituted for failure to comply with customs legislation.
     The competent authority which supplied that information shall be notified of such
     use.
5.   The Parties may, in their records of evidence, reports and testimonies and in
     proceedings and charges brought before the courts, use as evidence information
     obtained and documents consulted in accordance with the provisions of this
     Protocol.
                                        ARTICLE U
                                    Experts and witnesses
1. An official of a requested authority may be authorized to appear, within the limitations
of the authorization granted, as an expert or witness in judicial or administrative
proceedings regarding the matters covered by this Protocol in the jurisdiction of the other
Party, and produce such objects, documents or authenticated copies thereof, as may be
needed for the proceedings. The request for an appearance must indicate specifically on
what matters and by virtue of what title or qualification the official will be questioned.
2. The authorized official shall enjoy the protection guaranteed by existing legislation to
officials of the applicant authority on its territory.
                                        ARTICLE 12
                                     Assistance expenses
The Parties shall waive all claims on each other for the reimbursement of expenses
incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and
witnesses and to interpreters and translators who are not public service employees.
                                               &r                                        do?
 ---pagebreak---                                        Application
1. The application of this Protocol shall be entrusted to the central customs authorities
   of the Republic of Azerbaijan on the one hand and the competent services of the
   European Commission and, where appropriate, the customs authorities of the
   Member States of the European Union on the other. They shall decide on all
   practical measures and arrangements necessary for its application, taking into
   consideration the rules in force in the field of data protection. They may recommend
   to the competent bodies amendments which they consider should be made to this
   Protocol.
2. The Parties shall consult each other and subsequently keep each other informed of
   the detailed rules of implementation which are adopted in accordance with the
   provisions of this Protocol.
                                      ARTICLE 14
                                    Complementarity
   Without prejudice to Article 10, any agreements on mutual assistance which have
   been concluded between one or more Member States of the European Union and the
   Republic of Azerbaijan shall 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.
                                                                                       aT
 ---pagebreak---                  JOINT DECLARATION CONCERNING TITLE II
All references to the GATT are to the text of the GATT as modified in 1994
                                            ^r
                                                                           2F
 ---pagebreak---                JOINT DECLARATION CONCERNING ARTICLE 7
The Community and the Republic of Azerbaijan declare that the text of the safeguard
clause does not grant GATT safeguard treatment.
 ---pagebreak---                JOINT DECLARATION CONCERNING ARTICLE 8
Until the Republic of Azerbaijan accedes to the WTO, the Parties shall hold consultations
in the Joint Committee on their import tariff policies, including changes in tariff
protection. In particular, such consultations shall be offered prior to the increase of tariff
protection.
                                            ^                                             <3<>
 ---pagebreak---                JOINT DECLARATION CONCERNING ARTICLE 15
Within the limits of their respective competences, 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.
                                             X                                         2/
 ---pagebreak---                  JOINT DECLARATION CONCERNING ARTICLE 28
1. The Parties agree, for the purpose of its correct interpretation and its practical
    application, that the term "cases of special urgency" included in Article 28 of the
    Agreement means cases of material breach of the Agreement by one of the Parties. A
    material breach of the Agreement consists in
a) repudiation of the Agreement not sanctioned by the general rules of international
law
or
b)    violation of the essential elements of the Agreement set out in Article 1.
2. The parties agree that the "appropriate measures" referred to in Article 28 are
    measures taken in accordance with international law. If a party takes a measure in a
    case of special urgency as provided for under Article 28, the other party may avail
    itself of the procedure relating to settlement of disputes.
                                              ^3ff                                       32
 ---pagebreak--- Unilateral declaration by the Republic of Azerbaijan concerning the protection
               of intellectual, industrial and commercial property rights
The Republic of Azerbaijan declares that :
1. By the end of the fifth year after entry into force of the Agreement, the
    Republic of Azerbaijan shall accede to the multilateral conventions on
    intellectual, industrial and commercial property rights referred to in Paragraph 2
    of this declaration 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.
2. Paragraph 1 of this declaration concerns the following multilateral conventions:
- Berne Convention for the Protection of Literary and Artistic Works (Paris Act,
    1971);
- International Convention for the Protection of Performers, Producers of
    Phonograms and Broadcasting Organizations (Rome, 1961);
- 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, 1991)
3. The Republic of Azerbaijan confirm the importance it attaches 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).
4. From the entry into force of this Agreement the Republic of Azerbaijan shall
    grant to Community companies and nationals, in respect of the recognition and
    protection of intellectual, industrial and commercial property, treatment no less
    favourable than that granted by it to any third country under bilateral agreements.
 5. The provisions of paragraph 4 shall not apply to advantages granted by the
     Republic of Azerbaijan to any third country on an effective reciprocal basis or to
     advantages granted by the Republic of Azerbaijan to another country of the
     former USSR.
                                             ^_Oér                                      32
 ---pagebreak---                                                                    ISSN 0254-1475
                                                           COM(96) 613 final
                                              DOCUMENTS
EN                                                                   11 02     12
                                    Catalogue number : CB-CG-96-628-BN-C
                                                             ISBN 92-78- 12866-X
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                                                             3^7