CELEX: 51992PC0176
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 Latvia on trade and commercial and economic cooperation

COMMISSION OF THE EUROPEAN COMMUNITIES
                                         C0M(92) 176 final
                                        Brussels, 4 May 1992
                              Proposal for a
                             COUNCIL DECISION
        on the conclusion by the European Economic Community of an
       Agreement between the European Economic Community and Latvia
             on trade and commercial and economic cooperation
                      (presented by the Commission)
E.
 ---pagebreak---                           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 Latvia.
2. Exploratory talks between Commission and Latvian experts took place
between November 1991 and February this year in Brussels.
3. On the basis of directives adopted by the Council on 11 November
1991 there were a number of informal meetings between Community and
Latvian representatives, which resulted in a formal negotiating session
in Brussels on 4 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 Latvia 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 Latvia (Article 8 ) ;
(e) as regards commercial cooperation, Latvia 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 Latvian economy;
(g) the Community undertakes to support Latvia'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.
 ---pagebreak---                                  -2,"
  (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 theiAgreement.
                                                      i
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.                        i
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 Latvia.
 ---pagebreak---                                         -h
                                PROPOSAL FOR
                             A COUNCIL DECISION
                              of .
        on the conclusion by the European Economic Community of an
       Agreement between the European Economic Community and Latvia
             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 Latvia       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.
 ---pagebreak---                                    v-
                               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
 ---pagebreak---                                       ~6-
        GROUPE
EUROPE ORIENTALE                                  1/24/92 EN
     DOC. SEANCE iU                       Brussels, 4 February 1992
                                DRAFT AGREEMENT
  between the European Economic Community and the Republic of Latvia on trade
  and commercial and economic cooperation
  THE EUROPEAN ECONOMIC COMMUNITY,
  hereinafter called the "Community", of the one part, and
  THE REPUBLIC OF LATVIA,
  hereinafter called "Latvia", of the other part,
  CONSIDERING the importance of establishing and expanding trade links
  between the Community and Latvia,
  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 Latvia,
  BELIEVING that a further impetus should be given to the trading and
 economic relationship between the Community and Latvia 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 Latvia,
 ---pagebreak---                                        +
 HAVE DECIDED to conclude this Agreement and to this end have designated as
 their Plenipotentiaries:
 THE EUROPEAN ECONOMIC COMMUNITY:
 THE REPUBLIC OF LATVIA:
 WHO, having exchanged their full powers, found in good and due form,
 HAVE AGREED AS FOLLOWS:
                                     TITLE I
                                     General
                                   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 Latvia 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 Latvia 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 cr arrangements concluded between the community and
Latvia. In particular, a separate agreement for textile products will be
negotiated.                                                       /\f, £—~
   *    &    -
 ---pagebreak---                                      -g-
                                  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 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;                      N
(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.
 ---pagebreak---                                      -f-
                                  Article 7
 Latvia 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 Latvia 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 Latvia 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 cr 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.                     /\s-  /
 ---pagebreak---                                      -#
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 delating 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.                                                / , ^ . C-^.
 ---pagebreak---                                     -y-
                                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 Latvia.                                  Z^^^* ^ —
 ---pagebreak---                                       ~i n
 3. Latvia 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 Latvia,
-   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 uune IS58.
                                   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,                                                      A\/4 C^ .
 ---pagebreak---                                     13
 -  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 Latvian 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,
-  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,
-  mining 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,                 /  XyS' /
-  health.
 ---pagebreak---                                        -9-
 -   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 Latvia 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 Latvia in the field of economic
cooperation and to conclude, where appropriate, new economic cooperation
:.gre<?.ment5 with Lc-tvie .
                                    TITLE IV
            Accession to international organizations and conventions
                                   Article 17
The Community undertakes, within the limits of its powers, to support the
accession of Latvia to international organizations and conventions to which
the Community is a party, in order to enable Latvia to become more active
in the world economic system.
 ---pagebreak---                                      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 Latvia, 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 Riga
    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 Latvia;       *
 ---pagebreak---                                     -li-
                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 Latvia;
                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 Latvia 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 Latvia.
                                 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.                        Sis' /
                                                                / * *'<+'— .
 ---pagebreak--- 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 Latvia 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 Latvia 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 Latvian languages,
each text being equally authentic.                              *
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(92) 176 final
                                                      DOCUMENTS
EN                                                                          02 l i
                                 Catalogue number: CB-CO-92-191-EN-C
                                                             ISBN 92-77-43799-5
Office for Official Publications of the European Communities
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