CELEX: 51994PC0257
Language: en
Date: 1994-06-15
Title: Proposal for a Council and Commission Decision on the conclusion of the Agreement on Partnership and Cooperation between the European Communities and their Member States of the one part, and Russia, of the other part

COMMISSION OF THE EUROPEAN COMMUNITIES
                                             COM(94) 257     final
                                             Brussels, 15.06.1994
                                             94/ 015KAVC)
                                   Proposal
                   for a Council and Commission Decision
    on the conclusion of the Agreement on Partnership and Cooperation
       between the European Communities and their Member States
                of the one part, and Russia, of the other part
                          (presented by the Commission)
 ---pagebreak---                                   Explanatory memorandum
1. The attached proposal for a Council and Commission Decision constitutes the legal
   instrument for the conclusion of the Agreement on Partnership and Cooperation
   between the European Communities and their Member States, on the one hand, and
   Russia, on the other.
2. Following the Council's adoption of the negotiating directives on 5 October 1992,
   negotiations with Russia took place in the course of 1992, 1993 and 1994.
3. The Agreement is a mixed-type Agreement covering areas for which both the
   Community and the Member States are competent, and is concluded for an initial
   period often years.
   It establishes a political dialogue. The Agreement covers also trade in goods, labour
   conditions, establishment and operation of companies, cross-border supply of services,
   payments and capital, competition, intellectual, industrial and commercial property
   protection, legislative cooperation, economic cooperation, cultural cooperation and
   financial cooperation.
   The Agreement contains a clause covering human rights which allows it to be
   suspended, even unilaterally, in an emergency.
   The Agreement sets out an institutional framework for its implementation with a
   Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation
   Committee.
    The Agreement establishes the prospect of a future free trade area. In 1998,
    circumstances will be assessed in order to see whether negotiation can begin towards
    free trade.
4. The Agreement will supersede, as far as Russia is concerned, the Agreement on Trade
    and Commercial and Economic Cooperation between the European Economic
    Communities and USSR, signed on 18 December 1989.
                                                                                          /K
 ---pagebreak--- 5. The procedures of the three Communities (EC, EAEC and ECSC) for signing and
   concluding the Agreement differ.
   For the purpose of concluding the Agreement :
        the Council will conclude the Agreement on behalf of the European Community in
        accordance with Articles 113 and 235 of the EC Treaty by adopting the attached
        decisions;
        in accordance with Article 95 of the ECSC, after consulting the Consultative
        Committee and with the unanimous assent of the Council, the Commission will
        conclude the Agreement on behalf of the ECSC;
        the Council will approve the Agreement in accordance with the second paragraph
        of Article 101 of the Euratom Treaty. The Commission will then conclude the
        Agreement (on behalf of the European Atomic Energy Community);
        given the mixed-type nature of the Agreement, the conclusion of the Agreement
        will have to be ratified by all the Member States.
6. In view of the above, the Commission asks the Council to adopt the annexed decision.
                                                                                        A*-
 ---pagebreak---                      COUNCIL AND COMMISSION DECISION
          on the conclusion of the Agreement on Partnership and Cooperation
             between the European Communities and their Member States
                      of the one part, and Russia, of the other part
                              (../.. ./ECSC, EC, EURATOM)
THE COUNCIL OF THE EUROPEAN UNION,
THE EUROPEAN COMMISSION,
Having regard to the Treaty establishing the European Coal and Steel Community,
Having regard to the Treaty establishing the European Community, and in particular
Article 113 and 235 in conjunction with article 228 paragraph 2 and 3, second
subparagraph thereof,
Having regard to the Treaty establishing the European Atomic Energy Community, and in
particular the second paragraph of Article 101 thereof,
Having regard to the approval of the Council granted pursuant to Article 101 of the
Treaty establishing the European Atomic Energy Community,
Whereas the Agreement on Partnership and Cooperation between the European
Communities and their Member States, on the one part, and Russia, on the other, signed
on ..., should be approved,
Having consulted the Consultative Committee and with the unanimous agreement of the
Council,
Having regard to the assent of the European Parliament,
HAVE DECIDED AS FOLLOWS :
                                                                                       At
 ---pagebreak---                                          Article 1
The Agreement on Partnership and Cooperation between the European Communities and
their Member States of the one part, and Russia, of the other part, together with the
Protocols, the connected exchanges of letters, the declarations and the final act of
adoption of the Agreement are hereby approved on behalf of the European Community,
the European Coal and Steel Community, and the European Atomic Energy Community.
These texts are attached to this Decision.
                                         Article 2
 1. The position to be adopted by the Community in the Cooperation Council shall be
    determined by the Council, on a proposal from the Commission, or, where appropriate,
    by the Commission, in each case in accordance with the relevant provisions of the
    Treaties establishing the European Community, the European Coal and Steel
    Community and the European Atomic Energy Community.
 2. In accordance with Article 90 of the Agreement on Partnership and Cooperation, the
    President of the Council shall preside over the Cooperation Council and shall present
    the Community's position. A representative of the Commission shall preside over the
    Cooperation Committee in accordance with its rules of procedure and shall present the
    Community's position.
                                           Article 3
 The President of the Council shall give the notification provided for in Article 112 of the
 Agreement on behalf of the European Community. The President of the Commission shall
 give such notification on behalf of the European Coal and Steel Community and the
 European Atomic Energy Committee.
 Done at Brussels,
                                                                                             /" I
 ---pagebreak---                                                                                    4 Draft •
                                           FINALACT
The plenipotentiaries o f
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE REPUBUC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBUC,
IRELAND,
THE ITALIAN REPUBUC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE PORTUGUESE REPUBUC,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY, the Treaty
establishing the EUROPEAN COAL AND STEEL COMMUNITY, and the Treaty
establishing the EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as "the Member States", and of
the EUROPEAN COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY
 and the EUROPEAN COAL AND STEEL COMMUNITY, heremaâer referred to as "the
 Community",
 of the one part, and
 the plenipotentiary of the RUSSIAN FEDERATION, hereinafterreferredto as "Russia",
 of the other part,
 meeting at           this        in the year one thousand nine hundred and ninety-four for the
 signature of the Agreement on Partnership and Cooperation establishing a partnership between
 the European Communities and their Members States, of the one part, and the Russian
 Federation, of the other part, hereinafter referred to as the Agreement on Partnership and
 Cooperation, have adopted thefoUowingtexts:
 The Agreement on Partnership and Cooperation including its annexes and the foUowing
 Protocols:
         Protocol 1 on the establishment of a coal and steel contact group,
         Protocol 2   era mutual administrant assistance for
                      customs legislation,
                                                                                                /it,
 ---pagebreak--- The plenipotentiaries of the Member States and of the Community and the plenipotentiary of
Russia have adopted the texts of the joint declarations listed below and annexed to this Final
Act
      Joint declaration inrelationto Thle in and Article 94 of the Agreement
      Joint declaration inrelationto Article 10 of the Agreement
      Joint declaration inrelationto Article 12 of the Agreement
       Joint declaration inrelationto Article 17 of the Agreement
       Joint declaration inrelationto Article 18 of the Agreement
     . Joint declaration inrelationto Article 22 of the Agreement
       Joint declaration inrelationto Article 23 of the Agreement
       Joint declaration inrelationto Article 24 of the Agreement
       Joint declaration inrelationto Articles 26,32 and 37 of the Agreement
       Joint declaration inrelationto Article 28 of the Agreement
       Joint declaration inrelationto Article 29 (3) of the Agreement
       Joint declaration inrelationto Article 30 of the Agreement
       Joint declaration inrelationtoArticle 30 a) and g) of the Agreement
       Joint declaration inrelationto the notion of "control" in Article 30 (b) and Article 45 of
       the Agreement
       Joint declaration inrelationto Article 30 (h), 3rd subparagraph of the Agreement
        Joint declaration inrelationto Article 31 of the Agreement
        Joint declaration inrelationto Articles 34 and 38 of the Agreement
        Joint declaration inrelationto Article 35 of the Agreement
        Joint declaration inrelationto Article 39, (2c), 2nd subpara, of theAgreement on
        opening ports
        Joint declaration inrelationto Article 39, (2c), 2nd subpara, of the Agreement on vessels
        under a third flag
        Joint declaration inrelationto Article 44 of theAgreement
        Joint declaration inrelationto Article 46 (2) of the Agreement
        Joint declaration inrelationto Article 48 of the Agreement
        Joint declaration inrelationto Article 52 of the Agreement
        Joint declaration inrelationto Article 53 (2.2) of the Agreement
        Joint declaration inrelationto Article 54 of the Agreement
         Joint declaration inrelationto Article 99 of the Agreement
         Joint declaration inrelationto Article 101 of the Agreement
         Joint declaration inrelationto Article 107 of the Agreement
         Joint declaration inrelationto Article 107 (2) of the Agreement
         Joint declaration inrelationto Articles 2 and 107 of the Agreement
         Joint declaration inrelationto Article 112 of the Agreement
         Joint declaration inrelationto Article 6 of Protocol 2
                                                                                                  A (
 ---pagebreak--- The plenipotentiaries of the Member States and of the Community and the plempotentiaries of
Russia have also taken note of the foUowing exchanges of letters annexed to this Final Act
       Exchange of letters in relation to Article 18 of the Agreement
       Exchange of letters in relation to Article 22 of the Agreement
       Exchange of letters in relation to Article 29 of the Agreement
       Exchange of letters in relation to Article 52 of the Agreement
The plenipotentiary of Russia has taken note of the declarations listed below and annexed to
this Final Act
       Community declaration in relation to Article 36 of the Agreement
       Community declaration inrelationtoArticle 54 of the Agreement
The plenipotentiaries of the Member States and of the Community have taken note of the
declarations listed below and annexedtothis Final Act
       Declaration by Russia in relation to Article 34 of the Agreement
       Declaration by Russia in relation to Article 36 of the Agreement
Done at      .'                               in the year one thousand nine hundred and ninety
four.
For the Kingdom of Belgium:
etc.
For the European Community represented by the Council of the European Union and the
Commission of the European Communities:
For the Russian Federation:
                                                                                               A
                                                                                                 i
 ---pagebreak---                                 9 June 1994
                AGREEMENT ON PARTNERSHIP AND COOPERATION
ESTABLISHING A PARTNERSHIP BETWEEN THE EUROPEAN COMMUNITIES AND THEIR
MEMBER STATES, OF THE ONE PART, AND THE RUSSIAN FEDERATION, OF THE
OTHER PART.
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
IRELAND,
THE ITALIAN REPUBLIC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE PORTUGUESE REPUBLIC,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
contracting parties to the Treaty establishing the European community,
the Treaty establishing the European coal and Steel Community, and the
Treaty establishing the European Atomic Energy Community,
hereinafter referred to as "Member states", and
the EUROPEAN COMMUNITY, the EUROPEAN ATOMIC ENERGY COMMUNITY and the
     EUROPEAN COAL AND STEEL COMMUNITY,
hereinafter referred to as "the Community",
of the one part,
 and THE RUSSIAN FEDERATION
 hereinafter referred to as "Russia",
 of the other part,
                                                                       4k
 ---pagebreak--- CONSIDERING the importance of the historical links existing between
the Community, its Member States and Russia and the common values
that they share,
RECOGNIZING that the community and Russia wish to strengthen these
lin<s and to establish partnership and cooperation which would
deepen and widen the relations established between them in the past
in particular by the Agreement between the European Economic
Community and the European Atomic Energy Community and the Union of
Soviet Socialist Republics on Trade and Commercial and Economic
Cooperation, signed on 18 December 1989, hereinafter referred to as
the 1989 Agreement,
CONSIDERING the commitment of the Community and its Member States,
acting in the framework of the European Union established by the
Treaty on European Union of 7 February 1992, and of Russia to
strengthening the     political    and   economic freedoms    which
constitute the very basis of the partnership,
CONSIDERING the commitment of the Parties to promote international
peace and security as well as the peaceful settlement of disputes
and to cooperate to this end in the framework of the United
Nations, the Conference on Security and Cooperation in Europe, and
other fora,
CONSIDERING the firm commitment of the Community and its Member
Stares      and of Russia to the full implementation of all
principles and provisions contained in the Final Act of the
Conference on Security      and Cooperation in Europe (CSCE), the
Concluding Documents of the Madrid and Vienna Follow Up Meetings,
the Document of the CSCE Bonn Conference on Economic Cooperation,
the Charter of Paris for a New Europe and the CSCE Helsinki
Document 1992, "the Challenges of Change",
CONFIRMING the attachment of the Community and its Member States
and of Russia to the aims and principles set out in the European
Energy Charter of 17 December 1991 and in the Declaration of the
Lucerne Conference of April 1993,
CONVINCED of the paramount importance of the rule of law and
respect for human rights, particularly those of minorities, the
establishment of a multiparty system with free and democratic
elections and economic liberalisation aimed at setting up a market
eco nomy,
BELIEVING that the full implementation of partnership presupposes
the continuation and accomplishment of Russia's political and
economic reforms,
DESIROUS of encouraging the process of regional cooperation in the
areas covered by this Agreement between the countries of the former
USS* in order to promote the prosperity and stability of the
region,
                                  °L.
 ---pagebreak---     DESIROUS of establishing and developing regular political dialogue
    on bilateral and international issues of mutual interest,
    TAKING ACCOUNT of the Community's willingness to provide technical
    assistance, as appropriate, for the implementation of economic
    reform in Russia and for the development of economic cooperation,
    BEARING IN MIND the utility of the Agreement in favouring a gradual
    rapprochement between Russia and a wider area of cooperation in
    Europe   and   neighbouring   regions  and   Russia's   progressive
    integration into the open international trading system,
    CONSIDERING the commitment of the Parties to liberalise trade,
    based on the principles contained in the General Agreement on
    Tariffs and Trade, hereinafter referred to as "GATT", as amended by
    the Uruguay Round Trade Negotiations, and taking into account the
    establishment of the World Trade organisation, hereinafter referred
    to as "WTO",
    RECOGNISING that Russia is no longer a state trading country; - it
    is now a country with an economy in transition -, continued
    progress towards a market economy will be fostered by cooperation
    between the Parties in the forms set out in this Agreement,
    CONSCIOUS of the need to improve conditions affecting business and
    investment, and conditions in areas such as establishment of
    companies, labour, provision of services and capital movements,
    CONVINCED that this Agreement will create a new climate for
    economic relations between the Parties and in particular for the
    development of trade and investment, which are essential to
    economic restructuring and technological modernization,
    DESIROUS of establishing close cooperation in the area of
    environment protection taking into account the interdependence
    existing between the Parties in this field,
    BEARING in mind the intention of the Parties to develop their
    cooperation in the space field in view of the complementarity of
    their activities in this area,
    DESIROUS of promoting cultural cooperation and improving the flow
    of information,
Have agreed as fol low's :
 ---pagebreak---                                Article 1
A Partnership is hereby established between the community and its
Member states of the one part, and Russia of the other part. The
objectives of this partnership ares
    to provide an appropriate framework for the political dialogue
    between the Parties allowing the development of close relations
    between them in this field,
    to promote trade and investment and harmonious economic relations
    between the Parties based on the principles of market economy and
    so to foster sustainable development in the Parties,
-   to strengthen political and economic freedoms,
-   to support Russian efforts to consolidate its democracy and to
    develop its economy and to complete the transition into a market
    economy,
-   to provide a basis for economic, social, financial and cultural
    cooperation founded on the principles of mutual advantage, mutual
    responsibility and support,
-   to promote activities of joint interest,
    to provide an appropriate framework for the gradual integration
    between Russia and a wider area of cooperation in Europe,
    to create the necessary conditions for the future establishment of
    a free trade area between the Community and Russia covering
    substantially all trade in goods between them, as well as
    conditions for bringing about freedom of establishment of
    companies, of cross-border trade in services and of capital
    movements.
 ---pagebreak---                       TITLE I : GENERAL PRINCIPLES
                               Article 2
Respect for the democratic principles and human rights as defined in
particular in the Helsinki Final Act and the charter of Paris for a New
Europe underpin the internal and external policies of the Parties
and constitute an essential element of partnership and of the present
Agreement.
                               Article 3
The Parties undertake to consider development of the relevant titles of
this Agreement, in particular Title III and Article 53, as
circumstances allow, with a view to the establishment of a free trade
area between them. The Cooperation Council may make recommendations on
such developments to the Parties. Such development shall only be put
into effect by virtue of an agreement between the Parties in accordance
with their respective procedures. The Parties shall examine together
in the year 1998 whether circumstances allow the beginning of
negotiations on the establishment of a free trade area.
                                Article 4
The Parties undertake to examine together, by mutual consent,
amendments which it may be appropriate to make to any part of the
Agreement in view of changes in circumstances, and in particular of the
situation arising from Russia's accession to GATT/WTO. The first
examination shall take place three years after the entry into force of
the Agreement or when Russia becomes a Contracting Party to GATT/WTO,
whichever is earlier.
                                Article 5
 1. The most favoured nation treatment granted by Russia under this
    Agreement shall not apply during a transitional period expiring 5
    years after the entry into force of this Agreement in relation to
    advantages defined in Annex 1 granted by Russia to other countries
    of the former USSR. This period may be extended where appropriate
    for specific sectors by mutual consent between the Parties-
 2. In the case of the most favoured nation treatment granted under
    Title III the transitional period referred to in paragraph 1 shall
    expire three years after the entry into force of the Agreement or
    when Russia becomes a Contracting Party of GATT/WTO, whichever is
    earLier.
 ---pagebreak---                      TITLE II ; POLITICAL DIALOGUE
                               Article 6
A regular political dialogue shall be established between the Parties
which t-hey intend to develop and intensify. It shall accompany and
consolidate the rapprochement between the European Union and Russia,
support the political and economic changes underway in Russia and
contribute to the establishment of new forms of cooperation. The
political dialogue:
    8haLl strengthen the links between Russia and the European Union.
    The economic convergence achieved through this Agreement shall lead
    to more intense political relations;
    shall bring about an increasing convergence of positions on
    international issues of mutual concern thus increasing security and
    staoility.
-   shall foresee that the Parties endeavour to cooperate on matters
    pertaining to the observance of the principles of democracy and
    human rights and hold consultations if necessary, on matters
    related to their due implementation.
                               Article 7
1. Meetings shall take place in principle twice a year between the
    President of the European Council and the President of the
    Commission of the European _ Communities on one side and the
    President of Russia on the other.
2.  At ministerial level, political dialogue shall take place within
    the Cooperation Council established in Article 90 and on other
    occasions, including with the European Union Troika, by mutual
    agreement.
                               Article 8
Other procedures and mechanisms for political dialogue shall be set up
by the Parties, and in particular in the following forms:
-   biannual meetings at senior official level between the European
    Union Troika on the one hand, and officials of Russia on the other;
    taking full advantage of diplomatic channels;
    any other means, including the possibility of expert meetings,
    which would contribute to consolidating and developing this
    dia Logue.
                               Article 9
Political dialogue at parliamentary level shall take place within the
framework of the Parliamentary Cooperation Committee established in
Article 95.
 ---pagebreak---                           TITLE III: TRADE IN GOODS
                                 Article 10
   1. The Parties shall accord to one another the general most-favoured-
       nation treatment described in Article I paragraph 1 of the GATT.
   2.  The provisions of paragraph 1 shall not apply to:
   (a) advantages accorded to adjacent countries in order to facilitate
       frontier traffic;
   (b) advantages granted with the aim of creating a customs union or a
       free trade area or pursuant to the creation of such union or area.
       The terms "customs union" and "free trade area" shall have the same
       meaning as those described in paragraph 8 of Article XXIV of the
       GATT or created through the procedure indicated in paragraph 10 of
       the same GATT article;
   (c) advantages granted to particular countries in accordance with
       the GATT and with other international arrangements in favour of
       developing countries.
                                  Article 11
   1. The products of the territory of one Party imported into the
       territory of the other Party shall not be subject, directly or
       indirectly, to internal taxes or other internal charges of any kind
       in excess of those applied, directly or indirectly, to like
       domestic products.
   2.  Moreover, these products shall be accorded treatment no less
       favourable than that accorded to like products of national origin
       in respect of all laws, regulations and requirements affecting
       their internal sale, offering for sale, purchase, transportation,
       distribution or use. The provision of this paragraph shall not
       prevent the application of differential internal transportation
       charges which are based exclusively on the economic operation of
       the means of transport and not on the nationality of the product.
   3. Article III paragraphs 8, 9 and 10 of the GATT shall be applicable
       mutatis mutandis between the Parties.
                                  Article 12
   1. The Parties agree that the principle of freedom of transit is an
       essential condition of attaining the objectives of this Agreement.
       In this connection each Party shall provide for freedom of transit
       through its territory of goods originating in the customs territory
       or destined for the customs territory of the other Party.
   2.  The rules described in Article V, paragraphs 2, 3, 4 and 5 of the
       GATT shall be applicable between the Parties.
3)
 ---pagebreak---                                Article 13
The following articles of the GATT shall be applicable mutatis mutandis
between the Parties:
     i) Article  VII, paragraphs 1, 2, 3, 4 a), b) and d), 5;
     ii) Article VIII;
     iii)Article IX;
     iv) Article X.
                                Article 14
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
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. Such legislation shall be applied on
a most-favoured nation basis and thus subject to the exceptions listed
in Article 10 paragraph 2 of the present Agreement. 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 15
1. Goods originating in Russia shall be imported into the Community
     free of quantitative restrictions without prejudice to the
     provisions of articles 17, 20 and 21 of the present Agreement and
     to the provisions of articles 77, 81, 244, 249 and 280 of the Acts
     of Accession of Spain and Portugal to the European community.
2.   Goods originating in the Community shall be imported into Russia
     free of quantitative restrictions without prejudice to the
     provisions of articles 17, 20 and 21 and of Annex 2 to the present
     Agreement.
                                Article 16
Until Russia becomes a Contracting Party to the GATT/WTO, the Parties
 shall hold consultations in the cooperation 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.
 ---pagebreak---                               Article 17
1. Where any product is being imported- into the territory of one of
   the Parties in such increased quantities and under such conditions
   as to cause or threaten to cause substantial injury to domestic
   producers of like or directly competitive products, the community
   or Russia, 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 Russia as
   the case may be shall supply the Cooperation Committee with all
   relevant information with a view to seeking a solution acceptable
   to both Parties. The Parties shall commence consultations promptly
   within the Cooperation Committee.
3. If, as a result of the consultations, the Parties do not reach
   agreement within 30 days       of   referral  to   the   Cooperation
   Committee on actions to avoid the situation, the Party which
   requested consultations shall be free to restrict imports of the
   products concerned or to adopt other appropriate measures to the
   extent and for such time as is necessary to prevent or remedy
   the injury.
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. Where a safeguard measure is taken by one Party in accordance with
   the provisions of this article, the other Party shall be free to
   deviate from its obligations under Title III of this Agreement
   towards the first Party in respect of substantially equivalent
   trade.
   Sucn action shall not be taken before consultations have been
   offered by such other Party nor if agreement has been reached
   witnin 45 days following the date these consultations were offered.
7. The right of deviation from the obligations referred to in
   paragraph 6 shall not be exercised for the first three years that a
    safeguard measure is in effect, provided that the safeguard measure
   has been taken as a result of an absolute increase in imports, for
   the maximum period of four years, and in conformity with the
   provisions of this Agreement.
 ---pagebreak---                               Article 18
Nothing in this Title, and in Article 17 in particular shall prejudice
or affect in any way the taking, by either Party, of anti-dumping or
countervailing measures in accordance with Article VI of the GATT, the
Agreement on implementation of Article VI of the GATT, the Agreement on
interpretation and .application of Articles VI, XVI and XXIII of the
GATT or related internal legislation.
In respect of antidumping or subsidy investigations, each Party agrees
to examine submissions by the other Party and to inform the interested
parties concerned of the essential facts and considerations on the
basis of which a final decision is to be made. Before definitive
antidumping and countervailing duties are imposed, the Parties shall do
their utmost to bring about a constructive solution of the problem.
                               Article 19
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 20
Title III shall not affect the provisions of the Agreement between the
European Economic Community and the Russian Federation on trade in
textile products initialled on 12 June 1993 and applied with
retroactive effect as from 1 January 1993. Furthermore, Article 15 of
the present Agreement shall not apply to trade in textile products
falling under Chapters 50 to 63 of the combined nomenclature.
                               Article 21
 1. Trade in products covered by the Treaty establishing the European
    Coal and steel community shall be governed by:
        the provisions of this Title III, with the exception of Article
        15; and
        upon its entry into force, by the provisions of the agreement
        on quantitative arrangements concerning exchanges of ECSC steel
        products.
2.  The establishment of a contact Group on coal and steel matters is
    governed by Protocol No.l annexed to this Agreement.
                                    10
 ---pagebreak---                                Article 22
                       Trade in Nuclear Materials
1. Trade in nuclear materials shall be covered by:
   -  the provisions of this Agreement with the exception of Articles
      15 and 17 paragraphs 1 to 5 and paragraph 7;
   -  the provisions of Articles 6, 7, 14 and 15 paragraphs 1, 2, 3 -
      first sentence, and paragraphs 4 and 5 of the 1989 Agreement;
   -  the attached exchange of letters.
2. Notwithstanding the provisions of paragraph 1 of this Article, the
   Parties agree to take all necessary steps to arrive at an
   arrangement covering trade in nuclear materials by 1 January 1997.
3. Until such an arrangement is reached, the provisions of this
   Article will continue to apply.
4. Steps will be taken to conclude an agreement regarding nuclear
   safeguards, physical protection and administrative cooperation in
   transfers of nuclear materials. Until such an agreement is in
   force,    the   respective   legislation   and  international non-
   proliferation obligations of the Parties will be applicable as
   regards the transfer of nuclear materials.
5. For the purpose of the application of the regime provided for in
   paragraph 1:
   -   the reference in Article 6 and Article 15 paragraph 5 of the
       1989 Agreement to "this Agreement" shall be read as meaning the
       regime established by paragraph 1 of this Article;
      the reference in Article 17 paragraph 6 of the present Agreement
      to "this Article" shall be read as meaning Article 15 of the
       1989 Agreement;
    -  the reference in articles 6, 7, 14 and 15 of the 1989 Agreement
       to the "Contracting Parties" shall be read as meaning the
       Parties to the present Agreement;
       the reference to the "Joint Committee" in Article 15 of the 1989
      Agreement shall mean the Cooperation Committee provided for
       mder Article 92 of the present Agreement.
                                    11
 ---pagebreak---             TITLE IV: PROVISIONS ON BUSINESS AND INVESTMENT
                      Chapter I : Labour conditions
                               Article 23
1. Subject to the laws, conditions and procedures applicable in each
    Member State, the Community and the Member states shall ensure that
    the treatment accorded to Russian nationals, legally employed in
    the territory of a Member state shall be free from any
    discrimination    based   on    nationality, as   regards   working
    conditions, remuneration or dismissal, as compared to its own
    nationals.
2.  Russia shall, subject to the conditions and modalities applicable
    in Russia, accord the treatment referred to in paragraph 1 to
    nationals of a Member State who are legally employed in its
    territory.
                                Article 24
                     Coordination of social security
The Parties shall conclude agreements in order:
(i)     to adopt, subject to the conditions and modalities applicable
        in each Member state, the provisions necessary for the
        coordination of social security systems for workers of Russian
        nationality, legally employed in the territory of a Member
        state and where applicable for the members of their family,
        legally resident there. These provisions will in particular
        ensure that:
        -    all periods of insurance, employment or residence completed
            by such workers in the various Member states shall be added
            together for the purpose of pensions in respect of old age,
            invalidity and death and for the purpose of medical care
            for such workers and where applicable for such family
            members;
            any pensions in respect of old age, death, industrial
            accident or occupational disease, or of invalidity
            resulting therefrom, with the exception of the special non-
            contributory benefits, shall be freely transferable at the
            rate applied by virtue of the law of the debtor Member
             State or States;
                                     i ->
 ---pagebreak---         -   the workers in question shall where applicable receive
            family allowances for the abovementioned members of their
            family -
(ii)        to adopt, subject to the conditions and modalities
            applicable in Russia, the provisions necessary to accord to
            workers who are nationals of a Member State and legally
            employed in Russia, and to members of their families
            legally resident there, treatment similar to that specified
            in the second and third indents of paragraph (i).
                               Article 25
The measures to be taken in accordance with Article 24 of the present
Agreement shall not affect any rights or obligations arising from
bilateral agreements linking Russia and the Member States where those
agreements provide for more favourable treatment of nationals of Russia
or of the Member States.
                               Article 26
The Cooperation Council shall examine which improvements can be made in
working conditions for businessmen consistent with the international
commitments of the Parties, including those set out in the document of
the CSC3 Bonn Conference.
                               Article 27
The   Cooperation    Council  shall make     recommendations   for  the
implementation of Articles 23 and 26 of the present Agreement.
                                    13
 ---pagebreak---        Chapter II: Conditions affecting the establishment and
                       operation of companies
                             Article 28
1. The community and its Member States of the one part and Russia of
   the other part, shall grant to each other treatment no less
   favourable than that accorded to any third country, with regard to
   conditions affecting the establishment of companies in their
   territories and this in conformity with the legislation and
   regulations applicable in each Party.
2. Without prejudice to the reservations listed in Annex 3, the
   Community and its Member States shall grant to Community
   subsidiaries of Russian companies a treatment no less favourable
   than that granted to other community companies or to Community
   companies which are subsidiaries of any third country companies
   whichever is the better, in respect of their operation and this in
   conformity with their legislation and regulations.
3. Without prejudice to the reservations listed in Annex 4, Russia
   shall grant to Russian subsidiaries of Community companies a
   treatment no less favourable than that granted to other Russian
   companies or to Russian companies which are subsidiaries of any
   third country companies whichever is the better, in respect of
   their operation and this in conformity with its legislation and
   regulations.
4. The Community and its Member states of the one part and Russia of
   the other part shall grant to branches of Russian and Community
   companies respectively a treatment no less favourable than that
   accorded to branches of companies of any third country, in respect
   of their operation and this in conformity with their legislation
   and regulations.
5. The provisions of paragraphs 2 and 3 cannot be used so as to
   circumvent a Party's legislation and regulations applicable to
   access to specific sectors or activities by subsidiaries of
   companies of the other Party established in the territory of such
   fir3t Party.
   The treatment referred to in paragraphs 2 and 3 shall benefit
   companies established in the community and Russia respectively at
   the date of entry into force of this Agreement and companies
   established after that date once they are established.
                                  14
 ---pagebreak---                                    Article 29
    The provisions of Article 28 of the present Agreement together with the
    following provisions shall apply in respect of banking and insurance
    services referred to in Annex 6.
    1.  In respect of banking services referred to in Annex 6, part B, the
        nature of the treatment accorded by Russia under Article 28,
        paragraph 1, with regard to establishment by means of the setting
        up of subsidiaries only and under Article 28, paragraph 3, is set
        out in Annex 7, part A.
        In respect of insurance services referred to in Annex 6, part A,
        paragraphs 1 and 2, the nature of the treatment accorded by Russia
        under Article 28, paragraph 1, is set out in Annex 7, part B.
    2.  Notwithstanding any other provisions of this Agreement, a Party
        sha 11 not be prevented from taking measures for prudential reasons,
        including for the protection of investors, depositors, policy
        holders or persons to whom a fiduciary duty is owed by a financial
        service supplier, or to ensure the integrity and stability of the
        financial system. Such measures shall not be used as a means of
        avoiding the Party's obligations under the Agreement.
        Nothing in the Agreement shall be construed to require a Party to
        disclose information relating to the affairs and accounts of
        individual customers or any confidential or proprietary information
        in the possession of public entities.
    3. Without prejudice to the provisions of Part A, paragraph 1,
      • subparagraphs d and e of Annex 7, the Community and the Member
        States of the one part and Russia of the other part shall not adopt
        any new regulations or measures which would introduce or worsen
        discrimination as compared to the situation existing on the date of
        the signature of the Agreement as regards conditions affecting the
        establishment of the other Party's companies in their territories
        in comparison to their own companies.
        The parties agree that the terms "worsen discrimination" include
        the aggravation of discriminatory conditions or their extension or
        reintroduction after the current period of application-
    4.  For the  purposes of this Agreement, as regards banking activities a
        company  shall be regarded as a Russian subsidiary of a Community
        company  when more than fifty percent (50%) of its share capital is
        held by  the Community company.
                                       AX
14)
 ---pagebreak---                                Article 30
For the purposes of this Agreement:
a)  -Establishment" shall mean the right of Community or Russian
    companies as referred to in paragraph (h) of this article to take
    up economic activities by means of the setting up of subsidiaries
    and branches in Russia or in the community respectively.
    In respect of financial services mentioned in Article 29,
    "establishment" shall mean the right of Community or Russian
    companies as referred to in paragraph (b) of this article to take
    up economic activities by means of the setting up of subsidiaries
    and branches in Russia or in the Community respectively after
    receiving a licence from the competent authorities in conformity
    with the legislation and regulations applicable in each Party.
b)  **Subsidiary" of a company shall mean a company which is controlled
    by che first company.
c)  "Economic activities" shall mean activities of an industrial,
    commercial or professional character, including financial services.
d)  "Branch" of a company shall mean a place of business not having
    legal personality which has the appearance of permanency, such as
    the extension of a parent body, has a management and is materially
    equipped to negotiate business with third parties so that the
    latter, although knowing that there will if necessary be a legal
    link with the parent body, the head office of which is abroad, do
    not have to deal directly with such parent body but may transact
    business at the place of business constituting the extension.
e)   "Community subsidiary" or "Russian subsidiary" respectively shall
    mean a "Community company" or a "Russian company" respectively, as
    hereafter defined, which is also a subsidiary of a "Russian
    company" or a "Community company" respectively.
f) A national of a Member State or of Russia respectively shall mean a
    natural person who is a national of one of the Member States or of
    Russia    respectively   in   accordance   with   their   respective
    legislation.
g)   "Operation" shall mean the pursuit of economic activities.
     In respect of financial services mentioned in Article 29,
     "operation" shall mean the pursuit of all the economic activities
    authorized by the licence granted to the Company by the competent
     authorities in conformity with the laws and regulations applicable
     in each Party.
                                   Ak
 ---pagebreak--- h) A "Community company" or a "Russian company" respectively shall
    mean a company set up in accordance with the laws of a Member State
    or of Russia respectively and having its registered office or
    central administration, or principal place of business in the
    territory of the Community or Russia respectively. However, should
    the company, set up in accordance with the laws of a Member State
    or Russia respectively, have only its registered office in the
    territory of the Community or Russia respectively, the company
   * shall be considered a Community or Russian company respectively if
    its operations possess a real and continuous link with the economy
    of one of the Member States or Russia respectively.
    With regard to international maritime transport, shall also be
    beneficiaries of the provisions of this chapter and Chapter III,
    shipping companies established outside the Community or Russia and
    controlled by nationals of a Member state or of Russia
    respectively, if their vessels are registered in that Member state
    or in Russia in accordance with their respective legislations.
    For the purposes of this provision, international maritime
    transport shall be considered to include intermodal transport
    operations involving a sea leg without prejudice to applicable
    nationality restrictions concerning the carriage of goods and
    passengers by other transport modes.
i)  For the purpose of Article 29 and Annex 7, with regard to banking
    services referred to in Annex 6, part B, "Russian subsidiary" or
    "Community subsidiary" as defined in paragraph e), shall refer to
    sucn a subsidiary which is a bank in accordance with the laws of
    Russia or a Member State respectively.
    For the purpose of Article 29 and Annex 7, with regard to banking
    services referred to in Annex 6, part B, "community company or
    "Russian company" as defined in paragraph h), shall refer to such a
    company which is a bank in accordance with the laws of a Member
    State or Russia respectively.
                                    Al
 ---pagebreak---                                Article 31
Notwithstanding Article 100, the provisions of the present Title shall
not prejudice the application by each Party of any measure necessary to
prevent the cixcumvention, through the provisions of this Agreement, of
its measures concerning third country access to its market.
                               Article 32
1. Notwithstanding the provisions of Chapter I of this Title, a
     Community company and a Russian company established in the
     territory of Russia or the Community respectively shall be
     entitled to employ, or have employed by one of its subsidiaries,
     branches or joint ventures, in accordance with the legislation in
     force in the host country of establishment, in the territory of
     Russia and the Community respectively, employees who are nationals
     of Member states and Russia respectively, provided that such
     employees are key personnel as defined in paragraph 2 of this
     Article, and that they are employed exclusively by companies,
     subsidiaries, branches or joint ventures. The residence and work
     permits of such employees shall only cover the period of such
     employment.
2.   Key personnel of the above-mentioned companies herein referred to
     as "organizations" are "intra-corporate transferees" as defined in
     paragraph 2(c) of this Article in the following categories,
     provided that the organisation is a juridical person and that the
     persons concerned have been employed by it or have been partners in
     it (other than as majority shareholders), for at least the year
     immediately preceding such movement :
 (a) Persons working in a senior position with an organisation, who
     primarily direct the management of the establishment (branch,
     subsidiary or joint venture) , receiving general supervision or
     direction principally from the board of directors or stockholders
     of the business or their equivalent, including:
    .-   directing the establishment or a department or sub-division of
         the establishment;
     -    supervising and controlling the work of other supervisory,
         professional or managerial employees;
     -    having the authority personally to hire and fire or recommend
         hiring, firing or other personnel actions,
 (b) Persons working within an organisation who possess uncommon
     knowledge essential to the establishment's service, research
     equipment, techniques or management. The assessment of such
     knowledge may reflect, apart from knowledge specific to the
     establishment, a high level of qualification referring to a type of
     wor< or trade requiring specific technical knowledge, including
     memoership of an accredited profession.
                                  a
 ---pagebreak--- (c) An "intra-corporate transferee" is defined as a natural person
    working within an organisation din the territory of a Party, and
    being temporarily transferred in the context of pursuit of economic
    activities in the territory of the other Party; the organisation
    concerned must have its principal place of business in the
    territory of a Party and the transfer be to an establishment of
    that organisation, effectively pursuing like economic activities in
    the territory of the other Party.
                               Article 33
The Parties recognize the importance of granting each other national
treatment with regard to the establishment and, where not so foreseen
herein, operation of each other's companies in their territories and
agree to consider the possibility of movement towards this end on a
mutually satisfactory basis, and ,in the light of any recommendations by
the Cooperation Council.
                               Article 34
1. The Parties shall use their best endeavours to avoid taking any
    measures or actions which render the conditions for the
    establishment and operation of each other's companies more
    restrictive than the situation existing on the day preceding the
    date of signature of the Agreement.
2.  By the end of the third year after signature of the Agreement at
    the latest, and thereafter at annual intervals the Parties shall
    examine within the Cooperation Council:
            measures introduced by either Party since the signature of
            the Agreement which affect the establishment or operation
            of companies of one Party in the territory of the other
            Party, and which are the subject of commitments assumed in
            Article 28; and
        -   whether it is possible for the Parties to assume
                 the obligation not to take any measures or actions
                 which may render the conditions for the establishment
                 and   operation   of   each   other's   companies   more
                 restrictive than the situation existing at the time of
                 such examination, where not already foreseen herein, or
             -  other obligations affecting their freedom of action
             in areas agreed between the Parties in respect of the
            commitments assumed in Article 28.
                                    4?
 ---pagebreak---      If after such examination one Party is of the view that measures
     introduced by the other Party since the signature of the Agreement
    result in a situation which is significantly more restrictive in
    respect of establishment or operation of companies of the first
     Party in the territory of the other Party as compared with the
     situation existing at the date of signature of the Agreement, such
     Party may request the other Party to enter into consultations. In
     such case the provisions of Part A of Annex 8 shall apply.
3. In furtherance of the aims of this article, measures shall be taken
   as indicated in Part B of Annex 8.
4. The provisions of this article are without prejudice to those of
   Article 51: the situations covered by such Article 51 shall be
   solely governed by its provisions to the exclusion of any other.
                               Article 35
1. Article 28 shall not apply to air       transport,  inland  waterways
   transport and maritime transport.
2. However, in respect of activities, as indicated below, undertaken
   by shipping agencies for the provision of services to international
   maritime transport, including intermodal transport         operations
   involving a,sea-leg, each Party shall permit to the companies of
   the other Party to have a commercial presence in its territory in
   the form of subsidiaries or branches, under conditions of
   establishment and operation no less favourable than those accorded
   to its own companies or to subsidiaries or branches of companies of
   any third country, whichever are the better, and this in conformity
   with the legislation and regulations applicable in each Party.
3. Such activities include:
    (a) marketing and sales of maritime transport and related services
        through direct contact with customers, from quotation to
        invoicing;
    (b) purchase and resale of any transport and related services,
        including transport services by any inland mode, necessary for
        the supply of an intermodal service;
    (c) preparation of documentation concerning transport documents,
        customs documents, or other documents related to the origin and
        character of the goods transported;
                                  1°
 ---pagebreak---  (d) provision of business information by any means, including
     computerised information systems and electronic data interchange
     (subject to any non-discriminatory         restrictions    concerning
     telecommunications);
(e) setting up   of  any   business   arrangement  with   other   shipping
    agencies;
(f) acting on behalf of the companies, inter alia in organising the
    call of the vessel or taking over cargoes when required.
                                    V
 ---pagebreak---               Chapter III: Cross border supply of services
                               Article 36
For the sectors listed in Annex 5 to this Agreement, the Parties shall
grant each other treatment no less favourable than that accorded to any
third country with regard to the conditions affecting the cross border
supply of services, by Community or Russian companies into the
territory of Russia or the community respectively, pursuant to the
legislation and regulations applicable in each Party.
                               Article 37
Subject to the provisions of Article 48 of the present Agreement, the
Parties shall permit for the sectors listed in Annex 5 to this
Agreement the temporary movement of natural persons, who are
representatives of a Community or a Russian company and are seeking
temporary entry for the purpose of negotiating for the sales of cross-
border supply services or entering intc agreements to sell cross-border
services for that company, where those representatives will not be
engaged in making direct sales to the general public or in supplying
services themselves.
                               Article 38
1. For the sectors listed in Annex 5, each Party may regulate the
    conditions of cross border supply of services into its territory.
    Insofar as these regulations are of general application they shall
    be administered in a reasonable, objective and impartial manner.
2.  Paragraph 1 is without prejudice to the provisions of Article 36
    and Article 50.
3.  By the end of the third year after signature of the Agreement at
    the latest, the Parties shall examine within the Cooperation
    Council:
            measures introduced by either Party since the signature of
            the Agreement which affect the cross-border supply of
            services covered by Article 36
            whether it is possible for the Parties to assume
            -    the obligation not to take any measures or actions
                 which may render the conditions for the cross-border
                 supply of services covered by Article 36 more
                 restrictive than the situation existing at the time of
                 such examination
                                    22
 ---pagebreak---                    other obligations affecting their freedom of action
               in areas agreed between the Parties in respect of the
               commitments assumed in Article 36.
       If after such examination one Party is of the view that measures
       introduced by the other Party since the signature of the Agreement
       result in a situation which is significantly more restrictive in
       respect of cross-border supply of services covered by Article 36 as
       compared with the situation existing at the date of signature of
       the Agreement, such first Party may request the other Party to
       enter into consultations. In such case the provisions of Part A of
       Annex 8 shall apply.
    4. In furtherance of the aims of this article, measures shall be taken
       as indicated in Part B of Annex 8.
    5. The provisions of this article are without prejudice to those of
       Article 51: the situations covered by such Article 51 shall be
       solely governed by its provisions to the exclusion of any other.
                                  Article 39
    1. With regard to maritime transport, the Parties undertake to apply
       effectively   the   principle   of unrestricted    access  to the
       international market and traffic on a commercial basis.
       a)  The above provision does not prejudice the rights and
           obligations arising under the United Nations Convention on a
           Code of Conduct for Liner Conferences, as applicable for a
           Party to the present Agreement. Non-conference lines shall be
           free to operate in competition with a conference as long as
           they adhere to the principle of fair competition on a
           commercial basis.
       b)  The Parties affirm their commitment to a freely competitive
           environment as being an essential feature of the dry and liquid
           bulk trade.
    2. In applying the principles of paragraph 1, the Parties shall:
       a)  not apply, in their mutual trades, as from entry into force of
           this Agreement, any cargo sharing provisions of bilateral
           agreements between any Member State and the former USSR;
                                       23
(5)
 ---pagebreak---    b)  not introduce cargo sharing arrangements in future bilateral
       agreements with third countries concerning dry and liquid bulk
       and liner trade. However, this does not exclude the possibility
       of such arrangements concerning liner cargo in those
       exceptional circumstances where liner shipping companies from
       one or other Party to the present Agreement would not
       otherwise have an effective opportunity to ply for trade to and
       from the third country concerned;
   c)  abolish, upon entry into force of this Agreement, all
       unilateral measures, administrative, technical and other
       obstacles which could constitute a disguised restriction or
       have discriminatory effects on the free supply of services in
       international maritime transport.
       Each Party shall grant, inter alia, a treatment no less
       favourable than that accorded to a Party's own vessels, for
       vessels used for the transport of goods, passengers or both,
       and flying the flag of the other Party, with respect to access
       to ports open to foreign vessels, the use of infrastructure and
       auxiliary maritime services of those ports, as well as related
       fees and charges, customs facilities and the assignment of
       berths and facilities for loading and unloading.
3. The Parties agree that, following the entry into force of this
   Agreement and not later than 31 December 1996, they will conduct
   negotiations on the stage-by-stage opening of the inland waterways
   of each Party to the nationals and shipping companies of the other
   Party, in respect of the freedom tc provide international sea-river
   services.
                                  2.4
 ---pagebreak---                                Article 40
For the purpose of establishing favourable conditions for rail
transport between the Parties, it is agreed that both Parties will, in
the framework of this Agreement and through appropriate bilateral and
multilateral mechanisms, promote:
     -   the facilitation of customs and other border          clearance
         procedures for freight and for rolling stock;
     -   cooperation in the creation of suitable rolling stock meeting
         the requirements of international traffic;
     -   the approximation of regulations and procedures which govern
         international transport;
         the safeguarding and development of international passenger
         traffic between Russia and the Member States.
                                Article 41
Cooperation shall ensure fair, balanced and competitive conditions for
the space launching and transportation market based on sound economic
factors and, in particular, steps will be taken to promote the
negotiation and implementation of multilateral rules regarding
international trade in space launching and transportation services.
During the transitional period to the year 2000, conditions for the
supply of space launch services shall be agreed upon.
                                Article 42
The Parties shall endeavour to provide each other every assistance
possible as regards measures promoting cross-border trade in mobile
 satellite communications on their respective territories, in conformity
with their respective legislation, practices and conditions, applied by
each Party. In 1996, the Parties will meet to consider the
possibilities of granting to each other MFN treatment for mobile
 satellite services.
                                Article 43
With a view to assuring a coordinated development of transport between
 the Parties,adapted to their commercial needs, the Parties may, after
 the entry into force of this Agreement, conclude specific Agreements
 regarding the conditions of mutual market access and of provision of
 services in the transport sector, to the extent that these conditions
 are not already addressed by this Agreement, such agreements may apply
 to more than one or to a single mode of transport.
                                    rt
 ---pagebreak---                      Chapter IV: General Provisions
                                Article 44
For the purposes of Chapters II, III and Title V, no account shall be
taken of treatment accorded by the community, its Member States or
Russia pursuant to commitments entered into in economic integration
agreements.
                                Article 45
Companies which are controlled and exclusively owned by Russian
companies and Community companies jointly shall also be beneficiaries
of the provisions of Chapters II and III of this Title and of Title V.
                                Article 46
1. The provisions of this Title shall be applied subject to
     limitations justified on grounds of public policy(*), public
     security or public health.
2.   They shall not apply to activities which in the territory of either
     Party are connected, even occasionally, with the exercise of
     official authority.
                                Article 47
The Cooperation Council shall make recommendations for the further
liberalization of trade in services, taking into account the
development of the services sectors in the Parties and the other
international commitments entered into by the Parties, in particular in
the light of the final results of the negotiations of the General
Agreement on Trade in services, hereinafter referred to as "GATS".
                                Article 48
For the purpose of Title IV of this Agreement, nothing in the Agreement
shall prevent the Parties from applying their laws and regulations
regarding entry and stay, work, labour conditions and establishment of
natural persons and supply of services, provided that, in so doing,
they do not apply them in a manner as to nullify or impair the benefits
accruing to any Party under the terms of a specific provision of the
Agreement. The above provision does not prejudice the application of
Article 46.
 (1) To be translated in Russian as "obschestvenniy poriadok'
 ---pagebreak---                               Article 49
a)  The Most Favoured Nation treatment granted in accordance with the
    provisions of Title IV or Title V shall not apply to the tax
    advantages which the Parties are providing or will provide in the
    future on the basis of agreements to avoid double taxation, or
    other tax arrangements.
b)  Nothing in Title IV or Title V shall be construed to prevent the
    adoption or enforcement by the Parties of any measure aimed at
    preventing the avoidance or evasion of taxes pursuant to the tax
    provisions of agreements to avoid double taxation and other tax
    arrangements, or domestic fiscal legislation.
c)  Nothing in Title IV or Title v shall be construed to prevent Member
    States or Russia from distinguishing, in the application of the
    relevant provisions of their fiscal legislation, between taxpayers
    who are not in identical situations in particular as regards their
    place of residence.
                               Article 50
Without prejudice to Articles 32 and 37, no provision of Chapters II,
III and IV hereof shall be interpreted as giving the right to:
        nationals of the Member states or of Russia respectively to
        enter, or stay in, the territory of Russia or the community
        respectively in any capacity whatsoever, and in particular as a
        shareholder or partner in a company or manager or employed
        thereof or supplier or recipient of services;
    -   Community subsidiaries or branches of Russian companies to
        employ or have employed in the territory of the Community
        nationals of Russia;
    -   Russian subsidiaries or branches of community companies to
        employ or have employed in the territory of Russia nationals of
        the Member States;
    -   Russian companies or Community subsidiaries or branches of
        Russian companies to supply workers who are Russian nationals
        to act for and under the control of other persons by temporary
        employment contracts;
    -    Community companies or Russian subsidiaries or branches of
        Community companies to supply workers who are nationals of the
        Member states to act for and under the control of other persons
        by temporary employment contracts.
                                   <k
 ---pagebreak---                               Article 51
1. Treatment granted by either Party to the other hereunder shall, as
   from the day one month prior to the date of entry into force of the
   relevant obligations of the GATS, in respect of sectors or
   measures covered by the GATS, in no case be more favourable than
   that accorded by such first Party under the provisions of the GATS,
   and this, in respect of each service sector, sub-sector and mode of
   supply.
2. Without prejudice to the automatic nature of the provisions of
   paragraph 1, the Party which has assumed obligations under the GATS
   shall inform the other of the appropriate provisions and the
   adaptions resulting therefrom for this Agreement.
3. Within one month of. receipt from the Party, which has assumed
   obligations under the GATS, of the information referred to in
   paragraph 2 above, the other Party may notify the first Party of
   its intention to make adjustments to its obligations under this
   Title, and make those adjustments as follows:
   -    where a service sector, sub-sector or mode of supply of a
        service has been excluded from the Agreement, its scope reduced
        or made subject to the fulfilment of conditions pursuant to
        paragraph 1, the identical sector, sub-sector or mode of supply
        may be excluded or its scope reduced in the same way or made
        subject to the fulfilment of identical or similar conditions.
4. These adjustments made by the second Party should lead to the re-
   establishment of a balance of obligations between the Parties.
5. In the case that a Party considers that the adjustments made under
   paragraph 3 have not led to the re-establishment of the balance of
   obligations between the Parties, such Party may request the other
   Party, to enter into consultations within 30 days in order to find
   a satisfactory solution by means of any other appropriate
   adjustment of its obligations under this Title.
6. If within 30 days of the opening of such consultations no
    satisfactory solution has been found, the procedures of Article 101
   will be applicable at the request of either Party.
                                   2?
 ---pagebreak---                     TITLE V: PAYMENTS AND CAPITAL
                              Article 52
1. The Parties undertake to authorize in freely convertible currency,
   any current payments between residents of the community and of
   Russia connected with the movement of goods, services or persons
   made in accordance with the provisions of the present Agreement.
2. The free movement of capital between residents of the Community and
   of Russia in the form of direct investment made in companies formed
   in accordance with the laws of the host country, and direct
   investment made in accordance with the provisions of Chapter II of
   Title IV, and the transfer abroad of this investment, including any
   compensation payments arising from measures such as expropriation,
   nationalisation or measures of equivalent effect, and of any profit
   stemming therefrom shall be ensured.
3. The provisions of paragraph 2 .shall not prevent Russia from
   applying restrictions on outward direct investment by Russian
   residents. Five years after the entry into force of this Agreement
   the Parties agree to consult over the maintenance of these
   restrictions, taking into account all the relevant monetary, fiscal
   and financial considerations.
4. Transfers in respect of capital movements covered under paragraph 2
   shall be made on the same exchange rate conditions as those
   relating to current transactions.
5. Without prejudice to Paragraphs 6 and 7, after a transitional
   period of 5 years as from entry into force of this Agreement, the
   Parties shall not introduce any new restrictions on the movement of
   capital and current payments connected therewith between residents
   of the Community and Russia and shall not make the existing
   arrangements more restrictive. However, the introduction of
   restrictions during the transitional period referred to in the
   first sentence of this paragraph shall not affect the rights and
   obligations of the Parties under paragraphs 2, 3, 4 and 9 of this
   article.
6. After the prohibition in paragraph 5 has come into effect and
   without prejudice to Paragraphs 1 and 2 where, in exceptional
   circumstances, movements of capital between the residents of the
   Community and Russia cause, or threaten to cause, serious
   difficulties for the operation of exchange rate policy or monetary
   policy in the Community or Russia, the Community and Russia,
    respectively, may take safeguard measures with regard to movements
   of capital between the Community and Russia for a period not
    exceeding six months if such measures are strictly necessary.
                                    <o»-7
 ---pagebreak--- 7. With reference to the provisions of this Article, until a full
   convertibility of the Russian currency within the meaning of
   Article VIII of the articles of agreement of the International
   Monetary Fund (IMF) is introduced, Russia may apply exchange
   restrictions connected with the granting or taking up of short and
   medium-term financial credits to the extent that such restrictions
   are imposed on Russia for the granting of such credits and are
   permitted according to Russia's status under the IMF.
   Russia shall apply these restrictions in a non-discriminatory
   manner. They shall be applied in such a manner as to cause the
   least possible disruption to this Agreement. Russia shall inform
   the Cooperation Council promptly of the introduction of such
   measures and of any changes therein.
8. The Parties shall consult each other with a view to facilitate the
   movement of capital between the Community and Russia in order to
   promote the objectives of the present Agreement. The Parties shall
   particularly endeavour to further liberalize movements of capital
   related to portfolio investment and commercial credits, and
   movements of capital related to financial loans and credits granted
   by Community residents to Russian residents. The Cooperation
   Council shall make appropriate recommendations within the first
   five years after entry into force of this Agreement.
9. The Parties shall accord to one another most-favoured nation
   treatment in respect of freedom of current payments and capital
   movements and in respect of methods of payment.
                                  ?e
 ---pagebreak---         TITLE VI: COMPETITION. INTELLECTUAL, INDUSTRIAL AND COMMERCIAL
                 PROPERTY PROTECTION. LEGISLATIVE COOPERATION
                                  Article 53
                                  Competition
    1. The parties agree to work to remedy or remove through the
        application of their competition law or otherwise restrictions on
        competition by enterprises or caused by state intervention insofar
        as they may affect trade between the Community and Russia.
    2.  In order to attain the objectives mentioned in paragraph 1:
    2.1 The Parties shall ensure that they have and enforce laws addressing
        restrictions   on   competition    by  enterprises   within   their
        jurisdiction.
    2.2 The Parties shall refrain from granting export aids favouring
        certain undertakings or the production of products other than
        primary products. The Parties also declare their readiness, as
        from the third year from the date of entry into force of this
        Agreement, to establish for other aids which distort or threaten to
        distort competition insofar as they affect trade between the
        Community and Russia, strict disciplines, including the outright
        prohibition of certain aids. These categories of aids and the
        disciplines applicable to each shall be defined jointly within a
        period of three years after entry into force of this Agreement.
        Upon request by one Party, the other Party shall provide
        information on its aid schemes or in particular individual cases of
        State aid.
    2.3 During a transitional period expiring five years after the entry
        into.force of the Agreement, Russia may take measures inconsistent
        with paragraph 2.2, second sentence, provided that these measures
        are introduced and applied in the circumstances referred to in
        annex 9.
    2.4 In the case of State monopolies of a commercial character, the
        Parties declare their readiness, as from the third year from the
        date of entry into force of this Agreement, to ensure that there is
        no discrimination between nationals and companies of the Parties
        regarding the conditions under which goods are procured or
        martceted.
        In the case of public undertakings or undertakings to which Member
        States or Russia grant exclusive rights, the Parties declare their
        readiness, as from the third year from the date of entry into force
        of this Agreement, to ensure that there is neither enacted nor
        maintained any measure distorting trade between the Community and
        Russia to an extent contrary to the Parties' respective interests.
        This provision shall not obstruct the performance, in law or fact,
        of the particular tasks assigned tc such undertakings.
                                        ^u
(6)
 ---pagebreak--- 2.5 The period defined in paragraphs 2.2 and 2.4 may be extended by
    agreement of the Parties.
3.  Consultations may take place within the Cooperation Committee at
    the request of the community or Russia on the restrictions or
    distortions of competition referred to in paragraphs 1 and 2 and on
    the enforcement of their competition rules, subject to limitations
    imposed     by   laws    regarding   disclosure    of    information,
    confidentiality and business secrecy. Consultations may also
    comprise questions on the interpretation of paragraphs 1 and 2.
4.  A Party with experience in applying competition rules shall give
     full consideration to providing the other Party, upon request and
    within    available   resources, technical     assistance   for the
     development and implementation or competition rules.
5. The above provisions in no way affect a Party's rights to apply
     adequate measures, notably those referred to in Article 18, in
     order to address distortions of trade.
                                Article 54
       Intellectual, Industrial and Commercial Property Protection
1. Pursuant to the provisions of this Article and Annex 10, the
     Parties confirm the importance they attach to ensure adequate and
     effective protection and enforcement of intellectual, industrial
     and commercial property rights.(2)
2.   The Parties confirm the importance they attach to the obligations
     arising from the following multilateral conventions:
         Paris Convention for the Protection of Industrial Property
         (Stockholm Act, 1967 and amended in 1978);
         Madrid Agreement concerning the International Registration of
         Marks (Stockholm Act, 1967, and amended in 1979);
         Nice Agreement concerning the International classification of
         Goods and Services for the purposes of the Registration of
         Marks (Geneva 1977, and amended in 1979);
         Budapest Treaty on the International Recognition of the Deposit
         of Microorganisms for the purposes of Patent Procedures (1977,
         modified in 1980);
     -   Patent Cooperation Treaty (Washington 1970, amended and
         modified in 1980).                     '
         Protocol relating to the Madrid Agreement concerning the
         International Registration of Marks (Madrid, 1989).
3.   The implementation of the provisions of this article and Annex 10
     shaLl be regularly reviewed by the Parties in accordance with
     Article 90. If problems in the area of intellectual, industrial
     and commercial property affecting trading conditions were to occur,
     urgent consultations shall be undertaken, at the request of either
     Party, with a view to reaching mutually satisfactory solutions.
 (2) The term "intellectual, industrial and commercial property" will
     be translated into Russian by "intellectual'naya sobstvennost".
                                     TV
 ---pagebreak---                               Article 55
                       Legislative Cooperation
1. The Parties recognize that an important condition for strengthening
   the economic links between Russia and the community is the
   approximation of legislation. Russia shall endeavour to ensure
   that its legislation shall be gradually made compatible with that
   of the community.
2. The approximation of laws shall extend to the following areas in
   particular: company law, banking law, company accounts and taxes,
   protection of workers at the workplace, financial services, rules
   on competition, public procurement, protection of health and life
   of humans, animals and plants, the environment, consumer
   protection, indirect taxation, customs law, technical rules and
   standards, nuclear laws and regulations, transport.
                                   33
 ---pagebreak---                    TITLE VII: ECONOMIC COOPERATION
                             Article 56
1. The Community and Russia shall foster economic cooperation of wide
   scope in order to contribute to the expansion of their respective
   economies, to the creation of a supportive international economic
   environment and to the integration between Russia and a wider area
   of cooperation in Europe, such cooperation shall strengthen and
   develop economic links to the benefit of both Parties.
2. Policies and other measures of the Parties related to this title
   shall in particular be designed to bring about economic and social
   reforms and restructuring in Russia and shall be guided by the
   requirements of sustainability and harmonious social development;
   they shall also fully incorporate environmental considerations.
3. The cooperation shall, inter alia, cover:
   -   development of their respective industries and transport;
       exploration of new sources of supply and of new markets;
   -   encouragement of technological and scientific progress;
   -   encouragement of a stable social and human resources
       development and of local employment development;
   -   promotion of the regional cooperation with the aim of its
       harmonious and sustainable development.
4. The Parties consider it essential that, alongside with establishing
   a relationship of partnership and cooperation with each other, they
   maintain and develop cooperation with other European states and
   with the other countries of the former USSR with a view to a
   harmonious development of the region and shall make every effort to
   encourage this process .
5. As far as applicable economic and other forms of cooperation
   provided for in this Agreement may be supported by the community on
   the basis of the relevant Council regulations on technical
   assistance to the countries of the former USSR, taking into account
   the priorities agreed upon by the Parties. Support may also be
   provided through such other relevant Community instruments as may
   be available.
   Special attention shall be devoted by the Parties to measures
   capable of fostering cooperation with the other countries of the
   former USSR.
6. The provisions of this Title shall not affect the enforcement of
   the Parties' competition rules and of the specific competition
   provisions of this agreement applicable to undertakings.
                                   34
 ---pagebreak---                               Article 57
                        Industrial cooperation
1. cooperation shall aim at promoting in particular:
   -   the development of business links between economic operators,
       including.small and medium-size enterprises.
   -   the improvement of management on enterprise level;
   -   the process of privatisation in the context of economic
       restructuring, and the strengthening of the private sector;
       efforts in both public and private sector, to restructure and
       modernize the industry, during the transition period leading
       towards a market economy and under conditions ensuring
       environment protection and sustainable development;
   -   the conversion of defence industries;
       the development of appropriate market-based commercial rules
       and practices as well as the transfer of know-how.
2. Industrial cooperation initiatives shall take into account
   priorities determined by the community and by Russia. The
   initiatives should seek in particular to establish a suitable
   framework for undertakings, to improve management know-how and to
   promote transparency as regards markets and conditions for
   undertakings.
                              Article 58
                  Investment promotion and protection
1. Bearing in mind thé respective powers and competences of the
   Community and the Member states, cooperation shall aim to establish
   a favourable climate for investment, both domestic and foreign,
   especially through better conditions for investment protection, the
   transfer of capital and the exchange of information on investment
   opportunities.
2. The aims of this cooperation shall be in particular:
   -    the conclusion, where appropriate, between the Member States
       and Russia of agreements for the promotion and protection of
       investment;
       the conclusion, where appropriate, between the Member States
       and Russia of agreements to avoid double taxation;
   -    to exchange information on investment opportunities in the form
       of inter alia trade fairs, exhibitions, trade weeks and other
       events;
   -    to exchange information on laws, regulations and administrative
       practices in the field of. investment.
                                   3S
 ---pagebreak---                                Article 59
                           public Procurement
The Parties shall cooperate      to develop   conditions  for open and
competitive award of public      procurement  contracts,  in particular
through calls for tenders.
                               Article 60
        Standards and conformity assessment; consumer protection
1. Within the limits of their competence, and in accordance with their
    legislation the Parties shall take measures with a view to reducing
    the differences which exist between the Parties in the fields of
    metrology, standardisation and certification by encouraging the use
    of internationally agreed instruments in those fields.
    The Parties shall closely cooperate in the above-mentioned areas
    with the relevant European and other international organisations;
    The Parties shall, in particular, encourage practical interaction
    of their respective organisations, with the aim of starting to
    negotiate mutual recognition agreements in the field of conformity
    assessment activities.
2.  The Parties shall enter in close cooperation with a view to
    achieving compatibility     between their systems of consumer
    protection.
    This cooperation shall be aimed in particular at establishment of
    permanent systems of mutual information on dangerous products, the
    improvement of information provided to consumers especially on
    prices, characteristics of products and services offered, the
    development    of   exchanges    between   the   consumer   interest
    representatives, and increasing the compatibility of consumer
    protection policies.
                                    it
 ---pagebreak---                                Article 61
                       Mining and raw materials
1. The Parties shall cooperate with a view to fostering the
   development of the sectors of mining and raw materials. Spécial
   attention shall be paid to cooperation in the sector of non-ferrous
   metals.
2. The cooperation shall focus in particular on the following areas:
        exchange of information on all matters of interest to the
        Parties concerning the mining and raw materials sectors ,
        including trade matters;
        the adoption and implementation of environmental legislation;
        training.
3. Sucn cooperation shall be regularly reviewed by the Parties in a
   special committee or body to be set up in accordance with the
   provisions of Article 93.
4. This article is without prejudice to articles dealing more
   specifically with raw materials, in particular Articles 21, 65 and
   66.
                               Article 62
                         Science and technology
1. The Parties shall promote bilateral cooperation in civil scientific
   research and technological development (RTD) on the basis of mutual
   benefit and, taking into account the availability of resources,
   adequate access to their respective programmes and subject to
   appropriate levels of effective protection of intellectual,
   industrial and commercial property rights (IPR).
2. Science and technology cooperation shall cover:
        the exchange of scientific and technical information;
        joint RTD activities;
   -    training activities and mobility programmes for scientists,
        researchers and technicians engaged in RTD on both sides.
   Where such cooperation takes the form of activities involving
   education and/or training, it should be carried out in accordance
   with the provisions of Article 63.
    In carrying out such cooperation activities, special attention
    shaLl be devoted to the redeployment of scientists, engineers,
   researchers and technicians which are or have been engaged in
   research on/and production of weapons of mass destruction.
3.  sucn Cooperation shall be implemented according to specific
    arrangements to be negotiated and concluded in accordance with the
    procedures adopted by each party, and which shall set out, inter
    alia, appropriate IPR provisions.
                                   \ >
 ---pagebreak---                                Article 63
                         Education and training
1. The Parties shall cooperate with the aim of raising the level of
   general education and professional qualifications both in the
   public and private sectors.
2. The cooperation shall focus in particular on the following areas:
   -    updating higher education and training systems in Russia;
   -    the training of public and private sector executives and senior
        civil servants in priority areas to be determined;
   -    cooperation    between    universities,   cooperation    between
        universities and firms;
   -    mobility for teachers, graduates, young scientists and
        researchers, administrators and young people;
   -    promoting teaching in the field of European Studies within the
        appropriate institutions;
   -    teaching languages of the Community and of Russia;
   -    postgraduate training of conference interpreters;,
        training of journalists;
   -    exchange of methods of training and promotion of use of modern
        training programmes and technical facilities;
   -    development of distant education and new training technologies;
        training of trainers;
3. The participation of one Party in the respective programmes in the
   fie Id of education and training of the other Party could be
   considered in accordance with their respective procedures and,
   where    appropriate,   institutional   frameworks   and   plans of
   cooperation could then be established building on participation of
   Russia in the Community's TEMPUS programme.
                                    %i
 ---pagebreak---                                     Article 64
                   Agriculture and the agro-industrial sector
    1. cooperation shall aim at the modernisation, restructuring and
       privatisation of agriculture and the agro-industrial sector in
       Russia in conditions which ensure that the environment is
       respected. This cooperation shall be through, inter alia,
       developing private farm and distribution channels, methods of
       s to rage, marketing     and    management,  modernising  the   rural
       infrastructure and improvement of agricultural land-use planning,
       improving productivity, quality and efficiency, and the transfer of
       technology and know-how. The Parties shall aim at achieving
       compatibility between their sanitary and phytosanitary standards.
                                    Article 65
                                      Energy
    1. cooperation shall take' place within the principles of the market
       economy and the European Energy Charter, against a background of
       the progressive integration of the energy markets in Europe.
    2. The cooperation shall include among others the following areas:
       -     improvement of the quality and security of energy supply in an
             economic and environmentally sound manner;
       -     formulation of energy policy;
       -     improvement in management and regulation of the energy sector
             in line with a market economy;
             the introduction of the range of institutional, legal, fiscal
             and other conditions necessary to encourage increased energy
             trade and investment
       -     promotion of energy saving and energy efficiency;
       -     modernisation     of     energy     infrastructure,   including
             interconnection of gas supply and electricity networks;
             the environmental impact of energy production supply        and
             consumption, in order to prevent or to minimise             the
             environmental damage resulting from these activities.
        -    improvement of energy technologies in supply and end use across
             the range of energy types;
             management and technical training in the energy sector.
                                          H
17)
 ---pagebreak---                                Article 66
                             Nuclear sector
Bearing in mind the respective powers and competences of the community
and its Member states, civil cooperation in the nuclear sector
shall take place inter alia through the implementation of two
agreements on thermonuclear fusion, and on nuclear safety to be agreed
upon between the Parties.
                               Article 67
                                  Space
Without prejudice to Article 41, the Parties shall promote long term
cooperation as appropriate in the areas of civil space research
development and commercial application. They shall pay particular
attention to initiatives making on mutual beneficial basis full use of
the complementarity of their respective activities.
                               Article 68
                              Construction
The Parties shall cooperate in the field of construction industry,
particularly in the areas covered by Articles 55, 57, 60, 62, 63 and 77
of this agreement.
This cooperation shall, inter alia, aim at modernising and
restructuring the construction sector in Russia in line with the
principles of a market economy and duly taking into account related
health, safety and environmental aspects.
                               Article 69
                               Environment
1. Bearing in mind the European Energy Charter and the Declaration of
    the Lucerne Conference of 1993, the Parties shall develop and
    strengthen their cooperation on environment and human health.
2.  Cooperation shall aim at combating      the  deterioration  of  the
    environment and in particular:
         effective monitoring of pollution levels and assessment of
         environment; system of information on the state of the
         environment;
         combating local, regional and transboundary air and water
         pollution;
    -   -ecological restoration;
                                    an
 ---pagebreak---     -   sustainable, efficient and environmentally effective production
        and use of energy; .safety of industrial plants;
    -   classification and safe handling of chemicals;
    -   water quality;
    -   waste reduction, recycling and safe disposal, implementation of
        the Basle Convention;
    -   the environmental impact of agriculture, soil erosion, and
        chemical pollution;
    -   the protection of forests;
    -   the conservation of biodiversity, protected          areas and
        sustainable use and management of biological resources;
        land-use planning, including construction and urban planning;
    -   use of economic and fiscal instruments;
        global climate change;
    -   environmental education and awareness.
        implementation of thé Espoo Convention on Environmental impact
        Assessment in .a transboundary context.
3.  Cooperation shall take place particularly through:
        disaster planning and other emergency situations;
    -   exchange of information and experts, including information and
        experts dealing with the transfer of clean technologies and the
        safe and environmentally sound use of biotechnologies;
        joint research activities;
    -   improvement of laws (Community standards);
        cooperation at regional level (including cooperation within the
        framework of the European Environment Agency established by the
        Community and at international level;
        development of strategies, particularly with regard to global
        and climatic issues and also in view of achieving sustainable
        development;
    -   environmental impact studies;
                                Article 70
                                 Transport
The Parties shall develop and strengthen their cooperation in the field
of transport.
This cooperation shall, inter alia, aim at restructuring and
modernizing transport systems and networks in Russia and developing and
ensuring, where appropriate, compatibility of transportation systems in
the context of achieving a more global transportation system.
The cooperation shall include, inter alia:
    the modernizing of management and operations of road transport,
    raiLways, ports and airports;
                                     M
 ---pagebreak--- modernization and development of railways, waterways, road, port,
airport    and   air    navigation    infrastructure    including   the
modernization of major routes of common interest and the
transeuropean links for the above modes;
promotion and development of multimodal transport;
the promotion jointly of R and D programmes;
preparation of the legislative and institutional framework for
policy development and implementation including privatisation of
the transport sector.
                             Article 71
              Postal services and Telecommunications
The Parties shall expand and strengthen cooperation in this area
with the aim of gradual integration at the technical level of their
respective telecommunications and postal networks. To this end
they shall initiate notably the following actions:
     exchange information on telecommunications and postal services
     and TV and broadcasting policies
     exchange technical and other information, conduct training and
     advisory operations
     carry out transfer of technology and know-how
     have the appropriate bodies from both sides elaborate and carry
     out joint projects
     promote new communication facilities first of all for the needs
     of commercial and public institutions
 -   promote European technical standards, systems of certification
     and regulatory approaches
 -   cooperate    in    securing    the   communication    in   critical
     circumstances, consult each other on elaboration of guidelines
     for operator cooperation in conditions of catastrophes etc.
 These activities shall focus, inter alia, on the following priority
 areas :
     development      and     modernisation     of     an     integrated
     telecommunications sector in Russia in the framework of market
     reforms and creation of an appropriate regulatory basis;
 -   modernization of Russia's telecommunications network and its
     integration at the technical level into European and world
     networks ;
 -   cooperation in development of systems of information exchange
     and data transmission between organizations of the Community
     and Russia;
 -   integration     at   the    technical   level   of    transeuropean
     telecommunications networks;
     modernization of Russia's postal and broadcasting services,
     including legal and regulatory aspects;
                                  Lti
 ---pagebreak---         -   the management     of   telecommunications,  postal,   TV   and
            broadcasting services in the changing economic environments of
            both parties, including inter alia, organizational structures,
            strategy and planning, tariff policy, purchasing principles.
                                   Article 72
                               Financial Services
    The Parties shall cooperate with the aim of establishing and developing
    a suitable framework for the banking, insurance and other financial
    services sector in Russia adapted to the needs of market economy.
    The cooperation shall focus on:
        -   developing accounting standards which are suitable for a free
            market economy and which are compatible with the standards
            adopted by EC Member States;
            restructuring of the banking, insurance and financial system;
        -   improvement of monitoring and regulation      of  the  banking,
            insurance and financial services sector;
        -   developing compatible auditing systems;
        -   exchange of information on the respective laws in force or
            under preparation;
        -   modern infrastructure of commercial and private banks.
                                   Article 73
                              Regional development
    The Parties shall strengthen cooperation between them on regional
    development and land-use planning.
    They shall encourage exchange of information by national, regional and
    local ciuthorities on regional and land-use planning policy and on
    methods of formulation of regional policies, with special emphasis on
    the development of disadvantaged areas.
    They shall encourage direct contacts between the respective regions and
    public organisations responsible for regional development planning with
    the aim, inter alia, to exchange methods and forms of regional
    development fostering.
                                        43
(8)
 ---pagebreak---                               Article 74
                         'Social cooperation
1. with regard to health and safety, the parties shall develop
   cooperation between them with the aim of improving the level of
   protection of the health and safety of workers.
   The cooperation shall include notably:
   -   education and training on health and safety issues with
       specific attention to high risk sectors of activity;
   -   development and promotion of preventive measures to combat work
       related diseases and other work related ailments;
   -   prevention of major accidents hazards and the management of
       toxic chemicals;
       research to develop the knowledge base in relation to working
       environment and the health and safety of workers.
2. With regard to employment, the cooperation shall include notably
   technical assistance to:
   -   optimization of the labour market;
       modernisation of the job-finding and consulting services;
       planning and management of the restructuring programmes;
   -   encouragement of local employment development;
   -   exchange of information on the programmes of flexible
       employment, including those stimulating self-employment and
       promoting entrepreneurship.
3. The Parties shall pay special attention to cooperation in the
   sphere of social protection which, inter alia, shall include
   cooperation in planning and implementing social protection reforms
   in Russia.
   These reforms shall aim to develop in Russia methods of protection
   intrinsic to market economies and shall comprise all directions of
   social security activities.
   The cooperation shall also include technical assistance to the
   development of social insurance institutions with the aim of
   promoting gradual transition te- a system consisting of a
   combination of contributory and social assistance forms of
   protection, as well as respective non-governmental organisations
   providing social services.
                                   44
 ---pagebreak---                                Article 75
                                 Tourism
Thé Parties shall increase and develop cooperation between them, which
shall include :
-   facilitating the tourist trade ;
-'  cooperation between official tourism bodies;
-   increasing the flow of information;
-   transferring know-how;
-   studying   the  opportunities  for   joint operations.
                               Article 76
                   small and medium-sized enterprises
1. The Parties shall aim to develop and strengthen small and medium-
    sized enterprises (SMEs) and promote cooperation between SMEs of
    the Community and Russia.
2.  The Parties shall encourage the exchange of information and know-
    how, inter alia, in areas such as:
    -   legal, administrative, technical, tax, financial and other
        conditions necessary for setting up and expansion of SMEs and
        for cross-border cooperation;
    -    the provision of the specialized services required by SMEs,
        like management and marketing training, accounting, quality
        control and creation and strengthening of agencies providing
        such services;
    -    establishment of continuous and stable links between the
        Community and Russian operators in order to improve the flow of
        information to SMEs and promoting cross-border cooperation,
         inter alia, through access to and operation of Business
         cooperation Network, Euro-lnfo-Correspondence Centres provided
        the necessary conditions are met for any of these networks.
         The Parties shall closely cooperate with a view to ensuring
         that the necessary conditions for access to the networks are
         met.
                                     kÇ
 ---pagebreak---                               Article 77<3>
       Communication, Informatics   and Information Infrastructure
1. The Parties shall support the development of modern methods of
    information handling, including the media. They shall take
    appropriate steps to stimulate the effective mutual exchange of
    information. Priority shall be given to programmes aimed at
    providing the general public with basic information about the
    community and professional, inter alia, business circles with
    specialised information.
2.  The Parties shall make the necessary efforts to expand and
    .strengthen cooperation in order to establish the appropriate
    information infrastructure. To this end they shall initiate
    notably the following actions :
    the exchange of information on policies for the establishment of
     information infrastructures including regulatory policies;
    exploration of the possibility for joint projects on research and
    development in information and communication technologies, and on
    the establishment of an information infrastructure adapted to the
    needs of a market economy, taking into account the conversion
    potential of Russian enterprises and Russian interests for
     informatization and allowing for mter-operability with Community
     information infrastructures;
-    development of joint programmes concerning the training of
     specialists in information technologies and information services;
     promotion of European technical standards, systems of certification
     and regulatory approaches.
                                Article 78
                                  Customs
 1. The aim of cooperation shall be to achieve compatibility of the
     customs systems of the Parties.
2.   Cooperation shall include the following in particular:
         the exchange of information;
     -   the improvement of working methods;
     -   harmonisation   and simplification of        customs  procedures
         regarding the goods traded between the Parties;
 (3) Russia will translate 'informatics and information
     infrastructures' by 'informatsia i informatizatsia'
                                             c, c
 ---pagebreak---        the interconnection between the transit systems of the
       Community and Russia;
   -   the support in the introduction and management of modern
       customs information systems, including computer based systems
       on the customs check points;
   -   mutual assistance and joint actions with respect to "dual-use"
       goods and goods subject to non-tarif limitations;
   -   the organization of seminars and training periods.
   Technical assistance shall be provided where necessary.
3. Without prejudice to further cooperation foreseen in this agreement
   and in particular Articles 82 and 84, the mutual assistance between
   administrative authorities in customs matters of the Parties shall
   take place in accordance with the provisions of Protocol No. 2.
                              Article 79
                       Statistical cooperation
1. The cooperation shall aim at further development of efficient
   statistical systems, informational and programme-technological
   compatibility of statistical data, to provide, in time, reliable
   statistics needed to support and monitor the economic cooperation
   between the Parties, the process of economic reforms in Russia, and
   to contribute to the development of private enterprises in Russia.
2. The Parties shall cooperate in particular:
       to enhance the development of an efficient statistical system
       in Russia, in particular to elaborate an appropriate
       institutional framework;
       to improve the standards of training and the professional level
       of the statistical personnel;
       to bring about harmonization with international, " and in
       particular, Community methods, standards and classifications;
   -   to provide private and public sector economic operators with
       the appropriate macro- and microeconomic data;
       to guarantee the confidentiality of data;
       exchange statistical information and to this end to build up
       and/or to make appropriate use of databases.
                                     k>
 ---pagebreak---                               Article 80
                               Economics
1. The Parties shall facilitate the process of economic reform and the
   coordination of economic policies by cooperating to improve
   understanding of the fundamentals of their respective economies and
   the design and implementation of economic policy in market
   economies.
   The Parties shall:
   -   exchange information on macroeconomic performance and prospects
       and on development strategies;
   -   analyse economic issues of mutual interest, including the
       framing of economic policies and implementation instruments;
       encourage extensive cooperation among economists and senior
       officials in order to expedite the transfer of information and
       know-how for the drafting of economic policies and provide for
       wide dissemination of the results of policy-relevant research.
                              Article 31
                           Money laundering
1. The Parties agree on the necessity of making every effort and
   cooperating in order to prevent the use of their financial systems
   for laundering of proceeds from criminal activities in general and
   drug offences in particular.
2. Cooperation in this area shall include administrative and technical
   assistance with the purpose of establishing suitable standards
   against money laundering equivalent to those adopted by the
   Community and international fora in this field, including the
   Financial Action Task Force (FATF).
                                        ^2
 ---pagebreak---                                Article 82
                                  Drugs
The Parties shall cooperate in increasing the effectiveness and
efficiency of policies and measures to counter the illicit production,
supply and traffic of narcotic drugs and psychotropic substances,
including the prevention of diversion of precursor chemicals, as well
as in promoting drug demand prevention and reduction. The cooperation
in this area shall be based on mutual consultation and close
coordination between the Parties over the objectives and measures in
the various drug-related fields and shall, inter alia, provide for
exchange of training programmes and include, where available, technical
assistance from the community.
                               Article 83
                      Cooperation in the field of
         regulation of capital movements and payments in Russia
Without prejudice to Article 52, the Parties, recognizing the necessity
of a stable functioning and development of the Russian domestic
currency market shall cooperate in the field of creation of an
effective system of regulation of capital movements and payments in
Russia.
Bearing in mind the experience, competence and respective possibilities
of the Member States and the Community, cooperation in this field
supported by technical assistance from the Community shall cover inter
alia:
        establishing links between competent authorities of         the
        Community and its Member States and of Russia;
        exchanging information on a regular basis;
        helping in the development of appropriate regulations.
In ord€!r to permit an optimal use of the resources available the
Parties shall ensure close coordination with the measures undertaken by
other countries and international organizations.
                                    tf
 ---pagebreak---       TITLE VIII: COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES
                              Article 84
The Parties shall establish cooperation aimed at preventing illegal
activities such as:
-   illegal immigration and illegal presence of physical persons of
    their nationality on their respective territories, taking into
    account the principle and practice of readmission;
    illegal activities in the sphere of economics, including
    corruption;
-   illegal transactions of various goods, including industrial waste;
-   counterfeiting;
-   the illicit traffic of narcotic drugs and psychotropic substances.
The cooperation in the abovementioned areas will be based on mutual
consultations and close interactions and will provide technical and
administrative assistance including:
-   drafting of national legislation in the sphere of preventing
    illegal activities;
-   creation of information centres;
-   increasing the efficiency of institutions engaged in preventing
    illegal activities;
-   training of personnel and development of research infrastructures;
    elaboration of mutually acceptable measures impeding illegal
    activities.
                                       Ç V
 ---pagebreak---                     TITLE IX: CULTURAL COOPERATION
                              Article 35
1. The parties undertake to promote cultural cooperation with the aim
   of reinforcing the existing links between their peoples and to
   encourage the mutual knowledge of their respective languages and
   cultures while respecting creative freedom and reciprocal access to
   cultural values.
2. Cooperation shall cover in particular the following areas:
   -   exchange of information and experience in the field of
       conservation    and   protection    of    monuments   and    sites
       (architectural heritage);
       cultural exchanges between institutions, artists       and other
       persons working in the area of culture;
       translation of literary works.
3. The Cooperation council may        make    recommendations   for   the
   implementation of this article.
                                         *  (
 ---pagebreak---                     TITLE X: FINANCIAL COOPERATION
                              Article 36
In order to achieve the objectives of this Agreement, in particular
Titles VT and VII thereof, and in accordance with Articles 87, 88 and
89 Russia shall benefit from temporary financial assistance from the
Community by way of technical assistance in the form of grants to
accelerate the economic transformation of Russia.
                               Article 87
This financial assistance shall be covered within the framework of the
TACIS programme foreseen in the Community's relevant Council
Regulation.
                               Article 88
The objectives and the areas of the Community's financial assistance
shall be laid down in an indicative programme reflecting established
priorities to be agreed between the two Parties taking into account
Russia'3 needs, sectoral absorption capacities and progress with
reform. The Parties shall inform the Cooperation Council thereof.
                               Article 39
In order to permit optimum use of the resources available, the Parties
shall ensure that Community technical assistance contributions are made
in close coordination with those from other sources such as the
Member States, other countries, and       international   organisations
such as the International Bank for Reconstruction and Development and
the European Bank for Reconstruction and Development.
                                     ÇV
 ---pagebreak---          TITLE XI : INSTITUTIONAL, GENERAL AND FINAL PROVISIONS
                               Article 90
A Cooperation Council is hereby established which shall monitor the
implementation of this Agreement. It shall meet at ministerial level
once a year and when circumstances require.       It shall examine any
major issues arising within the framework of the Agreement and any
other bilateral or international issues of mutual interest for the
purpose of attaining the objectives of this Agreement. The Cooperation
Council may also make appropriate recommendations, by agreement
between the representatives within the Cooperation Council of the two
Parties.
                               Article 91
1.  The Cooperation council shall consist of the members of the Council
    of the European Union and members of the Commission -, of the
    European Communities, on the one hand, and of members of the
    Government of the Russian Federation, on the other.
2.  The Cooperation Council shall establish its rules of procedure.
3.  The office of President of the Cooperation Council shall be held
    alternately by a representative of the Community and by a member
    of the Government of the Russian Federation
                               Article '?2
1.  The Cooperation Council shall be assisted in the performance of its
    duties by a Cooperation Committee composed of representatives of
    the members of the Council of the European Union and of
    representatives of the Commission of the European Communities on
    the one hand and of representatives of the Government of the
    Russian Federation on the other, normally at senior civil servant
    level. The office of President of the Cooperation Committee shall
    be held alternately by a representative of the Community, and by a
    representative of the Government of the Russian Federation.
    In its rules of procedure the Cooperation Council shall determine
    the duties of the Cooperation Committee, which shall include the
    preparation of meetings of the Cooperation Council and such
    duties as are provided for in Articles 16, 17 and 53 and in annex
     2, and how the Committee shall function.
 2. The Cooperation Council may delegate any of      its powers to the
    Cooperation Committee, which shall ensure        continuity between
    meetings of the Cooperation Council.
                                    53
 ---pagebreak---                               Article 93
The cooperation Council may decide to set up any other special
committee or body that can assist it in carrying out its duties
and shall determine the composition and duties of such committees or
bodies and how they shall function.
                              Article 94
When examining any issue arising within the framework of this Agreement
in relation to a provision referring to an article of ^the GATT, the
Cooperation Council shall take into account to the greatest extent
possible the interpretation that is generally given to the article of
the GATT in question by the Contracting Parties to the GATT.
                               Article 95
A Parliamentary cooperation committee is hereby established.    It shall
meet at intervals which it shall itself determine.
                               Article 96
1. The Parliamentary Cooperation Committee shall consist of members of
    the European Parliament, on the one hand, and of members of the
    Federal Assembly of the Russian Federation, on the other.
2.  The Parliamentary Cooperation Committee shall establish its rules
    of procedure.
3. The Parliamentary Cooperation Committee shall be presided in turn
    by a member of the European Parliament and a member of the Federal
    Assembly of the Russian Federation respectively, in accordance with
    the provisions to be laid down in its rules of procedure.
                               Article 97
The   Parliamentary   Cooperation    Committee may   request    relevant
information regarding the implementation of this Agreement from the
Cooperation Council, which shall then supply the Committee with the
requested information.
The Parliamentary Cooperation Committee shall be       informed  of  the
recommendations of the Cooperation Council.
The Parliamentary Cooperation Committee may make recommendations to the
cooperation Council.
                                    ^a
 ---pagebreak---                                Article 98
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
    Russia;
-   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 10 June 1958.
                               Article 99
Nothing in this Agreement     shall prevent a Party    from taking   any
measures
1. which it considers necessary for the protection of its essential
    security interests:
     (a) to prevent the disclosure of     information  contrary  to  its
         essential security interests;
     (b) which relate to fissionable materials or the materials from
         which they are derived;
     (c) 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 hot impair the conditions of competition in respect of
         products not intended for specifically military purposes;
 ---pagebreak---    (d) 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 ha6 accepted for the purpose of
        maintaining peace and international security; or
2. which it considers necessary to respect its international
   obligations and commitments or autonomous measures taken in line
   with such generally accepted international obligations and
   commitments in the control of dual-use industrial goods and
   technology.
                              Article 100
1. In the fields covered by this Agreement and without prejudice to
   any special provisions contained therein:
        the arrangements applied by Russia 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 Russia
        shall not give rise to any discrimination between Russian
        nationals, or its companies or firms.
2. The provisions of Paragraph 1 are without prejudice to the right of
   the Parties to apply the relevant provisions of their fiscal
   legislation to tax payers who are not in identical situations^ in
   particular as regards their place cf residence.
                              Article 101
1. Eacn of the two Parties may refer to the Cooperation Council any
   dispute relating to the application or interpretation of this
   Agreement.
2. The Cooperation Council may settle the dispute by means of a
   recommendation.
3.  In the event of it not being possible to settle the dispute in
   accordance with paragraph 2 of this Article, either Party may
    notify the other of the appointment of a conciliator; the other
   Party must then appoint a second conciliator within two months. For
    the application of this procedure, the Community and the Member
    States shall be deemed to be one Party to the dispute.
    The Cooperation Council shall appoint a third conciliator.
    The conciliators' recommendations shall be taken by majority vote.
    Suci recommendations shall not be binding upon the Parties.
4.  The Cooperation Council may     establish rules of    procedure  for
    disoute settlement.
                                     ^
 ---pagebreak---                               Article 102
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 Bhall In no way affect   and are without
prejudice to Articles 17, 18, 101 and 107.
                              Article 103
Treatment granted to Russia hereunder shall in no case be more
favourable than that granted by the Member States to each other.
                              Article 104
For the; purposes of this Agreement, the term "Parties" shall mean
Russia, of the one part, and the Community, or the Member States, or
the Community and the Member states, in accordance with their
respective powers, of the other part.
                               Article 105
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 106
This Acreement is concluded for an initial period of 10 years. The
Agreement shall be automatically renewed years by year provided that
neither Party gives the other Party written notice of denunciation of
the Agreement at least six months before it expires.
                               Article 107
 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 appropriate
    measures. Before so doing, except in cases of special urgency, it
     shall supply the cooperation Council with all relevant information
     required for a thorough examination of the situation with a view to
     see<ing a solution acceptable to the Parties.
     In the selection of these measures, priority shall be given to
     those which least disturb thé functioning of the Agreement. These
    measures shall be notified immediately to the Cooperation Council
     if the other Party so requests.
                                      *?
 ---pagebreak---                               Article 108
Annexes 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 together with Protocols 1 and
2 shall form an integral part of this Agreement.
                               Article 109
This Agreement shall not, until equivalent(4) rights for individuals
and economic operators have been achieved hereunder, affect rights
assured to them through agreements binding one or more Member states on
the one hand and Russia on the other except in areas falling within
community competence and without prejudice to the obligations of Member
states resulting from this Agreement in areas falling within, their
competence.
                               Article 110
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 Russia.
                               Article 111
This Agreement, is drawn up in duplicate in the Danish, Dutch, English,
French, German, Italian, Spanish, Greek, Portuguese and Russian
languages, each of these texts being equally authentic.
                               Article 112
This Agreement shall 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 each other that
the procedures referred to in the first paragraph have been completed.
Upon its entry into force, and as far as relations between the
Community and Russia are concerned, this Agreement shall replace,
without prejudice to Article 22, paragraphs 1, 3 and 5, 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.
 (4) "Equivalent" will be translated into Russian as
     "Sootvetstvujuschie".
                                    a
 ---pagebreak---                             List of Annexes
Annex 1     indicative list of advantages granted by Russia to the
            countries of the former USSR in areas covered by the
            present Agreement (as of January 1994).
Annex 2     Derogations from Article 15 (quantitative restrictions).
Annex 3     Community reservations     in   accordance  with   Article   28
            paragraph 2.
Annex 4     Russian reservations     in   accordance   with   Article   28,
            paragraph 3.
Annex 5     cross-border supply of services.
            List of services for which the Parties shall grant most-
            favoured-nation treatment.
Annex 6     Definitions in relation to financial services.
Annex 7     Financial services.
Annex 8     Provisions in relation to Articles 34 and 38
Annex 9     Transitional period for provisions on competition and for
            the introduction of quantitative restrictions.
Annex 10    Protection of Intellectual,       Industrial   and   Commercial
            Property (Article 54)
                                Protocols
ProtocoL 1 on the establishment of a coal and steel contact group
Protocol. 2 on mutual administrative assistance for the correct
            application of customs legislation
                                    7-Ï
 ---pagebreak---                                  Annex 1
           indicative list of advantages granted by Russia to
   the countries of the former USSR in areas covered by the Present
                                Agreement
                           (As of January 1994)
Advantages are granted bilaterally by respective agreements or by
established practice. They provide for, inter alia:
1. Import/Export Taxation
    No import duties are applied.
    No export duties are applied with respect to goods delivered under
    annual bilateral interstate trade and cooperation arrangements
    within the nomenclature and volumes, stipulated therein, considered
    as "exportation     for federal state needs" as defined by
    corresponding Russian law.
    No 7AT is applied on import.
    No excise are applied on import.
2.   Allocation of quotas and licensing procedures
    Export quotas for deliveries of Russian products under annual
    bilateral interstate trade and cooperation agreements are opened in
    the same way as for "deliveries for state needs".
3. Special conditions for all kind of activities in banking and the
    financial sector (including establishment, operation) movement of
    capital and current payments, access to securities, etc.
4. Price system regarding Russian export of some kinds of raw
    materials and semifinished products (coal, crude oil, natural gas,
    ref ined oil products)
    Prices are determined on the basis of correspondent average world
    price converted in roubles or respective national currency at a
    rate quoted by the Central Bank of Russia as of 15th date of a
    month previous to the month of exportation.
5. Conditions of transportation and transit
    As regards CIS countries parties to the multilateral agreement "on
    the principles and conditions of relations in the field of
    transport" and/or on the basis of bilateral arrangements on
    transportation and transit, no taxes or fees are applied on a
    reciprocal basis for the transportation and customs clearing of
    goods (including goods in transit) and transit of vehicles.
6.  Communications      services,      including    postal,    courier,
    telecommunications, audiovisual and other services.
7. Access to information systems and data bases.
                                         é °
 ---pagebreak---                                 Annex 2
       Derogations from Article 15 (Quantitative Restrictions)
1. Exceptional measures which derogate from the provisions of Article
   15 may be taken by Russia in the form of quantitative restrictions
   on a non-discriminatory basis as provided for in article XIII of
   the GATT. Such measures can only be taken after the end of the
   first calendar year following signature of the Agreement.
2. These measures may only be taken in the circumstances mentioned in
   Annex 9.
3. The total value of imports of goods which are subject to these
   measures may not exceed the following proportions of total imports
   of goods originating in the Community:
        10% during the second and third      calendar  years  following
        signature of the Agreement;
   -    5% during the fourth and      fifth  calendar  years  following
       -signature of the Agreement;
   -    3% afterwards, until Russia's accession to the GATT/WTO.
   The abovementioned proportions will be determined by reference to
   the value of imports by Russia of goods originating in the
   Community during the last year prior to the introduction of
   quantitative restrictions for which statistics are available.
   These provisions shall not be circumvented by increased tariff
   protection on the imported goods concerned.
4. These measures shall not be applied after Russia's accession to the
   GATT/WTO unless otherwise provided for in Russia's accession
   protocol to the GATT/WTO.
5. Russia shall inform the Cooperation Committee of any measures it
   intends to take under the terms of the present Annex, and
   consultations shall be held in the Cooperation Committee if so
   requested by the Community on such measures before they are taken,
   and on the sectors to which they apply .
                                         Ç f
 ---pagebreak---                                 Annex 3
    Community reservations in accordance with article 28 paragraph 2
Mining
In some Member States, a concession may be required for mining and
mineral rights for non-EC controlled companies.
Fishing
Access to and use of the biological resources and fishing grounds
situated in the maritime waters coming under the sovereignty or within
the jurisdiction of Member states of the Community is restricted to
fishing vessels flying the flag of a community Member state and
registered in Community territory unless otherwise provided for.
Real estate purchase
In some Member States, the purchase of real estate is subject to
limitations.
Audiovisual services including radio
NationaL treatment concerning production and distribution, including
broadcasting and other forms of transmission to the public, may be
reserved to audiovisual works meeting certain origin criteria.
Telecommunications services including mobile and satellite services
Reserved services.
In some Member States market access concerning complementary services
and infrastructures is restricted.
Professional services
Services reserved to natural persons nationals of Members states. Under
certain conditions those persons may create companies.
Agriculture
In some Member States national treatment is not applicable to non-EC
control Led companies which wish to undertake an agricultural
enterprise. The acquisition of vineyards by non-EC controlled
companies is subject to notification, cr, as necessary, authorisation.
News agency services
In some Member States limitations of foreign           participation in
publishing companies and broadcasting companies.
                                           G
 ---pagebreak---                                  Annex 4
    Russian reservations in accordance with Article 28, Paragraph 3
Use of subsoil and natural resources including mining
1. A concession may be required for mining some ores and metals for
    non-Russian controlled companies.
2.  Some special auctions for the use of subsoil and natural resources
    for small enterprises or defence enterprises undergoing military
    conversion may be closed to non-Russian controlled companies.
Fishing
    Authorisation from the respective governmental body is necessary
    for fishing.
Real estate (immovable property) purchase and brokerage
(a) Non-Russian controlled companies are not allowed to acquire plots
    of land. Those companies, however, can lease plots of land for a
    period of no more than 49 years.
(b) As an exception to paragraph (a), non-Russian controlled companies
    can acquire plots of land in the cases when such companies are
    recognised as buyers in accordance with the Law of the Russian
    Federation on the privatisation of state and municipal enterprises
    in the Russian Federation and other respective legislation and
    regulations,    including   the    requirements  of   programs  of
    privatisation:
        within the framework of the privatisation of state and
        municipal enterprises in the form of commercial investment
        tender and auction;                                  '
        within the framework of the expansion and additional
        construction of enterprises in the form of commercial
         investment tender and auction;
Telecommunications
Telecommunication services including mobile and satellite services,
construction, installation, operation and maintenance of communication
devices is restricted.
Mass media services
Some limitations of foreign participation in mass media companies.
Profess ional activities
Some activities closed, limited or subject to special requirements for
natural persons who are non-Russian nationals.
Lease of Federal property
The lease of federal property whose value exceeds 100 million roubles
to non-Russian controlled companies is effected with the permission of
the state authority empowered to manage such property. This maximum is
to be raised and will be expressed in hard currency.
                                            £ *
 ---pagebreak---                                  Annex 5
                     Cross-border supply of services
    List of services for which the Parties shall grant MFN treatment
(a) Sectors to be covered, according to the provisional central Product
     Classification (CPC) of the United Nations organisation:
consultancy services relating to accounting review services: part of
CPC 86212 other than "auditing services"
consultancy services relating to bookkeeping services CPC 86220
Engineering services CPC 8672
Integrated engineering services CPC 8673
Advisory and Pre-design architectural services CPC 86711
Architectural design services CPC 86712
Urban planning and landscape architectural services CPC 8674
Computer and related services:
Consultancy services related to the installation of computer hardware
CPC 841
Software implementation services CPC 842
Data base services CPC 844
Advertising CPC 871
Market research and opinion polling CPC 864
Management consulting services CPC 866
Technical testing and Analysis services CPC 8676
Advisory and consulting services relating to agriculture, hunting and
forestry
Advisory and consulting services relating to Fishing          \
Advisor;/ and consulting services relating to mining
Printing and publishing CPC 88442
Convention services
Translation services CPC 87905
Interior design services CPC 87907
Telecommunications :
Value added services 'including (but not limited to) Electronic Mail,
Voice Mail, On-line information and Data base retrieval, Data
processing, EDI, Code and Protocol conversion
Packet and Circuit switched data services
Construction and related engineering services: site investigation work
CPC 5111
Franchising CPC 8929
Adult education services by correspondence part of CPC 924
News and press agency services CPC 962
Rental/Leasing services without operators related to other transport
equipment (CPC 83101 private cars, 83102 goods transport vehicles,
83105) and relating to other machinery and Equipment (CPC 83106, 83107,
83108, 33109)
Commission agents services and Wholesale trade services related to
import-export trade (part of CPC 621 and 622)
Research and development in software
Reinsurance and retrocession and the services auxiliary to insurance,
such as consultancy, actuarial, risk assessment and claim settlement
service 3
                                    fy
 ---pagebreak--- Insurance of risks relating to:
    (i) maritime shipping and commercial aviation and space launching
        and freight (including satellites), with such insurance to
        cover any or all of the following : persons being transported,
        the goods being exported from or imported to, the same vehicle
        transporting the goods and any liability arising there from;
    (ii)    goods in international transit; and
    (iii)   accident and health insurance;and personal motor liability
            insurance in the case of the cross-border movement.
(b) Data processing services CPC 843
    Provision and transfer of financial information and financial data
    processing (see paras. B.11 and B.12 of Annex 6):
    For the services listed under (b) MFN subject to Article 38 will be
    applied, without paragraph A of Annex 8.
                                     GS
 ---pagebreak---                                   Annex 6
              Definitions in relation to Financial Services
A financial service is any service of a financial nature offered by a
financial service supplier of one of the Parties. Financial services
include the following activities:
A.  All insurance and insurance-related services.
    1. Direct insurance (including co-insurance),
    (i) life
    (ii) non-life
    2. Reinsurance and retrocession.
    3. Insurance intermediation, such as brokerage and agency.
    4. Services     auxiliary   to   insurance,   such   as   consultancy,
        actuarial, risk assessment and claim settlement services.
B.  Ban<ing and other financial services (excluding insurance).
    1. Acceptance of deposits and other repayable funds from the
        public.
    2. Lending of all types, including consumer credit, mortgage
        credit, factoring and financing of commercial transaction.
    3. Financial leasing.
    4. All payment and money transmission services, including credit
        charge and debit cards, travellers cheques and bankers drafts.
    5. Guarantees and commitments.
    6. Trading for own account or for the account of customers,
        whether on an exchange, in .an over the counter market or
        otherwise, the following:
         (a) money   market   instruments   (including   cheques,   bills,
             certificates of deposits, etc.)
         (b) foreign exchange
         (c) derivative products including, but not limited to, futures
             and options
         (d) exchange rates and interest rate instruments, including
             products such as swaps, forward rate agreements, etc.
         (e) transferable securities
         (f) other   negotiable    instruments   and   financial   assets,
             including bullion.
7.  Participation in issues of all kinds of securities, including
    under-writing    and  placement    as  agent   (whether  publicly   or
    privately) and provision of services related to such issues.
8.  Money broking
9.  Asset management, such as cash or portfolio management, all forms
    of collective investment management, pension fund management,
    custodial depository and trust services.
                                      £ É
 ---pagebreak--- 10. Settlement and clearing services for financial assets, including
    securities, derivative.products, and other negotiable instruments.
11. Provision and transfer of financial information, and financial data
    processing and related software by suppliers of other financial
    services.
12. Advisory intermediation and other auxiliary financial services on
    all the activities listed in points 1 to 11 above, including credit
    reference and analysis, investment and portfolio research and
    advice, advice on acquisitions and on corporate restructuring and
    strategy.
The following activities are excluded from the definition of financial
services :
(a) Activities carried out by central banks or by any other public
    institution in pursuit of monetary and exchange rate policies.
(b) Activities conducted by central banks,       government agencies or
    departments, or public institutions, for    the account or with the
    guarantee of the government, except when    those activities may be
    carried out by financial service suppliers  in competition with such
    pub Lie entities.
(c) Activities forming part of  a statutory system of social security or
    pubLie retirement plans,     except when those activities may be
    carried out by financial     service suppliers in competition with
    pub Lie entities or private institutions.
                                    0-
 ---pagebreak---                               Annex 7
                        Financial Services
In respect of banking services referred to in Annex 6, part B, the
most favoured nation treatment granted under Article 28, paragraph
1, with regard to establishment by means of the setting up of a
subsidiary only (excluding therefore establishment by means of the
setting up of a branch), and the national treatment granted under
Article 28, paragraph 3, by Russia means treatment no less
favorable than the treatment granted by Russia to its own companies
with the following exceptions :
1. Russia reserves the right
    a.   to continue to apply to Russian subsidiaries and branches
         of Community companies the ceiling limiting the overall
         share of foreign capital in the Russian banking system
         which is in operation on the date of signature of the
         Agreement;
    b.   to apply to Russian subsidiaries of Community companies a
         minimum capital requirement higher than that applied to its
         own    companies   provided   that this     minimum    capital
         requirement is not raised as compared with the one in force
         on the date of signature of the Agreement before national
         treatment is applied in respect of the minimum capital
         requirement;
    c.   to restrict the number of branches of Russian subsidiaries
         of Community companies;
    d.   to set a minimum level not higher than 55.000 ECU for
         balances on accounts of each physical person with Russian
         subsidiaries of Community companies;
    e.   to prohibit Russian subsidiaries of community companies
         from carrying out transactions with shares and instruments
         convertible into shares of Russian joint stock companies;
    f.   to prohibit Russian subsidiaries of Community companies
         from carrying out transactions with Russian residents;
2.  The exceptions in paragraph        1 may   only   apply  under  the
    following conditions
     (i)    provided that they are applied        to   subsidiaries  of
            companies of every country, and
     (ii)   for    the   exceptions   mentioned    in    paragraph   1,
            subparagraphs c, d and e,
          (a)   until the expiry of .-five years from signature of the
                Agreement at the latest for the exceptions mentioned
                in subparagraphs c and d and three years for the
                exception mentioned in subparagraph e, and
                                  68
 ---pagebreak---             (b)   where the proportion of the share capital of the
                  Russian subsidiary of the Community company held by
                  Russian nationals or companies does not exceed fifty
                  percent (50%), and
            (c)   to Russian subsidiaries of community companies
                  established after the entry into force of these
                  exceptions;
       (iii) for the exception mentioned in paragraph 1, sub paragraph
              f, until 1st January 1996 and only to Russian
              subsidiaries of Community companies established after
              15th November 1993 or which have not commenced their
              operations with Russian residents before 15th November
              1993.
   3.  a. After the expiry of five years from the date of signature
           of the Agreement, Russia will consider the possibility of:
            (i)   increasing the ceiling limiting the overall share of
                  foreign capital in the Russian banking system which
                  is in operation on the date of the signature of this
                  Agreement, mentioned in subparagraph a of Paragraph
                  1, taking into consideration all the relevant
                  monetary, fiscal, financial and balance of payments
                  considerations and the state of the banking system of
                  Russia;
            (ii)  reducing the minimum capital requirement, mentioned
                  in subparagraph b of Paragraph 1, taking into
                  consideration all the relevant monetary, fiscal,
                  financial and balance of payments considerations and
                  the state of the banking system of Russia.
       b.   After the expiry of three years from the signature of this
            Agreement,   Russia   will   consider   the  softening   of
            restrictions mentioned in subparagraphs c and d of
            Paragraph 1, taking into consideration all the relevant
            monetary, fiscal, financial and balance of payments
            considerations and the state of the banking system of
            Russia.
B. In respect of insurance services referred to in Annex 6, part A,
   paragraphs 1 and 2 the most favoured nation treatment granted under
   Article 28, paragraph 1 with regard to establishment by means of
   the setting up of a subsidiary only authorised for the insurance
   operations is set out in the legislation and regulations applicable
   in Russia on the day of establishment taking into account the
   fol Lowing conditions:
                                   69
 ---pagebreak--- 1. Upon the expiry of five years from signature of the Agreement
   at the latest, Russia shall abolish the maximum foreign
   shareholding limit of 49 percent in company capital.
2. During the transitional period of 5 years the abolition of the
   maximum foreign shareholding limit does not prevent Russia from
   introducing measures for granting licences to EC companies in
   some classes of insurance. These measures could be taken only
   in the field of compulsory insurance schemes in the social
   security, or for public procurement, or for the reasons
   described in Article 29, paragraph 2, and shall not nullify or
   substantially impair the effects of the abolition of the
   maximum foreign shareholding limit of 49%.
                              7,n
 ---pagebreak---                                  Annex 8
               Provisions in relation to articles 34 and 38
Part A
The consultations shall begin within thirty days of the request
therefor by the first Party. They shall be held with a view to
reaching agreement either on:
         withdrawal by the other Party of the measures which have
         resulted in the significantly more restrictive situation; or
    -    adjustments of the obligations of both Parties; or
    -    adjustments to be made by the first Party to compensate for the
         more restrictive situation created by the other Party.
If agreement is not reached within sixty days of the request for
consultations made by the first Party, such first Party may make
appropriate    compensatory   adjustments   to its obligations. Such
adjustments shall be made to the extent and for such time as is
necessary to take account of the significantly more restrictive
situation created by the other Party. Priority must be given to those
measures which least disturb the functioning of the Agreement. The
rights which economic operators have acquired under the Agreement at
the time such adjustments are made shall nor be affected by the said
adjustments.
Part B
1. Acting in the spirit of partnership and cooperation the Government
    of Russia shall inform the Community, during a transitional period
    of three years following the signature of the Agreement, of its
    intentions to submit new legislation or adopt new regulations which
    may render the conditions for the establishment or operation of
    Russian subsidiaries and branches of Community companies more
    restrictive than the situation existing on the day preceding the
    date of signature of the Agreement. The Community may request
    Russia to communicate the drafts of such legislation or regulations
    and to enter into consultations about those drafts.
2.  Where new legislation or regulations introduced in Russia within
    the transitional period mentioned in paragraph 1 would result in
    rendering the conditions for operation of Russian subsidiaries and
    branches of Community companies more restrictive than the situation
    existing on the day of signature of the Agreement, such respective
     legislation or regulations shall not apply to those subsidiaries
     and branches already established in Russia at the time of entry
     into force of the relevant act, until the expiry of a period of
     three years from such entry into force.
                                     71
 ---pagebreak---                                 Annex 9
       Transitional period for provisions on competition and for
             the introduction of quantitative restrictions
The circumstances mentioned in Article 53, paragraph 2.3 and in Annex
2, paragraph 2 are understood in respect of sectors of the Russian
economy which:
-   are undergoing restructuring, or
-   are facing serious difficulties, particularly where these entail
    serious social problems in Russia, or
-   face the elimination or a drastic reduction of the total market
    share held by Russian companies or nationals in a given sector or
    industry in Russia, or
-   are newly emerging industries in Russia.
                                   n
 ---pagebreak---                                  Annex 10
     Protection of Intellectual, industrial and commercial Property
                               (Article 54)
1. Russia shall continue to improve the protection of intellectual,
    industrial and commercial property rights in order to provide, by
   the end of the fifth year after the entry into force of the
   Agreement, for a level of protection similar to that existing in
    the Community, including effective means of enforcing such rights.
2. By the end of the fifth year following entry into force of the
   Agreement, Russia shall accede to the multilateral conventions on
    intellectual, industrial and commercial property rights to which
   Memoer States are parties or which are de facto applied by Member
    States, according to the relevant provisions contained in these
    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);
    -    International Convention for the Protection of New Varieties of
         Plants (UPOV) (Geneva Act, 1991).
3. The Cooperation Council may recommend that paragraph 2 of this
    Annex shall apply to other multilateral conventions.
4.  From the entry into force of this Agreement Russia 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 Russia to any third country on an effective reciprocal basis and
    to advantages granted by Russia to another country of the former
   .USS*.
                                     "71
 ---pagebreak---                               PROTOCOL 1
          ON THE ESTABLISHMENT OF A COAL AND STEEL CONTACT
                                 GROUP
1. A contact Group is established between the Parties. The Group is
   composed of representatives of the Community and of Russia.
2. The Contact Group exchanges information on the situation of the
   coal and steel industries in both territories and on trade between
   them, particularly with the purpose of identifying such problems as
   might arise.
3. The Contact Group also examines the situation of the coal and steel
   industries at world level, including developments in international
   trade.
4. The Contact Group exchanges all useful information on the structure
   of the industries concerned, the development of their production
   capacities, the science and research progress in the relevant
   fields, and the evolution of employment. The Group also examines
   polLution and environmental problems.
5. The Contact Group also examines the progress made in the framework
   of technical assistance between the Parties, including assistance
   to financial, commercial and technical management.
6. The Contact Group exchanges all relevant information as to
   attitudes taken, or to be taken, in the appropriate international
   organisations or fora.
7. As and when both parties agree that the presence and/or
   participation of representatives of the industries is appropriate,
   the Contact Group is enlarged to include them.
8. The contact Group meets       twice   a year,  alternately  on  the
   territories of each party.
9. The chairmanship of the Contact Group is held alternately by a
   representative of the Government of the Russian Federation and a
   representative of the Commission of the European Communities.
                                   74
 ---pagebreak---                               PROTOCOL 2
   ON MUTUAL ADMINISTRATIVE ASSISTANCE FOR THE CORRECT APPLICATION OF
                           CUSTOMS LEGISLATION
                                ARTICLE 1
                               Definitions
For the purposes of this Protocol:
a)   "customs legislation" shall mean provisions applicable in the
     territories of the Parties governing the import, export, transit of
     goods and their placing under any customs procedure, including
     measures of prohibition, restriction and control adopted by the
     Parties.
b)   "customs duties" shall mean all duties, taxes, fees or any other
     charges which are levied and collected in the territories of the
     Parties, in application of customs legislation, but not including
     fees and charges which are limited in amount to the approximate
     costs of services rendered;
c)   "applicant authority", shall mean a competent administrative
     authority which has been appointed by a Party for this purpose and
     which makes a request for assistance in customs matters;
d)   "requested authority", shall mean a competent administrative
     authority which has been appointed by a Party for this purpose and
     which receives a request for assistance in customs matters;
e)   "contravention",   shall  mean     any violation  of   the  customs
     legislation as well as any attempted violation of such legislation.
                                 ARTICLE 2
                                   Scope
1.   The Parties shall assist each other, in the manner and under the
     conditions laid down in this Protocol, in ensuring that customs
     legislation is correctly applied, in particular by the prevention,
     detection, and investigation of contraventions of this legislation.
2.   Assistance, in customs matters, as provided for in this Protocol,
     applies to any administrative authority of the Parties which is
     competent for the application of this Protocol. It shall not
     prejudice the rules governing mutual assistance in criminal
     matters, nor shall' it cover information, including documents
     obtained under powers exercised at the request of the judicial
     authority, unless those authorities so agree.
                                      7S
 ---pagebreak---                                 ARTICLE 3
                          Assistance on request
1.  At the request of the applicant authority, the requested authority
    shall furnish it with all relevant information to enable it to
    ensure that customs legislation is correctly applied, including
    information regarding operations detected or planned which are,
    appear or would be in contravention 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 imported into the territory of the
    other Party, specifying, where appropriate, the customs procedure
    appLied to the goods.
3.  At the request of the applicant authority, the requested authority
    shaLl take the necessary steps to ensure that a surveillance is
    kept on :
     (a) natural or legal persons of whom there are reasonable grounds
         for believing that they are contravening or have contravened
         customs legislation;
     (b) places where stocks of goods have been assembled in such a way
         that there are reasonable grounds for supposing that they are
         intended as supplies for operations contrary to the customs
         legislation of the other Party;
     (c) movements of goods notified as possibly       giving   rise  to
         contraventions of customs legislation;
     (d) means of transport for which there are reasonable grounds for
         believing that they have been, are or may be used in the
         contravening of customs legislation.
                                ARTICLE 4
                          Spontaneous assistance
The Paities shall within their competences provide each other with
assistance without prior request where they consider that to be
necessary    for the correct     application   of customs   legislation,
particuLarly when they obtain information pertaining to :
    operations detected or planned, which are, appear or would be in
    contravention of such legislation ;
    new means or methods employed in realizing such operations;
    goods known to be subject to substantial contravention of customs
     legislation on import, export, transit or any other customs
    procedure.
                                     76
 ---pagebreak---                                 ARTICLE 5
             Form and substance of requests for assistance
1. Requests pursuant to the present Protocol shall be made in writing.
   Documents necessary for the execution of such requests shall
   accompany the request. When required because of the urgency of the
   situation, oral requests may be accepted, but must be confirmed in
   writing immediately.
2. Requests pursuant to paragraph 1 of this Article shall include the
   folLowing information:
   (a) the 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    being   the  target    of  the
        investigations;
    (f) a summary of the relevant facts.
3. Requests shall be submitted in an official language of the
   requested authority or in a language acceptable to such authority.
4. If a request does not meet the formal requirements, its correction
   or completion may be demanded; the ordering of precautionary
   measures may, however, take place.
                                ARTICLE 6
                          Execution of requests
1. Requests for assistance will be executed in accordance with the
   laws, rules and other legal instruments of the requested Party.
2.  In order to comply with a request for assistance, the requested
    authority shall proceed, within its competence and available
   resources, as though it were acting on its own account or at the
    request of other authorities of that same Party, by supplying
    information   already   possessed,    by   carrying  out   appropriate
    enquiries or by arranging for them to be carried out.
                                     77
 ---pagebreak--- 3.  Duly authorized officials of a Party may, with the agreement of the
    other Party involved and within the conditions laid down by the
    latter, obtain from the offices of the requested authority or other
    authority for which the requested authority is responsible,
    information relating to the contravention of customs legislation
    which the applicant authority needs for the purposes of this
    Protocol.
4.  Officials of a Party may, in particular cases, with the agreement
    of the other Party involved and within the conditions laid down by
    the latter, be present at enquiries carried out in the latter's
    territory.
5.  When, in the circumstances provided for under this Protocol,
    officials of one Party are present at enquiries carried out in the
    territory of the other Party, they must, at all times, be able to
    furnish proof of their official capacity. They must not wear
    uniform nor carry arms.
                                ARTICLE 7
             Form in which information is to be communicated
1.  Under the conditions and within the limits laid down in this
    Protocol, the Parties shall communicate each other information in
    the form of documents, certified copies of documents, reports and
    the like.
2.  Original files and documents may be transmitted on request only in
    cases where certified copies would be insufficient. Those files and
    documents shall be returned at the earliest opportunity.
3.  The documents provided for in paragraph 1 may be replaced by
    computerized information produced in any form for the same purpose.
    All relevant information for the utilization of the material shall
    be supplied on request.
                                ARTICLE 8
           Exceptions to the obligation to provide assistance
 1. The Parties may refuse to give assistance as provided for in this
    Protocol, provide it partially or provide it subject to certain
    conditions or requirements, where to do so would:
     (a) be likely to prejudice sovereignty, public policy, security or
         other essential interests; or
     (b) violate an industrial, commercial or professional secret.
                                    78
 ---pagebreak--- 2. Where the applicant authority asks for assistance which it would
   itself be unable to provide if asked so by another Party, it shall
   draw attention to that, fact in its request. It shall then be left
   to the requested authority to decide how to respond to such a
   request.
3. If assistance is withheld or denied, the decision and the reasons
   therefore must be notified in written form to the applicant
   authority without delay.
                              ARTICLE 9
                Obligation to observe confidentiality
1. Any information communicated in whatsoever form pursuant to this
   Protocol shall be of a confidential nature. It shall be covered by
   the obligation of official secrecy and shall enjoy the protection
   extended to like information under the relevant         legislation
   applicable in the Party which received it and the corresponding
   provisions applying to the Community institutions.
2. Nominative data shall not be transmitted whenever there are
   reasonable grounds to believe that the transfer or the use made of
   the data transmitted would be contrary to the basic legal
   principles of one of the Parties, and, in particular, if the person
   concerned would suffer a prejudice in fundamental human rights.
   Upon request, the receiving Party shall inform the furnishing Party
   of the use made of the information supplied and of the results
   ach ieved.
3. Nominative data may only be transmitted to customs authorities and,
   in the case of need for prosecution purposes, to public prosecution
   and judicial authorities. Other persons or\authorities may obtain
   sucn information only upon previous authorisation by the furnishing
   authority.
4. The furnishing Party shall verify the accuracy of the information
   to be transferred. Whenever it appears that the information
   supplied was inaccurate or to be deleted, the receiving Party shall
   be notified without delay. The latter shall be obliged to carry out
   the correction or deletion.
5. Witnout prejudice to cases of prevailing public interest, the
   person concerned may obtain, upon request, information on the data
   stores and the purpose of this storage.
                                  79
 ---pagebreak---                               ARTICLE LP
                          Use of information
1. Information obtained shall be used solely for the purposes of this
    Protocol and may be used within each Party for other purposes only
    with the prior written consent of the administrative authority
    which furnished the information and shall be subject to any
    restrictions laid down by that authority.
2. Paragraph 1 shall not impede the use of information in any judicial
    or administrative proceedings subsequently instituted for failure
    to comply with customs legislation.
3. The Parties may, in their records of evidence, reports and
    testimonies and in proceedings and charges brought before the
    courts, use as evidence information obtained and documents
    consulted in accordance with the provisions of this Protocol.
                               ARTICLE L1
                         Experts and witnesses
An offi.cial of a requested authority may be authorized to appear,
within the limitations of the authorization granted, as expert or
witness in judicial or administrative proceedings regarding the matters
covered by this Protocol in the jurisdiction of another Party, and
produce such objects, documents or authenticated copies thereof, as may
be needed for the proceedings. The request for an appearance must
indicate specifically on what matter and by virtue of what title or
qualification the official will be questioned.
                               ARTICLE L2
                          Assistance expenses
The Parties shall waive all claims on each other for the reimbursement
of expenses incurred pursuant to this Protocol, except, as appropriate,
for expenses to experts and witnesses and to interpreters and
translators who are not dependent upon public services.
                                    80
 ---pagebreak---                               ARTICLE 13
                            Implementation
1. The management of this Protocol shall be entrusted to the central
   customs authorities of Russia on the one hand and the competent
   services of the Commission of the European Communities and, where
   appropriate, the customs authorities of the EC Member States on the
   other. They shall decide on all practical measures and arrangements
   necessary for its application, taking into consideration rules in
   the field of data protection. They may recommend to the Cooperation
   Council 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 thé provisions of this Protocol.
                              ARTICLE 14
                           Complementarity
1. This Protocol shall complement and not impede application of any
   agreements on mutual assistance which have been concluded between
   individual or several Member States of the European Community and
   Russia. Nor shall it preclude more extensive mutual assistance
   granted under such agreements concluded or to be concluded.
2. Without prejudice to Article 10, these agreements do not prejudice
   Community provisions governing the communication between the
   competent services of the Commission and the customs authorities of
   the Member States of any information obtained in customs matters
   which could be of Community interest.
                                   ?/
 ---pagebreak---                    List of declarations and letters
Joint declaration in relation to Title III and article 94
joint declaration in relation to article 10
Joint declaration in relation to article 12
joint declaration in relation to article 17
Joint declaration in relation to article 18
Exchange of letters in relation to article 18
Exchange of letters in relation to article 22
Joint declaration in relation to article 22, paragraph 1 second indent
Joint declaration in relation to article 24
Joint declaration in relation to articles 26, 32 and 37
Joint declaration in relation to article 28
Joint declaration in relation to article 29(3)
Exchange of letters in relation to article 29
Joint declaration in relation to article 30
Joint declaration in relation to article 30 a) and g)
Joint declaration in relation to the notion of "control" in article
30(b) and article 45
Joint declaration in relation to article 30(h), 3rd subparagraph
Joint declaration in relation to article 31
Declaration by Russia in relation to article 34, paragraph 1
Joint declaration in relation to articles 34 and 38
Joint declaration in relation to article 35
Community declaration in relation to article 36
Declaration by Russia in relation to article 36
Joint declaration in relation to article 39(2c), 2nd subparagraph on
opening ports
Joint declaration in relation to article 39(2c), 2nd subparagraph on
vessels under a third flag
Joint declaration in relation to article 44
Joint declaration in relation to article 46 (2)
Joint declaration in relation to article 48
Exchange of letters in relation to article 52
Joint declaration in relation to article 52
Joint declaration in relation to article 53(2.2)
Joint declaration in relation to article 54
Community declaration in relation to article 54
Joint declaration in relation to article 99
Joint declaration in relation to article 101
Joint declaration in relation to article 107
Joint declaration in relation to article 107 (2)
Joint declaration in relation to articles 2 and 107
Joint declaration in relation to article 112
Joint declaration in relation to article 6 of Protocol 2
Exchange of letters on the consequences of enlargement (outside the
agreement)
Exchange of letters on Uruguay Round (outside the agreement)
                                   82
 ---pagebreak---         Joint declaration in relation to Title III and article 94
For the purpose of Title III and Article 94, the GATT is understood to
be the General Agreement on Tariffs and Trade signed in Geneva in 1947
as amended, as applied at the date of signature of the present
Agreement, if the Parties do not agree otherwise within the framework
of the Cooperation Council established under Article 90.
               Joint declaration in relation to article 10
The Parties agree, that the provisions of paragraph 1 of Article 10
shall not apply to conditions of import of products to the territory of
Russia under financial loans and credits granted for development and
humanitarian purposes, technical and humanitarian assistance and other
similar arrangements, concluded between Russia and third states or
international organisations in so far as such states or international
organisations require special treatment for such imports.
               Joint declaration in relation to article 12
Article 12, within Title III on trade in Goods, deals with the question
of transit. It is the understanding of the Parties that Article 12
deals exclusively with the freedom of transit of goods. This is
according to normal GATT practice. The issue of transit may be taken up
in the future negotiations on Transport Agreements as indicated in
Article 43.
               Joint declaration in relation to article 17
The Community and Russia declare that the text of the safeguard clause
 (Article 17) does not grant GATT safeguard treatment.
               Joint declaration in relation to article 18
The Parties agree that, without prejudice to their       legislation and
practice, when establishing normal value due account shall be taken
overall, in each case on its merits, when natural comparative
advantages can be shown by the manufacturers involved to be held with
regard to factors such as -access to raw materials, production process,
proximity of production to customers and special characteristics of the
product.
              Exchange of letters in relation to article 18
 It is understood that the provisions of this article and respective
declaration are neither intended to, nor shall, slow down, hinder or
 impede the procedures provided for in the respective legislations of
the Parties regarding antidumping and subsidies investigations.
                                     n
                                   •\r
 ---pagebreak---      Exchange of letters in relation to article 22 (nuclear trade)
sir.
The purpose of this letter is to confirm that with regard to trade in
nuclear materials as covered by Article 22 of the Partnership and
Cooperation Agreement signed today, we have reached the following
understanding:
Russia intends to act as a stable, reliable and long-term supplier of
nuclear materials to the Community and the Community recognises that
intention. The Russian Government takes note that the Community
considers Russia, in particular for the purposes of its supply policy
in the nuclear field, as a source of supply which is separate and
distinct from other suppliers.
In order to avoid any difficulties in trade, consultations shall be
held regularly or on request on developments in the trade of nuclear
materiaLs between Russia and the Community. These consultations could
include a continuous and regular dialogue on market developments and
forecasts.
The consultations shall be held within the framework of Article 92.
As provided in Article 13 of the Partnership and Cooperation Agreement
the regulations referred to in article 6 of the 1989 Agreement will be
implemented in a uniform, impartial and equitable manner.
I refer to our commitment to facilitate by all practicable means the
process of nuclear disarmament underway. We have agreed to take all
necessary steps to conduct consultations with all countries concerned,
if it appears that the implementation of respective bi- and
multilateral agreements causes or threatens to cause substantial injury
to the facilities of the Parties.
I propose that this letter and your reply will establish a formal
agreement between us.
        Joint declaration in relation to article 22, paragraph 1
                              second indent
With respect to the community the legislation and regulations, referred
to in Art. 6 of the 1989 Agreement, include, inter alia, the Treaty
establishing the European Atomic Energy Community and implementing
regulations thereof, in particular the provisions of those texts, which
specify the rights, powers and responsibilities of the EURATOM Supply
Agency and of the Commission of the European Communities.
                                   &
 ---pagebreak---               Joint declaration in relation to article 24
It is understood that the notion "members of their family" is defined
in accordance with the national legislation of the host country
concerned.
        Joint declaration in relation to articles 26, 32 and 37
The Parties to the Agreement shall ensure that the issuing of visas and
residents permits in conformity with the laws and regulations of Russia
and the Member states respectively are conducted in a manner consistent
with the principles of the concluding document of the CSCE Bonn
Conference, in particular with a view to facilitate the prompt entry,
stay and movement of businessmen in Russia and in the Member states.
Such efforts shall apply in particular to key personnel referred to in
Article 32 and to the sellers of cross-border services referred to in
Article 37, and ensure that the administrative procedures do not
nullify or impair the benefits accruing to any Party under these
Articles of the Agreement.
The Parties agree that an important element in this context is the
timely conclusion of re-admission agreements between the Member States
and Russia.
The Cooperation Council shall regularly review the evolution of the
situation in these areas.
              Joint Declaration in relation to article 28
Without prejudice to the provisions of Articles 50 and 51, the Parties
agree that the words "in conformity with ... legislation and
regulations" mentioned in paragraphs 1 and 4 of Article 28 mean that
each Party may regulate the establishment of companies by means of
setting up subsidiaries and branches as defined in Article 30 and the
operation of branches provided that this legislation and regulations do
not create reservations to the treatment no less favourable than that
accorded to companies or branches of any third country respectively.
Without prejudice to the reservations listed in Annexes 3 and 4 and to
the provisions of Articles 50 and 51, the Parties agree that the words
 "in conformity with ... legislation and regulations" mentioned in
paragraphs 2 and 3 of Article 28 mean that each Party may regulate the
operation of companies on its territory, provided that this legislation
and regulations do not create for the operations of companies of the
other Party any new reservations to the treatment no less favourable
than that accorded to their own companies or to subsidiaries of
companies of any third country whichever is the better.
                                  ? f
 ---pagebreak---         Joint declaration in relation to article 29 paragraph 3
The Parties confirm that nothing in Article 29 paragraph 3 prevent
Russia from adopting any new regulations or measures which would
introduce or worsen discrimination as compared to the situation
existing on the date of the signature of the Agreement as regards
conditions affecting the establishment of non-Community companies in
its territory in comparison to its own companies
             Exchange of letters in relation to article 29
       (conditions of establishment and operations in banking and
                           insurance services)
Letter from Russia
Dear Sir,
I refer to the Partnership and Cooperation Agreement initialled today.
I confirm our understanding that the provisions of the Agreement
concerning conditions of establishment and operation of community
companies in Russia were agreed between us and that signature shall go
ahead on that basis provided that Russia would not adopt before the
signature of the Agreement new measures or regulations which would
introduce or worsen discrimination vis à vis Russian companies as
compared to the situation existing on today's date as regards
conditions affecting the establishment and operation of Russian
subsidiaries of Community companies in Russia with the exception of
those which comply with sub-paragraphs- (d) and/or (e) of paragraph 1
Part A, and/or paragraph 2 of Part B of Annex 7.
I would be obliged if you would confirm the agreement of the Community
to the content of this letter.
                                   U
 ---pagebreak---                Joint Declaration in relation to article 30
The Parties confirm the importance of ensuring that the granting of
licences referred to in Article 30, paragraphs (a) and (g) of this
Agreement:
     -   shall be based on objective and transparent criteria, such as
         competence and the ability to supply the service;
     -   shall not be more burdensome than necessary to ensure the
         quality of the service;
         shall not in itself constitute a restriction on the supply of
         the service."
          Joint declaration in relation to Article 30 a) and g)
Article 30 a), second paragraph and g), second paragraph take into
account the specificity of access to financial services as it is agreed
in the framework of this Agreement, and do not affect the definitions
of "establishment" and "operation" as they apply to financial services
for other purposes than the purpose of this Agreement.
        Joint Declaration in relation to the notion of "control"
                     in article 30(b) and article 45
1.   The Parties confirm their mutual understanding that the question of
     control shall depend on the factual circumstances of the particular
     case.
2.   A company shall, for example, be considered as being "controlled"
     by another company, and thus a subsidiary of such other company if:
- the other company holds directly or indirectly a majority of the
voting rights, or
- the other company has the right to appoint., or dismiss a majority of
the administrative organ, of the management organ or of the
 supervisory organ and is at the same time a shareholder or member of
the subsidiary.
 3.  Both Parties consider    the criteria  in paragraph 2 to be non-
     exhaustive .
    Joint Declaration in relation to article 30 (h), 3rd subparagraph
 Taking into account the restrictions existing at present concerning the
 carriage of goods and passengers by inland transport modes, the Parties
 agree that until such restrictions are lifted, the expression
 "intermodal transport operations involving a sea-leg" is understood to
 mean the organisation of,such operations.
                                    s>
 ---pagebreak---                Joint Declaration in relation to article 31
The provisions of Article 31 permit the Parties to apply any measure
intended to prevent circumvention by a company of a third country of
the measures of the Parties concerning establishment of companies of
that third country in its territory by means of any possibility
provided for in this Agreement.
        Joint declaration in relation to Article 34, paragraph 1
Taking into account the explanations given by Russia to the Community
that in certain respects and for certain sectors the treatment granted
to Russian subsidiaries and branches of Community companies is better
than the treatment offered to Russian companies in general, namely
national treatment, the Parties agree that if measures were introduced
by Russia to align the treatment of Russian subsidiaries and branches
of foreign companies down to national treatment, this cannot be
considered to violate the obligation on Russia to use its best
endeavours contained in this paragraph.
           Joint declaration in relation to Articles 34 and 38
The Parties agree that if either Party were to be of the view that the
other had not correctly interpreted the terms "significantly more
restrictive" in Articles 34(2) or 38(3>, such Party may have resort to
the procedures set out in Article 101.
               Joint declaration in relation to article 35
The Parties agree that the activities referred to in subparagraphs (a)
and (b) do not include acting as a carrier.
             Community declaration in relation to article 36
The Community declares that the cross-border supply of services as
referred to in Article 36 does not imply the movement of the service
supplier into the territory of the country where the service is
destined, nor the movement of the recipient of the service into the
territory of the country from which the service comes.
             Declaration by Russia in relation to article 36
Russia declares that the suppliers in Community declaration in relation
to Article 36 could not be considered as a natural persons, who are
representatives of a community or Russian company and are seeking
temporary entry for the purpose of negotiating the sales of cross-
border supply services or entering into agreements to sell cross-border
 services for that company.
                                   rf
 ---pagebreak--- Joint declaration in relation to Article 39, para 2 (c), 2nd subpara.
on the basis of the information provided by the Russian side concerning
their ports open to foreign vessels, the Community takes note that
Russia intends to continue its effort to increase the number of ports
open to foreign vessels. The Russian side also notes the Community's
policy of maintaining open to foreign vessels all ports open to
international trade. The Parties to this Agreement consider that the
degree of openness of ports to foreign vessels is an essential feature
of an assessment of the conditions necessary for the free supply of
services in international maritime transport. They therefore undertake
to review the situation regarding ports open to foreign vessels at
least every two years through consultations to be held in the framework
of the Cooperation Council. If serious difficulties arise in
maintaining a port open to foreign vessels, the Party in whose
territory the port concerned is situated shall inform the other Party;
at the request of the latter, consultations shall be held so as to
ensure that any action taken affects as little as possible the free
supply of international maritime services.
     Joint declaration in relation to article 39.2(c), 2nd subpara.
The Parties agree after the expiry of five years from the date of entry
into force of this Agreement to consider the possibility of application
of the provisions of Article 39.2(c), 2nd subpara to vessels under a
third flag operated by shipping companies or nationals of a Member
State or Russia respectively.
               Joint declaration in relation to article 44
For the purposes of this Agreement, an economic integration agreement
shall be an agreement in accordance with thes principles set out in
Article V of the General Agreement on Trade in services ("GATS"). In
respect of any aspect of this Agreement covering areas other than
service activities an economic integration agreement shall be an
agreement in accordance, with the principles set out in Article XXIV of
the GATT on the creation of free trade areas or customs unions.
 ---pagebreak---             Joint declaration in relation to article 46 (2)
The Parties confirm their mutual understanding that the question of
whether activities are connected, even occasionally, with the exercise
of official authority in their respective territories, depends upon the
circumstances of each particular case. An examination, in each
particular case, whether such activities are connected with
-   the right to use physical constraint; or
-   the exercise of judicial functions; or
    the right unilaterally to enact binding regulations
will help to determine the answer to such questions.
              Joint declaration in relation to article 48
The sole fact of requiring a visa for natural persons of certain
Parties and not for those of others shall not be regarded as nullifying
or impairing benefits under a specific commitment.
             Exchange of letters in relation to article 52
                           Letter from Russia
With reference to Article 52 of the Partnership and Coopération
Agreement, I confirm that nothing in this article shall be construed as
restricting the transfer abroad by Community residents of investments
made in Russia by Community residents, including any compensation
payments arising from measures such as expropriation, nationalisation
or measures of equivalent effect and of any profit stemming therefrom.
I propose that this letter and your reply will establish a formal
agreement between us.
                                   7*
 ---pagebreak---        Joint Declaration in relation to Article 52 (Definitions)
                           "Current payments*'
"Current payments" are payments connected with the movement of goods,
services or persons made in accordance with normal international
business practice and do not cover arrangements which materially
constitute a combination of a current payment and a capital
transaction, such as deferrals of payments and advances which is meant
to circumvent respective legislation of the Parties in this field.
This definition does not preclude Russia from applying or enacting
legislation which lays down that such payments must be carried out
through those Russian banks which have received the respective licences
from the central Bank of the Russian Federation to carry out such
operations in freely convertible currencies.
                           "Direct investment"
"Direct Investment" is an investment for the purpose of establishing
lasting economic relations with an enterprise such as investments which
give the possibility of exercising an effective influence on the
management thereof, in the country concerned by non-residents or abroad
by residents, by means of:
1. Creation or extension of a wholly owned enterprise, a subsidiary or
    a branch, acquisition of full ownership of an existing enterprise;
2. Participation in a new or existing enterprise;
3. A loan of five years or longer.
                      "Freely convertible currency"
"A freely convertible currency" is any currency considered as such by
the International Monetary Fund.
            Joint Declaration in relation to Article 53(2.2)
"Primary products" are those defined as such in the GATT.
               Joint declaration in relation to article 54
The Parties agree that for the purpose of the Agreement, intellectual,
industrial and commercial property includes in particular copyright,
including the copyright of computer programmes, and neighbouring
rights, patents, industrial        designs, geographical   indications,
including appellations of origin, trade marks 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.
                                    91
 ---pagebreak---              Community declaration in relation to article 54
The provisions of the Agreement are without prejudice to the
competences of the European Community and its Member states in matters
of intellectual, industrial and commercial property.
               Joint declaration in relation to article 99
The Parties agree that the measures provided for in Article 99 shall
not be taken with the aim to distort conditions of competition in
relevant markets and thus to afford protection to domestic production.
               Joint déclaration in relation to article 101
The Parties invite the Cooperation Council to examine forthwith the
rules of procedure that may be useful for dispute settlement under this
Agreement.
               Joint Declaration in relation to article 107
The Parties agree, by common consent, for the purpose of its correct
interpretation and its practical application. that the terms "cases of
special urgency" included in Article 107 of the Agreement mean cases of
material breach of the Agreement by one of the Parties. A material
breach of the Agreement consists in
 (a) repudiation of the Agreement not sanctioned by the general rules of
     international law
or
 (b) violation of the essential element of the Agreement set out in
     Article 2.
         Joint declaration in relation to article 107 paragraph 2
The Parties agree that "appropriate measures" referred to in Article
107 paragraph 2 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 107 paragraph 2, the other Party may avail itself of
the procedure provided for in Article 101.
                                     ^2
 ---pagebreak---           Joint Declaration in relation to articles 2 and 107
The Parties declare that* the inclusion in the Agreement of the
reference to the respect for human rights constituting an essential
element of the Agreement and to cases of special urgency flows from
-   the community * s policy in the area of human rights, in conformity
    with the 11 May 1992 declaration of the Council which provides for
    the inclusion of this reference in cooperation or association
    agreements between the community and its CSCE partners, as well as
    Russia's policy in this field and
-   the attachment of both Parties to the relevant obligations, arising
    in particular from the Helsinki Final Act and the charter of Paris
    for a new Europe.
              Joint declaration in relation to article 112
The Parties confirm that although the present Agreement replaces the
Agreement of 18 December 1989 regarding relations between the Parties,
the Agreement shall not prejudice or otherwise affect any measures
taken before the entry into force of the present Agreement or
agreements made between them before that date in conformity with the
1989 Agreement and this upon the conditions and for the period of
application contained in such measures or agreements.
                                    93
 ---pagebreak---       Joint Declaration in relation to article 6 of Protocol 2
1. The Parties agree to take the necessary measures in order to assist
   each other, as provided for in this Protocol and without delay, for
   the following movements of goods:
   a) movement of arms, ammunition, explosives and explosive devices;
   b) movement of objects of art and antiquity, which present
       significant historical, cultural or archaeological value for
       one of the Parties;
   c) movement of poisonous goods as well as the substances dangerous
       for the environment and the public health;
   d) movement of sensitive and strategic goods subject to non-tariff
       limitations in accordance with the lists agreed upon by the
       Parties.
2. The Parties agree, if permitted by the basic principles of their
   respective legal systems, to take the necessary measures to allow
   the appropriate use of the controlled delivery technique on the
   basis of mutually agreed implementing provisions adopted by them in
   accordance with the procedures of this Protocol.
3. The Parties agree to take all necessary measures, in accordance
   with their respective legislation, in order:
   - to deliver all documents,
   - to notify all decisions,
   falLing within the scope of this Protocol to an addressee, residing
   or established in their respective territories on the basis of
   mutually agreed implementing provisions adopted by them in
   accordance with the procedures of this Protocol. In such a case
   Article 5 (3) is applicable.
4. The Parties agree that when the requested authority cannot act on
   his own, the administrative department to which the request has
   been addressed by this authority shall proceed under the same
   conditions applicable to the requested authority.
                                  94
 ---pagebreak--- outside the Agreement:
         Exchange of letters on the consequences of enlargement
                       Letter from the community
Dear Sir, I refer to the Agreement on Partnership and cooperation
signed today and confirm that if any amendment to this agreement might
became necessary as a result of an enlargement of the Community, this
would become the subject of consultations between the Parties pursuant
to Article 90 and in this context account would be taken, to the extent
possible, of the character of bilateral trade and economic relations
between Russia and acceding States.
I would be obliged if you could confirm the agreement of Russia to the
content of this letter.
                  Exchange of letters on Uruguay Round
                        Letter from the Community
Dear Sir, I refer to the Agreement on Partnership and Cooperation
signed today and confirm our agreement that one change of
circumstances, within the meaning of Article 4 of the Agreement, where
it would be appropriate to examine whether amendments should be made to
the Agreement, would be the situation arising upon the entry into force
of the Uruguay Round multilateral agreements and the conclusion of
amendments to the GATT, its codés and other agreements relating
thereto.
I would be obliged if you could confirm the agreement of Russia to the
content of this letter.
                                    95