CELEX: 51994PC0226
Language: en
Date: 1994-06-01
Title: Proposal for a Council and Commission Decision on the conclusion of the Partnership and Cooperation Agreement between the European Communities and their Member States of the one part, and Ukraine, of the other part

COMMISSION OF THE EUROPEAN COMVIUNITIES
                                          C0M(94) 226    final
                                          Brussels, 01.06.1994
                                          94/ 0136(AVC)
                                  Proposal
                  for a Council and Commission Decision
     on the conclusion of the Partnership and Cooperation Agreement
      between the European Communities and their Member States
              of the one part, and Ukraine, of the other part
                      (presented by the Commission)
 ---pagebreak---                                   Explanatory memorandum
 1. The attached proposal for a Council and Commission Decision constitutes the legal
     instrument for the conclusion of the Partnership and Cooperation Agreement between
    the European Communities and their Member States, on the one hand, and Ukraine, on
    the other.
2. Following the Council's adoption of the negotiating directives on 5 October 1992,
    negotiations with Ukraine were held in the course of 1993 and 1994. After four rounds
    of negotiations, the Agreement was initialled on 23 March 1994.
3. The Agreement is a mixed Agreement covering areas for which both the Communities
    and the Member States are competent, and is concluded for an initial period of ten
    years.
    It establishes a political dialogue. The Agreement covers also trade in goods, labour
    conditions, establishment and operation of companies, cross-border supply of services,
    payments and capital, competition, intellectual, industrial and commercial property
    protection, legislative cooperation, economic cooperation, cultural cooperation and
    financial cooperation.
    The Agreement contains a clause which allows it to be suspended, even unilaterally, if
    it is considered that there has been a breach of the essential elements underlying the
    Agreement i.e. respect for democracy, human rights and the principles of the market
    economy.
    The Agreement sets out an institutional framework for its implementation with a
    Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation
    Committee.
    The Agreement refers to the prospect of a future free trade area. In 1998,
    circumstances will be assessed in order to see whether negotiations can begin in view
    of a free trade agreement.
   Customs cooperation is covered by a separate protocol.
4. The Agreement will, as far as relations between the Community and Ukraine are
   concerned, replace the Agreement on Trade and Commercial and Economic
   Cooperation between the European Economic Communities and USSR, signed on 18
   December 1989.
 ---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, with the assent of the European
        Parliament, on behalf of the European Community in accordance with Articles 113
        and 235 and in conduction with Article 228 (3), second sub paragraph of the EC
        treaty by adopting the attached decisions;
        the Commission will conclude the Agreement on behalf of the ECSC in
        accordance with Article 95 of the ECSC, after consulting the Consultative
        Committee and with the unanimous assent of the Council, ;
        The Commission will conclude the Agreement (on behalf of the European Atomic
        Energy Community) after the Council approved it in accordance with the second
        paragraph of Article 101 of the Euratom Treaty ;
   The conclusion of the Agreement will have to be ratified by all the Member States
   given the mixed nature of the Agreement,.
6. In view of the above, the Commission asks the Council to adopt the annexed decision.
                                                                                        .16-/tt
 ---pagebreak---                        COUNCIL AND COMMISSION DECISION
                                           OF
            on the conclusion of the Partnership and Cooperation Agreement
              between the European Communities and their Member States
                      of the one part, and Ukraine, of the other part
                               (../.. ./ECSC, EC, EURATOM)
 THE COUNCIL OF THE EUROPEAN UNION,
 THE COMMISSION, of the European Communities
Having regard to the Treaty establishing the European Coal and Steel Community,
Having regard to the Treaty establishing the European Community, and in particular
 Article 113 and 235 in conjunction with Article 228 (3), second subparagraph thereof,
Having regard to the Treaty establishing the European Atomic Energy Community, and in
particular the second paragraph of Article 101 thereof,
 Having regard to the assent of the European Parliament,
Whereas, the Partnership and Cooperation Agreement between the European
Communities and their Member States, of the one part, and Ukraine, of the other part,
signed      , should be approved,
Having consulted the Consultative Committee and with the unanimous agreement of the
Council,
HAVE DECIDED AS FOLLOWS :
 ---pagebreak---                                          Article 1
The Partnership and Cooperation Agreement between the European Communities and
their Member States of the one part, and Ukraine, of the other part, together with the
Protocol, the exchanges of letters and the declarations are hereby approved on behalf of
the European Community, the European Coal and Steel Community, and the European
Atomic Energy Community.
These texts are attached to this Decision.
                                         Article 2
1. The position to be adopted by the Community in the Cooperation Council shall be
   determined by the Council, on a proposal from the Commission, or, where appropriate,
   by the Commission, in each case in accordance with the relevant provisions of the
   Treaties establishing the European Community, the European Coal and Steel
   Community and the European Atomic Energy Community.
2. In accordance with Article 78 of the Partnership and Cooperation Agreement, the
   President of the Council shall preside over the Cooperation Council and shall present
   the Community's position. A representative of the Commission shall preside over the
   Cooperation Committee in accordance with its rules of procedure and shall present the
   Community's position.
                                         Article 3
The President of the Council shall give the notification provided for in Article 99 of the
Agreement on behalf of the European Community. The President of the Commission shall
give such notification on behalf of the European Coal and Steel Community and the
European Atomic Energy Committee.
Done at Brussels,
                                                                                           AC
 ---pagebreak---                                           Final act
 The plenipotentiaries of :
 THE KINGDOM OF BELGIUM,
 THE KINGDOM OF DENMARK,
 THE REPUBLIC OF GERMANY,
 THE HELLENIC REPUBLIC,
 THE KINGDOM OF SPAIN,
 THE FRENCH REPUBLIC,
 IRELAND,
 THE ITALIAN REPUBLIC,
 THE GRAND DUCHY OF LUXEMBOURG,
 THE KINGDOM OF THE NETHERLANDS,
 THE PORTUGUESE REPUBLIC,
 THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
 Contracting Parties to the Treaty establishing the EUROPEAN COMMUNITY, the
 Treaty establishing the EUROPEAN COAL AND STEEL COMMUNITY, and the
 Treaty establishing the EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as "the Member States", and of
the EUROPEAN COMMUNITY, THE EUROPEAN ATOMIC ENERGY
COMMUNITY and the EUROPEAN COAL AND STEEL COMMUNITY, hereinafter
referred to as "the Community",
of the one part, and
the plenipotentiaries of Ukraine,
of the other part,
meeting         in the year one thousand nine hundred and ninety-four for the signature of
the Partnership and Cooperation Agreement establishing a partnership between the
European Communities and their Members States, of the one part, and Ukraine, of the
other part, hereinafter referred to as the Partnership and Cooperation Agreement, have
adopted the following text :
the Partnership and Cooperation Agreement and the Protocol on mutual assistance in
customs matters.
                                                                                           -/
 ---pagebreak---  The plenipotentiaries of the Member States and of the Community and the
 plenipotentiaries of Ukraine have adopted the texts of the Joint declarations Usted below
 and annexed to this Final Act :
Joint Declaration concerning Article 13 of the Agreement
Joint Declaration concerning Article 23 of the Agreement
Joint Declaration concerning Article 24 of the Agreement
Joint Declaration concerning the notion of "control" in Article 25(b) and Article 36 of the
Agreement
Joint Declaration concerning Article 42 of the Agreement
Joint Declaration concerning Article 94 of the Agreement
The plenipotentiaries of the Member States and of the Community and the
plenipotentiaries of Ukraine have also taken note of the following exchanges of letters
annexed to this Final Act :
Agreement in the form of an exchange of letters concerning Article 13bis of the
Agreement
Agreement in the form of an exchange of letters concerning the Chapter on establishment
of companies, Title IV, Chapter 2 of the Agreement
Done at                                      in the year one thousand nine hundred and
ninety four.
For the Council and the Commission of the European Communities.
For Ukraine.
                                                                                            /i $
 ---pagebreak--- PARTNERSHIP AND COOPERATION AGREEMENT
 BETWEEN THE EUROPEAN COMMUNITIES AND
    THEIR MEMBER STATES, AND UKRAINE
 ---pagebreak---                       PARTNERSHIP AND COOPERATION AGREEMENT
 Establishing a partnership between the European Communities and their Member States, of the
one part, and Ukraine, of the other part.
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
IRELAND,
THE ITALIAN REPUBLIC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE PORTUGUESE REPUBLIC,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
contracting parties to the Treaty establishing the European Community, the Treaty estabUshing
the European Coal and Steel Community, and the Treaty establishing the European Atomic
Energy Community,
hereinafter referred to as "Member States", and
the EUROPEAN COMMUNITY, the EUROPEAN ATOMIC ENERGY COMMUNITY and the
EUROPEAN COAL AND STEEL COMMUNITY,
hereinafter referred to as "the Community",
of the one part,
and UKRAINE
of the other part,
 ---pagebreak--- TAKING ACCOUNT of the wish of the Parties to establish close relations building upon the
existing historical links between them,
CONSIDERING the importance of developing cooperative links between the Union, its Member
 States and Ukraine and the common values that they share,
RECOGNIZING that the Community and Ukraine wish to strengthen these links and to establish
partnership and cooperation which would strengthen and widen the relations established in the
past in particular by the Agreement between the European Economic Community and the
European Atomic Energy Community and the Union of Soviet Socialist Republics on Trade and
Commercial and Economic Cooperation, signed on 18 December 1989,
CONSIDERING the commitment of the Community and its Member States and of Ukraine to
strengthening the political and economic freedoms which constitute the very basis of the
partnership,
CONSIDERING the commitment of the Parties to promote international peace and security as
well as the peaceful settlement of disputes and to cooperate to this end in the framework of the
United Nations and the Conference on Security and Cooperation in Europe,
CONSIDERING the firm commitment of the Community and its Member States and of Ukraine
to the full implementation of all principles and provisions contained in the Final Act of the
Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the
Madrid and Vienna Follow Up Meetings, the Document of the CSCE Bonn Conference on
Economic Cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki
Document 1992, "the Challenges of Change1*,
RECOGNIZING in that context that support of independence, sovereignty and territorial integrity
of Ukraine will contribute to safeguarding of peace and stability in the region of Central and
Eastern Europe and on the European Continent as a whole,
CONFIRMING the attachment of the Community and its Member States and of Ukraine to the
European Energy Charter and to the Declaration of the Luzem Conference, April 1993,
CONVINCED of the paramount importance of the rule of law and respect for human rights,
particularly those of minorities, the establishment of a multiparty system with free and
democratic elections and economic liberalisation aimed at setting up a market economy,
BELIEVING that there is a necessary connection between full implementation of partnership on
the one hand, and continuation of the actual accomphshment of Ukraine's pohtical, economic and
legal reforms on the other hand, as well as the introduction of the factors necessary for
cooperation, notably in the light of the conclusions of the CSCE Bonn Conference,
DESIROUS of encouraging the process of regional cooperation in the areas covered by this
agreement with the neighbouring countries in order to promote the prosperity and stability of the
region,
DESIROUS of establishing and developing regular political            dialogue    on bilateral and
international issues of mutual interest,
RECOGNIZING AND SUPPORTING the wish of Ukraine to establish close cooperation with
European institutions,
TAKING ACCOUNT of the Union's willingness to develop economic cooperation and provide
technical assistance, as appropriate, for the implementation of economic reform in Ukraine,
                                                                                                  . / / > •
 ---pagebreak--- BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between
Ukraine and a wider area of cooperation in Europe and neighbouring regions and Ukraine's
progressive integration into the open international trading system,
CONSIDERING the commitment of the Parties to liberalise trade, based on the principles
contained in the General Agreement on Tariffs and Trade, as amended by the Uruguay Round,
CONSCIOUS of the need to improve conditions affecting business and investment, and conditions
in areas such as establishment of companies, labour, provision of services and capital movements,
WELCOMING AND RECOGNISING the importance of Ukraine's efiforts, aimed at transition of
its economy away from a state trading country with centrally planned economy into a market
economy,
CONVINCED that continued progress towards a market economy will be fostered by cooperation
between the Parties in the forms set out in this Agreement,
CONVINCED that this Agreement will create a new climate for economic relations between the
Parties and in particular for the development of trade and investment, which are essential to
economic restructuring and technological modernization,
DESIROUS of estabUshing close cooperation in the area of environment protection taking into
account the interdependence existing between the Parties in this field,
BEARING in mind the intention of the Parties to develop their cooperation in the field of civil
science and technologies, including space research, in view of the complementarity of their
activities in this area,
DESIROUS of establishing cultural cooperation and improving theflowof information,
Have agreed as follows :
                                              Article 1
A Partnership is hereby established between the Community and its Member States of the one
part, and Ukraine of the other part The objectives of this partnership are:
      to provide an appropriateframeworkfor the political dialogue
      between the Parties allowing the development of close pohtical relations,
      to promote trade and investment and harmonious economic relations between the Parties
      and so to foster their sustainable development
      to provide a basis for mutually advantageous economic, social, financial, civil scientific
      technological and cultural cooperation,
      to support Ukrainian efforts to consolidate its democracy and to develop its economy and to
      complete the transition into a market economy.
                                                                                                  . / //.
 ---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 darter of Paris for a New Europe, as well as the principles of market
economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin
the internal and external policies of the Parties and constitute an- essential element of
partnership and of the present Agreement.
                                                Article 3
The Parties consider that it is essential for the future prosperity and stability of the region of the
former Soviet Union that the newly independent states which have emerged from the dissolution
of the Union of Soviet Socialist Republics (hereinafter called "Independent States") should
maintain and develop cooperation among themselves in compliance with the principles of the
Helsinki Final Act and with international law and spirit of good neighbourly relations and will
make every effort to encourage this process.
In view of the above the Parties consider that the development of their relations should take due
account of Ukraine's wish to maintain cooperative relations with other Independent States.
                                              Article 3 bis
The Parties undertake to consider, in particular when Ukraine has further advanced in the process
of economic reform, developments of the relevant Titles of this Agreement, in particular Title in
and Article 4 Ibis, with a view to the establishment of a free trade area between them. The
Cooperation Council may make iecommendations on such developments to the Parties. Such
developments shall only be put into effect by virtue of an agreement between the Parties in
accordance with their respective procedures, l i e Parties shall consult each other in the year 1998
whether circumstances, and in particular Ukraine's advances in market oriented economic reforms
and the economic conditions prevailing there at that time, allow the beginning of negotiations on
the establishment of a free trade area.
                                              Article 3 ter
The Parties undertake to examine together, by mutual consent, amendments which it may be
appropriate to make to any part of the Agreement in view of changes in circumstances, and in
particular of the situation arising from Ukraines accession to GATT. The first examination shall
take place three years after the entry into force of the Agreement or when Ukraine becomes a
Contracting Party of GATT, whichever is earlier.
 ---pagebreak---                                TITLE II ; POLITICAL DIALOGUE
                                                Article 4
A regular political dialogue shall be established between the Parties which they intend to develop
and intensify. It shall accompany and consolidate the rapprochement between the Community and
Ukraine, support the political and economic changes underway in that country and contribute to
the establishment of new forms of cooperation. The political dialogue:
      shall strengthen the links of Ukraine with the Community, and thus with the community of
      democratic nations. The economic convergence achieved through this Agreement will lead to
      more intense political relations;
      shall bring about an increasing convergence of positions on international issues of mutual
      concern thus increasing security and stability.
      shall foresee that the Parties endeavour to cooperate on matters pertaining to the
      strengthening of stability and security in Europe, the observance of the principles of
      democracy, the respect and promotion of human rights, particularly those of minorities and
      shall hold consultations, if necessary, on the relevant matters.
                                                Article 5
Consultations as appropriate shall be held between the Parties at the highest political level.
At ministerial level, political dialogue shall take place within the Cooperation Council established
in Article 77 and on other occasions including with the Union Troika by mutual agreement.
                                                Article 6
Other procedures and mechanisms for political dialogue shall be set up by the Parties by
establishing appropriate contacts, exchanges and consultations, in particular in the following
forms:
      regular meetings at the level of the senior officials between representatives of Ukraine
      and representatives of the Union;
      taking full advantage of all diplomatic channels between the parties, including
      appropriate contacts in the bilateral as well as the multilateral field, such as United
      Nations, CSCE meetings and elsewhere;
      exchanging regular information on matters of mutual interest concerning political
      cooperation in Europe ;
      any other means which would contribute to consolidating and developing political dialogue.
                                                Article 7
Pohtical dialogue at parliamentary level shall take place within the framework of the
Parliamentary Cooperation Committee which shall be established under Article 82 of the
Agreement.
 ---pagebreak---                                         TITLE III: TRADE IN GOODS
                                                Article 8
 1.   The Parties shall accord to one another most-favoured-nation treatment according to Article
       1, paragraph 1 of the GATT.
2.    The provisions of paragraph 1 shall not apply to:
(a) advantages granted with the aim of creating a customs union or a free-trade area or
      pursuant to the creation of such a union or area;
(b) advantages granted to particular countries in accordance with the General Agreement on
      Tarifis and Trade and with other international arrangements in favour of developing
      countries;
(c) advantages accorded to adjacent countries in order to facilitate frontier traffic.
                                                Article 9
 1.   The parties agree that the principle offreedomof transit of goods is an essential condition of
      attaining the objectives of this Agreement
      In this connection each Party shall provide for unrestricted transit via or through its territory
      of goods originating in the customs territory or destined for the customs territory of the other
      Party.
2.    The rules described in Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable
      between the two Parties.
3.    The rules contained in this Article are without prejudice to any special rules relating to
      specific sectors, in particular such as transport, or products agreed between the_Parties.
                                              Article 9bis
The provisions of Article 8 paragraph 1 and Article 9 paragraph 2 shall not apply, during a
transitional period expiring on the 31.12.1998 or the accession of Ukraine to GATT, whichever is
earlier, to advantages defined in Annex I granted by Ukraine to other Independent States as from
the day preceding the date of entry into force of the Agreement.
                                               Article 10
Without prejudice to the rights and obhgations stemming from international conventions on the
temporary admission of goods which bind both Parties, each Party shall furthermore grant the
other Party exemption from import charges and duties on goods admitted temporarily, in the
instances and according to the procedures stipulated by any other international convention on this
matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions
under which the obligations stemmingfromsuch a convention have been accepted by the Party in
question.
 ---pagebreak---                                                 Article 11
Goods originating in Ukraine and the Community respectively shall be imported into the
Community and Ukraine respectively free of quantitative restrictions without prejudice to the
provisions of Article 13, 16, 17, annex II, and to the provisions of Article 77, 81, 244, 249 and
280 of the Acts of Accession of Spain and Portugal to the European Community.
                                              Article 11 bis
 1.   The products of the territory of one Party imported into the territory of the other Party shall
      not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in
      excess of those applied, directly or indirectly, to like domestic products.
2.    Moreover, these products shall be accorded treatment no less favourable than that accorded
      to like products of national origin in respect of all laws, regulations and requirements
      affecting their internal sale, offering for sale, purchase, transportation, distribution or use.
      The provision of this paragraph shall not prevent the application of differential internal
      transportation charges which are based exclusively on the economic operation of the means
      of transport and not on the nationality of the product.
                                              Article 11 ter
The following Articles of the GATT shall be applicable mutatis mutandis between the two
Parties.
(i)   Article VII, paragraphs 1,2, 3,4a, 4b, 4d, 5;
(ii) Article VIE;
(iii) Article EX;
(iv) Article X.
                                                Article 12
Goods shall be traded between the Parties at market-related prices.
                                                Article 13
      Where any product is being imported into the territory of one of the Parties in such increased
      quantities and under such conditions as to cause or threaten to cause substantial injury to
      domestic producers of like or direct competitive products, the Community or Ukraine, which
      ever is concerned, may take appropriate measures in accordance with the following
      procedures and conditions.
 ---pagebreak---  2.    Before taking any measures, or in cases to which paragraph 4 applies as soon as possible
      thereafter, the Community or Ukraine as the case may be shall supply the Cooperation
       Committee with all relevant information with a view to seeking a solution acceptable to
       both Parties.
 3.    If, as a result of the consultations, the Parties do not reach agreement within 30 days of
       referral to the Cooperation Committee on actions to avoid the situation, the Party which
       requested consultations shall be free to restrict imports of the products concerned to the
       extent and for such time as is necessary to prevent or remedy the injury, or to adopt
       other appropriate measures.
4.     In critical circumstances where delay would cause damage difficult to repair, the Parties
       may take the measures before the consultations, on the condition that consultations shall be
      offered immediately after taking such action.
5.    In the selection of measures under this Article, the Contracting Parties shall give priority to
      those which cause least disturbance to the achievement of the aims of this Agreement.
                                            Article 13 bis
Nothing in this Title, and in Article 13 in particular shall prejudice or affect in any way the
taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI
of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on
interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal
legislation.
In respect of anti-dumping or subsidies investigations, each Parry agrees to examine submissions
by the other Party and to inform the interested parties concerned of the essential facts and
considerations on the basis of which a final decision is to be made. Before definitive anti-
dumping and countervailing duties are imposed, the Party shall do the utmost to bring about a
constructive solution to the problem.
                                              Article 15
The Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on grounds of pubhc morahty, pubhc pohcy or pubhc security; the protection of
health and life of humans, animals or plants; the protection of natural resources; the protection of
national treasures of artistic, historic or archaeological value or the protection of intellectual,
industrial and commercial property or rules relating to gold and silver. Such prohibitions or
restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised
restriction on trade between the Parties.
 ---pagebreak---                                              Article 16
This Title III shall not apply to trade in textile products falling under chapters 50 to 63 of the
Combined Nomenclature. Trade in these products shall be governed by a separate agreement,
initialed on 5th May 1993 and applied provisionally since 1st January 1993.
                                             Article 17
1.     Trade in products covered by the Treaty establishing the European Coal and Steel
       Community shall be governed by the provisions of this Title III, with the exception of
       Article 11 and upon entry into force, by the provisions of an agreement on quantitative
       arrangements conœming exchanges of ECSC steel products.
2.     A contact group on coal and steel matters is set up, comprising representatives of the
       Community on the one hand, and representatives of Ukraine on the other.
       The contact group shall exchange, on a regular basis, information on all coal and steel
       matters of interest to the Parties.
                                             Article 18
Trade in nuclear materials shall be subject to the provisions of a specific Agreement to be
concluded between the European Atomic Energy Community and Ukraine.
                                                  10
 ---pagebreak---          TITLE IV: PROVISIONS AFFECTING BUSINESS AND INVESTMENT
                                   Chapter I: Labour conditions
                                             Article 19
      Subject to the laws, conditions and procedures applicable in each Member State, the
      Community and the Member States shall endeavour to ensure that the treatment accorded to
      Ukrainian nationals, legally employed in the territory of a Member State shall be free from
     any discrimination based on nationality, as regards working conditions, remuneration or
     dismissal, as compared to its own nationals.
      Subject to the laws, conditions and procedures applicable in Ukraine, Ukraine shall
     endeavour to ensure that the treatment accorded to nationals of a Member State, legally
     employed in the territory of Ukraine shall be free from any discrimination based on
     nationality, as regards working conditions, remuneration or dismissal, as compared to its
     own nationals.
                                           Article 19 bis
                                  Coordination of Social Security
The Parties shall conclude agreements in order:
(i) to adopt, subject to the conditions and modalities applicable in each Member State, the
     provisions necessary for the coordination of Social Security systems for workers of
     Ukrainian nationality, legally employed in the territory of a Member State. These provisions
     will in particular ensure that:
           all periods of insurance, employment or resident completed by such workers in the
     various Member States shall be added together for the purpose of pensions in respect of old
     age, invalidity and death and for the purpose of medical care for such workers;
           any pensions in respect of old age, death, invalidity, industrial accidents or
     occupational disease, with the exception of the special non-contributory benefits, shall be
     freely transferable at the rate applied by virtue of the law of the debtor Member State or
     States;
(ii) to adopt, subject to the conditions and modalities applicable in Ukraine, the provisions
     necessary to accord to workers who are nationals of a Member State and legally employed in
     Ukraine, treatment similar to that specified in the second indent of paragraph (i).
                                           Article 19 ter
The measures to be taken in accordance with Article 19 bis shall not affect any rights or
obhgations arising from bilateral agreements linking Ukraine and the Member States where those
agreements provide for more favourable treatment of nationals of Ukraine or of the Member
States.
                                                 11
 ---pagebreak---                                             Article 20
The Cooperation Council shall examine which joint efforts can be made to control illegal
immigration taking into account the principle and practice of readmission.
                                            Article 21
The Cooperation Council shall examine which improvements can be made in working conditions
for business people consistent with the international commitments of the Parties, including those
set out in the document of the CSCE Bonn Conference.
                                            Article 22
The Cooperation Council shall make recommendations for the implementation of Articles 19, 20
and 21.
                                                12
 ---pagebreak---    Chapter H: Conditions affecting the establishment and operation of companies
                                               Article 23
1. a)     The Community and its Member States shall grant for the establishment of Ukrainian
          companies in their territories treatment no less favourable than that accorded to
          companies of any third country, and this in conformity with their legislation and
          regulations.
    b)    Without prejudice to the reservations listed in Annex IV, the Community and its Member
          States shall grant to subsidiaries of Ukrainian companies established in their territories a
          treatment no less favourable than that granted to any Community companies, in respect of
          their operation, and this in conformity with their legislation and regulations.
    c)    The Community and its Member States shall grant to branches of Ukrainian companies
          established in their territories a treatment no less favourable than that accorded to
          branches of companies of any third country, in respect of their operation, and this in
          conformity with their legislation and regulations.
2. a)     Without prejudice to the reservations listed in Annex V, Ukraine shall grant for the
          establishment of Community companies in its territory, a treatment no less favourable
          than that accorded to its own companies or to companies of any third country whichever
          is the better, and this in conformity with its legislation and regulations.
    b)    Ukraine shall grant to subsidiaries and branches of Community companies, established in
          its territory, treatment no less favourable than that accorded to its own companies or
          branches respectively or to companies or branches of any third country respectively,
          whichever is the better, in respect of their operations, and this in conformity with its
          legislation and regulations.
3.        The provisions of paragraphs 1 and 2 cannot be used so as to circumvent a Party's
          legislation and regulations applicable to access to specific sectors or activities by
          subsidiaries of companies of the other Party established in the territory of such first Party.
          The treatment referred to in paragraph 1 and 2 shall benefit companies established in the
          Community and Ukraine respectively at the date of entry into force of this Agreement and
          companies established after that date once they are established.
                                               Article 24
1. The provisions of Article 23 shall not apply to air transport, inland waterways transport and
     maritime transport, without prejudice to the provisions of Article 96.
2. However, in respect of activities undertaken by shipping agencies for the provision of
     international maritime transport services, including intermodal activities involving a sea leg,
     each Party shall permit to the companies of the other Party their commercial presence in its
     territory in the form of subsidiaries or branches, under conditions of establishment and
     operation no less favourable than those accorded to its own companies or to subsidiaries or
     branches of companies of any third country, whichever are the better.
                                                    13
 ---pagebreak---     Such activities include, but are not limited to:
(a) marketing and sales of maritime transport and related services through direct contact with
    customers, from quotation to invoicing, whether these services are operated or offered by the
    service supplier itself or by service suppliers with which the service seller has established
    standing business arrangements;
(b) purchase and use, on their own account or on behalf of their customers (and the resale to their
    customers) of any transport and related services, including inward transport services by any
    mode, particularly inland waterways, road and rail, necessary for the supply of an integrated
    service;
(c) preparation of documentation conœrning transport documents, customs documents, or other
    documents related to the origin and character of the goods transported;
(d) provision of business information of any means, including computerised information systems
    and electronic data interchange (subject to any nonKhscriminatory restrictions concerning
    telecommunications);
(e) setting up of any business arrangement, including participation in the company's stock and the
    appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the
    relevant provisions of this Agreement), with any locally established shipping agency;
(f) acting on behalf of the companies, organising the call of the ship or taking over cargoes when
    required.
                                              Article 25
For the purposes of this Agreement:
a)   A "Community company" or a "Ukrainian company" respectively shall mean a company set
     up in accordance with the laws of a Member State or of Ukraine respectively and having its
     registered office or central administration or principal place of business in the territory of the
     Community or Ukraine respectively. However, should the company, set up in accordance
     with the laws of a Member State or Ukraine respectively, have only its registered office in the
     territory of the Community or Ukraine respectively, the company shall be considered a
     Community or Ukrainian company respectively if its operations possess a real and
     continuous link with the economy of one of the Member States or Ukraine respectively.
b)   "Subsidiary" of a company shall mean a company which is effectively controlled by the first
     company.
c)   "Branch" of a company shall mean a place of business not having legal personality which has
     the appearance of permanency, such as the extension of a parent body, has a management
     and is materially equipped to negotiate business with third parties so that the latter, although
     knowing that there will if necessary be a legal link with the parent body, the head office of
     which is abroad, do not have to deal directly with such parent body but may transact
     business at the place of business constituting the extension.
d)   "Establishment" shall mean the right of Community or Ukrainian companies as referred to in
     Article 25 a) to take up economic activities by means of the setting up of subsidiaries and
     branches in Ukraine or in the Community respectively.
e)   "Operation" shall mean the pursuit of economic activities.
f)   "Economic activities" shall mean activities of an industrial, commercial and professional
     character.
                                                  14
 ---pagebreak--- (g) With regard to international maritime transport, including intermodal operations involving a
     sea leg, shall also be beneficiaries of the provisions of this Chapter and Chapter in, nationals
     of the Member States or of Ukraine established outside the Community or Ukraine
     respectively, and shipping companies established outside the Community or Ukraine and
     controlled by nationals of a Member State or Ukrainian nationals respectively, if their vessels
     are registered in that Member State or in Ukraine respectively in accordance with their
     respective legislations.
                                               Article 26
 1.  Notwithstanding any other provisions of the Agreement, a Party shall not be prevented from
     taking measures for prudential reasons, including for the protection of investors, depositors,
     pohcy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or
     to ensure the integrity and stability of the financial system. Where such measures do not
     conform with the provisions of the Agreement, they shall not be used as a means of avoiding
     the obligations of a Party under the Agreement.
2.   Nothing in the Agreement shall be construed to require a Party to disclose information
     relating to the affairs and accounts of individual customers or any confidential or proprietary
     information in the possession of public entities.
                                               Article 27
The provisions of the present Agreement shall not prejudice the apphcation by each Party of any
measure necessary to prevent the circumvention of its measures concerning third country access to
its market, through the provisions of this Agreement.
                                               Article 28
1.   Notwithstanding the provisions of Chapter I of this Title, a Community company or a
     Ukrainian company established in die territory of Ukraine or the Community respectively
     shall be entitled to employ, or have employed by one of its subsidiaries or branches, in
     accordance with the legislation in force in the host country of establishment, in the territory
     of Ukraine and the Community respectively, employees who are nationals of Community
     Member States and Ukraine respectively, provided that such employees are key personnel as
     defined in paragraph 2 of this Article, and that they are employed exclusively by companies,
     subsidiaries or branches. The residence and work permits of such employees shall only
     cover the period of such employment.
2.   Key personnel of the above mentioned companies herein referred to as "organisations" are
     "intra-corporate transferees" as defined in (c) of this Article in the following categories,
     provided that the organisation is a juridical person and that the persons concerned have been
     employed by it or have been partners in it (other than as majority shareholders), for at least
     the year immediately preceding such movement:
     (a) Persons working in a senior position with an organisation, who primarily direct the
         management of the establishment, receiving general supervision or direction principally
         from the board of directors or stockholders of the business or their equivalent, including:
                                                   15
 ---pagebreak---          - directing the establishment or a department or sub-division of the establishment;
         - supervising and controlling the work of other supervisory, professional or managerial
           employees;
         - having the authority personally to hire and fire or recommend hiring, firing or other
           personnel actions,
     (b) Persons working within an organisation who possess uncommon knowledge essential to
         the establishment's service, research equipment, techniques or management. The
         assessment of such knowledge may reflect, apart from knowledge specific to the
         establishment, a high level of qualification referring to a type of work or trade requiring
         specific technical knowledge, including membership of an accredited profession.
     (c)An "intra-corporate transferee" is defined as a natural person working within an
         organisation in the territory of a Party, and being temporarily transferred in the context of
         pursuit of economic activities in the territory of the other Party; the organisation
         concerned must have its principal place of business in the territory of a Party and the
         transfer be to an establishment (branch, subsidiary) of that organisation, effectively
         pursuing like economic activities in the territory of the other Party.
                                               Article 30
1.   The Parties shall use their best endeavours to avoid taking any measures or actions which
     render the conditions for the establishment and operation of each other's companies more
     restrictive than the situation existing on the day preceding the date of signature of the
     Agreement.
2.   The provisions of this Article are without prejudice to those of Article 37: the situations
     covered by such Article 37 shall be solely governed by its provisions to the exclusion of any
     other.
3.   Acting in the spirit of partnership and cooperation and in hght of provisions contained in
     Article 43 the Government of Ukraine shall inform the Community of its intentions to submit
     new legislation or adopt new regulations which may render the conditions for the
     establishment or operation in Ukraine of subsidiaries and branches of Community companies
     more restrictive than the situation existing on the day preceding the date of signature of the
     Agreement. The Community may request Ukraine to communicate the drafts of such
     legislation or regulations and to enter into consultations about those drafts.
4.   Where new legislation or regulations introduced in Ukraine would result in rendering the
     conditions for establishment of Community companies into its territory and for the operation
     of subsidiaries and branches of Community companies established in Ukraine more
   • restrictive than the situation existing on the day of signature of the Agreement, such
     respective legislation or regulations shall not apply during three years following the entry into
     force of the relevant act to those subsidiaries and branches already established in Ukraine at
     the time of entry into force of the relevant act.
                                                    16
 ---pagebreak--- Chanter M ; Cross-border supply of services between the Community and Ukraine
                                              Article 31
1.  The Parties undertake in accordance with the provisions of this Chapter to take the necessary
    steps to allow progressively the supply of services by Community or Ukrainian companies
    who are established in a Party other than that of the person for whom the services are
    intended, taking into account the development of the services sectors in the Parties.
2.  The Cooperation Council shall make recommendations for the implementation of paragraph
     1 of this Article.
                                              Article 32
The Parties shall cooperate with the aim of developing a market-oriented service sector in
Ukraine.
                                              Article 33
1.   The Parties undertake to apply effectively the principle of unrestricted access to the
     international maritime market and traffic on a commercial basis.
     a)    The above provision does not prejudice the rights and- obhgations arising from the
           United Nations Code of Conduct for Liner Conferences, as applicable to one or other
           Contracting Party to the present Agreement. Non-conference lines will be free to
           operate in competition with a conference as long as they adhere to the principle of fair
           competition on a commercial basis.
     b)    The Parties affirm their commitment to a freely competitive environment as being an
           essential feature of the dry and liquid bulk trade.
2.   In applying the principles of paragraph 1, the Parties shall:
     a)    not apply, as from entry into force of this agreement, any cargo sharing provisions of
           bilateral agreements between any Member State of the Community and the former
           Soviet Union;
     b)    not introduce cargo sharing clauses in future bilateral agreements with third countries,
           other than in those exceptional circumstances where liner shipping companies from one
           or other Party to the present agreement would not otherwise have an effective
           opportunity to ply for trade to and from the third country concerned;
     c)    prohibit cargo sharing arrangements in future bilateral agreements concerning dry and
           liquid bulk trade;
                                                   17
 ---pagebreak---       d)    abolish, upon entry into force of this Agreement, all unilateral measures,
            administrative, technical and other obstacles which could have restrictive or
            discriminatory effects on the free supply of services in international maritime transport.
            Each Party shall grant, inter alia, no less favourable treatment, than that accorded to a
            Party's own ships for the ships flying the flag of the other Party with regard to access
            to ports open to international trade, the use of infrastructure and auxiliary maritime
            services of the ports, as well as related fees and charges, customs facilities and the
            assignment of berths and facilities for loading and unloading.
            The same treatment shall also be accorded by each Party in respect of ships operated
            by the other Party's nationals and companies, which fly the flag of a third country,
            after a transitional pericKi expfrmg not later than 1 July 1997.
      Nationals and companies of the Community providing international maritime transport
      services shall be free to provide international sea-river services in the inland waterways of
      Ukraine and vice versa.
                                              Article 33 bis
With a view to assuring a coordinated development of transport between the Parties, adapted to
their commercial needs, the conditions of mutual market access and provision of services in
transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with
by specific agreements where appropriate negotiated between the Parties as defined in Article 91
after entry into force of this Agreement.
                                                    18
 ---pagebreak---                                 Chapter IV; General Provisions
                                               Article 34
 1.   The provisions of this Title shall be applied subject to limitations justified on grounds of
      public pohcy, public security or pubhc health.
2.   They shall not apply to activities which in the territory of either Party are connected, even
      occasionally, with the exercise of official authority.
                                               Article 35
For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties
from applying their laws and regulations regarding entry and stay, work, labour conditions and
establishment of natural persons and supply of services, provided that - in so doing - they do not
apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms
of a specific provision of the Agreement. The above provision does not prejudice the application
of Article 34.
                                               Article 36
Companies which are controlled and exclusively owned by Ukrainian companies and Community
companies jointly shall also be beneficiaries of the provisions of Chapters H, HI and IV of this
Title.
                                               Article 37
Treatment granted by either Party to the other hereunder shall, as from the day one month prior to
the date of entry into force of the relevant obhgations of the GATS, in respect of sectors or
measures covered by the GATS, in no case be more favourable than that accorded by such first
Party under the provisions of GATS and this in respect of each service sector, sub-sector and
mode of supply.
                                               Article 38
For the purposes of Chapters II, III and IV of this Title, no account shall be taken of treatment
accorded by the Community, its Member States or Ukraine pursuant to commitments entered into
in economic integration agreements in accordance with the principles of Article V of the GATS.
                                                   19
 ---pagebreak---                                               Article 39
 1.   The Most Favoured Nation treatment granted in accordance with the provisions of this Title
      shall not apply to the tax advantages which the Parties are providing or will provide in the
      future on the basis of agreements to avoid double taxation, or other tax arrangements.
2.    Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties
      of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax
      provisions of agreements to avoid double taxation and other tax arrangements, or domestic
      fiscal legislation.
3.    Nothing in this Title shall be construed to prevent Member States or Ukraine from
      distinguishing, in the apphcation of the relevant provisions of their fiscal legislation, between
      taxpayers who are not in identical situations, in particular as regards their place of residence.
                                              Article 40
Without prejudice to Article 28, no provision of Chapters II, HI and IV hereof shall be interpreted
as giving the right to:
-   nationals of the Member States or of Ukraine respectively to enter, or stay in, the territory of
    Ukraine or the Community respectively in any capacity whatsoever, and in particular as a
    shareholder or partner in a company or manager or employed thereof or supplier or recipient of
    services;
-   Community subsidiaries or branches of Ukrainian companies to employ or have employed in
    the territory of the Community nationals of Ukraine;
-   Ukrainian subsidiaries or branches of Community companies to employ or have employed in
    the territory of Ukraine nationals of the Member States;
-   Ukrainian companies or Community subsidiaries or branches of Ukrainian companies to
    supply Ukrainian persons to act for and under the control of other persons by temporary
    employment contracts;
-   Community companies or Ukrainian subsidiaries or branches of Community companies to
    supply workers who are nationals of the Member States by temporary employment contracts.
                                                   20
 ---pagebreak---                     TITLE V: CURRENT PAYMENTS AND CAPITAL
                                            Article 41
1. The Parties undertake to authorize in freely convertible currency, any payments on the
   current account of balance of payments between residents of the Community and of Ukraine
   connected with the movement of goods, services or persons made in accordance with the
   provisions of the present Agreement.
2. With regard to transactions on the capital account of balance of payments, from entry into
   force of the Agreement, thefreemovement of capital relating to direct investments made in
   companies formed in accordance with the laws of the host country and investments made
   in accordance with the provisions of Chapter II of this Tide IV, and the liquidation or
   repatriation of these investments and of any profit stemming therefrom shall be ensured.
3. Without prejudice to Paragraph 2 or to Paragraph 5, asfromentry into force of this
   Agreement, no new foreign exchange restrictions on the movement of capital and current
   payments connected therewith between residents of the Community and Ukraine shall be
   introduced and the existing arrangements shall not become more restrictive.
4. The Parties shall consult each other with a view to facilitate the movement of forms of
   capital other than those referred to in paragraph 2 above between the Community and
   Ukraine in order to promote the objectives of the present Agreement.
5. With reference to the provisions of this Article, until a full convertibihty of the Ukrainian
   currency within the meaning of Article VHI of the articles of agreement of the International
   Monetary Fund is introduced, Ukraine may in exceptional circumstances apply exchange
   restrictions connected with the granting or taking up of short and medium-term financial
   credits to the extent that such restrictions are imposed on Ukraine for the granting of such
   credits and are permitted according to Ukraine's status under the IMF. Ukraine shall apply
   these restrictions in a non-discriminatory manner. They shall be applied in such a manner
   as to cause the least possible disruption to this Agreement. Ukraine shall inform the
   Cooperation Council promptly of the introduction of such measures and of any changes
   therein.
6. Without prejudice to paragraph 1 and 2, where, in exceptional circumstances, movement of
   capital between the Community and the Ukraine cause, or threaten to cause, serious
   difficulties for the operation of exchange rate pohcy or monetary pohcy in the Community or
   Ukraine, the Community and Ukraine, respectively, may take safeguard measures with
   regard to movements of capital between the Community and Ukraine for a period not
   exceeding six months if such measures are strictly necessary.
                                                21
 ---pagebreak---   TITLE VI: COMPETITION. INTELLECTUAL. INDUSTRIAL AND COMMERCIAL
            PROPERTY PROTECTION AND LEGISLATIVE COOPERATION
                                             Article 41bis
1. The parties agree to work to remedy or remove through the application of their competition
    laws or otherwise, restrictions on competition by enterprises or caused by State intervention
    insofar as they may affect trade between the Community and the Ukraine.
2. In order to attain the objectives mentioned in paragraph 1 :
2.1 The Parties shall ensure that they have and enforce laws addressing restrictions on
    competition by enterprises within their jurisdiction.
2.2 The Parties shall refrain from granting State aids favouring certain undertakings or the
    production of goods other than primary products as defined in the General Agreement on
    Tariffs and Trade, or the provision of services, which distort or threaten to distort competition
    insofar as they affect trade between the Community and the Ukraine.
2.3 Upon request by one Party, the other Party shall provide information on its aid schemes or on
    particular individual cases of State aid. No information needs to be provided which is
    covered by legislative requirements of the Parties on professional or commercial secrets.
2.4 In the case of State monopolies of a commercial character, the Parties declare their readiness,
    as from the fourth year from the date of entry into force of their Agreement, to ensure that
    there is no discrimination between nationals of the Parties regarding the conditions under
    which goods are procured or marketed.
2.5 In the case of pubhc undertakings or undertakings to which Member States of the European
    Union or the Ukraine grant exclusive rights, the Parties declare their readiness, as from the
    fourth year from the date of entry into force of this Agreement, to ensure that there is neither
    enacted nor maintained any measure distorting trade between the Community and the Ukraine
    to an extent contrary to the Parties* respective interests. This provision shall not obstruct the
    performance, in law or fact, of the particular tasks assigned to such undertakings.
2.6 The period defined in paragraphs 2.4 and 2.5 may be extended by agreement of the Parties.
3. Consultations may take place within the Cooperation Committee at the request of the
    Community or Ukraine on the restrictions or distortions of competition referred to in
    paragraphs 1 and 2 and on the enforcement of their competition rules, subject to limitations
    imposed by laws regarding disclosure of information, confidentiality and business secrecy.
    Consultations may also comprise questions on the interpretation of paragraphs 1 and 2.
4. The Parties with experience in applying competition rules shall give full consideration to
    providing other Parties, upon request and within available resources, technical assistance for
    the development and implementation or competition rules.
5. The above provisions in no way affect the Parties' rights to apply adequate measures, notably
    those referred to in Article 13 bis, in order to address distortions of trade in goods or services.
                                                   22
 ---pagebreak---                                             Article 42
    Pursuant to the provisions of this Article and of Annex HI, Ukraine shall continue to
   improve the protection of intellectual, industrial and commercial property rights in order to
   provide, by the end of the fifth year after the entry into force of the Agreement for a level of
   protection similar to that existing in the Community, including effective means of enforcing
    such rights.
   By the end of the fifth year after entry into force of the Agreement, Ukraine shall
   accede to the multilateral conventions on intellectual, industrial and commercial property
   rights referred to in Paragraph 1 of Annex III to which Member States of the Community
   are parties or which are de facto applied by Member States according to the relevant
   provisions contained in these conventions.
                                            Article 43
1. The Parties recognize that an important condition for strengthening the economic links
   between Ukraine and the Community is the approximation of Ukraine's existing and future
   legislation to that of the Community. Ukraine shall endeavour to ensure that its legislation
   will be gradually made compatible with that of the Community.
2. The approximation of laws shall extend to the foUowing areas in particular: customs law,
   company law, banking law, company accounts and taxes, intellectual property, protection
   of workers at the workplace, financial services, rules on competition, pubhc procurement,
   protection of health and life of humans, animals and plants, the environment, consumer
   protection, indirect taxation, technical rules and standards, nuclear laws and regulations,
   transport.
3. The Community shall provide Ukraine with technical assistance as appropriate for the
   implementation of these measures, which may include i.e. :
   the exchange of experts;
   the provision of early information especially on relevant legislation;
   organization of seminars;
   training activities;
   aid for translation of Community legislation in the relevant sectors.
                                                23
 ---pagebreak---                                 TITLE VII: ECONOMIC COOPERATION
                                              Article 44
1.   The Community and Ukraine shall establish economic cooperation aimed at contributing to
     the process of economic reform and recovery and sustainable development of Ukraine.
     Such cooperation shall strengthen and develop economic links, to the benefit of both parties.
2.   Policies and other measures will be designed to bring about economic and social reforms and
     restructuring of the economic system in Ukraine and will be guided by the requirements of
     sustainability and harmonious social development; they will also fully incorporate
     environmental considerations.
3.  To this end the cooperation will concentrate, on industrial cooperation, investment promotion
    and protection, pubhc procurement, standards and conformity assessments, mining and raw
    materials, science and technology, education and training, agriculture and agro-industrial
    sector, energy, civil nuclear sector, environment, transport, space, telecommunications,
    financial services, money laundering, monetary policy, regional development, social
    cooperation, tourism, small and medium sized entreprises, information and communication,
    consumer protection, customs, statistical cooperation, economics and drugs.
4.   Special attention shall be devoted to measures capable of fostering cooperation between the
     Independent States and other neighbouring countries with a view to stimulating a
     harmonious development of the region.
5.   Where appropriate, economic cooperation and other forms of cooperation provided for
     in this Agreement may be supported by technical assistance from the Community, taking
     into account the Community's relevant Council regulation applicable to technical assistance
     in the Independent States, the priorities agreed upon in the indicative programme related to
     European Community technical assistance to Ukraine and its established coordination and
     implementation procedures.
6. The Cooperation Council shall make recommendations as to the development of cooperation
   in fields identified in paragraph 3 of this Article.
                                              Article 45
                                      Industrial cooperation
      Cooperation shall aim at promoting the following in particular:
    the development of business links between economic operators of both sides, e.g. in view of
    the transfer of technologies and know-how;
     Community participation in Ukraine's efforts to restructure and technically upgrade its
     industry;
    the improvement of management;
    the development of appropriate commercial rules and practices, including product
    marketing;
     environmental protection.
     adaptation of the structure of industrial production to the standards of an advanced market
     economy;
    the conversion of the military-industrial complex
                                                  24
 ---pagebreak--- 2.    The provisions of this article shall not affect the enforcement of Community competition
      rules applicable to undertakings.
                                              Article 46
                                Investment promotion and protection
 1. Bearing in mind the respective powers and competences of the Community and the Member
     States, cooperation shall aim to establish a favourable climate for investment, both domestic
    and foreign, especially through better conditions for investment protection, the transfer of
    capital and the exchange of information on investment opportunities.
2. The aims of this cooperation shall be in particular:
         - the conclusion, where appropriate, between the Member States and Ukraine, of
            agreements for the promotion and protection of investment;
         - the conclusion, where appropriate, between the Member States and Ukraine, of
           agreements to avoid double taxation;
         - the creation of favourable conditions for attracting foreign investments into the
            Ukrainian economy;
         - to establish stable and adequate business law and conditions, and to exchange
           information on laws, regulations and administrative practices in the field of
           investment;
         - to exchange information on investment opportunities in the form of inter alia trade
           fairs, exhibitions, trade weeks and other events.
                                              Article 47
                                        Public Procurement
The Parties shall cooperate to develop conditions for open and competitive award of contracts for
goods and services in particular through calls for tenders.
                                             Article 48
                 Cooperation in the field of standards and conformity assessment
1. Cooperation between the Parties shall promote alignment with internationally agreed criteria,
    principles and guidelines followed in the field of quality. The required actions will facilitate
    progress towards mutual recognition in the field of conformity assessment, as well as the
    improvement of Ukrainian product quality.
                                                  25
 ---pagebreak--- 2. To this end they shall seek:
      to promote appropriate cooperation with organisations and institutions specialised in these
      fields;
      to promote the use of Community technical regulations and the application of European
      standards and conformity assessment procedures;
      to permit the sharing of experience and technical information in the field of quality
      management.
                                               Article 49
                                      Mining and raw materials
1.    The Parties shall aim at increasing investment and trade in mining and raw materials.
2.   The cooperation shall focus in particular on the following areas :
            exchange of information on the developments in the mining and non-ferrous metals
            sectors,
            the establishment of a legal framework for cooperation,
            trade matters,
            the development of legislative and other measures in the field of environmental
            protection
            training
             safety in the mining industry
                                              Article SO
                               Cooperation in science and technology
1. The Parties shall promote cooperation in civil scientific research and technological
    development (RTD) on the basis of mutual benefit and, taking into account the availability of
    resources, adequate access to their respective programmes and subject to appropriate levels of
    effective protection of intellectual, industrial and commercial property rights (IPR).
2.    Science and technology cooperation shall cover:
            the exchange of scientific and technical information;
            joint RTD activities,
            training activities and mobility programmes for scientists, researchers and technicians
            engaged in RTD in both sides.
Where such cooperation takes the form of activities involving education and/or training, it should
be carried out in accordance with the provisions of article 5 i.
The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in
science and technology
                                                    26
 ---pagebreak--- In carrying out such cooperation activities, special attention shall be devoted to the redeployment
of scientists, engineers, researchers and technicians which are or have been engaged in research
on/and production of weapons of mass destruction.
3.    The Cooperation covered by this article shall be implemented according to specific
      arrangements to be negotiated and concluded in accordance with the procedures adopted by
      each party, and which shall set out, inter alia, appropriate IPR provisions.
                                              Article 51
                                       Education and training
 1.   The Parties shall cooperate with the aim of raising the level of general education and
      professional qualifications in Ukraine, both in the public and private sectors.
2.    The cooperation shall focus in particular on the following areas:
            updating higher education and training systems in Ukraine including the system of
            certification of higher educational establishments and diplomas of higher education;
            the training of public and private sector executives and civil servants in priority areas
            to be determined;
            cooperation between educational establishments cooperation, between educational
            establishments and firms;
            mobility for teachers, graduates, administrators, young scientists and researchers, and
            young people;
            promoting teaching in the field of European Studies within the appropriate institutions;
            teaching Community languages;
            post-graduate training of conference interpreters;
            training journalists;
            training of trainers.
3.    The possible participation of one Party in the respective programmes in the field of
      education and training of the other Party could be considered in accordance with their
      respective procedures and, where appropriate, institutional frameworks and plans of
      cooperation will then be established building on participation of Ukraine in the Community's
      TEMPUS programme.
                                               Article 52
                              Agriculture and the agro-industrial sector
The purpose of cooperation in this area shall be the pursuance of agrarian reform, the
modernisation, privatisation and restructuring of agriculture, the agro-industrial and services
 sectors in Ukraine, development of domestic and foreign markets for the Ukrainian products, in
 conditions that ensure the protection of the environment, taking into account the necessity to
 improve security of food supply. The Parties shall also aim at the gradual approximation of
 Ukrainian standards to Community technical regulations concerning industrial and agricultural
 food products including sanitary and phytosanitary standards.
                                                   27
 ---pagebreak---                                            Article 53
                                             Energy
    Cooperation shall take place within the principles of the market economy and the European
    Energy Charter, against a background of the progressive integration of the energy markets in
   Europe.
   The cooperation shall include among others the following areas :
          the environmental impact of energy production supply and consumption, in order to
          prevent or minimise the environmental damage resulting from these activities;
          improvement of the quality and security of energy supply, including diversification of
          suppliers, in an economic and environmentally sound manner;
          formulation of energy policy;
          improvement in management and regulation of the energy sector in line with a market
          economy;
          the introduction of the range of institutional, legal, fiscal and other conditions
          necessary to encourage increased energy trade and investment;
          promotion of energy saving and energy effectiveness;
          modernisation, development and diversification of energy infrastructure;
          improvement of energy technologies in supply and end use across the range of energy
          types;
          management and technical training in the energy sector.
                                           Article 54
                             Cooperation in the civil nuclear sector
1. Bearing in mind the respective powers and competences of the Community and its Member
   States, cooperation in the civil nuclear sector shall take place through the implementation of
   specific agreements on i.e. trade in nuclear materials, nuclear safety and thermonuclear
   fusion and in accordance with the legal procedures of each Party.
2. The parties shall cooperate, including in international fora, in addressing the problems
   which have arisen as a consequence of the Chernobyl disaster; cooperation could involve in
   particular:
   a joint study of the scientific problems related to the accident at Chernobyl;
   combating the radioactive contamination of air, soil and water;
   monitoring and supervision of the radioactive condition of the environment;
   dealing with emergency nuclear/radioactivity situations;
   de-contamination of radioactively polluted land and handing of nuclear waste;
   medical problems related to the impact of nuclear accidents on the population health;
   solution of the safety problem of the destroyed 4th power unit at Chernobyl;
   economic and administrative aspects of efforts to overcome the disaster;
   ti^ining in the area of preventing and mitigating nuclear accidents;
   scientific and technical aspects of the remedial activities relating to the eradication of the
   consequences of the Chernobyl disaster;
   Other areas subject to agreement of the parties.
                                                28
 ---pagebreak---                                             Article 55
                                          Environment
1. Bearing in mind the European Energy Charter and the Declaration of the Luzem Conference
    1993, the Parties shall develop and strengthen their cooperation on environment and human
   health.
2. Cooperation shall aim at combating the deterioration of the environment and in particular :
   - effective monitoring of pollution levels and assessment of environment; system of
     information on the state of the environment;
   - combating local, regional and transboundary air and water pollution;
   - ecological restoration;
   - sustainable, efficient and environmentally effective production and use of energy; safety
     of industrial plants;
   - classification and safe handling of chemicals;
   - water quality;
   - waste reduction, recycling and safe disposal, implementation of the Basle Convention;
   - the environmental impact of agriculture, soil erosion, and chemical pollution;
   - the protection of forests;
   - the conservation of biodiversity, protected areas and sustainable use and management
     of biological resources;
   - land-use planning, including construction and urban planning;
   - use of economic and fiscal instruments;
   - global climate change;
   - environmental education and awareness;
   - implementation of the Espoo Convention on Environmental Impact Assessment in a
     transboundary context.
3. Cooperation shall take place particularly through :
   - planning for the handling of disasters and other emergency situations;
   - exchange of information and experts, including information and experts dealing with the
     transfer of clean technologies and the safe and environmentally sound use of
     biotechnologies;
   - joint research activities;
   - improvement of laws towards Community standards;
   - cooperation at regional level, including cooperation within the framework of the European
     Environment Agency, and at international level;
   - development of strategies, particularly with regard to global and climatic issues and also
     in view of achieving sustainable development;
   - environmental impact studies.
                                                29
 ---pagebreak---                                                  Article 56
                                                 Transport
The Parties shall develop and strengthen their cooperation in the field of transport.
This cooperation shall, inter alia, aim at restructuring and modernising transport systems and
networks in Ukraine and developing and ensuring, where appropriate, compatibility of
transportation systems in the context of achieving a more global transport system.
The cooperation shall include, inter alia :
- the modernising of management and operations of road transport, railways, ports and airports
- modernisation and development of railways, waterways, road, port, airport and air navigation
  infrastructure including the modernisation of major routes of common interest and the trans-
  European links for the above modes;
- promotion and development of multi-modal transport;
- the promotion ofjoint research and development programmes;
- preparation of the legislative and institutional framework for pohcy development and
  implementation including privatisation of the transport sector.
                                                 Article 57
                                                   Space
       Bearing in mind the respective competences of the Community, its Member States and the
       European Space Agency the Parties shall promote where appropriate long term cooperation
       in the areas of civil space research, development and commercial applications. The Parties
       will pay particular attention to initiatives making full use of the complementarity of their
       respective space activities.
                                                 Article 58
                               Postal services and Telecommunications
      Within their respective powers and competences the Parties shall expand and strengthen
       cooperation in the following areas:
      the establishment of policies and guidelines for the development of the telecommunications
       sector and postal services;
      development of principles of a tariff policy and marketing in telecommunications and postal
      services;
       encourage the development of projects for telecommunications and postal services and
       attracting investment;
       enhancing efficiency and quality of the provision of telecommunications and postal services,
       amongst others through liberalization of activities of sub-sectors;
      advanced application of telecommunications, notably in the area of electronic funds transfer;
      management of telecommunications networks and their ''optimization'';
      an appropriate regulatory basis for the provision of telecommunicational and postal services
      and for the use of a radio frequency spectrum;
      training in the field of telecommunications and postal services for operations in market
      conditions.
                                                     30
 ---pagebreak---                                               Article 59
                                          Financial Services
Cooperation shall in particular aim at facihtating the involvement of Ukraine in universally
accepted systems of mutual settlements. Technical assistance shall focus on:
      the development of banking and financial services, the development of common market of
      credit resources, the involvement of Ukraine in universally accepted system of mutual
      settlements;
      the development of fiscal system, institutions in Ukraine, exchange of experience and
      personnel training;
     the development of insurance services, which would inter aha create a favourable framework
     for the Community's companies' participation in the establishment of joint ventures in the
     insurance sector in Ukraine, as well as the development of export credit insurance.
     this cooperation shall in particular contribute to foster the development of relations between
     Ukraine and the EC Member States in the financial services sector.
                                              Article 60
                                          Money laundering
      The Parties agree on the necessity of making efforts and cooperating in order to prevent the
      use of their financial systems for laundering of proceeds from criminal activities in general
      and drug offences in particular.
      Cooperation in this area shall include administrative and technical assistance with the
      purpose of establishing suitable standards against money laundering equivalent to those
      adopted by the Community and international fora in this field, including the Financial
      Action Task Force (FATF).
                                              Article 61
                                           Monetary policy
At the request of the Ukrainian authorities, the Community shall provide technical assistance
designed to support the efforts of Ukraine towards the creation and strengthening of its own
monetary system and the introduction of a new monetary unit which is to become a convertible
currency and the gradual adjustment of its policies to those of the European Monetary System.
This will include informal exchange of views concerning the principles and the functioning of the
European Monetary System.
                                                  31
 ---pagebreak---                                               Article 62
                                       Regional development
1.   The Parties shall strengthen cooperation on regional development and land-use planning.
2.   To this end, they shall encourage exchange of information by national, regional and local
     authorities on regional and land-use planning policy and on methods of formulation of
     regional policies with special emphasis on the development of disadvantaged areas.
     They shall also encourage direct contacts between the respective regions and public
     organizations responsible for regional development planning with the aim, inter alia, to
     exchange methods and ways of fostering regional development.
                                              Article 63
                                         Social cooperation
1. With regard to health and safety, the parties shall develop cooperation between them with the
   aim of improving the level of protection of the health and safety of workers.
   The cooperation shall include notably:
        education and training on health and safety issues with specific attention to high risk
        sectors of activity;
        development and promotion of preventive measures to combat work related diseases
        and other work related ailments;
        prevention of major accidents hazards and the management of toxic chemicals;
        research to develop the knowledge base in relation to working environment and the
        health and safety of workers.
2. With regard to employment, the cooperation shall include notably technical assistance to:
        optimization of the labour market;
        modernisation of the job-finding and consulting services;
        planning and management of the restructuring programmes;
        encouragement of local employment development;
        exchange of information on the programmes of flexible employment, including those
        stimulating self-employment and promoting entrepreneurship.
3. The Parties shall pay special attention to cooperation in the sphere of social protection which,
   inter alia, shall include cooperation in planning and implementing social protection reforms in
   Ukraine.
   These reforms shall aim to develop in Ukraine methods of protection intrinsic to market
   economies and shall comprise all directions of social protection.
                                                  32
 ---pagebreak---                                               Article 64
                                               Tourism
The Parties shall increase and develop cooperation between them, which shall include :
      facilitating the tourist trade;
      cooperation between official tourism bodies
      increasing the flow of information;
      transferring know-how;
      studying the opportunities for joint operations;
      training fortourismdevelopment;
                                              Article 65
                                Small and medium-sized enterprises
 1.   The Parties shall aim to develop and strengthen small and medium-sized enterprises and
      their associations and cooperation between SMEs in the Community and Ukraine.
2.    Cooperation shall include technical assistance, in particular in the following areas:
             the development of a legislativeframeworkfor SMEs;
             the development of an appropriate infrastructure (an agency to support SMEs,
             communications, assistance to the creation of a fund for SMEs);
             the development of technology parks.
                                              Article 66
                                  Information and communication
The Parties shall support the development of modern methods of information handling, including
the media, and stimulate the effective mutual exchange of information. Priority shall be given to
programmes aimed at providing the general pubhc with basic information about the Community,
and Ukraine including, where possible, mutual access to databases in full respect of intellectual
property rights.
                                              Article 67
                                        Consumer Protection
The Parties will enter into close cooperation aimed at achieving compatibility between tiieir
systems of consumer protection. This cooperation shall comprise in particular the provision of
expertise on legislative and institutionalreform,the establishment of permanent systems of mutual
information on dangerous products, the improvement of information provided to consumers
especially on prices, characteristics of products and services offered, training activities for
administration officials and other consumer interest representatives, the development of exchanges
between the consumer interest representatives, and increasing the compatibility of consumer
protection policies.
                                                  33
 ---pagebreak---                                             Article 68
                                             Customs
1. The aim of cooperation shall be to guarantee compliance with all the provisions scheduled
   for adoption in connection with trade and fair trade and to achieve the approximation of
   Ukraine's customs system to that of the Community.
2. Cooperation shall include the following in particular:
         the exchange of information
         the improvement of working methods
         the introduction of the combined nomenclature and the single administrative document
         the interconnection between the transit systems of the Community and Ukraine
         the simplification of inspections and formalities in respect of the carriage of goods;
         the support in the introduction of modern customs information systems
         the organisation of seminars and training periods
3. Without prejudice to further cooperation foreseen in this Agreement and in particular Article
   71 the mutual assistance between administrative authorities in customs matters of the Parties
   shall take place in accordance with the provisions of the Protocol attached to this
   Agreement.
                                            Article 69
                                     Statistical cooperation
   Cooperation in this area shall have as its aim the development of an efficient statistical
   system to provide the reliable statistics needed to support and monitor the process of
   economic reform and contribute to the development of private enterprise in Ukraine.
   The Parties, in particular, shall cooperate in the following fields:
   adaptation of Ukrainian statistical system to international, methods, standards and
   classification;
   exchange of statistical information;
   provision of necessary statistical macro and microeconomic information to implement and
   manage economic reforms;
   To this end the Community shall contribute through rendering technical assistance to
   Ukraine.
                                                34
 ---pagebreak---                                             Article 70
                                            Economies
The Parties shall facilitate the process of economic reform and the coordination of economic
policies by cooperating to improve understanding of the fundamentals of their respective
economies and the design and implementation of economic pohcy in market economies. To this
end the Parties shall exchange information on macro economic performance and prospects.
The Community shall provide technical assistance as to;
      assist Ukraine in the process of economic reform by providing expert advisory and technical
      assistance,
      encourage cooperation among economists in order to expedite the transfer of know-how for
      the drafting of economic policies, and provide for wide dissemination of policy-relevant
      research.
                                            Article 71
                                              Drugs
Within the framework of their respective powers and competences the Parties shall cooperate in
increasing the effectiveness and efficiency of policies and measures to counter the illicit
production, supply and traffic of narcotic drugs and psychotropic substances, including the
prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention
and reduction. The cooperation in this area shall be based on mutual consultation and close
coordination between the Parties over the objectives and measures on the various drug-related
fields.
                                                35
 ---pagebreak---                   TITLE VIII: CULTURAL COOPERATION
                                    Article 72
The Parties undertake to promote, encourage and facilitate cultural cooperation. Where
appropriate, the Community's cultural cooperation programmes or those of one or more
Member States may be the subject of cooperation and further activities of mutual interest
may be developed.
                                        36
 ---pagebreak---                            TITLE IX : FINANCIAL COOPERATION
                                              Article 73
In order to achieve the objectives of this Agreement and in accordance with Articles 74, 75 and
76 Ukraine shall benefit from temporary financial assistance from the Community by way of
technical assistance in the form of grants to accelerate the economic transformation of Ukraine.
                                              Article 74
This financial assistance shall be covered within the framework ofthe~Opcratien TACIS foreseen
in the Community's relevant Council Regulation.
                                              Article 75
The objectives and the areas of the Community's financial assistance shall be laid down in an
indicative programme reflecting established priorities to be agreed between the two Parties taking
into account Ukraine's needs, sectoral absorption capacities and progress with reform. The Parties
shall inform the Cooperation Council thereof.
                                              Article 76
In order to permit optimum use of the resources available, the Parties shall ensure that
Community technical assistance contributions are made in close coordination with those from
other sources such as the Member States, other countries, and international organisations such
as the International Bank for Reconstruction and Development and the European Bank for
Reconstruction and Development as well as UNDP and IMF.
                                                  37
 ---pagebreak---             TITLE X: INSTITUTIONAL. GENERAL AND FINAL PROVISIONS
                                               Article 77
A Cooperation Council is hereby established which shall supervise the implementation of this
Agreement. It shall meet at ministerial level once a year and when circumstances require. It shall
examine any major issues arising within the framework of the Agreement and any other bilateral
or international issues of mutual interest for the purpose of attaining the objectives of this
Agreement. The Cooperation Council may also make appropriate recommendations, by agreement
between the two Parties.
                                               Article 78
 1. The Cooperation Council shall consist of the members of the Council of the European Union
    and members of the Commission of the European Communities, on the one hand, and of
    members of the Government of Ukraine, on the other.
2. The Cooperation Council shall establish its rules of procedure.
3. The office of President of the Cooperation Council shall be held alternately by a representative
    of the Community and by a member of the Government of Ukraine.
                                               Article 79
       The Cooperation Council shall be assisted in the performance of its duties by a
       Cooperation Committee composed of representatives of the members of the Council of the
       European Union and of members of the Commission of the European Communities on
      the one hand and of representatives of thé Government of Ukraine on the other, normally
       at senior civil servant level. The office of President of the Cooperation Committee shall be
       held alternately by the Community and by Ukraine.
       In its rules of procedure the Cooperation Council shall determine the duties of the
       Cooperation Committee, which shall include the preparation of meetings of the
       Cooperation Council, and how the Committee shall function.
       The Cooperation Council may delegate any of its powers to the Cooperation Committee,
       which will ensure continuity between meetings of the Cooperation Council.
                                               Article 80
The Cooperation Council may decide to set up any other special committee or body that can
assist it in carrying out its duties and shall determine the composition and duties of such
committees or bodies and how they shall function.
                                               Article 81
When examining any issue arising within the framework of this Agreement in relation to a
provision referring to an article of the GATT, the Cooperation Council shall take into account to
the greatest extent possible the interpretation that is generally given to the article of the GATT in
question by the Contracting Parties to the General Agreement.
                                                    38
 ---pagebreak---                                                Article 82
A Parhamentary Coopération Committee is hereby established. It shall be a forum for Members
of the Ukrainian Parliament and the European Parliament to meet and exchange views. It shall
meet at intervals which it shall itself determine.
                                               Article 83
1.    The Parhamentary Cooperation Committee shall consist of members of the European
      Parliament, on the one hand, and of members of the Ukrainian Parliament, on the other.
2.    The Parhamentary Cooperation Committee shall establish its rules of procedure.
3.    The Parliamentary Cooperation Committee shall be presided in turn by the European
      Parliament and the Ukrainian Parliament respectively, in accordance with the provisions to
      be laid down in its rules of procedure.
                                              Article 84
The Parliamentary Cooperation Committee may request relevant information regarding the
implementation of this Agreement from the Cooperation Council, which shall then supply the
Committee with the requested information.
The Parliamentary Cooperation Committee shall be informed of the recommendations of the
Cooperation Council.
The Parhamentary Cooperation Committee may make recommendations to the Cooperation
Council.
                                              Article 85
1. Within the scope of this Agreement, each Party undertakes to ensure that natural and legal
   persons of the other Party have access free of discrimination in relation to its own nationals
   to the competent courts and administrative organs of the Parties to defend their individual
   rights and their property rights, including those concerning intellectual, industrial and
   commercial property.
2.    Within the limits of their respective powers, the Parties:
     s\iall encourage the adoption of arbitration for the setdement of disputes arising out of
     commercial and cooperation transactions concluded by economic operators of the
     Community and those of Ukraine;
     agree that where a dispute is submitted to arbitration, each Party to the dispute may, except
     where the rules of the arbitration centre chosen by the Parties provide otherwise, choose its
     own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the
     sole arbitrator may be a citizen of a third state;
     will recommend their economic operators to choose by mutual consent the law applicable to
     their contracts;
     shall encourage recourse to the arbitration rules elaborated by the United Nations
     Commission on International Trade Law (Uncitral) and to arbitration by any centre of a state
     signatory to the Convention on Recognition and Enforcement of Foreign Arbitral Awards
     done at New York on 10th June 1958.
                                                   39
 ---pagebreak---                                                Article 86
Nothing in the Agreement shall prevent a Party from taking any measures:
(a)    which it considers necessary to prevent the disclosure of information contrary to its essential
       security interests;
(b)    which relate to the production o£ or trade in arms, munitions or war materials or to
       research, development or production indispensable for defence purposes, provided that such
       measures do not impair the conditions of competition in respect of products not intended for
       specifically military purposes;
(c)    which it considers essential to its own security in the event of serious internal disturbances
       affecting the maintenance of law and order, in time of war or serious international tension
       constituting threat of war or in order to carry out obligations it has accepted for the purpose
       of maintaining peace and international security.
(d)    which it considers necessary to respect its international obligations and commitments on the
       control of dual use industrial goods and technologies.
                                               Article 87
1.     In the fields covered by this Agreement and without prejudice to any special provisions
       contained therein:
      the arrangements applied by Ukraine in respect of the Community shall not give rise to any
      discrimination between the Member States, their nationals or their companies or firms;
      the arrangements applied by the Community in respect of Ukraine shall not give rise to any
      Œscrimination between Ukrainian nationals, or its companies or firms.
2.    The provisions of Paragraph 1 are without prejudice to the right of the Parties to apply the
      relevant provisions of their fiscal legislation to tax payers who are not in identical situations
      as regards their place of residence.
                                               Article 88
1. Each of the two Parties may refer to the Cooperation Council any dispute relating to the
    application or interpretation of this Agreement.
2. The Cooperation Council may settle the dispute by means of a recommendation.
3. In the event of it not being possible to settle the dispute in accordance with paragraph 2 of this
    Article, either Party may notify the other of the appointment of an conciliator; the other Party
    must then appoint a second conciliator within two months. For the application of this
    procedure, the Community and the Member States shall be deemed to be one Party to the
    dispute.
    The Cooperation Council shall appoint a third conciliator.
    The conciliator's recommendations shall be taken by majority vote. Such recommendations
    shall not be binding upon the Parties.
                                                    40
 ---pagebreak---                                              Article 89
The Parties agree to consult promptly through appropriate channels at the request of either party
to discuss any matter concerning the interpretation or implementation of this Agreement and other
relevant aspects of the relations between the Parties.
The provisions of this Article shall in no way affect and are without prejudice to Articles 13,
 13bis, 88 and 94.
                                             Article 90
Treatment granted to Ukraine hereunder shall in no case be more favourable than that granted by
the Member States to each other.
                                             Article 91
For the purposes of this Agreement, the term "Parties" shall mean Ukraine on the one part, and
the Community, or the Member States, or the Community and the Member States, in accordance
with their respective powers, on the other part.
                                             Article 92
Insofar as matters covered by this Agreement are covered by the European Energy Charter Treaty
and Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters
but only to the extent that such apphcation is provided for therein.
                                             Article 93
This Agreement is concluded for an initial period of 10 years. The Agreement shall be
automatically renewed year by year provided that neither Party gives the other Party written
notice of denunciation of the Agreement six months before it expires.
                                                 41
 ---pagebreak---                                               Article 94
    The Parties shall take any general or specific measures required to fulfil their obhgations under
    the Agreement. They shall see to it that the objectives set out in the Agreement are attained.
    If either Party considers that the other Party has failed to fulfil an obligation under the
    Agreement, it may take the appropriate measures. Before so doing, except in cases of special
    urgency, it shall supply the Cooperation Council with all relevant information required for a
    thorough examination of the situation with a view to seeking a solution acceptable to the
    Parties.
    In the selection of these measures, priority must be given to those which least disturb the
    functioning of the Agreement. These measures shall be notified immediately to the
    Cooperation Council if the other Party so requests.
                                              Article 95
Annexes I, D, III, IV, V, V bis and the Protocol shall form an integral part of this Agreement.
                                              Article 96
This Agreement shall not, until equivalent rights for individuals and economic operators have
been achieved hereunder, affect rights assured to them through existing Agreements binding one
or more Member States on the one hand and Ukraine on the other except in areas railing within
Community competence and without prejudice to the obhgations of Member States resulting from
this Agreement in areas falling within their competence.
                                              Article 97
This Agreement shall apply, on the one hand, to the territories in which the treaties establishing
the European Economic Community, the European Atomic Energy Community and the
European Coal and Steel Community are applied and under the conditions laid down in those
Treaties and, on the other hand, to the territory of Ukraine.
                                            Article 97 bis
The Secretary-General of the Council of the European Union shall be the depositary of this
Agreement.
                                              Article 98
This original of the Agreement, of which the Danish, Dutch, English, French, German, Italian,
Spanish, Greek, Portuguese and Ukrainian languages are equally authentic, shall be deposited
with the Secretary-General of the Council of the European Union.
                                                   42
 ---pagebreak---                                               Article 99
This Agreement will be approved by the Parties in accordance with their own procedures.
This Agreement shall enter into force on the first day of the second month following the date on
which the Parties notify the Secretary-General of the Council of the European Union that the
procedures referred to in this paragraph have been completed.
Upon its entry into force, and as far as relations between Ukraine and the Community are
concerned, this Agreement shall replace the Agreement between the European Economic
Community, the European Atomic Energy Community and the Union of Soviet Socialist
Republics on trade and economic and commercial cooperation signed in Brussels on 18
December 1989.
                                             Article 100
In the event that, pending the completion of the procedures necessary for the entry into force of
this Agreement, the provisions of certain parts of this Agreement are put into effect in 1994 by
means of an interim agreement between the Community and Ukraine, the Contracting Parties
agree that, in such circumstances, the term "date of entry into force of the Agreement" shall mean
the date of entry into force of the interim Agreement.
                                                  43
 ---pagebreak---                                         LIST OF ANNEXES
Annex I         Indicative list of advantages granted by Ukraine to the Independent States in
                accordance with Article 9bis.
Annex II        Exceptional measures which derogate from the provisions of Article 11.
Annex III       Intellectual, Industrial and Commercial Property conventions (Article 42).
Annex IV        Community reservations in accordance with Article 23 paragraph lb
Annex V         Ukrainian reservations in accordance with Article 23 paragraph 2a
Annex Vbis     Financial services: definitions
                                          List of Protocols
Protocol on mutual assistance in customs matters.
                                                  44
 ---pagebreak---                                             ANNEX I
Indicative list of advantages granted by Ukraine to the Independent States in accordance with
Article 9bis.
1. Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan, Russia
    No import duties are implemented.
    No export duties are implemented as regards goods delivered under clearing and interstate
    agreements within the volumes stipulated in these agreements.
    No VAT is applied on export and import. No excise is applied on export.
    All Independent States - export quotas for deliveries of products under annual interstate trade
    and cooperation agreements are opened in the same way as for deliveries for state needs.
2. Armenia, Belarus, Estonia, Georgia, Kazakhstan, Lithuania, Moldova, Turkmenistan, -
    Payments could be made in roubles
    Russia - payments could be made in roubles or karbovanets.
    All Independent States - special system of non-commercial operations, including payments
    resulting from these operations.
3. All Independent States - special system of current payments.
4. All Independent States - special price system in trade with some raw materials and semi-
    finished products.
5. All Independent States - special conditions of transit.
6. All Independent States - special conditions of customs procedures.
                                                 45
 ---pagebreak---                                         ANNEX 17
         Exceptional measures which derogate from the provisions of Article 11
Exceptional measures which derogate from the provisions of Article 11 may be taken by
Ukraine in the form of quantitative restrictions on a non-discriminatory basis.
 Ilicse measures may only concern infant industries, or certain sectors undergoing
restructuring or facing serious difficulties, particularly where these difficulties produce
important social problems.
The total value of imports of the products which are subject to these measures may not
exceed 15 % of total imports from the Community during the last year, prior to the
introduction of any quantitative restrictions for which statistics are available.
These measures may only be applied during a transitional period ending 31st December
 ! 998 unless parties agree otherwise, or when Ukraine becomes a contracting Party to GATT
whichevci is earlier.
( Jkrainc shall inform the Cooperation Council of any measures it intends to take under the
terms of the present annex, and, at the request of the Community, consultations shall be held
in the Cooperation Council on such measures and the sectors to which they apply before
they enter into force.
 ---pagebreak---                                            ANNEX m
            Intellectual. Industrial and Commercial Property conventions (Article 42)
1.  Paragraph 2 of Article 42 concerns the following multilateral conventions:
          Berne Convention for the Protection of Literary and Artistic Works (Pans Act,
           1971);
          International Convention for the Protection of Performers, Producers                of
          Phonograms and Broadcasting Organizations (Rome, 1961);
          Protocol relating to the Madrid             Agreement    concerning the International
          Registration of Marks (Madrid, 1989);
          Nice Agreement concerning the International Classification of Goods and Services for
          the purposes of the Registration of Marks (Geneva 1977, amended 1979);
          Budapest Treaty on the International Recognition of the Deposit of Micro-organisms
          for the purposes of Patent Procedures (1977, modified in 1980);
          International Convention for the Protection of New Varieties of Plants (UPOV)
          (Geneva Act, 1978)
2. Ukraine shall make its best endeavours to accede, without undue delay, to the 1991 Act of
   the International Convention for the Protection of New Varieties of Plants (UPOV).
3.  The Cooperation Council may recommend that paragraph 2 of Article 42 shall apply to
    other multilateral conventions. If problems in the area of intellectual, industrial and
    commercial property affecting trading conditions were to occur, urgent consultations will be
    undertaken, at the request of either Party, with a view to reaching mutually satisfactory'
    solutions.
4.  The Parties confirm the importance they attach to the obligations arising from the following
    multilateral conventions:
          Paris Convention for the Protection of Industrial Property (Stockholm Act, 1967 and
          amended in 1979);
          Madrid Agreement concerning the International Registration of Marks (Stockholm Act,
           1967, and amended in 1979);
          Patent Cooperation Treaty (Washington 1970, amended and modified in 1979 and
           1984);
5.  From the entry into force of this Agreement Ukraine shall grant to Community companies
    and nationals, in respect of the recognition and protection of intellectual, industrial and
    commercial property, treatment no less favourable than that granted by it to any third
    country under bilateral agreements.
6.  The provisions of paragraph 5 shall not apply to advantages granted by Ukraine to any third
    country on an effective reciprocal basis or to advantages granted by Ukraine to another
    country of the former USSR.
                                               47
 ---pagebreak---                                                ANNEX IV
                 Community reservations in accordance with Article 23 paragraph lb
Mining
In some Member States, a concession may be required for mining and mineral rights for non-EC
controlled companies.
Fishing
Access to and use of the biological resources and fishing grounds situated in the maritime waters
coming under the sovereignty or within the jurisdiction of Member States of the Community is
restricted to fishing vessels flying the flag of a Community Member State and registered in
Community territory unless otherwise provided for.
Real estate purchase
In some Member States, the purchase of real estate by non-EC companies is subject to
restrictions.
Audiovisual services including radio
National treatment concerning production and distribution, including broadcasting and other
forms of tramission to the pubhc, may be reserved to audiovisual works meeting certain origin
criteria.
Telecommunications services including mobile and satellite services
Reserved services
In some Member States market access concerning complementary services and infrastructures is
restricted.
Professional services
Services reserved to natural persons nationals of Member States. Under certain conditions those
persons may create companies.
Agriculture
In some Member States national treatment is no apphcable to non-EC controlled companies which
wish to undertake an agricultural enterprise. The acquisition of vineyards by non-EC controlled
companies is subject to notification, or, as necessary, authorisation.
News agency services
In some Member States limitations of foreign participation in publishing companies and
broadcasting companies.
                                                    48
 ---pagebreak---                                               ANNEXV
                 Ukrainian reservations in accordance, with Article 23 paragraph 2a
The application of the reservations in this annex shall in no case result in treatment less
favourable than that accorded to companies of any third country.
1. Financial services (as defined in Annex V bis)
1-1 Banking and related financial services ;
     During a transitional period not exceeding five years from the date of signature of this
     Agreement, Ukraine may, in respect of the establishment of subsidiaries and branches of
     Community companies in Ukraine, continue to apply the provisions of the Ukrainian laws:
         "on the system of currency regulation and currency control"
         "on banks and banking activities"
     -   "on collateral"
         "on stocks and stock exchange"
         "on privatization papers" (related to the distribution and trading of privatization
         vouchers)
    During the transitional period referred to above, no new regulations or measures shall be
    introduced which increase the level of discrimination applying to subsidiaries or branches of
     Community companies as compared to Ukrainian companies.
1.2 Insurance (as defined in Annex V bis) :
    No later than five years following the date of signature of this Agreement Ukraine shall create
    the necessary conditions for the establishment of Community insurance companies as well as
    joint insurance companies in accordance with Article 23.2 a.
    During the transitional period referred to above, no new regulations or measures shall be
    introduced which increase the level of discrimination applying to subsidiaries or branches of
    Community companies as compared to Ukrainian companies.
    Insurance activities in some sectors for foreigners are closed, limited or are subject to special
    requirements during the transitional period.
2. Other areas:
    Brokerage of immovable property including land
    Ownership and use of natural resources
    Use of subsoil and natural resources including mining.
    Acquisition and sale of natural resources
                                                  49
 ---pagebreak--- Fishing
Access to and use of the biological resources and fishing grounds situated in Ukrainian
territorial waters and in Ukraine's exclusive economic zone is subject to restrictions.
Hunting is restricted in accordance with the legislation of Ukraine.
Agriculture
Acquisition and sale of agricultural land and forests.
Lease of state property
The lease of state property may be required to be paid in freely convertible currency.
Telecommunications
Authorisation may be required for companies controlled by foreigners in respect of
establishment.
Mass media companies
Some limitation of foreign participation in mass media activities.
Some professional activities
Professional activities in some sectors are reserved to Ukrainian nationals or are subject to
special requirements (medicine, education, legal services not including business consultancy
involving relevant legal aspects).
Historical buildings and monuments
                                             50
 ---pagebreak---                                            ANNEX V bis
                                  Financial Services : Definitions:
A financial service is any service of a financial nature offered by a financial service supplier of a
party. Financial services include the following activities:
A. All insurance and insurance-related services.
    1. Direct insurance (including co-insurance),
        (i)       life
        (ii)      non-life
    2. Reinsurance and retrocession.
    3. Insurance intermediation, such as brokerage and agency.
    4. Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim
        settlement services.
B. Banking and other financial services (excluding insurance).
    1. Acceptance of deposits and other repayable funds from the public.
    2. Lending of all types, including consumer credit, mortgage credit, factoring and financing
        of commercial transaction.
    3. Financial leasing.
    4. All payment and money transmission services, including credit charge and debit cards,
        travellers cheques and bankers drafts.
    5. Guarantees and commitments.
    6. Trading for own account or for the account of customers, whether on an exchange, in an
        over the counter market or otherwise, the following:
        a)       money market instruments (including cheques, bills, certificates of deposits, etc.)
        b)       foreign exchange
        c)       derivative products including, but not limited to, futures and options
        d)       exchange rates and interest rate instruments, including products such as swaps,
                 forward rate agreements, etc.
        e)       transferable securities
        f)       other negotiable instruments and financial assets, including bullion.
    7. Participation in issues of all kinds of securities, including under-writing and placement as
        agent (whether publicly or privately) and provision of services related to such issues.
    8. Money broking
    9. Asset management, such as cash or portfolio management, all forms of collective
        investment management, pension fund management, custodial depository and trust
        services.
    10. Settlement and clearing services for financial assets, including securities, derivative
        products, and other negotiable instruments.
                                                  51
 ---pagebreak---      11. Provision and transfer offinancialinformation, andfinancialdata processing and related
         software by suppliers of otherfinancialservices.
     12. Advisory intermediation and other auxiliaryfinancialservices 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 offinancialservices:
(a) Activities carried out by central banks or by any other public institution in pursuit of
    monetary and exchangeratepolicies.
(b) Activities conducted by central banks, government agencies or departments, or public
    institutions, for the account or with the guarantee of the government, except when those
    activities may be carried out by financial service suppliers in competition with such public
    entities.
(c) Activities forming part of a statutory system of social security or public retirement plans,
    except when those activities may be carried out by financial service suppliers in competition
    with public entities or private institutions.
                                                  52
 ---pagebreak---             PROTOCOL
      ON MUTUAL ASSISTANCE
BETWEEN ADMINISTRATIVE AUTHORITIES
       IN CUSTOMS MATTERS
                53
 ---pagebreak---                                                  Article 1
                                               Definitions
For the purposes of this Protocol :
a) "customs legislation" shall mean provisions applicable in the territories of the Parties and
   governing the import, export, transit of goods and their placing under any customs procedure,
   including measures of prohibition, restriction and control and adopted by the said Parties;
b) "customs duties" shall mean all duties, taxes, fees or any other charges which are levied and
   collected in the territories of the Parties, in application of customs legislation, but not including
   fees and charges which are limited in amount to the approximate costs of services rendered;
c) "applicant authority", shall mean a competent administrative authority which has been
   appointed by a Party for this purpose and which makes a request for assistance in customs
   matters;
d) "requested authority", shall mean a competent administrative authority which has been
   appointed by a Party for this purpose and which receives a request for assistance in customs
   matters;
e) "contravention", shall mean any violation of the customs legislation as well as any attempted
   violation of such legislation.
                                                 Article 2
                                                  Scone
1. The Parties shall assist each other, within their competences, in the manner and under the
   conditions laid down in this Protocol, in ensuring that customs legislation is correctly applied,
   in particular by the prevention, detection and investigation of contraventions of this legislation.
2. Assistance, in customs matters, as provided for in this Protocol, applies to any administrative
   authority of the Parties which is competent for the apphcation of this Protocol. It shall not
   prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover
   information obtained under powers exercised at the request of the judicial authority, unless
   those authorities so agree.
                                                 Article 3
                                         Assistance on request
   At the request of the applicant authority, the requested authority shall furnish it with all
   relevant information to enable it to ensure that customs legislation is correctly applied,
   including information regarding operations noted or planned which contravene or would
   contravene such legislation.
                                                    54
 ---pagebreak--- 2. At the request of the applicant authority, the requested authority shall inform it whether goods
    exported from the territory of one of the Parties have been properly imported into the territory
    of the other Party, specifying, where appropriate, the customs procedure applied to the goods.
3. At the request of the applicant authority, the requested authority shall take the necessary steps
    to ensure that a surveillance is kept on :
    (a) natural or legal persons of whom there are reasonable grounds for believing that they are
         contravening or have contravened customs legislation;
    (b) movements of goods notified as possibly giving rise to substantial contraventions of
         customs legislation;
    (c) means of transport for which there are reasonable grounds for believing that they have
         been, are or may be used in the contravening of customs legislation.
                                                Article 4
                                        Spontaneous assistance
The Parties shall provide each other, in accordance with their laws, rules and other legal
instruments, with assistance if they consider that to be necessary for the correct application of
customs legislation, particularly when they obtain information pertaining to :
-   operations which have contravened, contravene or would contravene such legislation and
    which may be of interest to other Parties;
-   new means or methods employed in realizing such operations;
-   goods known to be subject to substantial contravention of customs legislation.
                                                Article S
                                          Delivery/Notification
At the request of the apphcant authority, the requested authority shall in accordance with its
legislation take all necessary measures
                  in order to deliver all documents,
                  to notify all decisions,
falling within the scope of this Protocol to an addressee, residing or established in its territory. In
such a case Article 6, point 3 is applicable.
                                                    55
 ---pagebreak---                                                 Article 6
                             Form and substance of requests for assistance
 1. Requests pursuant to this Protocol shall be made in writing. Documents necessary for the
     execution of such requests shall accompany the request. When required because of the urgency
     of the situation, oral requests may be accepted, but must be confirmed in writing immediately.
2. Requests pursuant to paragraph 1 of this Article shall include the following information :
     (a)  the apphcant authority making the request;
     (b)  the measure requested;
     (c)  the object of and the reason for the request;
     (d)  the laws, rules and other legal elements involved;
     (e)  indications as exact and comprehensive as possible on the natural or legal persons
          being the target of the investigations;
     (f)  a summary of the relevant facts and of the enquiries already carried out, except in
          cases provided for in Article 5.
3. Requests shall be submitted in an official language of the requested authority or in a language
    acceptable to such authority.
4. If a request does not meet the formal requirements, its correction or completion may be
    demanded ; the ordering of precautionary measures may, however, take place.
                                                Article 7
                                         Execution of requests
1. In order to comply with a request for assistance, the requested authority or, when the latter can
    not act on its own, the administrative department to which the request has been addressed by
    this authority, shall proceed, within its competence and available resources, as though it were
    acting on its own account or at the request of other authorities of that same Party, by
    supplying information already possessed, by carrying out appropriate enquiries or by
    arranging for them to be carried out.
2. Requests for assistance will be executed in accordance with the laws, rules and other legal
    instruments of the requested Party.
3. Duly authorised officials of a Party may, with the agreement of the other Party involved and
    within the conditions laid down by the latter, obtain from the offices of the requested authority
    or other authority for which the requested authority is responsible, information relating to the
    contravention of customs legislation which the applicant authority needs for the purposes of
    this Protocol.
4. Officials of a Party may, with the agreement of the other Party involved and within the
    conditions laid down by the latter, be present at enquiries carried out in the latter's territory.
                                                   56
 ---pagebreak---                                                 Article 8
                         Form in which information is to be communicated
 1. The requested authority shall communicate results of enquiries to the applicant authority in the
     form of documents certified copies of documents, reports and the like.
2. The documents provided for in paragraph 1 may be replaced by computerized information
     produced in any form for the same purpose.
                                               Article 9
                         Exceptions to the obligation to provide assistance
 1. The Parties may refuse to give assistance as provided for in this Protocol, where to do so
     would :
     (a) be likely to prejudice sovereignty, public policy, security or other essential interests;
          or
     (b) involve currency or tax regulations other than regulations concerning customs duties;
          or
    (c) violate an industrial, commercial or professional secret.
2. Where the apphcant authority asks for assistance which it would itself be unable to provide if
    so asked, it shall draw attention to that fact in its request. It shall then be left to the requested
    authority to decide how to respond to such a request.
3. If assistance is withheld or denied, the decision and the reasons therefore must be notified to
    the apphcant authority without delay.
                                               Article 10
                                Obligation to observe confidentiality
1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a
    confidential nature. It shall be covered by the obligation of official secrecy and shall enjoy the
    protection extended to like information under the relevant laws of the Party which received it
    and the corresponding provisions applying to the Community authorities.
2. Nominative data shall not be transmitted whenever there are reasonable grounds to believe that
    the transfer or the use made of the date transmitted would be contrary to the basic legal
    principles of one of the Parties, and, in particular, if the person concerned would suffer undue
    disadvantages. Upon request, the receiving Party shall inform the furnishing Party of the use
    made of the information supplied and of the results achieved.
3. Nominative data may only be transmitted to customs authorities and, in the case of need for
    prosecution purposes, to public prosecution and judicial authorities. Other persons or
    authorities may obtain such information only upon previous authorisation by the furnishing
    authority.
                                                   57
 ---pagebreak--- 4. The furnishing Party shall verify the accuracy of the information to be transferred. Whenever
    it appears that the information supphed was inaccurate or to be deleted, the receiving Party
    shall be notified without delay. The latter shall be obliged to carry out the correction or
    deletion.
5. Without prejudice to cases of prevailing public interest, the person concerned may obtain,
    upon request, information on the data stores and the purpose of this storage.
                                               Article 11
                                          Use of information
1. Information obtained shall be used solely for the purposes of this Protocol and may be used
    within each Party for other purposes only with the prior written consent of the administrative
    authority which furnished the information and shall be subject to any restrictions laid down by
    that authority.
2. Paragraph 1 shall not impede the use of information in any judicial or administrative
    proceedings subsequently instituted for failure to comply with customs legislation.
3. The Parties may, in their records of evidence, reports and testimonies and in proceedings and
    charges brought before the courts, use as evidence information obtained and documents
    consulted in accordance with the provisions of this Protocol.
                                               Article 12
                                        Experts and witnesses
An official of a requested authority may be authorized to appear, within the limitations of the
authorization granted, as expert or witness in judicial or adrninistrative proceedings regarding the
matters covered by this Protocol in the jurisdiction of another Party, and produce such objects,
documents or authenticated copies thereof, as may be needed for the proceedings. The request for
an appearance must indicate specifically on what matters and by virtue of what title or
qualification the official will be questioned.
                                               Article 13
                                          Assistance expenses
The Parties shall waive all claims on each other for the reimbursement of expenses incurred
pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to
interpreters and translators who are not dependent upon public services.
                                                   58
 ---pagebreak---                                             Article 14
                                         Implementation
1. The management of this Protocol shall be entrusted to the central customs authorities of
   Ukraine on the one hand and the competent services of the Commission of the European
   Communities and, where appropriate, the customs authorities of the Member States of the
   European Union on the other. They shall decide on all practical measures and arrangements
   necessary for its application, taking into consideration rules in the field of data protection.
   They may recommend to the competent bodies amendments which they consider be made to
   this Protocol.
2. The Parties shall consult each other and subsequentiy keep each other informed of the detailed
   rules of implementation which are adopted in accordance with the provisions of this Protocol.
                                            Article 15
                                        Complementarity
1. This Protocol shall complement and not impede the application of any agreements on mutual
   assistance which have been concluded or may be concluded between individual or several
   Member States of the European Union and Ukraine. Nor shall it preclude more extensive
   customs cooperation granted under such agreements.
2. Without prejudice to Article 11, these agreements do not prejudice Community provisions
   governing the communication between the competent services of the Commission and the
   customs authorities of the Member States of any information obtained in customs matters
   which could be of Community interest.
                                                59
 ---pagebreak---                     JOINT DECLARATION CONCERNING ARTICLE 13
The Community and Ukraine declare that the text of the safeguard clause does not grant GATT
safeguard treatment.
                                            60
 ---pagebreak---                       JOINT DECLARATION CONCERNING ARTICLE 23
Without prejudice to the reservations listed in Annexes IV and V and to the provisions of Articles
37 and 40, the Parties agree that the words Min conformity with their legislation and regulations"
mentioned in paragraphs 1 and 2 of Article 23 mean that each Party may regulate the
establishment and operation of companies on its territory, provided that these regulations do no V
create for the establishment and operations of companies of the other Party any new reservations
to the treatment no less favourable than that accorded to their own companies or to companies or
branches or subsidiaries companies of any third country.
                                                 61
 ---pagebreak---                       JOINT DECLARATION CONCERNING ARTICLE 23
Without prejudice to the reservations listed in Annexes IV and V and to the provisions of Articles
37 and 40, the Parties agree that the words "in conformity with their legislation and regulations"
mentioned in paragraphs 1 and 2 of Article 23 mean that each Party may regulate the
establishment and operation of companies on its territory, provided that these regulations do no "t
create for the establishment and operations of companies of the other Party any new reservations
to the treatment no less favourable than that accorded to their own companies or to companies or
branches or subsidiaries companies of any third country.
                                                 61
 ---pagebreak---           JOINT DECLARATION CONCERNING THE NOTION OF "CONTROL"
                            IN ARTICLE 25(b) AND ARTICLE 36
1. The Parties confirm their mutual understanding that the question of control shall depend on
   the factual circumstances of the particular case.
2. A company shall, for example, be considered as being "controlled" by another company, and
   thus a subsidiary of such other company if :
       the other company holds directly or indirectly a majority of the voting rights, or
       the other company has the right to appoint or dismiss a majority of the administrative
   organ, of the management organ or of the supervisory organ and is at the same time a
   shareholder or member of the subsidiary.
3. Both Parties consider the criteria in paragraph 2 to be non-exhaustive.
                                                63
 ---pagebreak---                 JQINTDECLARATION CONCERNING ARTICLE 42
The Parties agree that for the purpose of the Agreement, intellectual, industrial and
commercial property includes in particular copyright, including the copyright in computer
programs, and neighbouring rights, the rights relating to patents, industrial designs,
geographical indications, including appellations of origin, trademarks and service marks,
topographies of integrated circuits as well as protection against unfair competition as
referred to in Article 10 bis of the Paris Convention for the protection of Industrial Property
and protection of undisclosed information on know-how.
The Parties declare that the term "intellectual, industrial and commercial property" shall be
translated into Ukrainian as "intelektualna vlasnist".
                                            64
 ---pagebreak---                      JOINT DECLARATION CONCERNING ARTICLE 94
The Parties agree, for the purpose of its correct interpretation and its practical apphcation, that
the term "cases of special urgency" included in Article 94 of the Agreement mean cases of
material breach of the Agreement by one of the Parties. A material breach of the Agreement
consists in
a)    repudiation of the Agreement not sanctioned by the general rules of international law
or
b)   violation of the essential elements of the Agreement set out in Article 2.
                                                 (O
 ---pagebreak---                  EXCHANGE OF LETTERS CONCERNING ARTICLE 13 bis
It is understood that the provisions of Article 13 bis are neither intended to, nor shall slow down,
hinder or impede the procedures provided for in the respective legislations of the Parties regarding
anti-dumping and subsidies investigations.
                                                 66
 ---pagebreak--- Exchange of letters in relation to the chapter on establishment of companies. Title IV
Chapter 2
Letter from Deputy Foreign Minister Makarenko to the negotiator of the Community
Dear Sir,
I refer to the Partnership and Cooperation Agreement initialled on 23rd March 1994.
As I underlined during the negotiations, Ukraine grants to Community companies establishing and
operating in Ukraine in certain respects a privileged treatment. I explained that this reflects the
Ukrainian policy to promote by all means the establishment of Community companies in Ukraine.
With this in mind, it is my understanding that during the period between the date of initialling of
this agreement and the entry into force of the relevant articles on establishment of companies,
Ukraine shall not adopt measures or regulations which would introduce or worsen discrimination
of Community companies vis-à-vis Ukrainian companies or companies from any third country as
compared to the situation existing on the date of initialling of this agreement.
1 would be obliged if you could acknowledge receipt of this letter.
                                                          Mr Makarenko
                                                          Deputy Foreign Minister of Foreign Affairs
Letter of reply
Dear Sir,
Thank you for letter of (date), which read :
"Dear Sir,
I refer to the Partnership and Cooperation Agreement initialled on 23rd March 1994.
As I underlined during the negotiations, Ukraine grants to Community companies establishing and
operating in Ukraine in certain respects a privileged treatment. I explained that this reflects the
Ukrainian policy to promote by all means the establishment of Community companies in Ukraine.
With this in mind, it is my understanding that during the period between the date of initialling of
this agreement and the entry into force of the relevant articles on establishment of companies,
Ukraine shall not adopt measures or regulations which would introduce or worsen discrimination
of Community companies vis-à-vis Ukrainian companies or companies from any third country as
compared to the situation existing on the date of initialling of this agreement.
I would be obliged if you could acknowledge receipt of this letter."
I can acknowledge receipt of this letter.
                                                 67
                                                                                                     , //
 ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(94) 226 final
                                                      DOCUMENTS
EN                                                                               u
                                 Catalogue number : CB-CO-94-240-EN-C
                                                             ISBN 92-77-69549-8
Office for Official Publications of tbe European Communities
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