CELEX: 51997PC0693
Language: en
Date: 1998-02-06
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 and Turkmenistan

COMMISSION OF THE EUROPEAN COMMUNITIES
                                       Brussels, 06.02.1998
                                       COM(97) 693 final
                                       98/0031 (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
                        and Turkmenistan
                  (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                            SUMMARY
Negotiations on a Partnership and Cooperation Agreement with Turkmenistan were
concluded on 24 May 1997. This is a mixed agreement with an initial duration of ten years,
establishing a political dialogue and covering trade in goods, investment-related questions
and cooperation in a wide range of civil areas. It contains a clause allowing it to be
suspended if there is a breach of the essential elements underlying the Agreement, i.e. respect
for democracy, human rights and the principles of the market economy.
This Communication proposes the formal signature and conclusion of the Agreement by the
Council and Commission. It is intended that the signature take place in the margins of the
General Affairs Council in February or March 1998.
                                           A
 ---pagebreak---                                  Explanatory mc mo rand inn
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 Turkmenistan, on the
other.
2. Following the Council's adoption of the negotiating directives on 5 October 1992,
   negotiations with Turkmenistan were held in the course of 1997. After two rounds of
   negotiations, the Agreement was initialled on 24 May 1997.
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 often years.
   It establishes a political dialogue. The Agreement also covers 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, cooperation on human rights
   and democracy, cooperation in combatting illegal activities and illegal immigration,
   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 ft'the market economy.
   The Agreement sets out an institutional framework lor its implementation with a
   Cooperation Council, a Cooperation Committee and a Parliamentary Cooperation
   Committee.
   Customs cooperation is covered by a separate protocol.
4. The Agreement will, as far as trade relations between the Community and Turkmenistan
   are concerned, replace the Agreement on Trade and Commercial and Economic
   Cooperation between the European Economic Community and the European Atomic
   Enerev Community, and the USSR, siened on 18 December l^S l \
5. The procedures of the three Communities (EC. EAEC and ECSC) for signing and
   concluding the Agreement differ.
    In the case of the EC. account will have to be taken of Opinion 1 94 delivered by the Court
    of Justice on 15 November 1994 on the competence of the European Community to
    conclude the aureements reached durinu the Urimuav Round.
                                                  '1 CL
 ---pagebreak---    For the purpose of concluding the Agreement:
   the Council will conclude the Agreement, with the assent of the European Parliament and
   having consulted the Economic and Social Committee, on behalf of the European
   Community in accordance with Article 54(2), the closing sentence of Article 57(2) and
   Articles 73c(2), 75, 84(2), 113 and 235 in conjunction with the second sentence of Article
   228(2) and the second subparagraph of Article 228(3) of the EC Treaty by adopting the
   attached decision taking into account opinion 1/94 of the European Court of Justice;
   the Commission will conclude the Agreement on behalf of the European Atomic Energy
   Community after the Council has approved it in accordance with the second paragraph of
   Article 101 of the Euratom Treaty;
   the Commission will conclude the Agreement on behalf of the ECSC in accordance with
   the ECSC Treaty, after consulting the Consultative Committee and with the unanimous
   assent of the Council;
   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 proposes that the Council adopt the annexed
   decision.
                                     4 Or
 ---pagebreak---                                           PROPOSAL FOR A
                          COUNCIL AND COMMISSION DECISION
            on the conclusion of the Partnership and Cooperation Agreement
             between the European Communities and their Member States
                                        and Turkmenistan
                                   (../.../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
54(2), the closing sentence of Article 57(2) and Articles 73c(2), 75, 84(2), 113 and 235 in
conjunction with the second sentence of Article 228(2) and the second subparagraph of
Article 228(3) 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,
Having regard to the approval of the Council given in accordance with Article 101 of the
Treaty establishing the European Atomic Energy Community,
Having consulted the ECSC Consultative Committee and the Economic and Social
Committee, and with the unanimous assent of the Council,
Wliereas the conclusion of the Partnership and Cooperation Agreement between the European
Communities and their Member States and Turkmenistan signed in            on          would
contribute to achieving the European Communities' objectives;
Wliereas that Agreement seeks to strengthen existing links, notably those established by the
Agreement on Trade and Commercial and Economic Cooperation between the European
Economic Community and the European Atomic Energy Community and the USSR, signed
on 18 December 1989;
Wliereas some of the obligations provided for in the Agreement in fields other than
Community trade policy affect the arrangements established by Community acts, particularly
acts relating to the right of establishment and to transport;
                                             A. C
 ---pagebreak--- Whereas the Agreement imposes on the Community certain obligations relating to the
movement of capital and payments between the Community and Turkmenistan;
Whereas in the case of certain measures provided for in the Agreement and falling within the
Community's powers the EC Treaty provides no basis for action other than Article 235,
HAVE DECIDED AS FOLLOWS :
                                           Article 1
The Partnership and Cooperation Agreement between the European Communities and their
Member States and Turkmenistan, together with the Protocol, the declarations and the
exchange of letters, are hereby approved on behalf of the European Community, the
European Coal and Steel Community and the European Atomic Energy Community.
                                           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 79 of the Partnership and Cooperation Agreement, the President
   oï the Council shall chair the Cooperation Council and shall present the Community's
   position. A representative of the Commission shall chair 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 100 of the
Agreement on behalf of the European Community. The President of the Commission shall
give such notification on behalf o\' the European Coal and Steel Community and the
European Atomic Energy Community.
Done at Brussels,
                                            d
 ---pagebreak---                                           Final Act
The plenipotentiaries of:
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 RHPl'BLIC OF AUSTRIA,
THE PORTUGUESE REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN,
THE I ;NH ED 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
 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 TURKMENISTAN,
                                             A Q-
 ---pagebreak--- of the other part,
meeting at         on        in the year one thousand nine hundred and ninety-six 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 Turkmenistan, 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.
The plenipotentiaries of the Member States and of the Community and the plenipotentiaries
of Turkmenistan have adopted the texts of the Joint Declarations listed below and annexed to
this Final Act:
Joint Declaration concerning personal data
Joint Declaration concerning Article 5 of the Agreement
Joint Declaration concerning Article 13 of the Agreement
Joint Declaration concerning the notion of "control" in Article 23 (h) ami Article 34 of the
Agreement
Joint Declaration concerning Article 33 of the Agreement
Joint Declaration concerning Article 40 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 Turkmenistan have also taken note of the exchange of letters listed below annexed to this
Final Act:
Establishment of companies
The plenipotentiaries of the Member States and of the Community and the Plenipotentiaries
of Turkmenistan have also taken note of the declaration listed below annexed to this Final
 Act:
 Unilateral Declaration by the French Republic on the Overseas Countries Territories
 Done at                  in the year one thousand nine hundred and ninety seven.
 For the Council and the Commission of the European Communities.
 For Turkmenistan.
                                                  A
 ---pagebreak---                      PARTNERSHIP AND COOPERATION AGREEMENT
establishing a partnership between the European Communities and their Member States, of the
one part, and Turkmenistan, 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 REPUBLIC OF AUSTRIA^
THE PORTUGUESE REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
Parties to the Treaty establishing the European Community, the Treaty establishing the European
Coal and Steel Community, and the Treaty establishing the European Atomic Energy
Community,
hereinafter referred to as "Member States", and
THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY,
AND THE EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as "the Community",
of the one part,
AND TURKMENISTAN,
of the other part,
 ---pagebreak--- CONSIDERING the links between the Community, its Member States and Turkmenistan and the
common values that they share,
RECOGNIZING that the Community and Turkmenistan 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 Turkmenistan
to strengthening the political and economic freedoms which constitute the very basis of the
partnership,
RECOGNIZING in that context that support of the independence, sovereignty and territorial
integrity of Turkmenistan will contribute to the safeguarding of peace and stability in Central
Asia,
ACKNOWLEDGING that the United Nations General Assembly has recognised, and expressed
its support for, the status of permanent neutrality declared by Turkmenistan,
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 Organisation for Security and Cooperation in Europe (OSCE),
CONSIDERING the firm commitment of the Community and its Member States and of
Turkmenistan to the full implementation of all principles and provisions contained in the Final
Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding
Documents of the Madrid and Vienna Follow-Up Meetings, the Document of the CSCE Bonn
Conference on Economic Cooperation, the Charter of Paris for a New Europe and the CSCE
Helsinki Document 1992 "The Challenges of Change", and other fundamental documents of the
OSCE,
CONVINCED of the paramount importance of the rule of law and respect for human rights,
particularly those of persons belonging to minorities, the establishment of a multiparty system
with free and democratic elections and economic liberalization aimed at setting up a market
economy,
BELIEVING that full implementation of this Partnership and Cooperation Agreement will both
depend on and contribute to continuation and accomplishment of the political, economic and legal
reforms in Turkmenistan, 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 neighbouring countries in order to promote the prosperity and stability of the
region,
                                                                                        /   '.   .. 'y
                                                                                       ./• C(^<X^    /
 ---pagebreak--- DESIROUS of establishing and developing regular political dialogue on bilateral and international
issues of mutual interest,
RECOGNIZING AND SUPPORTING the wish of Turkmenistan to establish close cooperation
with European institutions,
CONSIDERING the necessity of promoting investment in Turkmenistan, including in the energy
sector, and in this context the importance attached by the Community and its Member States to
equitable conditions for access to and transit for export of energy products ; confirming the
attachment of the Community and its Member States and of Turkmenistan to the European
Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy
Charter Protocol on energy efficiency and related environmental aspects,
TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and
technical assistance as appropriate,
BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between
Turkmenistan and a wider area of cooperation in Europe and neighbouring regions and its
progressive integration into the open international trading system,
CONSIDERING the commitment of the Parties to liberalize trade, in conformity with World
Trade Organisation (WTO) rules,
CONSCIOUS of the need to improve conditions affecting business and investment, and
conditions in areas such as establishment of companies, labour, provision of services and capital
movements,
CONVINCED that this Agreement will create a new climate for economic relations between the
Parties and in particular for the development of trade and investment, which are essential to
economic restructuring and technological modernization,
DESIROUS of establishing close cooperation in the area of environment protection taking into
account the interdependence existing between the Parties in this field,
RECOGNIZING that cooperation for the prevention and control of illegal immigration,
international organised crime and drug trafficking constitute one of the primary objectives of this
Agreement,
DESIROUS of establishing cultural cooperation and improving the flow of information,
HAVE AGREED AS FOLLOWS:
                                                                                                  *¥:
 ---pagebreak---                                               ARTICLE 1
A Partnership is hereby established between the Community and its Member States of the one
part, and Turkmenistan, of the other part. The objectives of this partnership are:
    to support the independence and sovereignty of Turkmenistan,
    to support Turkmenistan's efforts to consolidate its democracy, to develop its economy and
     to achieve transition to a market economy,
    to assist in the construction of a civil society in Turkmenistan based upon the rule of law,
    to provide an appropriate framework for the political dialogue between the Parties allowing
     the development of political relations,
    to promote trade and investment, in particular in the energy sector, and harmonious economic
     relations between the Parties and so to foster their sustainable economic development,
     to provide a basis for legislative, economic, social, financial, civil, scientific, industrial,
     technological and cultural cooperation,
 ---pagebreak---                                               TITLE I
                                     GENERAL PRINCIPLES
                                            ARTICLE 2
Respect for democratic principles and fundamental and human rights, as defined in particular in
the Universal Declaration of Human Rights, the United Nations Charter, the Helsinki Final Act
and the Charter of Paris for a New Europe, as well as the principles of market economy,
including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal
and external policies of the Parties and constitute an essential element of this Agreement.
                                            ARTICLE 3
The Parties consider that it is essential for their future prosperity and stability 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 in .the spirit of good neighbourly relations, and will make every effort to
encourage this process.
 ---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 Turkmenistan, support the political and economic changes underway in Turkmenistan and
contribute to the establishment of new forms of cooperation. The political dialogue:
-   will strengthen the links of Turkmenistan with the Community and its
    Member States, and thus with the community of democratic nations as a whole. The
    economic convergence achieved through this Agreement will lead to more intense political
    relations;
-   will bring about an increasing convergence of positions on international issues of mutual
    concern thus increasing security and stability in the region,
-   shall foresee that the Parties endeavour to cooperate on matters pertaining to the observance
    of the principles of democracy, and the respect, protection and promotion of human rights,
    including those of persons belonging to minorities and shall hold consultations, if necessary,
    on relevant matters.
Such dialogue may take place on a regional basis.
                                              ARTICLE 5
At ministerial level, political dialogue shall take place within the Cooperation Council established
in Article 77 and on other occasions by mutual agreement.
                                              ARTICLE 6
Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in
particular in the following forms:
-   regular meetings at senior official level between representatives of the Community and its
    Member States on the one hand, and representatives of Turkmenistan on the
    other hand;
-   taking full advantage of diplomatic channels between the parties including appropriate
    contacts in the bilateral as well as the multilateral fields, including at United Nations, OSCE
    meetings and elsewhere;
-   any other means, including the possibility of expert meetings which would contribute to
    consolidating and developing this dialogue.
                                                                                                /£.&,
 ---pagebreak---                                                TITLE m
                                         TRADE IN GOODS
                                             ARTICLE 7
1.   The Parties shall accord to one another most-favoured-nation treatment in all areas in respect
      of:
-   customs duties and charges applied to imports and exports, including the method of
    collecting
    such duties and charges;
-   provisions relating to customs clearance, transit, warehouses and transhipment;
-   taxes and other internal charges of any kind applied directly or indirectly to imported goods;
-   methods of payment and the transfer of such payments;
-   the rules relating to the sale, purchase, transport, distribution and use of goods on the
    domestic market.
2.   The provisions of paragraph 1 shall not apply to:
(a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant
      to the creation of such a union or area;
(b) advantages granted to particular countries in accordance with WTO rules and with other
      international arrangements in favour of developing countries;
(c) advantages accorded to adjacent countries in order to facilitate frontier traffic.
3.     The provisions of paragraph 1 shall not apply, during a transitional period expiring on
      31 December 1998, to advantages defined in Annex I granted by Turkmenistan to other
      states which have emerged from the dissolution of the USSR.
                                              ARTICLE 8
1.    The Parties agree that the principle of free transit is an essential condition of attaining the
      objectives of this Agreement.
      In this connection each Party shall secure unrestricted transit via or through its territory of
      goods originating in the customs territory or destined for the customs territory of the other
      Party.
2.    The rules described in Article V, paragraphs 2, 3, 4 and 5 of the GATT 1994 are applicable
      between the Parties.
3.     The rules contained in this Article are without prejudice to any special rules relating to
      specific sectors, in particular such as transport, or products agreed between the Parties.
                                                                                              fr-  &,--
 ---pagebreak---                                             ARTICLE 9
Without prejudice to the rights and obligations stemming from international conventions on the
temporary admission of goods which bind the Parties, each Party shall furthermore grant the
other Party exemption from import charges and duties on goods admitted temporarily, in the
instances and according to the procedures stipulated by any other international convention on this
matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions
under which the obligations stemming from such a convention have been accepted by the Party in
question..
                                           ARTICLE 10
1.    Goods originating in Turkmenistan shall be imported into the Community free of
      quantitative restrictions and measures of equivalent effect, without prejudice to the
      provisions of Articles 12, 15 and 16 of this Agreement.
2.      Goods originating in the Community shall be imported into Turkmenistan free of
     quantitative restrictions and measures of equivalent effect, without prejudice to the
     provisions of Articles 12, 15 and 16 of this Agreement.
                                           ARTICLE 11
Goods shall be traded between the Parties at market-related prices.
                                           ARTICLE 12
1.   Where any product is being imported into the territory of one of the Parties in such increased
     quantities or under such conditions as to cause or threaten to cause injury to domestic
     producers of like or direct competitive products, the Community or Turkmenistan,
     whichever is concerned, may take appropriate measures in accordance with the following
     procedures and conditions.
2.    Before taking any measures, or in cases to which paragraph 4 applies as soon as possible
     thereafter, the Community or Turkmenistan as the case may be shall supply the
     Cooperation Council with all relevant information with a view to seeking a solution
     acceptable to the Parties as provided for in Title XI.
3.    If, as a result of the consultations, the Parties do not reach agreement within 30 days of
     referral to the Cooperation Council 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.
                                                                                           Cc. LQA
 ---pagebreak--- 4.     In critical circumstances where delay would cause damage difficult to repair, the Parties may
       take the measures before the consultations, on the condition that consultations shall be
       offered immediately after taking such action.
5.     In the selection of measures under this Article, the Parties shall give priority to those which
       cause least disturbance to the achievement of the aims of this Agreement.
6.      Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of
       anti-dumping or countervailing measures in accordance with Article VI of the GATT 1994,
       the Agreement on implementation of Article VI of the GATT 1994, the Agreement on
       Subsidies and Countervailing Measures or related internal legislation.
                                             ARTICLE 13
The Parties undertake to consider development of the provisions in this Agreement on trade in
goods between them, as circumstances allow, including the situation arising from the future
accession of Turkmenistan to the WTO. The Cooperation Council may make recommendations
on such developments to the Parties which could be put into effect, where accepted, by virtue of
agreement between the Parties in accordance with their respective procedures.
                                             ARTICLE 14
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on grounds of public morality, public policy or public security; the protection of
health and life of humans, animals or plants; the protection of natural resources, the protection of
national treasures of artistic, historic or archaeological value or the protection of intellectual,
industrial and commercial property or rules relating to gold and silver. Such prohibitions or
restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised
restriction on trade between the Parties.
                                             ARTICLE 15
This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the
Combined Nomenclature. Trade in these products shall be governed by a separate agreement,
initialled on 30 December 1995 and applied provisionally since 1 January 1996.
                                                                                                tf\ c
 ---pagebreak---                                            ARTICLE 16
 1.   Trade in products covered by the Treaty establishing the European Coal and Steel
      Community shall be governed by the provisions of this Title, with the exception of
      Article 10.
2.    A contact group on coal and steel matters shall be set up, comprising representatives of the
      Community on the one hand, and representatives of Turkmenistan 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 17
Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty
establishing the European Atomic Energy Community. If necessary, trade in nuclear materials
shall be subject to the provisions of a specific Agreement to be concluded between the European
Atomic Energy Community and Turkmenistan.
                                                  10
 ---pagebreak---                                             TITLE IV
                PROVISIONS AFFECTING BUSINESS AND INVESTMENT
                                          CELAPTER I
                                        Labour conditions
                                          ARTICLE 18
           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 nationals of Turkmenistan, 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 Turkmenistan,
          Turkmenistan shall endeavour to ensure that the treatment accorded to nationals of a
          Member State, legally employed in the territory of Turkmenistan shall be free from any
          discrimination based on nationality, as regards working conditions, remuneration or
          dismissal, as compared to its own nationals.
                                          ARTICLE 19
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 20
The Cooperation Council shall make recommendations for the implementation of Articles 18 and
 19.
                                                 11
                                                                                            U-UU.
 ---pagebreak---                                              CHAPTER n
              Conditions affecting the establishment and operation of companies
                                             ARTICLE 21
1.   The Community and its Member States shall grant, for the establishment of Turkmen
     companies as defined in Article 23 (d), treatment no less favourable than that accorded to
     any third country companies.
2.   Without prejudice to the reservations listed in Annex II, the Community and its Member
     States shall grant to subsidiaries of Turkmen companies established in their territories a
     treatment no less favourable than that granted to any Community companies, in respect of
     their operation.
3.   The Community and its Member States shall grant to branches of Turkmen 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.
4.  Without prejudice to the reservations listed in Annex III, Turkmenistan shall grant, for the
     establishment of Community companies as defined in Article 23 (d), treatment no less
     favourable than that accorded to Turkmen companies or to any third country companies,
     whichever is the better.
5.   Turkmenistan shall grant to subsidiaries and branches of Community companies established
     in its territory treatment no less favourable than that accorded to Turkmen companies or
     branches or to any third country company or branch, whichever is the better, in respect of
     their operations.
                                             ARTICLE 22
1.  The provisions of Article 21 shall not apply to air transport, inland waterways transport and
     maritime transport.
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 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.
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;
                                                  12
 ^  ^                                               fc                                              cty
 ---pagebreak---  (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 concerning transport documents, customs documents, or
      other documents related to the origin and character of the goods transported;
(d)   provision of business information by any means, including computerized information
      systems and electronic data interchange (subject to any non-discriminatory 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, organizing the call of the ship or taking over cargoes
      when required.
                                             ARTICLE 23
For the purpose of this Agreement:
(a) A "Community company" or a "Turkmen company" respectively shall mean a company set up
in accordance with the laws of a Member State or of Turkmenistan respectively and having its
registered office or central administration, or principal place of business in the territory of the
Community or Turkmenistan respectively. However, should the company set up in accordance
with the laws of a Member State or Turkmenistan respectively have only its registered office in
the territory of the Community or Turkmenistan'respectively, the company shall be considered a
Community or Turkmen company respectively if its operations possess a real and continuous link
with the economy of one of the Member States or Turkmenistan 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 Turkmen companies as referred to in
point (a) to take up economic activities by means of the setting up of subsidiaries and branches in
Turkmenistan or in the Community respectively.
(e) "Operation" shall mean the pursuit of economic activities.
                                                    13
                                                                                              £&/.
 ---pagebreak--- (f) "Economic activities" shall mean activities of an industrial, commercial and professional
character.
(g) With regard to international maritime transport, including intermodal operations involving a
sea leg, nationals of the Member States or of Turkmenistan established outside the Community or
Turkmenistan respectively, and shipping companies established outside the Community or
Turkmenistan and controlled by nationals of a Member State or nationals of Turkmenistan
respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III if their
vessels are registered in that Member State~ or in Turkmenistan respectively in accordance with
their respective legislation.
                                            ARTICLE 24
1.     Notwithstanding any other provisions of this Agreement, a Party shall not be prevented
      from taking measures for prudential reasons, including for the protection of investors,
      depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service
      supplier, or to ensure the integrity and stability of the financial system. Where such
      measures do not conform with the provisions of this Agreement, they shall not be used as a
      means of avoiding the obligations of a Party under this Agreement.
2.    Nothing in this Agreement shall be construed as requiring a Party to disclose information
      relating to the affairs and accounts of individual customers or any confidential or proprietary
      information in the possession of public entities.
3.   For the purposes of this Agreement, "financial services" shall mean those activities described
      in Annex IV.
                                            ARTICLE 25
The provisions of this Agreement shall not prejudice the application 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 26
       Notwithstanding the provisions of Chapter I of this Title, a Community company or a
      Turkmen company established in the territory of Turkmenistan 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 Turkmenistan and the Community respectively, employees who are nationals
      of Community Member States and Turkmenistan respectively, provided that such employees
      are key personnel as defined in paragraph 2, and that they are employed exclusively by
      companies, or branches. The residence and work permits of such employees shall only
      cover the period of such employment.
       Key personnel of the abovementioned companies herein referred to as "organizations" are
       "intra-corporate transferees" as defined in (c) in the following categories, provided that the
                                                   14
                                                                                               ^J\ CtS
                                                                                                      r
 ---pagebreak---       organization is a legal person and that the persons concerned have been employed by it or
      have been partners in it (other than majority shareholders), for at least the year immediately
      preceding such movement:
(a) Persons working in a senior position with an organization, 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:
    -    directing the establishment or a department or subdivision 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 organization 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 organization
      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 organization 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 organization, effectively pursuing like economic
      activities in the territory of the other Party.
                                              ARTICLE 27
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 35; the situations
      covered by Article 35 shall be solely governed by its provisions to the exclusion of any
      other.
                                                      15
 ---pagebreak--- 3.  Acting in the spirit of partnership and cooperation and in the light of the provisions of
    Article 41, the Government of Turkmenistan 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 Turkmenistan 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 Turkmenistan 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 Turkmenistan would result in rendering
    the conditions for operation of subsidiaries and branches of Community companies
    established in Turkmenistan more restrictive than the situation existing on the day of
    signature of this Agreement, such 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 Turkmenistan at the time of entry into force of the relevant act.
                                        CHAPTER III
                   Cross border supply of services between the Community
                                      and Turkmenistan
                                         ARTICLE 28
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 Turkmen
    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 service sectors in the
    Parties.
2.  The Cooperation Council shall make recommendations for the implementation of
    paragraph 1.
                                         ARTICLE 29
The Parties shall cooperate with the aim of developing a market oriented service sector in
Turkmenistan.
                                         ARTICLE 30
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 obligations arising from
     the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable
     to one or other Party to this Agreement. Non-conference lines will be free to operate in
                                                16
 ---pagebreak---       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 the entry into force of this Agreement, any cargo sharing provisions of
      bilateral agreements between any Member States of the Community and the former Soviet
      Union;
(b) not introduce cargo sharing clauses into future bilateral agreements with third countries,
      other than in those exceptional circumstances where liner shipping companies from one or
      other Party to this 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;
(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.
3.   Each party shall grant, inter alia, no less favourable treatment, for the ships operated by
      nationals or companies of the other Party, than that accorded to a Party's own ships, 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.
                                            ARTICLE 31
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 after entry into force of
this Agreement.
                                                   17
 ---pagebreak---                                             CHAPTER IV
                                         General Provisions
                                            ARTICLE 32
 1.   The provisions of this Title shall be applied subject to limitations justified on grounds of
      public policy, public security or public health.
2.    They shall not apply to activities which in the territory of the Parties are connected, even
      occasionally, with the exercise of official authority.
                                            ARTICLE 33
For the purpose of this Title, nothing in this 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 this Agreement. The above provision does not prejudice the application of Article
                                            ARTICLE 34
Companies which are controlled and exclusively owned by Turkmen companies and Community
companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV.
                                            ARTICLE 35
Treatment granted by either Party to the other hereunder shall, as from the day one month prior
to the date of entry into force of the relevant obligations of the General Agreement on Trade in
Services (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 36
For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by
the Community, its Member States or Turkmenistan pursuant to commitments entered into in
economic integration agreements in accordance with the principles of Article V of the GATS.
                                                   18
                                                                                               Û.
                                                                                                   <4\
 ---pagebreak---                                              ARTICLE 37
      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.
      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.
      Nothing in this Title shall be construed to prevent Member States or Turkmenistan from
      distinguishing, in the application of the relevant provisions of their fiscal legislation, between
      tax payers who are not in identical situations, in particular as regards their place of
      residence.
                                             ARTICLE 38
Without prejudice to Article 26, no provision of Chapters II, III and IV shall be interpreted as
giving the right to:
- nationals of the Member States or of Turkmenistan respectively to enter, or
  stay in, the territory of Turkmenistan or the Community respectively in any
  capacity whatsoever, and in particular as a shareholder or partner in a company or manager or
  employee thereof or supplier or recipient of services;
- Community subsidiaries or branches of Turkmen companies to employ or have employed in
  the territory of the Community nationals of Turkmenistan;
- Turkmen subsidiaries or branches of Community companies to employ or have employed in
  the territory of Turkmenistan nationals of the Member States;
- Turkmen companies or Community subsidiaries or branches of Turkmen companies to supply
  Turkmen persons to act for and under the control of other persons by temporary employment
  contracts;
- Community companies or Turkmen subsidiaries or branches of Community companies to
   supply workers who are nationals of the Member States by temporary employment contracts.
                                             CHAPTER V
                                   Current payments and capital
                                             ARTICLE 39
      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
      Turkmenistan connected with the movement of goods, services or persons made in
      accordance with the provisions of this Agreement.
                                                    19
                                                                                                        ^ r -
 ---pagebreak--- 2.   With regard to transactions on the capital account of balance of payments, from entry into
     force of this Agreement, the free movement 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, 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, as from the entry 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 Turkmenistan shall
     be introduced and the existing arrangements shall not become more restrictive.
4.   The Parties shall consult each other with a view to facilitating the movement of forms of
     capital other than those referred to in paragraph 2 between the Community and
     Turkmenistan in order to promote the objectives of this Agreement.
5.   With reference to the provisions of this Article, until full convertibility of the Turkmen
     currency within the meaning of Article VIII of the Articles of Agreement of the
     International Monetary Fund (IMF) is introduced, Turkmenistan 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
     Turkmenistan for the granting of such credits and are permitted according to Turkmenistan's
     status under the IMF. Turkmenistan 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. Turkmenistan shall inform the Cooperation Council promptly of the
     introduction of such measures and of any changes therein.
6. . Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movements
     of capital between the Community and Turkmenistan cause, or threaten to cause, serious
     difficulties for the operation of exchange rate policy or monetary policy in the Community
     or Turkmenistan, the Community and Turkmenistan respectively may take safeguard
     measures with regard to movements of capital between the Community and Turkmenistan
     for a period not exceeding six months, if such measures are strictly necessary
                                                 20
 ---pagebreak---                                      CHAPTER VI
             Intellectual, industrial and commercial property protection
                                      ARTICLE 40
Pursuant to the provisions of this Article and of Annex V, Turkmenistan 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 this 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 this Agreement, Turkmenistan shall
accede to the multilateral conventions on intellectual, industrial and commercial property
rights referred to in paragraph 1 of Annex V to which Member States are parties or which
are de facto applied by Member States, according to the relevant provisions contained in
these conventions.
                                             21
                                                                                             4. tf-f
 ---pagebreak---                                                 TITLE V
                                   LEGISLATIVE COOPERATION
                                              ARTICLE 41
1.     The Parties recognize that an important condition for strengthening the economic links
       between Turkmenistan and the Community is the approximation of Turkmenistan's existing
       and future legislation to that of the Community. Turkmenistan 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 following areas in particular: customs law,
       company law, laws on banking and other financial services, company accounts and taxes,
       intellectual property, protection of workers at the workplace, rules on competition including
       any related issues and practices affecting trade, public 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, telecommunications.
3.     The Community shall provide Turkmenistan with technical assistance 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 of personnel involved in the drafting andimplementation of legislation;
-  aid for translation of Community legislation in the relevant sectors.
4.     The Parties agree to examine ways to apply their respective competition laws on a concerted
       basis in such cases where trade between them is affected.
                                                    22
                                                                                                    L(Au
 ---pagebreak---                                               TITLE VI
                                   ECONOMIC COOPERATION
                                             ARTICLE 42
 1.    The Community and Turkmenistan shall establish economic cooperation aimed at
       contributing to the process of economic reform and recovery and sustainable development
       of Turkmenistan. Such cooperation shall strengthen existing economic links, to the benefit
       of the Parties.
2.     Policies and other measures will be designed to bring about economic and social reforms
       and restructuring of the economic system in Turkmenistan 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, in particular, on economic and social
       development, human resources development, support for enterprises (including
       privatization, investment and development of financial services), agriculture and food,
       energy and civil nuclear safety, transport, postal services and telecommunications, tourism,
       environmental protection and regional cooperation.
4.     Special attention shall be devoted to measures capable of fostering regional cooperation.
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
       Community technical assistance to Turkmenistan and its established coordination and
       implementation procedures.
                                            ARTICLE 43
                       Cooperation in the field of trade in goods and services
The Parties will cooperate with a view to ensuring that Turkmenistan's international trade is
conducted in conformity with the rules of the WTO. The Community shall provide Turkmenistan
with technical assistance for this purpose.
Such cooperation shall include specific issues directly relevant to trade facilitation, in particular
with a view to assisting Turkmenistan to harmonise its legislation and regulations with WTO
rules and so to fulfil as soon as possible the conditions of accession to that Organisation. These
include:
-    formulation of policy on trade and trade-related questions, including payments and clearing
    mechanisms,
- drafting of relevant legislation.
                                                   23
 ---pagebreak---                                              ARTICLE 44
                                         Industrial cooperation
 1.    Cooperation shall aim at promoting the following in particular:
-   the development of business links between economic operators of both sides;
-   Community participation in Turkmenistan's efforts to restructure its industry;
-   the improvement of management;
-   the improvement of the quality of industrial products;
-   the development of efficient production and processing capacity in the raw materials sector;
-   the development of appropriate commercial rules and practices including product marketing;
-   environmental protection;
-   defence conversion;
-    training of management personnel.
2.      The provisions of this Article shall not affect the enforcement of Community competition
        rules applicable to undertakings.
                                             ARTICLE 45
                                 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 private 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 cooperation shall be in particular:
- the conclusion, where appropriate, between the Member States and the Republic of
    Turkmenistan of agreements for the promotion and protection of investment;
- the conclusion, where appropriate, between the Member States and the Republic of
    Turkmenistan of agreements to avoid double taxation;
- the creation of favourable conditions for attracting foreign investments into the Turkmen
    economy;
- to establish stable and adequate business law and conditions, and to exchange information on
    laws, regulation's 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.
                                                    24
 ---pagebreak---                                                ARTICLE 46
                                           Public Procurement
The Parties shall cooperate to develop conditions for open and competitive award of contracts
forgoods and services in particular through calls for tenders.
                                               ARTICLE 47
                   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 Turkmen product quality.
2.     To this end the Parties shall seek to cooperate in technical assistance projects which will:
- promote appropriate cooperation with organizations and institutions specialized in these
    fields;
- promote the use of Community technical regulations and the application of European
    standards and conformity assessment procedures;
- permit the sharing of experience and technical information in the field of quality management.
                                              ARTICLE 48
                                       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 prospects of the mining and non-ferrous metals sectors;
-   the establishment of a legal framework for cooperation;
-   trade matters;
-   the adoption and implementation of environmental legislation;
-   training;
- safety in the mining industry.
                                               ARTICLE 49
                                 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:
                                                     25
                                                                                                     UMi
 ---pagebreak--- -    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 50.
      The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in
      science and technology.
      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 50
                                        Education and training
1.     The Parties shall cooperate with the aim of raising the level of general education and
       professional qualifications in Turkmenistan, 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 Turkmenistan 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 and 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 of journalists;
- training of trainers.
                                                    26
                                                                                                  U , to
 ---pagebreak--- 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 through the participation of Turkmenistan in the
     Community's TEMPUS programme.
                                           ARTICLE 51
                             Agriculture and the agro-industrial sector
The purpose of cooperation in this area shall be the pursuance of agrarian reform, the
modernization, privatization and restructuring of agriculture, the agro-industrial and services
sectors in Turkmenistan, development of domestic and foreign markets for the Turkmen
products, in conditions that ensure the protection of the environment, taking into account the
necessity to improve security of food supply as well as the development of agri-business, the
processing and distribution of agricultural products. The Parties shall also aim at the gradual
approximation of Turkmen standards to Community technical regulations concerning industrial
and agricultural food products including sanitary and phytosanitary standards.
                                           ARTICLE 52
                                              Energy
1.    Cooperation shall take place within the principles of the market economy and the European
      Energy Charter, against a background of the progressive integration of the energy markets
      in Europe.
2.   Cooperation shall concentrate, inter alia, upon the formulation and development of energy
      policy. It shall include among others the following areas:
- improvement in management and regulation of the energy sector in line with a market
   economy;
- improvement of energy supply, including security of supply, in an economic and
   environmentally sound manner;
- promotion of energy saving and energy efficiency and implementation of the Energy Charter
   Protocol on Energy Efficiency and related environmental aspects;
- modernisation of energy infrastructures;
- improvement of energy technologies in supply and end use across the range of energy types;
- management and technical training in the energy sector;
- transportation and transit of energy materials and products.
- the introduction of the range of institutional, legal, fiscal and other conditions necessary to
   encourage increased energy trade and investment;
- development of hydro-electric and other renewable energy resources.
                                                  27
 ---pagebreak---         The Parties shall exchange relevant information relating to investment projects in the energy
        sector, in particular concerning the production of energy resources and the construction and
        refurbishing of oil and gas pipelines or other means of transporting energy products. The
       Parties attach particular importance to cooperation regarding investments in the energy
        sector and the manner in which these are regulated. They shall cooperate with a view to
        implementing as efficaciously as possible the provisions of Title IV and of Article 45, in
        respect of investments in the energy sector.
                                             ARTICLE 53
                                              Environment
 1.    Bearing in mind the European Energy Charter, the Declarations of the Lucerne Conference
       of April 1993, and the of the Sofia Conference of October 1995, and taking into account the
       Energy Charter Treaty and especially its Article 19, and the Energy Charter Protocol on
       Energy Efficiency and related environmental aspects, the Parties shall develop and
       strengthen their cooperation on environment and human health.
2.     Cooperation shall aim at protecting the environment and in particular:
- effective monitoring of pollution levels and assessment of the 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:
- disaster planning and other emergency situations;
- exchange of information and experts, including information and experts dealing with the
    transfer of clean technologies and the safe and environmentally sound use of biotechnologies;
- joint research activities;
                                                   28
                                                                                                  u   ay
 ---pagebreak---  - 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 to achieving sustainable development;
- environmental impact studies.
4. The Parties shall seek to develop their cooperation on questions of human health, in particular
    through technical assistance on the prevention and combatting of infectious diseases and the
    protection of mothers and young children.
                                            ARTICLE 54
                                              Transport
The Parties shall develop and strengthen their cooperation in the field of transport.
This cooperation shall, inter alia, aim at restructuring and modernizing transport systems and
networks in Turkmenistan; developing and ensuring, where appropriate, compatibility of
transportation systems in the context of achieving a more global transport system; and identifying
and elaborating priority projects and seeking to attract investment for their implementation.
The cooperation shall include, inter alia:
- the modernisation of management and operations of road transport, railways, ports and
   airports ;
- modernization and development of railways, waterways, roads, airport and air navigation
   infrastructure as well as navigation aids, and including the modernization of major routes of
   common interest and the trans-European links for the above modes, particularly those related
   to the TRACECA project;
- promotion and development of multi-modal transport;
- the promotion of joint research and development programmes;
- preparation of the legislative and institutional framework for policy development and
   implementation including privatization of the transport sector.
                                            ARTICLE 55
                              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;
- transferring technology and know-how, particularly regarding European technical standards
   and certification systems;
- encouraging the development of projects for telecommunications and postal services and
                                                   29
 '                                                                                               iX LL{
 ---pagebreak---   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 telecommunication and postal services and
  for the use of the radio frequency spectrum;
- training in the field of telecommunications and postal services for operations in market
  conditions.
                                             ARTICLE 56
                              Financial Services and fiscal institutions
     Cooperation in the field of financial services shall in particular aim at facilitating the
      involvement of Turkmenistan in universally accepted systems of mutual settlements.
      Technical assistance shall focus on:
  the development of a stock market and a securities market;
  the development of banking services, the development of a common market of credit
  resources and the involvement of Turkmenistan in a universally accepted
  system of mutual settlements;
  the development of insurance services, which would inter alia create a favourable framework
  for Community companies' participation in the establishment of joint ventures in the insurance
  sector in Turkmenistan, as well as the development of export credit insurance.
    This cooperation shall in particular contribute to foster the development of relations between
    the Parties in the financial services sector.
     The Parties shall cooperate in developing the fiscal system and fiscal institutions in
      Turkmenistan. This cooperation shall include the exchange of information and experience
      on fiscal matters and the training of personnel involved in the formulation and
      implementation of fiscal policy.
                                             ARTICLE 57
                             Enterprise restructuring and privatisation
Recognizing that privatisation is of fundamental importance to a sustainable economic recovery',
the Parties agree to cooperate in the development of the necessary institutional, legal and
methodological framework. Particular attention will be paid to the orderly and transparent nature
of the privatisation process.
Technical assistance shall focus on, inter alia :
-   the further development of an institutional base within the Government of Turkmenistan to
    assist with defining and managing the privatisation process;
    the further development of the privatisation strategy of the government of Turkmenistan,
    including the legislative framework, and implementation mechanisms;
                                                  30
                                                                                                 0
                                                                                                   -,-
                                                                                                   U
 ---pagebreak---        furthering market approaches to land use and ownership, and the privatisation of land;
      the restructuring of those enterprises not yet ready for privatisation;
      the development of private enterprise, particularly in the small and medium enterprise sector;
      the development of investment funds.
 The objective of this cooperation is also to contribute to the promotion of Community investment
 in Turkmenistan.
                                              ARTICLE 58
                                         Regional development
 1.     The Parties shall strengthen cooperation on regional development and land-use planning.
2.      To this end, the Parties shall encourage the 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, of
        exchanging information regarding means to foster regional development.
                                              ARTICLE 59
                                           Social cooperation
1.      With regard to health and safety, the Parties shall develop cooperation between them with
        the aim of improving inter alia 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 accident hazards and the management of toxic chemicals;
- research on developing information and understanding of the working environment and on the
    health and safety of workers.
2.      With regard to employment, the cooperation shall include notably technical assistance to:
-   optimization of the labour market;
-   modernization 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.
                                                     31
 ---pagebreak--- 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 Turkmenistan.
These reforms shall aim to develop in Turkmenistan methods of protection intrinsic to market
economies and shall comprise all relevant forms of social protection.
                                           ARTICLE 60
                                              Tourism
The Parties shall increase and develop cooperation between them, which shall include:
-  facilitatingThe tourist trade;
-  increasing the flow of information;
-  transferring know-how;
-  studying the opportunities for joint operations;
-  cooperation between official tourism bodies, including the preparation of promotional material;
-  training for tourism development.
                                            ARTICLE 61
                                Small and medium-sized enterprises
1.    The Parties shall aim to develop and strengthen small and medium-sized enterprises (SMEs)
      and their associations and cooperation between SMEs in the Community and Turkmenistan
2.     Cooperation shall include technical assistance, in particular in the following areas:
- the development of a legislative framework for SMEs;
- the development of an appropriate infrastructure to support SMEs, to promote communication
   and business cooperation between SMEs both within Turkmenistan and further afield, and to
   train SMEs in the skills necessary to access funding;
- training in the areas of marketing, accounting and control of the quality of products.
                                            ARTICLE 62
                                  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 public with basic information about the Community
and Turkmenistan, including, where possible, access to databases, in full respect of intellectual
property rights.
                                                   32
 ---pagebreak---                                             ARTICLE 63
                                       Consumer Protection
The Parties will enter into close cooperation aimed at achieving compatibility between their
systems of consumer protection. This cooperation may include the exchange of information on
legislative work and institutional reform, 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, the development of
exchanges between the consumer interest representatives, and increasing the compatibility of
consumer protection policies, and the organization of seminars and training periods.
                                            ARTICLE 64
                                              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
      Turkmenistan'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 simplification of inspections and formalities in respect of the carriage of goods;
-  support for the introduction of modern customs information systems;
-  the organization of seminars and training periods.
Technical assistance shall be provided where necessary.
3.    Without prejudice to further cooperation foreseen in this Agreement and in particular Title
      VIII, mutual assistance in customs matters between administrative authorities of the Parties
      shall take place in accordance with the provisions of the Protocol attached to this
      Agreement.
                                                   33
 ---pagebreak---                                             ARTICLE 65
                                       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 Turkmenistan.
The Parties, in particular, shall cooperate in the following fields:
- adaptation of the Turkmen 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.
The Community shall contribute to this end by rendering technical assistance to Turkmenistan.
                                            ARTICLE 66
                                              Economics
The Parties shall facilitate the process of economic reform and the coordination of economic
policies by cooperating to improve understanding of the fundamentals of their respective
economies and the design and implementation of economic policy in market economies. To this
end, the Parties shall exchange information on macroeconomic performance and prospects.
The Community shall provide technical assistance so as to:
- assist Turkmenistan 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;
- improve Turkmenistan's capacity to formulate economic models.
                                                    34
                                                                                                   kUfr
 ---pagebreak---                                                TITLE VD
               COOPERATION ON MATTERS RELATING TO DEMOCRACY
                                       AND HUMAN RIGHTS
                                              ARTICLE 67
The Parties shall cooperate on all questions relevant to the establishment or reinforcement of
democratic institutions, including those required in order to strengthen the rule of law, and the
protection of human rights and fundamental freedoms according to international law and OSCE
principles.
This cooperation shall take the form of technical assistance programmes intended to assist, inter
alia, in the drafting of relevant legislation and regulations; the implementation of such legislation;
the functioning of the judiciary; the role of the State in questions of justice; and the operation of
the electoral system. They may include training where appropriate. The Parties shall encourage
contacts and exchanges between their national, regional and judicial authorities, parliamentarians,
and non-governmental organisations.
                                                    35
 ---pagebreak---                                               TITLE VIII
        COOPERATION ON PREVENTION OF ILLEGAL ACTIVITIES AND THE
                PREVENTION AND CONTROL OF ILLEGAL IMMIGRATION
                                             ARTICLE 68
The Parties shall establish cooperation aimed at preventing illegal activities such as:
    illegal activities in the sphere of economics, including corruption;
    illegal transactions of various goods, including industrial waste, and illicit traffic of arms;
    counterfeiting;
Cooperation in the abovementioned areas will be based on mutual consultation and close
interaction. Technical and administrative assistance will be provided, including in the following
areas:
    drafting of national legislation in the sphere of preventing illegal activities;
    creation of information centres;
    increasing the efficiency of institutions engaged in preventing illegal activities;
    training of personnel and development of research infrastructures;
    elaboration of mutually acceptable measures impeding illegal, activities.
                                             ARTICLE 69
                                           Money laundering
1.    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.
2.    Cooperation in this area shall include administrative and technical assistance with the
      purpose of establishing suitable standards against money laundering equivalent to those
      adopted by the Community and international fora in this field, including the Financial Action
      Task Force (FATF).
                                             ARTICLE 70
                                                 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 in narcotic drugs and psychotropic substances, including the
prevention of diversion of precursor chemicals, as well as in promoting drug demand prevention
and reduction. As regards the control of precursor chemicals and other essential substances used
for the illicit production of narcotic drugs and psychotropic substances, this cooperation shall be
on the basis of the standards adopted by the Community and the international authorities
concerned, such as those of the Chemical Action Task Force (CATF). Cooperation in this area
                                                   36
                                                                                                   &'• CC/
 ---pagebreak--- shall be based on mutual consultation and close coordination between the Parties on objectives
and measures to be taken in the various drug-related fields.
                                             ARTICLE 71
                                         Illegal Immigration
1.    The Member States and Turkmenistan agree to cooperate in order to prevent and control
      illegal immigration. To this end:
    Turkmenistan agrees to readmit any of its nationals illegally present on the
    territory of a Member State, upon request by the latter and without further formalities; and
    each Member State agrees to readmit any of its nationals, as defined for community
    purposes, illegally present on the territory of Turkmenistan, upon request by
    the latter and without further formalities.
    The Member States and Turkmenistan will also provide their nationals with
    appropriate identity documents for such purposes.
2.    Turkmenistan, agrees to conclude bilateral agreements with Member States which so
      request, regulating -specific obligations for readmission including an obligation for the
      readmission of nationals of other countries and stateless persons who have arrived on the
      territory of any such Member State from Turkmenistan or who have arrived on the territory
      of Turkmenistan from any such Member State.
3.   The Cooperation Council shall examine what other joint efforts can be made to prevent and
      control illegal immigration.
                                                   37
 ---pagebreak---                                           TITLE IX
                               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.
                                               38
                                                                                          k-U<
 ---pagebreak---                                              TITLE X
                                 FINANCIAL COOPERATION
                                            ARTICLE 73
In order to achieve the objectives of this Agreement and in accordance with Articles 74, 75 and
76 Turkmenistan shall benefit from temporary financial assistance from the Community by way of
technical assistance in the form of grants.
                                            ARTICLE 74
This financial assistance shall be covered within the framework of Tacis as 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 Community and
Turkmenistan, taking into account Turkmenistan'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 organizations such as
the International Bank for Reconstruction and Development and the European Bank for
Reconstruction and Development.
                                                39
 ---pagebreak---                                             TITLE XI
                  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. It shall examine any major issues
arising within the framework of this 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 Parties.
                                          ARTICLE 78
1.   The Cooperation Council shall consist of 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 Turkmenistan, 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 Turkmenistan.
                                          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 the Government of Turkmenistan 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 Turkmenistan.
      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.
                                                40
 ---pagebreak---                                             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 one of the Agreements constituting the WTO, the
Cooperation Council shall take into account to the greatest extent possible the interpretation that
is generally given to the Article in question by the Members of the WTO.
                                            ARTICLE 82
A Parliamentary Cooperation Committee is hereby established. It shall be a forum for Members
of the Turkmen Parliament and the European Parliament to meet and exchange views, including
on matters concerning political dialogue at parliamentary level. It shall meet at intervals which it
shall itself determine.
                                            ARTICLE 83
1.    The Parliamentary Cooperation Committee shall consist of members of the European
      Parliament, on the one hand, and of members of the Turkmen Parliament, on the other.
2.    The Parliamentary Cooperation Committee shall establish its rules of procedure.
3.    The Parliamentary Cooperation Committee shall be presided in turn by the European
      Parliament and the Turkmen 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 Parliamentary Cooperation Committee may make recommendations to the Cooperation
Council.
                                                  41
                                                                                                     U-\ ûy
 ---pagebreak---                                                 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 and competences, the Parties:
 - shall encourage the adoption of arbitration for the settlement of disputes arising out of
     commercial and cooperation transactions concluded by economic operators of the Community
     and those of Turkmenistan;
 - agree that where a dispute is submitted to arbitration, each party to the dispute may, except
     where the rules of the arbitration centre chosen by the parties provide otherwise, choose its
     own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the sole
     arbitrator may be a citizen of a third State;
- will recommend their economic operators to choose by mutual consent the law applicable to
    their contracts;
- shall encourage recourse to the arbitration rules elaborated by the United Nations Commission
    on International Trade Law (Uncitral) and to arbitration by any centre of a State signatory to
    the Convention on Recognition and Enforcement of Foreign Arbitral Awards done at New
    York on 10 lune 1958.
                                               ARTICLE 86
Nothing in this Agreement shall prevent a Party, within the limits of its respective powers and
competences, from taking any measures:
(a) which it considers necessary to prevent the disclosure of information contrary to its essential
        security interests;
(b)      which relate to the production of, or trade in arms, munitions or war materials or to
        research, development or production indispensable for defence purposes, provided that such
       measures do not impair the conditions of competition in respect of products not intended for
       specifically military purposes;
(c)    which it considers essential to its own security in the event of serious internal disturbances
       affecting the maintenance of law and order, in time of war or serious international tension
       constituting threat of war or in order to carry out obligations it has accepted for the purpose
       of maintaining peace and international security;
(d) which it considers necessary to respect its international obligations and commitments in the
       control of dual use industrial goods and technology.
                                                     42
                                                                                                          **.
 ---pagebreak---                                               ARTICLE 87
 1.      In the fields covered by this Agreement and without prejudice to any special provisions
       contained therein:
- the arrangements applied by Turkmenistan 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 Turkmenistan shall
    not give rise to any discrimination between Turkmen nationals, or Turkmen 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 Parties may refer to the Cooperation Council any dispute relating to the
       application or interpretation of this Agreement.
2.     The Cooperation Council may settle the dispute by means of a recommendation.
3.     In the event of it not being possible to settle the dispute in accordance with paragraph 2 of
       this Article, either Party may notify the other of the appointment of a conciliator; the other
       Party must then appoint a second conciliator within two months. For the application of this
       procedure, the Community and the Member States shall be deemed to be one Party to the
       dispute.
The Cooperation Council shall appoint a third conciliator.
The conciliators' recommendations shall be taken by majority vote. Such recommendations shall
not be binding upon the Parties.
                                              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 12, 88
and 94.
                                                     43
 ---pagebreak---                                             ARTICLE 90
Treatment granted to Turkmenistan 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 Turkmenistan 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 Energy Charter Treaty and
Protocols thereto, such Treaty and Protocols shall upon entry into force apply to such matters but
only to the extent that such application is provided for therein.
                                            ARTICLE 93
This Agreement is concluded for an initial period of ten years after which time the Agreement
shall be automatically renewed year by year provided that neither Party gives the other Party
written notice of denunciation of this Agreement six months before it expires.
                                            ARTICLE 94
1.   The Parties shall take any general or specific measures required to fulfil their obligations
      under this Agreement. They shall see to it that the objectives set out in this Agreement are
      attained.
2.    If either Party considers that the other Party has failed to fulfil an obligation under this
      Agreement, it may take appropriate measures. Before so doing, except in cases of special
      urgency, it shall supply the Cooperation Council with all relevant information required for a
      thorough examination of the situation with a view to 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 this Agreement. These measures shall be notified immediately to the Cooperation
Council if the other Party so requests.
                                            ARTICLE 95
Annexes I, II, III, IV and V together with the Protocol shall form an integral part of this
Agreement.
                                                  44
                                                                                                 \0 ,
 ---pagebreak---                                            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 Turkmenistan, on the other, except in areas falling
within Community competence and without prejudice to the obligations of Member States
resulting from this Agreement in areas falling within their competence.
                                           ARTICLE 97
This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing
the European Community, the European Coal and Steel Community and the European Atomic
Energy Community are applied and under the conditions laid down in those Treaties and, on the
other hand, to the territory of Turkmenistan.
                                           ARTICLE 98
The Secretary-General of the Council of the European Union shall be the depositary of this
Agreement.
                                           ARTICLE 99
The original of this Agreement, of which the Danish, Dutch, English, Finnish, French, German,
Greek, Italian, Portuguese, Spanish, Swedish and Turkmen languages are equally authentic, shall
be deposited with the Secretary-General of the Council of the European Union.
                                           ARTICLE 100
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 the first paragraph have been completed.
Upon its entry into force, and as far as relations between Turkmenistan 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.
                                                 45
                                                                                                 4. ^
 ---pagebreak---                                          ARTICLE 101
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 by means of
an Interim Agreement between the Community and Turkmenistan, the Parties agree that, in such
circumstances, the term "date of entry into force of this Agreement" shall mean the date of entry
into force of the Interim Agreement.
                                                46
                                                                                                  M?
 ---pagebreak---                                    List of Documents attached
Annex I      Indicative list of advantages granted by Turkmenistan to the
             Independent States in accordance with Article 7(3).
Annex II      Community reservations in accordance with Article 21(2).
Annex III    Turkmen reservations in accordance with Article 21(4)
Annex IV     Financial services, referred to in Article 24(3).
Annex V      Intellectual, industrial and commercial property conventions referred to in Article
             40.
Protocol on mutual administrative assistance in customs matters.
                                                 47
                                                                                                 C/. ia
 ---pagebreak---                                                                                             ANNEX 1
                   Indicative list of advantages granted by Turkmenistan to
                    the Independent States in accordance with Article 7(3)
 1. Import/export taxation
No import or export duties are levied.
Services such as customs clearance, commissions and other duties levied by the State Customs,
the State Commodity Exchange and the State Tax Inspection are not payable in the case of the
following goods:
• import of grain, baby food, food stuffs which are sold to the population at state controlled
    prices;
• good imported on a contract basis and financed by the Turkmenistan state budget.
2. Conditions of transportation and transit
In respect of the CIS countries which are Parties to the Multilateral Agreement "on the principles
and conditions of relations in the field of transport" and/or on the basis of bilateral agreements on
transportation and transit, no taxes or fees are applied on a reciprocal basis for the transportation
and customs clearing of goods, (including goods in transit) and transit of vehicles.
Vehicles from CIS States are exempted from paying any duties when in transit through the
territory of Turkmenistan.
                                                  48
 ---pagebreak---                                                                             ANNEX n
                    Community reservations in accordance with Article 21(2)
Mining
In some Member States, a concession may be required for mining and mineral rights for
non-Community controlled companies.
Fishing
Access to and use of the biological resources andfishinggrounds 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-Community companies is subject to
restrictions.
Audio-visual services including radio
National treatment concerning production and distribution, including broadcasting and other
forms of transmission to the public, may be reserved to audiovisual works meeting certain origin
criteria.
Telecommunications services including mobile and satellite services
Reserved services
In some Member States market access concerning complementary services and infrastructures is
restricted.
Professional services
Services reserved to natural persons who are nationals of Member States. Under certain
conditions those persons may create companies.
Agriculture
In some Member States national treatment is not applicable to non-Community controlled
companies which wish to undertake an agricultural enterprise. The acquisition of vineyards by
non-Community controlled companies is subject to notification, or, as necessary, authorization.
News agency services
In some Member States limitations exist on foreign participation in publishing companies and
broadcasting companies.
                                                    49
 ---pagebreak---                                                                               ANNEX n i
                Reservations of Turkmenistan in accordance with Article 21(4)
1. Under current Turkmen legislation, a licence in required by companies or natural persons
   wishing to invest in certain economic activities in Turkmenistan. The conditions for the issue
   of such licenses may not result in discrimination between Turkmen and foreign companies.
   Such licensing may therefore not be used in order to nullify the benefits accorded to
   Community companies pursuant to Article 21(4) of this Agreement, nor to circumvent any
   other provisions of this Agreement. In particular it may not be used to impede the
   establishment of Community companies in any area of economic activity, except as provided
   for in paragraph 2 below. No license may be revoked without due justification and any such
   revocation may be subject to appeal and, if necessary, dispute settlement.
2. The following reservations are currently applied:
   Real estate (immovable property) purchase
   Foreign persons and companies are not allowed to acquire plots of land. They may, however,
   lease plots of land on a long term basis.
   Agriculture
   There are limitations for foreigners regarding the breeding of horses and "sardzhin" sheep.
   Historical sites and monuments
   The application of the reservations in paragraph 2 above can in no case result in treatment less
   favourable than that accorded to companies of any third country. Any relaxation of these
   restrictions will be extended to Community companies on the basis of national treatment or
   most-favoured-nation treatment, whichever is the better.
   The future development of investment legislation in Turkmenistan will take place in
   conformity with the provisions and the spirit of this Agreement including in particular its
   General Principles, the conditions affecting the establishment and operation of companies, and
   the provisions regarding legislative cooperation (Titles I, IV and V) as well as the Exchange of
   Letters between the Community and Turkmenistan in Relation to the Establishment of
   Companies.
                                                  50
 ---pagebreak---                                                                                  ANNEX IV
                           Financial services referred to in Article 24(3)
A financial service is any service of a financial nature offered by a financial service provider 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, inter-alia, 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 (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 brokering.
    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 instrument's.
    11. Advisory intermediation and other auxiliary financial services on all the activities
        listed in points 1 to 10 above, including credit reference and analysis, investment
        and portfolio research and advice, advice on acquisitions and on corporate
        restructuring and strategy.
                                                   51
                                                                                                  I' - t i t
 ---pagebreak---      12. Provision and transfer offinancialinformation, and financial data processing and
         related software by providers of other financial services.
The following activities are excluded from the definition of financial services:
(a) Activities carried out by central banks or by any other public institution in pursuit of
    monetary and exchange rate policies.
(b) Activities conducted by central banks, government agencies or departments, or public
    institutions, for the account or with the guarantee of the government, except when those
    activities may be carried out by financial service providers 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 providers in
    competition with public entities or private institutions.
                                                  52
                                                                                                 tj f
 ---pagebreak---                                                                      ANNEX V
                Intellectual, industrial and commercial property conventions
                                    referred to in Article 40
1.    Article 40(2) concerns the following multilateral conventions:
      -       Berne Convention for the Protection of Literary and Artistic Works
              (Paris Act, 1971);
              International Convention for the Protection of Performers, Producers of
              Phonograms and Broadcasting Organizations (Rome, 1961);
      -       Madrid Agreement concerning the International Registration of Marks
              (Stockholm Act, 1967 and amended in 1979);
      -    * 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 and amended
              in 1979);
      -       Budapest Treaty on the International Recognition of the Deposit of
              Micro Organisms for the purposes of Patent Procedures (1977, modified in 1980);
              International Convention for the Protection of New Varieties of Plants
              (UPOV) (Geneva Act, 1991 );
2. The Cooperation Council may recommend that Article 40(2) 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.
3. 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);
      -       Patent Cooperation Treaty (Washington, 1970, amended in 1979 and modified
              in 1984).
4. From the entry into force of this Agreement, Turkmenistan shall grant to Community
   companies and nationals, in respect of the recognition and protection of intellectual,
   industrial and commercial property, treatment no less favourable than that granted by it to
   any third country under bilateral agreements.
5. The provisions of paragraph 4 shall not apply to advantages granted by Turkmenistan to any
   third country on an effective reciprocal basis and to advantages granted by Turkmenistan to
   another country of the former USSR.
                                                53
                                                                                               ^Uj
 ---pagebreak---             PROTOCOL
ON MUTUAL ADMINISTRATIVE ASSISTANCE
       IN CUSTOMS MATTERS
                54
                                    U sLC{
 ---pagebreak---                                             ARTICLE 1
                                             Definitions
For the purposes of this Protocol :
    a) "customs legislation" shall mean any legal or regulatory provisions applicable in the
      territory of the Parties governing the import, export and transit of goods and their placing
      under any customs procedure, including measures of prohibition, restriction and control
      adopted by the said Parties;
   b) "applicant authority",, shall mean a competent administrative authority which has been
      appointed by a Party for this purpose and which makes a request for assistance in customs
      matters;
   c) "requested authority", shall mean a competent administrative authority which has been
      appointed by a Party for this purpose and which receives a request for assistance in customs
      matters;
    d) "personal data", shall mean all information relating to an identified or identifiable
      individual;
    e) "operation in breach of the customs legislation" shall mean any violation or attempted
      violation of customs legislation.
                                             ARTICLE 2
                                                Scope
     The Parties shall assist each other, in the areas within their competence, in the manner and
      under the conditions laid down in this Protocol, to ensure the correct application of customs
      legislation, in particular by preventing, detecting and investigating operations in breach of
      that legislation.
      Assistance in customs matters, as provided for in this Protocol, shall apply to any
      administrative authority of the Parties which is competent for the application of this
      Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters
      Nor shall it cover information obtained under powers exercised at the request of the judicial
      authorities, except where communication of such information is authorised by the said
      authorities.
                                             ARTICLE 3
                                        Assistance on request
     At the request of the applicant authority, the requested authority shall furnish it with all
       relevant information which may enable it to ensure compliance with customs legislation,
       including information regarding operations noted or planned which are or might be in breach
       of such legislation.
                                                  55
                                                                                                 U .u<
 ---pagebreak---       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.
      At the request of the applicant authority, the requested authority shall, within the framework
       of its laws, take the necessary steps to ensure special surveillance of :
     (a) natural or legal persons of whom there are reasonable grounds for believing that they are
       or have been involved in operations in breach of customs legislation;
     (b) places where goods are stored in a way that gives grounds for suspecting that they are
       intended to be used in operations in breach of customs legislation;
     (c) movements of goods notified as possibly giving rise to operations in breach of customs
       legislation;
     (d) means of transport for which there are reasonable grounds for believing that they have
       been, are or may be used in operations in breach of customs legislation.
                                              ARTICLE 4
                                        Spontaneous assistance
The Parties shall provide each other, at their own initiative and 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 are or appear to be in breach of such legislation and which may be of
          interest to another Party;
          new means or methods employed in carrying out such operations;
          goods known to be subject to operations in breach of customs legislation;
          natural or legal persons concerning whom there are reasonable grounds for believing that
          they are or have been involved in operations in breach of customs legislation;
          means of transport concerning which there are reasonable grounds for believing that they
          have been, are or may be used in operations in breach of customs legislation.
                                               ARTICLE 5
                                          Delivery /Notification
At the request of the applicant authority, the requested authority shall, in accordance with its
legislation, take all necessary measures in order :
     - to deliver all documents,
     - to notify all decisions,
falling within the scope of this Protocol to an addressee, residing or established in its territory. In
such a case, Article 6(3) shall apply to the requests for communication or notification.
                                                    56
 ---pagebreak---                                              ARTICLE 6
                          Form and substance of requests for assistance
1.  Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by
     the documents necessary to enable compliance with the request. When required because of
     the urgency of the situation, oral requests may be accepted, but must be confirmed in
     writing immediately.
2. Requests pursuant to paragraph 1 shall include the following information :
   (a)  the applicant authority making the request;
   (b)  the measure requested;
   (c)  the object of and the reason for the request;
   (d)  the laws, rules and other legal elements involved;
   (e)  indications as exact and comprehensive as possible on the natural or legal persons who
        are the target of the investigations;
   (f) a summary of the relevant facts and of the enquiries already carried out, except in cases
        provided for in Article 5.
3.  Requests shall be submitted in an official language of the requested authority or in a language
     acceptable to that authority.
4.  If a request does not meet the formal requirements, its correction or completion may be
     requested; precautionary measures may, however, be ordered.
                                              ARTICLE 7
                                        Execution of requests
1.  In order to comply with a request for assistance, the requested authority shall proceed, within
     the limits of its competence and available resources, as though it were acting on its own
     account or at the request of other authorities of that same Party, by supplying information
     already possessed, by carrying out appropriate enquiries or by arranging for them to be
     carried out. This provision shall also apply to the administrative department to which the
     request has been addressed by the requested authority when the latter cannot act on its own.
2.  Requests for assistance shall be executed in accordance with the laws, rules and other legal
     instruments of the requested Party.
3.  Duly authorized officials of a Party may, with the agreement of the other Party involved and
     subject to the conditions laid down by the latter, obtain from the offices of the requested
     authority or other authority for which the requested authority is responsible, information
     relating to operations which are or may be in breach of customs legislation which the
     applicant authority needs for the purposes of this Protocol.
4.   Officials of a Party may, with the agreement of the other Party involved and subject to the
     conditions laid down by the latter, be present at enquiries carried out in the latter's territory.
                                                  57
                                                                                                     U.u
 ---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.
3.   Original files and documents shall be requested only in cases where certified copies would
     be insufficient. Originals which have been transmitted shall be returned at the earliest
     opportunity.
                                            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
     would:
   (a) be likely to prejudice the sovereignty of Turkmenistan or that of a
        Member State of the European Union which has been asked to provide assistance
        under this Protocol; or
   (b) be likely to prejudice public policy, security or other essential interests, in particular in
        the cases referred to under Article 10 (2); or
   (c) involve currency or tax regulations other than customs legislation; or
   (d) violate an industrial, commercial or professional secret.
2.  Where the applicant authority requests assistance which it would itself be unable to provide if
     so asked, it shall draw attention to that fact in its request. It shall then be left to the
     requested authority to decide how to respond to such a request.
3.  If assistance is refused, the decision and the reasons therefor must be notified to the applicant
     authority without delay.
                                            ARTICLE 10
                             Information exchange and confidentiality
    Any information communicated in whatsoever form pursuant to this Protocol shall be of a
     confidential or restricted nature, depending on the rules applicable in each of the Parties. It
     shall be covered by the obligation of official secrecy and shall enjoy the protection extended
     to similar information under the relevant laws of the Party which received it and the
     corresponding provisions applying to the Community institutions.
    Personal data may be exchanged only where the receiving Party undertakes to protect such
     data in at least an equivalent way to the one applicable to that particular case in the
     supplying Party.
                                                  58
 ---pagebreak---  3.  Information obtained shall be used solely for the purposes of this Protocol. Where one of the
      Parties requests the use of such information for other purposes, it shall ask for the prior
      written consent of the authority which furnished the information. Such use shall then be
      subject to any restrictions laid down by that authority.
4.    Paragraph 3 shall not impede the use of information in any judicial or administrative
      proceedings subsequently instituted for failure to comply with customs legislation. The
      competent authority which supplied that information shall be notified of such use.
 5.  The Parties may, in their records of evidence, reports and testimonies and in proceedings and
      charges brought before the courts, use as evidence information obtained and documents
      consulted in accordance with the provisions of this Protocol.
                                             ARTICLE 11
                                         Experts and witnesses
An official of a requested authority may be authorized to appear, within the limitations of the
authorization granted, as an expert or witness in judicial or administrative proceedings regarding
the matters covered by this Protocol in the jurisdiction of the other Party, and produce such
objects, documents or authenticated copies thereof, as may be needed for the proceedings. The
request for an appearance must indicate specifically on what matters and by virtue of what title or
qualification the officiaf will be questioned.
                                             ARTICLE 12
                                          Assistance expenses
The Parties shall waive all claims on each other for the reimbursement of expenses incurred
pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to
interpreters and translators who are not public service employees.
                                             ARTICLE 13
                                              Application
1.   The application of this Protocol shall be entrusted to the central customs authorities of
      Turkmenistan, on the one hand and to 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 the rules in force in the
      field of data protection. They may recommend to the competent bodies amendments which
      they consider should be made to this Protocol.
2.   The Parties shall consult each other and subsequently keep each other informed of the
      detailed rules of implementation which are adopted in accordance with the provisions of this
      Protocol.
                                                   59
 ---pagebreak---                                             ARTICLE 14
1. Taking into account the respective competences of the European Community and the Member
   States, the provisions of this Protocol shall:
• not affect the obligations of the Contracting Parties under any other international agreement or
   convention;
• be deemed complementary with agreements on mutual assistance which have been or may be
   concluded between individual Member States of the European Union and Turkmenistan; and
• not affect the provisions governing the communication between the competent services of the
   Commission and the customs authorities of the Member States of any information obtained
   under this agreement which could be of interest to the Community.
2. Notwithstanding the provisions of paragraph 1, the provisions of this agreement shall take
   precedence over the provisions of the bilateral agreement on mutual assistance which have
   been or may be concluded between individual Member States of the European Union and
   Turkmenistan insofar as the provisions of the latter are incompatible with those of this
   Protocol.
3. In respect of questions relating to the applicability of this Protocol, the Contracting Parties
   shall consult each other to resolve the matter in the framework of the Cooperation Committee
   established under Article 79 of this Agreement.
                                                  60
 ---pagebreak---                                     JOINT DECLARATION
In applying this Agreement, the parties are aware of the necessity of an adequate protection of
individuals with regard to the processing of personal data and on the free movement of such data.
                                                 61
 ---pagebreak---                                    JOINT DECLARATION
                                IN RELATION TO ARTICLE 5
Should the Parties agree that circumstances warrant meetings at the highest level, such meetings
may be arranged on an ad hoc basis.
                                                62
                                                                                              ^ * LU.
 ---pagebreak---                                      JOINT DECLARATION
                                  CONCERNING ARTICLE 13
Until Turkmenistan accedes to the WTO, the Parties shall hold consultations in the Cooperation
Committee on Turkmenistan's import tariff policies, including changes in tariff protection. In
particular, such consultations shall be offered prior to the increase of tariff protection.
                                                  63
                                                                                            U, \.LJ
 ---pagebreak---                                     JOINT DECLARATION
                      CONCERNING THE NOTION OF "CONTROL"
                            IN ARTICLE 23(b) AND ARTICLE 34
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.  The Parties consider the criteria in paragraph 2 to be non-exhaustive.
                                                  64
 ---pagebreak---                                      JOINT DECLARATION
                                   CONCERNING ARTICLE 33
The sole fact of requiring a visa for natural persons of certain Parties and not for those of others
shall not be regarded as nullifying or impairing benefits under a specific commitment.
                                                  65
 ---pagebreak---                                       JOINT DECLARATION
                                    CONCERNING ARTICLE 40
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.
                                                  66
 ---pagebreak---                                      JOINT DECLARATION
                                  CONCERNING ARTICLE 94
1.  The Parties agree, for the purpose of its correct interpretation and its practical application,
     that the term "cases of special urgency" included in Article 94 of the Agreement means
     cases of material breach of the Agreement by one of the Parties. A material breach of the
     Agreement consists in
   (a) repudiation of the Agreement not sanctioned by the general rules of international law
   or
   (b) violation of the essential elements of the Agreement set out in Article 2.
2.   The parties agree that the "appropriate measures" referred to in Article 94 are measures
     taken in accordance with international law. If a party takes a measure in a case of special
     urgency as provided for under Article 94, the other party may avail itself of the procedure
     relating to settlement of dispute.
                                                  67
                                                                                                    <^y
 ---pagebreak---              EXCHANGE OF LETTERS
           BETWEEN THE COMMUNITY
               AND TURKMENISTAN
IN RELATION TO THE ESTABLISHMENT OF COMPANIES
                       68
 ---pagebreak--- A. Letter from the Government of Turkmenistan
Dear Sir,
I refer to the Partnership and Cooperation Agreement initialled on
As I Underlined during the negotiations, Turkmenistan grants to Community companies
establishing and operating in Turkmenistan in certain respects a privileged treatment. I explained
that this reflects the Turkmen policy to promote by all means the establishment of Community
companies in Turkmenistan.
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,
Turkmenistan shall not adopt measures or regulations which would introduce or worsen
discrimination of Community companies vis-à-vis Turkmen 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 would acknowledge receipt of this letter.
Please accept, Sir, the assurance of my highest consideration.
                                                              For the Government of Turkmenistan
                                                  69
 ---pagebreak--- B. Letter from the European Community
Dear Sir,
Thank you for your letter of today's date, which reads as follows:
"I refer to the Partnership and Cooperation Agreement initialled on
As I underlined during the negotiations, Turkmenistan grants to Community companies
establishing and operating in Turkmenistan in certain respects a privileged treatment. I explained
that this reflects the Turkmen policy to promote by all means the establishment of Community
companies in Turkmenistan.
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,
Turkmenistan shall not adopt measures or regulations which would introduce or worsen
discrimination of Community companies vis-à-vis Turkmen 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 would acknowledge receipt of this letter."
I acknowledge receipt of the letter.
Please accept, Sir, the assurance of my highest consideration.
                                                              On behalf of the European Community
                                                  70
                                                                                                    LC|
 ---pagebreak---                                         DECLARATION
                             BY THE FRENCH GOVERNMENT
The French Republic notes that the Partnership and Cooperation Agreement with Turkmenistan
does not apply to the overseas countries and territories associated with the European Community
pursuant to the Treaty establishing the European Community.
                                                71
 ---pagebreak---                        Declaration bv the Council and Commission
                                    (for the minutes)
The Council and Commission confirm that the definition of "personal data" contained in
Article 1 of the Customs Protocol does not constitute an obligation to transmit all personal
data.
                                           "-) L
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 693 final
                                              DOCUMENTS
EN                                                                06  10 11
                                    Catalogue number : CB-C0-97-716-EN-C
                                                             ISBN 92-78-29160-9
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                                  Is