This law is an agreement establishing an association between the European Communities and their Member States, and the Republic of Bulgaria

21994A1231(24) 21994A1231(24) Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Bulgaria, of the other part - Protocol 1 on textile and clothing products - Protocol 2 on ECSC products - Protocol 3 on trade between Bulgaria and the Community in processed agricultural products not covered by Annex II to the EEC Treaty - Protocol 4 concerning the definition of the concept of originating products and methods of administrative cooperation - Protocol 5 on specific provisions relating to trade between Bulgaria, of the one part, and Spain and Portugal, of the other part - Protocol 6 on mutual assistance in customs matters - Protocol 7 on concessions with annual limits - Protocol 8 on transboundary watercourses - Final Act

German ; Greek ; English ; French ; Italian ; Dutch ; Portuguese ;

Other than Community language ; Bulgarian Author:

EUROPEAN ECONOMIC COMMUNITY ; European Coal and Steel Community ;

European Atomic Energy Community ; The 12 Member States ; Belgium ;

Denmark ; Federal Republic of Germany ; Greece ; Spain ; France ;

Ireland ; Italy ; Luxembourg ; Netherlands ; Portugal ; United Kingdom ; Bulgaria Subject matter: External relations ; Association Directory code: 11401030 EUROVOC descriptor: EC association agreement ; Bulgaria ; economic cooperation ; trade cooperation ; European integration ; trade agreement Legal basis:

151K095................... Adoption 157A101-L2................ Adoption 192E228-P2F2.............. Adoption 192E228-P3L2.............. Adoption 192E238................... Adoption Instruments cited:

157E042...................

157E043...................

157E085...................

157E086...................

157E092-P3LA..............

157E092...................

362R0026..................

475A3490..................

383R3420..................

389R3906..................

290A1023(02)..............

390D0233..................

390D0685..................

391R3687..................

293A0216(02)..............

Amendment to:

290A1023(02)...... Amendment..... Replacement from 01/02/1995 Amended by:

Completed by.. 294A0129(06)...... Completion from 01/02/1994 Amended by.... 294A0129(06)...... Amendment from 01/02/1994 Completed by.. 294A0517(05)...... DP31/12/93 Amended by.... 294A0712(01)...... Amendment from 01/07/1994 Corrected by.. 294A1231(24)R(01).

Completed by.. 294A1231(25)...... Completion Completed by.. 294A1231(26)...... Completion Completed by.. 294A1231(27)...... Completion Completed by.. 294A1231(28)...... Completion Completed by.. 294A1231(29)...... Completion Completed by.. 294A1231(38)...... Completion from 01/01/1995 Amended by.... 294A1231(38)...... Amendment ANN.III from 01/01/1995 Amended by.... 294A1231(38)...... Amendment PROT 1 ART.2.1 from 01/01/1995 Amended by.... 294A1231(38)...... Replacement ART.10.3 from 01/01/1995 Adopted by.... 394D0908.......... DP19/12/94 Completed by.. 295A1230(02)......

Completed by.. 296A0426(01)...... Completion Amended by.... 296A0426(01)...... Completion ART.11.3 Amended by.... 296A0426(01)...... Amendment PROT 1 ART.2.1 Amended by.... 297A0520(01)...... Completion from 31/12/1993 Amended by.... 297D0524(01)...... Replacement PROT 4 from 01/01/1997 Implemented by 298D0121(01)...... Implementation ART 64.1 PT I. from 07/10/1997 Implemented by 298D0121(01)...... Implementation ART 64.1 PT II. from 07/10/1997 Implemented by 298D0121(01)...... Implementation PROT 2 ART 9.1 from 07/10/1997 Repealed by... 299A0429(01)...... Repeal ANN 10 Repealed by... 299A0429(01)...... Repeal ANN 13A Repealed by... 299A0429(01)...... Repeal ANN 13B Repealed by... 299A0429(01)...... Repeal ANN 14A Repealed by... 299A0429(01)...... Repeal ANN 14B Repealed by... 299A0429(01)...... Repeal ART.18 Repealed by... 299A0429(01)...... Repeal ART.21.4 Amended by.... 299A0429(01)...... Addition ANN 17 Amended by.... 299A0429(01)...... Replacement ANN 11A Amended by.... 299A0429(01)...... Replacement ANN 11B Amended by.... 299A0429(01)...... Replacement ANN 12A Amended by.... 299A0429(01)...... Replacement ANN 12B Amended by.... 299A0429(01)...... Replacement ART.19.2 Amended by.... 299A0429(01)...... Replacement ART.21.2 Amended by.... 299A0429(01)...... Replacement ART.21.3 Amended by.... 299A0429(01)...... Replacement ART.9.1 Amended by.... 299A0429(01)...... Replacement PROT 3 TXT Amended by.... 299D0212(01)...... Completion PROT 4 ANN 1 from 01/01/1999 Amended by.... 299D0212(01)...... Completion PROT 4 ANN 2 from 01/01/1999 Amended by.... 299D0212(01)...... Addition PROT 4 ANN 5 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.13 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.14 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.15 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.17 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.21 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.26.1 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.27 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.30 from 01/01/1999 Amended by.... 299D0212(01)...... Amendment PROT 4 ART.32 from 01/01/1999 Amended by.... 299D0212(01)...... Replacement DATE PROT 4 ART.15.6 Amended by.... 299D0212(01)...... Replacement PROT 4 ART.1.I from 01/01/1999 Amended by.... 299D0212(01)...... Replacement PROT 4 ART.12 from 01/01/1999 Amended by.... 299D0212(01)...... Replacement PROT 4 ART.3 from

01/01/1999 Amended by.... 299D0212(01)...... Replacement PROT 4 ART.4 from 01/01/1999 Amended by.... 200D0114(02)...... Amendment PROT 4 ANN 2 from 01/01/2000 Amended by.... 200D0114(02)...... Amendment PROT 4 ART.21 from 01/01/2000 Amended by.... 200D0114(02)...... Amendment PROT 4 ART.26 from 01/01/2000 Amended by.... 200D0114(02)...... Replacement PROT 4 ART.30 from 01/01/2000 Amended by.... 300R2290.......... Replacement ANN 10 from 20/10/2000 Amended by.... 201D0359.......... Amendment PROT4ART22 from 01/01/2001 Amended by.... 201D0359.......... Addition PROT4ART20BI from 01/01/2001 Amended by.... 201D0359.......... Extended validity PROT4ART15.6 till 31/12/2001 Amended by.... 201D0359.......... Replacement PROT4ART30 from 01/01/2001 Amended by.... 201D0359.......... Amendment PROT4ANN2 from 01/01/2001 Amended by.... 201D0359.......... Replacement PROT4ART1PTI from 01/01/2001 Amended by.... 201D0359.......... Replacement PROT4ART15.6 from 01/01/2001 Amended by.... 201D0359.......... Replacement PROT4ART7 from 01/01/2001 Implemented by 201D0620.......... Implementation ART 64.1 from 01/06/2001 Implemented by 201D0620.......... Implementation ART 64.2 from 01/06/2001 Implemented by 201D0620.......... Implementation PROT 2 ART 9.1 from 01/06/2001 Implemented by 201D0620.......... Implementation PROT 2 ART 9.2 from 01/06/2001 Amended by.... 203A0424(02)...... Amendment ANN 10 from 01/06/2003 Amended by.... 203A0424(02)...... Amendment ANN 11 from 01/06/2003 Amended by.... 203A0424(02)...... Addition PROT from 01/06/2003 Amended by.... 203D0049.......... Replacement PROT 3 ANN 1 from 01/09/2002 Amended by.... 203D0049.......... Replacement PROT 3 ANN 2 from 01/09/2002 Amended by.... 203D0528.......... Replacement PROT 4 from 01/01/2002 Affected by case:

A45P1........: Interpreted by.......................... 699J0235 A59P1........: Interpreted by.......................... 699J0235 Subsequent related instruments:

Relation...... 399Y0331(01)......

Amendment proposed by 501PC0368.........

Relation...... 202A1212(01)......

EUROPE AGREEMENT establishing an association between the European Communities and their Member States, of the one part, and the Republic of Bulgaria, of the other part THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE PORTUGUESE REPUBLIC, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Contracting Parties to the Treaty establishing the EUROPEAN ECONOMIC 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 ECONOMIC 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 REPUBLIC OF BULGARIA, hereinafter referred to as 'Bulgaria', of the other part, CONSIDERING the importance of the traditional links existing between the Community, its Member States and Bulgaria and the common values that they share, RECOGNIZING that the Community and Bulgaria wish to strengthen these links and to establish close and long lasting relations, based on mutual interest and reciprocity, which would allow Bulgaria to take part in the process of European integration, thus strengthening and widening the relations established in the past notably by the Agreement on Trade and Commercial and Economic Cooperation, signed on 8 May 1990, CONSIDERING the opportunities for a relationship of a new quality offered by the emergence of a new democracy in Bulgaria, CONSIDERING the commitment of the Community and its Member States and of Bulgaria to strengthening the political and economic freedoms which constitute the very basis of the association, RECOGNIZING the fundamental character of the democratic changes in Bulgaria, taking place in a peaceful manner and aimed at building a new political and economic system, based on the rule of law and human rights, political pluralism, and a pluralist multi-party system involving free and democratic elections and the creation of the legislative and economic conditions, necessary for the development of a market economy, as well as the need to continue and complete that process with the assistance of the Community, CONSIDERING the firm commitment of the Community and its Member States and of Bulgaria to the rule of law and human rights, including those of persons belonging to minorities, and to the full

implementation of all other principles and provisons contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the concluding documents of Vienna and Madrid, the Charter of Paris for a new Europe, as well as to the principles and provisions of the European Energy Charter, WILLING to promote improved contacts among their citizens as well as the free flow of information and ideas, as agreed by the Parties in the framework of the CSCE, CONSCIOUS of the importance of this Agreement to establishing and enhancing in Europe a system of stability based on cooperation, with the Community as one of the cornerstones, BELIEVING that a link should be made between full implementation of association, on the one hand, and continuation of the actual accomplishment of Bulgaria's political, economic and legal reforms on the other hand, as well as the introduction of the factors necessary for cooperation and the actual rapprochement between the Parties' systems, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of establishing regular political dialogue on bilateral and international issues of mutual interest to enhance and complete the association, TAKING ACCOUNT of the Community's willingness to provide decisive support for the completion of the transition towards a market economy in Bulgaria and to help Bulgaria cope with the economic and social consequences of structural readjustment, TAKING ACCOUNT furthermore of the Community's willingness to set up instruments of cooperation and economic, technical and financial assistance on a global and multiannual basis, CONSIDERING the commitment of the Community and Bulgaria to free trade, and in particular in respect of the General Agreement on Tariffs and Trade principles, BEARING in mind the economic and social disparities between the Community and Bulgaria and thus recognizing that the objectives of this association should be reached through appropriate provisions of this Agreement, CONVINCED that this Agreement will create a new climate for their economic relations and in particular for the development of trade and investment, instruments which are indispensable for economic restructuring and technological modernization of the Bulgarian economy, DESIROUS of establishing cultural cooperation and developing exchanges of information, RECOGNIZING the fact that Bulgaria's ultimate objective is to become a member of the Community, and that this association, in the view of the Parties, will help Bulgaria to achieve this objective,

HAVE DECIDED to conclude this Agreement and to this end have designated as their plenipotentiaries, THE KINGDOM OF BELGIUM:

Robert URBAIN, Minister for Foreign Trade and European Affairs;

THE KINGDOM OF DENMARK:

JŲrgen ŲSTRŲM MŲLLER, State Secretary for Foreign Affairs;

THE FEDERAL REPUBLIC OF GERMANY:

Klaus KINKEL, Federal Minister for Foreign Affairs;

THE HELLENIC REPUBLIC:

Michel PAPACONSTANTINOU, Minister for Foreign Affairs;

THE KINGDOM OF SPAIN:

Javier SOLANA, Minister for Foreign Affairs;

THE FRENCH REPUBLIC:

Elisabeth GUIGOU, Minister responsible for European Affairs;

IRELAND:

Dick SPRING, Minister for Foreign Affairs;

THE ITALIAN REPUBLIC:

Valdo SPINI, State Secretary for Foreign Affairs;

THE GRAND DUCHY OF LUXEMBOURG:

Jacques POOS, Minister for Foreign Affairs;

THE KINGDOM OF THE NETHERLANDS:

P. KOOIJMANS, Minister for Foreign Affairs;

THE PORTUGUESE REPUBLIC:

J. M. DURAO BARROSO, Minister for Foreign Affairs;

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND:

Douglas HURD, Secretary of State for Foreign and Commonwealth Affairs;

THE EUROPEAN ECONOMIC COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY AND THE EUROPEAN COAL AND STEEL COMMUNITY:

Niels HELVEG PETERSEN, Minister for Foreign Affairs of the Kingdom of Denmark, President-in-Office of the Council of the European Communities;

Sir Leon BRITTAN, Member of the Commission of the European Communities;

Hans VAN DEN BROEK, Member of the Commission of the European Communities;

THE REPUBLIC OF BULGARIA:

Luben BEROV, Prime Minister and Minister for Foreign Affairs;

WHO, having exchanged their full powers, formed in good and due form, HAVE AGREED AS FOLLOWS:

Article 11. An association is hereby established between the Community and

its Member States on the one part, and Bulgaria on the other part.

TITLE I POLITICAL DIALOGUE

Article 2A 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 Bulgaria, support the political and economic changes underway in that country and contribute to the establishment of new links of solidarity and new forms of cooperation. The political dialogue and cooperation, based on shared values and aspirations:

The economic rapprochement provided for in this Agreement will lead to greater political convergence,

Article 31. Meetings as appropriate shall take place between the President of

the European Council and the President of the Commission of the European Communities on one side and the President of the Republic of Bulgaria on the other.

Article 4Other procedures and mechanisms for political dialogue shall be set

up by the Parties, and in particular in the following forms:

Article 5Political dialogue at parliamentary level shall take place within

the framework of the Parliamentary Association Committee.

TITLE II GENERAL PRINCIPLES

Article 6Respect for the democratic principles and human rights established

by the Helsinki Final Act and the Charter of Paris for a New Europe inspires the domestic and external policies of the Parties and constitutes an essential element of the present association.

Article 71. The association includes a transitional period of a maximum

duration of 10 years divided into two successive stages, each in principle lasting five years. The first stage shall begin when the Agreement enters into force.

TITLE III FREE MOVEMENT OF GOODS

Article 81. The Community and Bulgaria shall gradually establish a free trade

area in a transitional period lasting a maximum of 10 years starting from the entry into force of this Agreement, in accordance with the provisons of this Agreement and in conformity with those of the General Agreement on Tariffs and Trade (GATT).

CHAPTER I Industrial products

Article 91. The provisions of this chapter shall apply to products

originating in the Community and in Bulgaria listed in Chapters 25 to 97 of the combined nomenclature and of the Bulgarian Customs Tariff with the exception of the products listed in Annex I.

Article 101. Customs duties on imports applicable in the Community to products

originating in Bulgaria other than those listed in Annexes IIa, IIb and III shall be abolished on the entry into force of the Agreement.

Customs duties on imports applicable in the Community to products originating in Bulgaria listed in Annex IIb shall be progressively reduced, from the date of entry into force of the Agreement, by annual reductions of 20 % of the basic duty so as to arrive at total abolition by the end of the fourth year after the date of entry into force of the Agreement.

At the same time, the customs duties on imports to be applied to import quantities when the quotas have been exhausted or when the levying of customs duties has been reintroduced with respect to products covered by a tariff ceiling, shall be progressively dismantled from the entry into force of the Agreement by annual reductions of 15 % of the basic duty. By the end of the fifth year, remaining duties shall be abolished.

Article 111. Customs duties on imports applicable in Bulgaria to products

originating in the Community which are listed in Annex IV shall be abolished on the date of entry into force of the Agreement.

Article 12The provisions concerning the abolition of customs duties on imports

shall also apply to customs duties of a fiscal nature.

Article 131. The Community shall abolish in its imports from Bulgaria any

charges having an effect equivalent to customs duties on imports upon the entry into force of the Agreement.

Article 141. The Community and Bulgaria shall progressively abolish between

them at the latest by the end of the fifth year after entry into force of the Agreement any customs duties on exports and charges having equivalent effect.

Article 15Each Party declares its readiness to reduce its customs duties in

trade with the other Party more rapidly than is provided for in Articles 10 and 11 of its general economic situation and the situation of the economic sector concerned so permit.

The Association Council may make recommendations to this effect.

Article 16Protocol 1 lays down the arrangements applicable to the textile

products referred to therein.

Article 17Protocol 2 lays down the arrangements applicable to products covered

by the Treaty establishing the European Coal and Steel Community.

Article 181. The provisions of this chapter do not preclude the retention by

the Community of an agricultural component in the duties applicable to products listed in Annex X in respect of products originating in Bulgaria.

CHAPTER II Agriculture

Article 191. The provisions of this chapter shall apply to agricultural

products originating in the Community and in Bulgaria.

Article 20Protocol 3 lays down the trade arrangements for processed

agricultural products which are listed in such protocol.

Article 211. The Community shall abolish at the date of entry into force of

the Agreement the quantitative restrictions on imports of agricultural products originating in Bulgaria maintained by virtue of Council Regulation (EEC) No 3420/83 in the form existing on the date of signature hereof.

Agricultural products originating in the Community listed in Annex XIIb shall be subject to the quantitative restrictions set out in that Annex.

Article 22Notwithstanding other provisons of this Agreement, and in particular

Article 31, if, given the particular sensitivity of the agricultural markets, imports of products originating in one Party, which are the subject of concessions granted in Article 21, cause serious disturbance to the markets in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such a solution, the Party concerned may take the measures it deems necessary.

CHAPTER III Fisheries

Article 23The provisions of this chapter shall apply to fishery products

originating in the Community and in Bulgaria, which are covered by Regulation (EEC) No 3687/91.

Article 24The provisions of Article 21 (5) shall apply mutatis mutandis to

fishery products.

CHAPTER IV Common provisions

Article 25

The provisions of this chapter shall apply to trade in all products, except where otherwise provided herein or in Protocols 1, 2 or 3.

Article 261. No new customs duties on imports or exports or charges having

equivalent effect shall be introduced, nor shall those already applied be increased, in the trade between the Community and Bulgaria from the date of entry into force of the Agreement.

Article 271. The two Parties shall refrain from any measure or practice of an

internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

Article 281. This Agreement shall not preclude the maintenance or

establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.

Article 29Exceptional measures of limited duration which derogate from the

provisions of Articles 11 and 26 (1) may be taken by Bulgaria in the form of increased customs duties.

These measures may only concern infant industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly where these difficulties produce important social problems.

Customs duties on imports applicable in Bulgaria to products originating in the Community introduced by these measures may not exceed 25 % ad valorem and shall maintain an element of preference for products originating in the Community. The total value of imports of the products which are subject to these measures may not exceed 15 % of total imports from the Community of industrial products as defined in Chapter I, during the last year for which statistics are available.

These measures shall be applied for a period not exceeding five years, unless a longer duration is authorized by the Association Council. They shall cease to apply at the latest at the expiration of the transitional period.

No such measures can be introduced in respect of a product if more than three years have elapsed since the elimination of all duties and quantitative restrictions or charges or measures having an equivalent effect concerning that product.

Bulgaria shall inform the Association Council of any exceptional measures it intends to take and, at the request of the Community, consultations shall be held in the Association Council on such measures and the sectors to which they apply before they are applied. When taking such measures, Bulgaria shall provide the Association Council with a schedule for the elimination of the customs duties introduced under this Article. This schedule shall provide for a phasing out of these duties starting at the latest two years after their introduction at equal annual rates. The Association Council may decide on a different schedule.

Article 30If one of the Parties finds that dumping is taking place in trade

with the other Party within the meaning of Article VI of the General Agreement on Tariffs and Trade, it may take appropriate measures against this practice in accordance with the Agreement relating to the application of Article VI of the General Agreement on Tariffs and Trade, with related internal legislation and with the conditions and procedures laid down in Article 34.

Article 31Where any product is being imported in such increased quantities and

under such conditions as to cause, or threaten to cause:

Article 32Where compliance with the provisions of Articles 14 and 26 leads to:

(i) re-export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties or measures having equivalent effect; or (ii) a serious shortage, or threat thereof, of a product essential to the exporting Party, and where the situations above referred to give rise, or are likely to give rise, to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 34. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.

Article 33The Member States and Bulgaria shall progressively adjust any State

monopolies of a commercial character so as to ensure that, by the end of the fifth year following the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of Bulgaria. The Association Council will be informed of the measures adopted to implement this objective.

Article 341. In the event of the Community or Bulgaria subjecting imports of

products liable to give rise to the difficulties referred to in Article 31 to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.

In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement.

The safeguard measures shall be notified immediately to the Association Council and shall be the subject of periodic consulations within that body, particularly with a view to establishing a timetable for their abolitions as soon as circumstances permit.

If the Association Council or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures must not exceed the scope of what is necessary to remedy the difficulties which have arisen. (b) As regards Article 30, the Association Council shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. When no end has been put to the dumping or no other satisfactory solution has been reached within 30 days of the matter being referred to the Association Council, the importing Party may adopt the appropriate measures. (c) As regards Article 32, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Association Council.

The Association Council may take any decision needed to put an end to the difficulties. If it has not taken such a decision within 30 days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned. (d) Where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Bulgaria, whichever is concerned, may, in the situations specified in Articles 30, 31 and 32, apply forthwith the precautionary and provisional measures strictly necessary to deal with the situation, and the Association Council will be informed immediately.

Article 35Protocol 4 lays down rules of origin for the application of tariff

preferences foreseen in this Agreement.

Article 36This 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 the exhaustible 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 37Protocol 5 lays down the specific provisions to apply to trade

between Bulgaria of the one part and Spain and Portugal of the other part.

TITLE IV MOVEMENT OF WORKERS, ESTABLISHMENT, SUPPLY OF SERVICES

CHAPTER I Movement of workers

Article 381. Subject to the conditions and modalities applicable in each

Member State:

Article 391. With a view to coordinating social security systems for workers

of Bulgarian nationality, legally employed in the territory of a Member State and for the members of their family, legally resident there, and subject to the conditions and modalities applicable in each Member State,

Article 401. The Association Council shall by decision adopt the appropriate

provisions to implement the objective set out in Article 39.

Article 41The provisions adopted by the Association Council in accordance with

Article 40 shall not affect any rights or obligations arising from bilateral Agreements linking Bulgaria and the Member States where those Agreements provide for more favourable treatment of nationals of Bulgaria or of the Member States.

Article 421. Taking into account the labour market situation in the Member

State, subject to its legislation and to the respect of rules in force in that Member State in the area of mobility of workers,

Article 43During the second stage referred to in Article 7, or earlier if so

decided, the Association Council shall examine further ways of improving the movement of workers, taking into account inter alia the social and economic situation in Bulgaria and the employment situation in the Community. The Association Council shall make recommendations to such end.

Article 44In the interest of facilitating the restructuring of labour

resources resulting from the economic restructuring in Bulgaria, the Community shall provide technical assistance for the establishment of a suitable social security system in Bulgaria as set out in

Article 89

CHAPTER II Establishment

Article 451. Each Member State shall grant, from entry into force of the

Agreement, for the establishment of Bulgarian companies and nationals and for the operation of Bulgarian companies and nationals established in its territory, a treatment no less favourable than that accorded to its own companies and nationals, save for matters referred to in Annex XVa.

Following the expiration of the transitional period referred to in paragraph 2 (i), the Association Council may exceptionally, upon request by Bulgaria, and if the necessity arises, decide to prolong the duration of exclusion of certain areas or matters listed in Annexes XVb and XVc for a limited period of time.

Article 461. Subject to the provisions of Article 45 with the exception of

financial services described in Annex XVb, each Party may regulate the establishment and operation of companies and nationals on its territory, in so far as these regulations do not discriminate against companies and nationals of the other Party in comparison to its own companies and nationals.

Article 47In order to make it easier for Community nationals and Bulgarian

nationals to take up and pursue regulated professional activities in Bulgaria and the Community respectively, the Association Council shall examine which steps are necessary to be taken to provide for the mutual recognition of qualifications. It may take all necessary measures to that end.

Article 48The provisions of Article 46 do not preclude the application by a

Party of particular rules concerning the establishment and operation in its territory of branches and agencies of companies of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches and agencies as compared to branches and agencies of companies incorporated in its territory, or, as regards financial services, for prudential reasons. The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences, or, as regards financial services, described in Annex XVb, for prudential reasons.

Article 491. A 'Community company' and a 'Bulgarian company' respectively

shall, for the purpose of this Agreement, mean a company or a firm set up in accordance with the laws of a Member State or of Bulgaria respectively and having its registered office, central administration, or principle place of business in the territory of the Community or Bulgaria respectively. However, should the company or firm, set up in accordance with the laws of a Member State or of Bulgaria respectively, have only its registered office in the territory of the Community or Bulgaria respectively, its operations must possess a real and continuous link with the economy of one of the Member States or Bulgaria respectively.

Article 50For the purpose of this Agreement 'financial services' shall mean

those activities described in Annex XVb. The Association Council may extend or modify the scope of Annex XVb.

Article 51During the first five years following the date of entry into force

of this Agreement, or for the sectors referred to in Annex XVb and XVc during the transitional period referred to in Article 7, Bulgaria may introduce measures which derogate from the provisions of this chapter as regards the establishment of Community companies and nationals if certain industries:

Such measures: (i) shall cease to apply at the latest two years after the expiraton of the fifth year following the date of entry into force of this Agreement; and (ii) shall be reasonable and necessary in order to remedy the situation; and (iii) shall only relate to establishments in Bulgaria to be created after the entry into force of such measures and shall not introduce discrimination concerning the operations of Community companies or nationals already established in Bulgaria at the time of introduction of a given measure compared to Bulgarian companies or nationals.

The Association Council may exceptionally, upon request by Bulgaria, and if the necessity arises, decide to prolong the period referred to in indent (i) for a given sector for a limited period of time not exceeding the duration of the transitional period referred to in

Article 7While devising and applying such measures, Bulgaria shall grant

whenever possible to Community companies and nationals a preferential treatment, and in no case a treatment less favourable than that accorded to companies or nationals from any third country.

Prior to the introduction of these measures, Bulgaria shall consult the Association Council and shall not put them into effect before a one month period following the notification to the Association Council of the concrete measures to be introduced by Bulgaria, except where the threat of irreparable damage requires the taking of urgent measures in which case Bulgaria shall consult the Association Council immediately after their introduction.

Upon the expiration of the fifth year following the entry into force of the Agreement, or for the sectors referred to in Annexes XVb and XVc upon expiration of the transitional period referred to in Article 7, Bulgaria may introduce such measures only with the authorization of the Association Council and under conditions determined by the latter.

Article 521. The provisions of this chapter shall not apply to air transport

services, inland-waterways transport services and maritime cabotage transport services.

Article 531. Notwithstanding the provisions of Chapter I of this title, the

beneficiaries of the rights of establishment granted by Bulgaria and the Community respectively shall be entitled to employ, or have employed by one of their subsidiaries, in accordance with the legislation in force in the host country of establishment, in the territory of Bulgaria and the Community respectively, employees who are nationals of Community Member States and Bulgaria respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by such beneficiaries or their subsidiaries. The residence and work permits of such employees shall only cover the period of such employment.

These may include, but are not limited to, members of accredited professions.

Each such employee must have been employed by the organization concerned for at least one year preceding the detachment by the organization.

Article 541. The provisions of this chapter shall be applied subject to

limitations justified on grounds of public policy, public security or public health.

Article 55Companies which are controlled and exclusively owned jointly by

Bulgarian companies or nationals and Community companies or nationals shall also be beneficiaries of the provisions of this chapter and Chapter III of this title.

CHAPTER III Supply of services between the Community and Bulgaria

Article 561. 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 Bulgarian companies or nationals who are established in a Party other than that of the person for whom the services are intended taking into account the development of the services sectors in the Parties.

Article 57With regard to supply of transport services between the Community

and Bulgaria, the following replaces the provisions of Article 56:

Non-conference liners will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis. (b) The Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade.

Article 58The provisions of Article 54 shall apply to the matters covered by

this chapter.

CHAPTER IV General provisions

Article 591. For the purpose of Title IV, nothing in the Agreement shall

prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement. The above provision does not prejudice the application of Article 54.

Pending Bulgaria's accession to a future GATS Agreement, and without prejudice to any decisions the Association Council may take, (i) the Community shall grant to Bulgarian companies and nationals a treatment no less favourable than that accorded under the provisions of a future GATS Agreement to companies and nationals of other members of that Agreement; (ii) Bulgaria shall grant Community companies and nationals a treatment no less favourable than that accorded by Bulgaria to companies and nationals from any third country.

TITLE V PAYMENTS, CAPITAL, COMPETITION AND OTHER ECONOMIC

PROVISIONS, APPROXIMATION OF LAWS

CHAPTER I Current payments and movement of capital

Article 60

The Parties undertake to authorize, in freely convertible currency, any payments on the current account of balance of payments to the extent that the transactions underlying the payments concern movements of goods, services, or persons between the Parties which have been liberalized pursuant to this Agreement.

Article 611. With regard to transactions on the capital account of balance of

payments, from entry into force of the Agreement, the Member States and Bulgaria respectively shall ensure 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 to the provisions of Chapter II of Title IV, and the liquidation or repatriation of these investments and of any profit stemming therefrom.

Notwithstanding the above provision, such free movement, liquidation and repatriation shall be ensured by the end of the first stage referred to in Article 7 for all investments linked to establishment of Community nationals establishing in Bulgaria as self-employed persons pursuant to Chapter II of Title IV.

Article 621. During the five years following the date of entry into force of

the Agreement, the Parties shall take measures permitting the creation of the necessary conditions for the further gradual application of Community rules on the free movement of capital.

Article 63With reference to the provisions of this chapter, and

notwithstanding the provisions of Article 65, until a full convertibility of Bulgarian currency in the meaning of Article VIII of the International Monetary Fund (IMF) is introduced, Bulgaria may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term credits to the extent that such restrictions are imposed on Bulgaria for the granting of such credits and are permitted according to Bulgaria's status under the IMF.

Bulgaria 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. Bulgaria shall inform the Association Council promptly of the introduction of such measures and of any changes therein.

CHAPTER II Competition and other economic provisions

Article 641. The following are incompatible with the proper functioning of

this Agreement, in so far as they may affect trade between the Community and Bulgaria: (i) all Agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition; (ii) abuse by one or more undertakings of a dominant position in the territories of the Community or of Bulgaria as a whole or in a substantial part thereof; (iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

Title III:

In the case of practices incompatible with paragraph 1 (iii) of this Article, such appropriate measures may, where the General Agreement on Tariffs and Trade applies thereto, only be adopted in conformity with the procedures and under the conditions laid down by the General Agreement on Tariffs and Trade and any other relevant instrument negotiated under its auspices which are applicable between the Parties.

Article 651. The Parties shall endeavour to avoid the imposition of

restrictive measures including measures relating to imports for balance of payments purposes. In the event of their introduction, the Party having introduced the same shall present to the other Party a time schedule for their removal.

Article 66With regard to public undertakings and undertakings to which special

or exclusive rights have been granted, the Association Council shall ensure that, as from the third year from the date of entry into force of the Agreement, the principles of the Treaty establishing the European Economic Community, notably Article 90, and the principles of the concluding document of the April 1990 Bonn meeting of the Conference on Security and Cooperation in Europe (notably entrepreneurs' freedom of decision) are upheld.

Article 671. Bulgaria shall continue to improve the protection of

intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement, for a level of protection similar to that existing in the Community, including comparable means of enforcing such rights.

Article 681. The Parties consider the opening up of the award of public

contracts on the basis of the principles of non-discrimination and reciprocity, in particular in the GATT context, to be a desirable objective.

Community companies as defined in Article 49 shall be granted access to contract award procedures in Bulgaria under a treatment no less favourable than that accorded to Bulgarian companies at the latest at the end of the transitional period referred to in Article 7.

Community companies established in Bulgaria under the provisions of

Chapter II of Title IV in the form of subsidiaries as described in

Article 45 and in the forms described in Article 55 shall have upon entry into force of the Agreement access to contract award procedures under a treatment no less favourable than that accorded to Bulgarian companies. Community companies established in Bulgaria in the form of branches and agencies as described in Article 45 shall be granted such treatment at the latest by the end of the transitional period.

The Association Council shall periodically examine the possibility for Bulgaria to introduce access to award procedures in Bulgaria for all Community companies prior to the end of the transitional period.

CHAPTER III Approximation of laws

Article 69The Parties recognize that an important condition for Bulgaria's

economic integration into the Community is the approximation of Bulgaria's existing and future legislation to that of the Community.

Bulgaria shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community.

Article 70The approximation of laws shall extend to the following areas in

particular: customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, protection of health and life of humans, animals and plants, consumer protection, indirect taxation, technical rules and standards, nuclear law and regulation, transport and the environment.

Article 71The Community shall provide Bulgaria with technical assistance for

the implementation of these measures, which may include inter alia:

TITLE VI ECONOMIC COOPERATION

Article 721. The Community and Bulgaria shall establish economic cooperation

aimed at contributing to Bulgaria's development and growth potential. Such cooperation shall strengthen existing economic links on the widest possible foundation, to the benefit of both Parties.

Article 73Industrial cooperation

Article 74Investment promotion and protection

The cooperation shall also aim to encourage and promote foreign investment and privatization in Bulgaria.

Article 75Agro and industrial standards and conformity assessment

Article 76Cooperation in science and technology

Technical assistance shall be provided where appropriate.

Article 77Education and training

Institutional frameworks and plans of cooperation will be established (building on the European Training Foundation, when established, and the Tempus programme). Participation of Bulgaria in other Community programmes shall also be considered in this context.

Article 78Agriculture and the agro-industrial sector

Article 79Energy

Article 80Nuclear safety

Article 81Environment

Article 82Transport

Article 83Telecommunications and postal services

Article 84Banking, insurance and other financial services

Article 85Audit and financial control cooperation

Article 86Monetary policy

At the request of the Bulgarian authorities, the Community shall provide technical assistance designed to support the efforts of Bulgaria towards the introduction of full convertibility of the leva and the gradual approximation of its policies to those of the European Monetary System. This will include informal exchange of information concerning the principles and the functioning of the European Monetary System.

Article 87Money laundering

Article 88Regional development

Article 89Social cooperation

Cooperation shall comprise the following in particular:

Cooperation in this field shall be realized through actions such as the performance of studies, provision of the services of experts and information and training.

Article 90Tourism

The Parties shall increase and develop cooperation between them, which shall include:

Article 91Small and medium-sized enterprises

Article 92Information and the audiovisual sector

The Community will encourage the Bulgarian audiovisual sector to participate in the appropriate Eureka programmes.

The Parties shall coordinate and, where appropriate, harmonize their policies regarding the regulation of cross-border broadcasting, technical norms in the audiovisual field and the promotion of European audiovisual technology.

Cooperation could include inter alia the exchange of programmes, bursaries and facilities for the training of journalists and other media professionals.

Article 93Consumer protection

Article 94Customs

Technical assistance shall be provided where appropriate.

Article 95Statistical cooperation

Article 96Economics

Article 97Drugs

The Parties may agree to include other areas.

TITLE VII CULTURAL COOPERATION

Article 98Taking into account the Solemn Declaration on European Union, 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 extended to Bulgaria and further activities of interest to both sides developed.

This cooperation may notably cover:

TITLE VIII FINANCIAL COOPERATION

Article 99In order to achieve the objectives of this Agreement and in

accordance with Articles 100, 101, 103 and 104, without prejudice to Article 102, Bulgaria shall benefit from temporary financial assistance from the Community in the form of grants and loans, including loans from the European Investment Bank according to the provisions of Article 18 of the Statute of the Bank, to accelerate the economic transformation of Bulgaria and to help Bulgaria to cope with the economic and social consequences of structural readjustment.

Article 100This financial asssistance shall be covered:

Article 101The objectives and the areas of the Community's financial assistance

shall be laid down in an indicative programme to be agreed between the two Parties. The Parties shall inform the Association Council.

Article 1021. The Community shall, in case of special need, taking into account

the G-24's guidelines for action and the availability of all financial resources, on request by Bulgaria and in coordination with international financial institutions, in the context of the G-24, examine the possibility of granting temporary financial asssistance:

Article 103The Community financial assistance shall be evaluated in the light

of the needs which arise and of Bulgaria's development level, and taking into account established priorities and the absorption capacity of Bulgaria's economy, the ability to repay loans and progress towards a market economy system and restructuring in Bulgaria.

Article 104In order to permit optimum use of the resources available, the

Parties shall ensure that Community contributions are made in close coordination with those from other sources such as the Member States, other countries, including the G-24, and international financial institutions, such as the International Monetary Fund, the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development.

TITLE IX INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 105An Association Council is hereby established which shall supervise

the implementation of this Agreement. It shall meet at ministerial level once a year and when circumstances require. It shall examine any major issues arising within the framework of the Agreement and any other bilateral or international issues of mutual interest.

Article 1061. The Association Council shall consist of the members of the

Council of the European Communities and members of the Commission of the European Communities, on the one hand, and of members appointed by the Government of Bulgaria, on the other.

Article 107The Association Council shall, for the purpose of attaining the

objectives of the Agreement, have the power to take decisions in the cases provided for therein. The decisions taken shall be binding on the Parties which shall take the measures necessary to implement the decisions taken. The Association Council may also make appropriate recommendations.

It shall draw up its decisions and recommendations by Agreement between the two Parties.

Article 1081. Each of the two Parties may refer to the Association Council any

dispute relating to the application or interpretation of this Agreement.

The Association Council shall appoint a third arbitrator.

The arbitrators' decisions shall be taken by majority vote.

Each Party to the dispute must take the steps required to implement the decision of the arbitrators.

Article 1091. The Association Council shall be assisted in the performance of

its duties by an Association Committee composed of representatives of the members of the Council of the European Communities and of members of the Commission of the European Communities on the one hand and of representatives of the Government of Bulgaria on the other, normally at senior civil servant level.

In its rules of procedure the Association Council shall determine the duties of the Association Committee, which shall include the preparation of meetings of the Association Council and how the Committee shall function.

Article 107

Article 110The Association Council may decide to set up any other special

committee or body that can assist it in carrying out its duties.

In its rules of procedure, the Association Council shall determine the composition and duties of such committees or bodies and how they shall function.

Article 111An Association Parliamentary Committee is hereby established. It

shall be a forum for members of the Bulgarian Parliament and the European Parliament to meet and exchange views. It shall meet at intervals which it shall itself determine.

Article 1121. The Association Parliamentary Committee shall consist of members

of the European Parliament, on the one hand, and of members of the Bulgarian Parliament, on the other.

Article 113The Association Parliamentary Committee may request relevant

information regarding the implementation of this Agreement from the Association Council, which shall then supply the Committee with the requested information.

The Association Parliamentary Committee shall be informed of the decisions of the Association Council.

The Association Parliamentary Committee may make recommendations to the Association Council.

Article 114Within 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.

Article 115Nothing in this Agreement shall prevent a Contracting Party from

taking any measures: (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to the production of, or trade in, arms ammunition 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.

Article 1161. In the fields covered by this Agreement and without prejudice to