This law is an agreement between the European Communities and their Member States and the former Yugoslav Republic of…

22004A0320(03) 22004A0320(03) Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, of the other part - Protocol 1 on textile and clothing products - Protocol 2 on steel products - Protocol 3 on trade between the former Yugoslav Republic of Macedonia and the Community in processed agricultural products - Protocol 4 concerning the definition of the concept of "originating products" and methods of administrative cooperation - Protocol 5 on mutual administrative assistance in customs matters - Final Act Official Journal L 084 , 20/03/2004 P. 0013 - 0197 Dates: of document: 09/04/2001; DATSIG of effect: 04/01/2004; Entry into force See Art 127 And OJ L 85/2004 P. 26 of signature: 09/04/2001; Luxembourg end of validity: 99/99/9999 Authentic language: The official languages Author:

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

France ; Ireland ; Italy ; Luxembourg ; Spain ; Austria ; Portugal ;

Finland ; Sweden ; United Kingdom Subject matter: External relations ; Association Directory code: 11401040 EUROVOC descriptor: EC association agreement ; Former Yugoslav Republic of Macedonia ; economic stabilisation ; economic development ; EC trade agreement ; cooperation policy ; peacekeeping Legal basis:

157A101-L2................ Adoption 102E300-P2L1FR2........... Adoption 102E300-P3L2.............. Adoption 102E310................... Adoption Amendment to:

297A1218(02)...... Replacement... from 01/04/2004 Amended by:

Relation...... 204X0323(01)......

Subsequent related instruments:

Relation...... 204A0320(02)......

Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the former Yugoslav Republic of Macedonia, 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, Contracting Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community, the Treaty establishing the European Atomic Energy Community, and the Treaty on European Union hereinafter referred to as "Member States", and THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY, THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as the "Community", of the one part, and THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA, hereinafter referred to as "the former Yugoslav Republic of Macedonia", of the other part, CONSIDERING the strong links between the Parties and the values that they share, their desire to strengthen those links and establish a close and lasting relationship based on reciprocity and mutual interest, which should allow the former Yugoslav Republic of Macedonia to further strengthen and extend the relations established previously, in particular through the Cooperation Agreement signed on 29 April 1997 by way of Exchange of Letters, which entered into force on 1 January 1998, CONSIDERING that the relationship between the Parties in the field of inland transport should continue to be governed by the Agreement between the European Community and the former Yugoslav Republic of Macedonia in the field of transport, signed on 29 June 1997, which entered into force on 28 November 1997, CONSIDERING the importance of this Agreement, in the framework of the Stabilisation and Association process with the countries of south-eastern Europe, to be further developed by an EU Common strategy for this region, in the establishment and consolidation of a stable European order based on cooperation, of which the European Union is a mainstay, as well as in the framework of the Stability Pact, CONSIDERING the commitment of the Parties to contribute by all means to the political, economic and institutional stabilisation in the former Yugoslav Republic of Macedonia as well as in the region, through the development of civic society and democratisation,

institution building and public administration reform, enhanced trade and economic cooperation, the strengthening of national and regional security, as well as increased cooperation in justice and home affairs, CONSIDERING the commitment of the Parties to increasing political and economic freedoms as the very basis of this Agreement, as well as their commitment to respect human rights and the rule of law, including the rights of persons belonging to national minorities, and democratic principles through free and fair elections and a multiparty system, CONSIDERING the commitment of the Parties to the principles of free market economy and the readiness of the Community to contribute to the economic reforms in the former Yugoslav Republic of Macedonia, CONSIDERING the commitment of the Parties to the full implementation of all principles and provisions of the UN Charter, of the OSCE, notably those of the Helsinki Final Act, the concluding documents of the Madrid and Vienna Conferences, the Charter of Paris for a New Europe, and of the Cologne Stability Pact for south-eastern Europe, so as to contribute to regional stability and cooperation among the countries of the region, DESIROUS of establishing regular political dialogue on bilateral and international issues of mutual interest, including regional aspects, CONSIDERING the commitment of the Parties to free trade, in compliance with the rights and obligations arising out of the WTO, CONVINCED that the Stabilisation and Association Agreement will create a new climate for economic relations between them and above all for the development of trade and investment, factors crucial to economic restructuring and modernisation, BEARING IN MIND the commitment by the former Yugoslav Republic of Macedonia to approximate its legislation to that of the Community, TAKING ACCOUNT of the Community's willingness to provide decisive support for the implementation of reform, and to use all available instruments of cooperation and technical, financial and economic assistance on a comprehensive indicative multi-annual basis to this endeavour, CONFIRMING that the provisions of this Agreement that fall within the scope of Part III, Title IV of the Treaty establishing the European Community bind the United Kingdom and Ireland as separate Contracting Parties, and not as part of the European Community, until the United Kingdom or Ireland (as the case may be) notifies the former Yugoslav Republic of Macedonia that it has become bound as part of the European Community in accordance with the Protocol on

the position of the United Kingdom and Ireland annexed to the Treaty on European Union and the Treaty establishing the European Community. The same applies to Denmark, in accordance with the Protocol annexed to those Treaties on the position of Denmark, RECALLING the European Union's readiness to integrate to the fullest possible extent the former Yugoslav Republic of Macedonia into the political and economic mainstream of Europe and its status as a potential candidate for EU membership on the basis of the Treaty on European Union and fulfilment of the criteria defined by the European Council in June 1993, subject to successful implementation of this Agreement, notably regarding regional cooperation, HAVE AGREED AS FOLLOWS:

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

its Member States of the one part and the former Yugoslav Republic of Macedonia of the other part.

TITLE I GENERAL PRINCIPLES

Article 2Respect for the democratic principles and human rights as proclaimed

in the Universal Declaration of Human Rights and as defined in the Helsinki Final Act and the Charter of Paris for a New Europe, respect for international law principles and the rule of law as well as the principles of market economy as reflected in the Document of the CSCE Bonn Conference on Economic Cooperation, shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement.

Article 3International and regional peace and stability, the development of

good neighbourly relations are central to the Stabilisation and Association Process. The conclusion and the implementation of this Agreement come within the framework of the regional approach of the Community as defined in the Council conclusions of 29 April 1997, based on the merits of the individual countries of the region.

Article 4The former Yugoslav Republic of Macedonia commits itself to enter

into cooperation and good neighbourly relations with the other countries of the region including an appropriate level of mutual concessions concerning the movement of persons, goods, capital and services as well as the development of projects of common interest.

This commitment constitutes a key factor in the development of the relations and cooperation between the Parties and thus contributes to regional stability.

Article 51. The Association shall be fully realised over a transitional

period of a maximum of ten years divided into two successive stages.

The purpose of this division into successive stages is to implement progressively the provisions of the Stabilisation and Association Agreement and to focus on areas described hereinafter in Titles III, V, VI and VII during the first stage.

Title IV.

Article 6The Agreement shall be fully compatible with the relevant WTO

provisions, in particular Article XXIV of the GATT 1994 and Article V of the GATS.

TITLE II POLITICAL DIALOGUE

Article 7Political dialogue between the Parties shall be further developed

and intensified. It shall accompany and consolidate the rapprochement between the European Union and the former Yugoslav Republic of Macedonia and contribute to the establishment of close links of solidarity and new forms of cooperation between the Parties.

The political dialogue is intended to promote in particular:

Article 8

Political dialogue may take place within a multilateral framework, and as a regional dialogue including other countries of the region.

Article 91. At ministerial level, political dialogue shall take place within

the Stabilisation and Association Council, which shall have the general responsibility for any matter that the Parties might wish to put to it.

Article 10Political dialogue at parliamentary level shall take place within

the framework of the Stabilisation and Association Parliamentary Committee established under Article 114.

TITLE III REGIONAL COOPERATION

Article 11In conformity with its commitment to peace and stability, and to the

development of good neighbourly relations, the former Yugoslav Republic of Macedonia will actively promote regional cooperation.

The Community will also support projects having a regional or cross-border dimension through its technical assistance programmes.

Whenever the former Yugoslav Republic of Macedonia foresees to reinforce its cooperation with one of the countries mentioned in Articles 12 to 14 below, it shall inform and consult the Community and its Member States according to the provisions laid down in Title X.

Article 12Cooperation with other countries having signed a Stabilisation and

Association Agreement No later than when at least one Stabilisation and Association Agreement will have been signed with another of the countries concerned by the Stabilisation and Association Process, the former Yugoslav Republic of Macedonia shall start negotiations with the country or the countries concerned with a view to concluding a Convention on regional cooperation, the aim of which will be to enhance the scope of cooperation between the countries concerned.

The main elements of this Convention will be:

This Convention will contain provisions for the creation of the necessary institutional mechanisms, as appropriate.

This Convention on regional cooperation shall be concluded within two years after the entry into force of at least the second Stabilisation and Association Agreement. Readiness by the former Yugoslav Republic of Macedonia to conclude such a Convention will be a condition for the further development of the relations between the former Yugoslav Republic of Macedonia and the EU.

Article 13Cooperation with other countries concerned by the Stabilisation and

Association Process The former Yugoslav Republic of Macedonia shall engage in regional cooperation with the other countries concerned by the Stabilisation and Association Process in some or all the fields of cooperation covered by this Agreement, and notably those of common interest.

Such cooperation should be compatible with the principles and objectives of this Agreement.

Article 14Cooperation with countries candidate for EU accession

The former Yugoslav Republic of Macedonia may foster its cooperation and conclude a Convention on regional cooperation with any country candidate for EU accession in any of the fields of cooperation covered by this Agreement. Such Convention should aim to gradually align bilateral relations between the former Yugoslav Republic of Macedonia and that country to the relevant part of the relations between the European Community and its Member States and that country.

TITLE IV FREE MOVEMENT OF GOODS

Article 151. The Community and the former Yugoslav Republic of Macedonia shall

gradually establish a free trade area over a period lasting a maximum of 10 years starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the GATT 1994 and the WTO. In so doing they shall take into account the specific requirements laid down hereinafter.

CHAPTER I INDUSTRIAL PRODUCTS

Article 161. The provisions of this Chapter shall apply to products

originating in the Community or the former Yugoslav Republic of Macedonia listed in Chapters 25 to 97 of the Combined Nomenclature, with the exception of the products listed in Annex I. ē I, (ii) of the Agreement on agriculture (GATT 1994).

Article 171. Customs duties on imports into the Community of products

originating in the former Yugoslav Republic of Macedonia shall be abolished upon the entry into force of this Agreement.

Article 181. Customs duties on imports into the former Yugoslav Republic of

Macedonia of goods originating in the Community other than those listed in Annexes I and II shall be abolished upon the entry into force of this Agreement.

Article 19The Community and the former Yugoslav Republic of Macedonia shall

abolish upon the entry into force of this Agreement in trade between themselves any charges having an effect equivalent to customs duties on imports.

Article 201. The Community and the former Yugoslav Republic of Macedonia shall

abolish any customs duties on exports and charges having equivalent effect upon the entry into force of this Agreement.

Article 21The former Yugoslav Republic of Macedonia declares its readiness to

reduce its customs duties in trade with the Community more rapidly than is provided for in Article 18 if its general economic situation and the situation of the economic sector concerned so permit.

The Stabilisation and Association Council shall make recommendations to this effect.

Article 22Protocol 1 lays down the arrangements applicable to the textile

products referred to therein.

Article 23Protocol 2 lays down the arrangements applicable to steel products

referred to therein.

CHAPTER II AGRICULTURE AND FISHERIES

Article 24Definition

Article 25Protocol 3 lays down the trade arrangements for processed

agricultural products that are listed therein.

Article 261. On the date of entry into force of this Agreement, the Community

shall abolish all quantitative restrictions and measures having equivalent effect, on imports of agricultural and fishery products originating in the former Yugoslav Republic of Macedonia.

Article 27Agricultural products

For the products covered by Chapters 7 and 8 of the Combined Nomenclature, for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the elimination applies only to the ad valorem part of the duty.

Article 28Fisheries products

The rules contained in this paragraph shall not apply to products listed in Annex V(b) which shall be subject to tariff reductions laid down in the said Annex.

Article 291. Taking account of the volume of trade in agricultural and fishery

products between the Parties, of their particular sensitivities, of the rules of the Community common policies for agriculture and fisheries, of the rules of the agricultural policies of the former Yugoslav Republic of Macedonia, of the role of agriculture in the former Yugoslav Republic of Macedonia's economy, of the production and export potential of its traditional branches and markets and of the consequences of the multilateral trade negotiations under the WTO, the Community and the former Yugoslav Republic of Macedonia shall examine in the Stabilisation and Association Council, no later than 1 January 2003, product by product and on an orderly and appropriate reciprocal basis, the opportunities for granting each other further concessions with a view to implementing greater liberalisation of the trade in agricultural and fishery products.

Article 30Notwithstanding other provisions of this Agreement, and in

particular Article 37, given the particular sensitivity of the agricultural and fisheries markets, if imports of products originating in one of the two Parties, which are the subject of concessions granted pursuant to Article 25, 27 and 28, cause serious disturbance to the markets or to their domestic regulatory mechanisms, in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary.

CHAPTER III COMMON PROVISIONS

Article 31The provisions of this Chapter shall apply to trade in all products

between the Parties except where otherwise provided herein or in Protocols 1, 2 and 3.

Article 32Standstill

Article 33Prohibition of fiscal discrimination

Article 34The provisions concerning the abolition of customs duties on imports

shall also apply to customs duties of a fiscal nature.

Article 35Customs unions, free trade areas, cross-border arrangements

Article 36Dumping

Article 37General safeguard clause

Such measures shall contain clear elements progressively leading to their elimination at the end of the set period, at the latest.

Measures shall not be taken for a period exceeding one year. In very exceptional circumstances, measures may be taken up to a total maximum period of three years. No safeguard measure shall be applied to the import of a product that has previously been subject to such a measure for a period of, at least, three years since the expiry of the measure.

Article 38Shortage clause

Article 39State monopolies

The former Yugoslav Republic of Macedonia 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 the former Yugoslav Republic of Macedonia. The Stabilisation and Association Council shall be informed about the measures adopted to attain this objective.

Article 40Protocol 4 lays down the rules of origin for the application of

tariff preferences provided for in this Agreement.

Article 41Restrictions authorised

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 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 42Both Parties agree to cooperate to reduce the potential for fraud in

the application of the trade provisions of this Agreement.

Notwithstanding other provisions of this Agreement, and in particular Articles 30, 37 and 88 and Protocol 4, where one Party finds that there is sufficient evidence of fraud such as a significant increase in trade of products by one Party to the other Party, beyond the level reflecting economic conditions such as normal production and export capacities, or failure to provide administrative cooperation as required for the verification of evidence of origin by the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary. In the selection of the measures priority must be given to those which least disturb the functioning of the arrangements established in this Agreement.

Article 43The application of this Agreement shall be without prejudice to the

application of the provisions of Community law to the Canary Islands.

TITLE V MOVEMENT OF WORKERS, ESTABLISHMENT, SUPPLY OF SERVICES,

CAPITAL

CHAPTER I MOVEMENT OF WORKERS

Article 441. Subject to the conditions and modalities applicable in each

Member State:

Article 451. Taking into account the labour market situation in the Member

States, subject to their legislation and to compliance with the rules in force in the Member States in the area of mobility of workers:

Article 46Rules shall be laid down for the coordination of social security

system for workers with the nationality of the former Yugoslav Republic of Macedonia, legally employed in the territory of a Member State, and for the members of their families legally resident there.

To that effect, a decision of the Stabilisation and Association Council, which should not affect any rights or obligations arising from bilateral agreements where the latter provide for more favourable treatment, will put the following provisions in place:

The former Yugoslav Republic of Macedonia shall accord to workers who are nationals of a Member State and legally employed in its territory, and to members of their families legally resident there, treatment similar to that specified in the second and third indents of the first paragraph.

CHAPTER II ESTABLISHMENT

Article 47For the purposes of this Agreement:

(a) a "Community company" or a "company of the former Yugoslav Republic of Macedonia" respectively shall mean a company set up in accordance with the laws of a Member State or of former Yugoslav Republic of Macedonia respectively and having its registered office or central administration or principal place of business in the territory of the Community or former Yugoslav Republic of Macedonia respectively.

However, should the company, set up in accordance with the laws of a Member State or of the former Yugoslav Republic of Macedonia respectively, have only its registered office in the territory of the Community or the former Yugoslav Republic of Macedonia respectively, the company shall be considered a Community or a company from the former Yugoslav Republic of Macedonia respectively if its operations possess a real and continuous link with the economy of one of the Member States or the former Yugoslav Republic of Macedonia 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: (i) as regards nationals, the right to set up undertakings, in particular companies, which they effectively control. Business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party; (ii) as regards Community or the former Yugoslav Republic of Macedonia companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in the former Yugoslav Republic of Macedonia or in the Community respectively; (e) "operations" shall mean the pursuit of economic activities; (f) "economic activities" shall in principle include activities of an industrial, commercial and professional character and activities of craftsmen; (g) "Community national" and "national of the former Yugoslav Republic of Macedonia" shall mean respectively a natural person who is a national of one of the Member States or of the former Yugoslav Republic of Macedonia; (h) with regard to international maritime transport, including inter-modal operations involving a sea leg, nationals of the Member States or of the former Yugoslav Republic of Macedonia established outside the Community or of the former Yugoslav Republic of Macedonia respectively, and shipping companies established outside the Community or the former Yugoslav Republic of Macedonia and

controlled by nationals of a Member State or the nationals of the former Yugoslav Republic of Macedonia 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 the former Yugoslav Republic of Macedonia respectively, in accordance with their respective legislation; (i) "financial services" shall mean those activities described in Annex VI. The Stabilisation and Association Council may extend or modify the scope of that Annex.

Article 481. The former Yugoslav Republic of Macedonia shall grant, upon entry

into force of this Agreement: (i) as regards the establishment of Community companies treatment no less favourable than that accorded to its own companies or to any third country company, whichever is the better, and (ii) as regards the operation of subsidiaries and branches of Community companies in the former Yugoslav Republic of Macedonia, once established, treatment no less favourable than that accorded to its own companies and branches or to any subsidiary and branch of any third country company, whichever is the better.

Article 491. Subject to the provisions of Article 48, with the exception of

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

Article 501. The provisions of this Chapter shall not apply to air transport

services, inland waterways transport services and maritime cabotage services.

Article 511. The provisions of Articles 48 and 49 do not preclude the

application by a Party of particular rules concerning the establishment and operation in its territory of branches 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 as compared to branches of companies incorporated in its territory or, as regards financial services, for prudential reasons.

Article 52In order to make it easier for Community nationals and nationals of

the former Yugoslav Republic of Macedonia to take up and pursue regulated professional activities in the former Yugoslav Republic of Macedonia and Community respectively, the Stabilisation and Association Council shall examine which steps are necessary for the mutual recognition of qualifications. It may take all necessary measures to that end.

Article 531. A Community company or a company from the former Yugoslav

Republic of Macedonia established in the territory of the former Yugoslav Republic of Macedonia 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 the former Yugoslav Republic of Macedonia and the Community respectively, employees who are nationals of the Community Member States and former Yugoslav Republic of Macedonia respectively, provided that such employees are key personnel as defined in paragraph 2 and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall only cover the period of such employment.

Article 54During the first four years following the date of entry into force

of this Agreement, the former Yugoslav Republic of Macedonia may introduce measures which derogate from the provisions of this Chapter as regards the establishment of Community companies and nationals of certain industries which:

Such measures: (i) shall cease to apply at the latest two years after the end of the first stage of the transitional period; (ii) shall be reasonable and necessary in order to remedy the situation, and (iii) shall not introduce discrimination concerning the activities of Community companies or nationals already established in the former Yugoslav Republic of Macedonia at the time of introduction of a given measure, by comparison with companies or nationals from the former Yugoslav Republic of Macedonia.

While devising and applying such measures, the former Yugoslav Republic of Macedonia shall grant preferential treatment wherever possible to Community companies and nationals, and in no case treatment less favourable than that accorded to companies or nationals from any third country. Prior to the adoption of these measures, the former Yugoslav Republic of Macedonia shall consult the Stabilisation and Association Council and shall not put them into effect before a one month period has elapsed following the notification to the Stabilisation and Association Council of the concrete measures to be introduced by the former Yugoslav Republic of Macedonia, except where the threat of irreparable damage requires the taking of urgent measures, in which case the former Yugoslav Republic of Macedonia shall consult the Stabilisation and Association Council immediately after their adoption.

Upon the expiry of the fourth year following the entry into force of this Agreement the former Yugoslav Republic of Macedonia may introduce or maintain such measures only with the authorisation of the Stabilisation and Association Council and under conditions determined by the latter.

CHAPTER III SUPPLY OF SERVICES

Article 551. The Parties undertake in accordance with the following provisions

to take the necessary steps to allow progressively the supply of services by Community or the former Yugoslav Republic of Macedonia companies or nationals which are established in a Party other than that of the person for whom the services are intended.

Account shall be taken of the progress achieved by the Parties in the approximation of their laws.

Article 561. The Parties shall not take any measures or actions which render

the conditions for the supply of services by Community and the former Yugoslav Republic of Macedonia nationals or companies which are established in a Party other than that of the person for whom the services are intended significantly more restrictive as compared to the situation existing on the day preceding the day of entry into force of the Agreement.

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

and the former Yugoslav Republic of Macedonia, the following provisions shall apply:

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 of the dry and liquid bulk trade.

In step with the common progress in the achievement of the objectives of this Chapter, the Stabilisation and Association Council shall examine ways of creating the conditions necessary for improving freedom to provide air and inland transport services.

CHAPTER I CURRENT PAYMENTS AND MOVEMENT OF CAPITAL

Article 58

The Parties undertake to authorise, in freely convertible currency, in accordance with the provisions of Article VIII of the Articles of Agreement of the International Monetary Fund, any payments and transfers on the current account of balance of payments between the Community and the former Yugoslav Republic of Macedonia.

Article 591. With regard to transactions on the capital and financial account

of balance of payments, from the entry into force of the Agreement, the Parties 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 with the provisions of Chapter II of Title V, and the liquidation or repatriation of these investments and of any profit stemming therefrom.

They shall also ensure, from the beginning of the second stage, free movement of capital relating to portfolio investment and financial loans and credits with a maturity shorter than a year.

Article 601. During the first stage, 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.

CHAPTER V GENERAL PROVISIONS

Article 611. The provisions of this Title shall be applied subject to

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

Article 62For the purpose of this Title, nothing in this Agreement shall

prevent the Parties from applying their laws and regulations regarding entry and stay, employment, working conditions, establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in such a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. This provision shall be without prejudice to the application of Article 61.

Article 63Companies which are controlled and exclusively owned jointly by the

former Yugoslav Republic of Macedonia companies or nationals and Community companies or nationals shall also be covered by the provisions of this Title.

Article 641. The Most-Favoured-Nation treatment granted in accordance with the

provisions of this Title shall not apply to the tax advantages that the Parties are providing or will provide in the future on the basis of agreements designed to avoid double taxation or other tax arrangements.

Article 651. The Parties shall endeavour wherever possible to avoid the

imposition of restrictive measures, including measures relating to imports, for balance of payments purposes. A Party adopting such measures shall present as soon as possible to the other Party a timetable for their removal.

Article 66

The provisions of this Title shall be progressively adjusted, notably in the light of requirements arising from Article V of the General Agreement on Trade in Services (GATS).

Article 67The 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.

TITLE VI APPROXIMATION OF LAWS AND LAW ENFORCEMENT

Article 681. The Parties recognise the importance of the approximation of the

existing and future laws of the former Yugoslav Republic of Macedonia to those of the Community. The former Yugoslav Republic of Macedonia shall endeavour to ensure that its laws will be gradually made compatible with those of the Community.

Deadlines will be set for competition law, intellectual property law, standards and certification law, public procurement law and data protection law. Legal approximation in other sectors of the internal market will be an obligation to be met at the end of the transition period.

Article 69Competition and other economic provisions

Each Party shall ensure that the provisions of this Article are applied within five years of the Agreement's entry into force.

In the case of practices incompatible with paragraph 1(iii), such appropriate measures may, where the WTO Agreement applies thereto, only be adopted in accordance with the procedures and under the conditions laid down thereby or the relevant Community internal legislation.

Article 70With regard to public undertakings, and undertakings to which

special or exclusive rights have been granted, each Party shall ensure that as from the third year following the date of entry into force of this Agreement, the principles of the Treaty establishing the European Community, in particular Article 86 thereof, are upheld.

Article 71Intellectual, industrial and commercial property

If problems in the area of intellectual, industrial and commercial property affecting trading conditions occur, they shall be referred urgently to the Stabilisation and Association Council, at the request of either Party, with a view to reaching mutually satisfactory solutions.

Article 72Public contracts

The above provisions will also apply to contracts in the utilities sector once the government of the former Yugoslav Republic of Macedonia has adopted the legislation introducing the Community rules in this area. The Community shall examine periodically whether the former Yugoslav Republic of Macedonia has indeed introduced such legislation.

Community companies not established in the former Yugoslav Republic of Macedonia shall be granted access to contract award procedures in the former Yugoslav Republic of Macedonia pursuant to the Law on Public Procurement under treatment no less favourable than that accorded to companies of the former Yugoslav Republic of Macedonia at the latest five years after the entry into force of this Agreement. Community companies established in the former Yugoslav Republic of Macedonia under the provisions of Chapter II of Title V shall have, upon entry into force of this Agreement, access to contract award procedures under treatment no less favourable than that accorded to companies of the former Yugoslav Republic of Macedonia.

The Stabilisation and Association Council shall periodically examine the possibility for the former Yugoslav Republic of Macedonia to introduce access to award procedures in the former Yugoslav Republic of Macedonia for all Community companies.

Article 73Standardisation, metrology, accreditation and conformity assessment

TITLE VII JUSTICE AND HOME AFFAIRS

Article 74Reinforcement of institutions and rule of law

In their cooperation in justice and home affairs the Parties will attach particular importance to the reinforcement of institutions at all levels in the areas of administration in general and law enforcement and the machinery of justice in particular. This includes the consolidation of the rule of law. Cooperation in the field of justice will focus in particular on the independence of the judiciary, the improvement of its effectiveness and training of the legal professions.

Article 75Visa, border control, asylum and migration

The Stabilisation and Association Council can recommend additional subjects for cooperation under this Article.

Article 76Prevention and control of illegal immigration; readmission

The Member States of the European Union and the former Yugoslav Republic of Macedonia will provide their nationals with appropriate identity documents and will extend to them the administrative facilities necessary for such purposes.

Article 77Combating money laundering

Article 78Preventing and combating crime and other illegal activities

Cooperation in the above matters will be the subject of consultations and close coordination between the parties.

Article 79Cooperation on illicit drugs

TITLE VIII COOPERATION POLICIES

Article 801. The Community and the former Yugoslav Republic of Macedonia shall

establish a close cooperation aimed at contributing to the development and growth potential of the former Yugoslav Republic of Macedonia. Such cooperation shall strengthen existing economic links on the widest possible foundation, to the benefit of both Parties.

Article 81Economic policy

Article 82Statistical cooperation

Article 83Banking, insurance and other financial services

The cooperation shall focus on:

Cooperation shall focus on:

Article 84Investment promotion and protection

Article 85Industrial cooperation

Article 86Small and medium-sized enterprises

The Parties shall aim to develop and strengthen private sector small and medium-sized enterprises (SMEs), the establishment of new undertakings in areas offering potential for growth and cooperation between SMEs in the Community and the former Yugoslav Republic of Macedonia.

Article 87Tourism

Cooperation between the Parties in the field of tourism will be aimed at facilitating and encouraging tourism and tourist trade through know-how transfer, participation of the former Yugoslav Republic of Macedonia in important European tourism organisations and studying the opportunities for joint operations, notably in regional tourism projects.

Article 88Customs

Article 89Taxation

The Parties will establish cooperation in the field of taxation including measures aiming at the further reform of the fiscal system, the modernisation of the tax services with a view to ensuring effectiveness of tax collection and the fight against fiscal fraud.

Article 90Social cooperation

Article 91Education and training

Article 92Cultural cooperation

The Parties undertake to promote cultural cooperation. This cooperation serves, inter alia, to raise mutual understanding and esteem between individuals, communities and peoples.

Article 93Information and communication

The Community and the former Yugoslav Republic of Macedonia will take the measures necessary to stimulate the mutual exchange of information. Priority will be given to programmes aimed at providing the general public with basic information about the Community and professional circles in the former Yugoslav Republic of Macedonia with more specialised information.

Article 94Cooperation in the audio-visual field

The Parties shall cooperate to promote the audio-visual industry in Europe and encourage co-production in the fields of cinema and television.

The Parties will coordinate, and where appropriate, harmonise their policies on the regulation of content aspects of cross-border broadcasting, paying particular attention to matters relating to the acquisition of intellectual property rights for programmes and broadcast by satellite or cable.

Article 95Electronic communications infrastructure and associated services

The Parties will strengthen cooperation in the area of electronic communications infrastructures, including classical telecommunications networks and relevant electronic audio-visual transport networks, and associated services, with the objective of ultimate alignment with the acquis by the former Yugoslav Republic of Macedonia one year after the entry into force of the Agreement.

The abovementioned cooperation will focus on the following priority areas:

Article 96Information Society

The Parties agree to strengthen cooperation with the objective of further developing the Information Society in the former Yugoslav Republic of Macedonia. Global objectives will be preparing society as a whole for the digital age, attracting investments and interoperability of networks and services.

The authorities of the former Yugoslav Republic of Macedonia, with the assistance of the Community, will review carefully any political commitment undertaken in the European Union with the objective of aligning its own policies on those of the Union.

The authorities of the former Yugoslav Republic of Macedonia will establish a plan for the adoption of Community legislation in the area of the Information Society.

Article 97Consumer protection

The Parties will cooperate in order to align the standards of consumer protection in the former Yugoslav Republic of Macedonia on those of the Community. Effective consumer protection is necessary in order to ensure that the market economy functions properly, and this protection will depend on the development of an administrative infrastructure in order to ensure market surveillance and law enforcement in this field.

To that end, and in view of their common interests, the Parties will encourage and ensure:

Article 98Transport

Article 99Energy

Article 100Agriculture, and the agro-industrial sector

Cooperation in this field shall have as its aim the modernisation and restructuring of agriculture and the agro-industrial sector, water management, rural development, the gradual harmonisation of veterinary and phytosanitary legislation with Community standards and the development of fishery and forestry sectors in the former Yugoslav Republic of Macedonia.

Article 101Regional and local development

The Parties will strengthen regional development cooperation, with the objective of contributing to economic development and reducing regional imbalances.

Specific attention will be given to cross-border, trans-national and interregional cooperations. To this end, the exchange of information and experts may be undertaken.

Article 102Cooperation in research and technological development

Article 103Environment and nuclear safety

TITLE IX FINANCIAL COOPERATION

Article 104In order to achieve the objectives of this Agreement and in

accordance with Articles 3, 108 and 109 the former Yugoslav Republic of Macedonia may receive financial assistance from the Community in the forms of grants and loans, including loans from the European Investment Bank.

Article 105Financial assistance, in the form of grants, shall be covered by the

operation measures provided for in the relevant Council Regulation within a multi-annual indicative framework established by the Community following consultations with the former Yugoslav Republic of Macedonia.

The overall objectives of the assistance, in the form of institution-building and investment, shall contribute to the democratic, economic and institutional reforms of the former Yugoslav Republic of Macedonia, in line with the Stabilisation and Association process. Financial assistance may cover all areas of harmonisation of legislation and cooperation policies of this Agreement, including Justice and Home Affairs.

Consideration should be given to the full implementation of the infrastructure projects of common interest identified in the Transport Agreement.

Article 106At the request of the former Yugoslav Republic of Macedonia and in

case of special need, the Community could examine in coordination with international financial institutions, the possibility of granting on an exceptional basis macro-financial assistance subject to certain conditions taking into account the availability of all financial resources.

Article 107In 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 and international financial institutions.

To this effect, information on all sources of assistance shall be exchanged regularly between the Parties.

TITLE X INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 108A Stabilisation and Association Council is hereby established which

shall supervise the application and implementation of this Agreement. It shall meet at an appropriate level at regular intervals and when circumstances require. It shall examine any major issues arising within the framework of this Agreement and any other bilateral or international issues of mutual interest.

Article 1091. The Stabilisation and Association Council shall consist of the

members of the Council of the European Union and members of the Commission of the European Communities, on the one hand, and of members of the Government of the former Yugoslav Republic of Macedonia, on the other.

Article 110The Stabilisation and Association Council shall, for the purpose of

attaining the objectives of this Agreement, have the power to take decisions within the scope of the Agreement 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. When deciding on the transition to the second stage, as provided for in Article 5, the Stabilisation and Association Council may also decide on any possible changes to be brought about as regards the content of the provisions governing the second stage.

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

The Stabilisation and Association Council may delegate to the Stabilisation and Association Committee any of its powers. In this event the Stabilisation and Association Committee shall take its decisions in accordance with the conditions laid down in this Article.

The Stabilisation and Association Council may also make appropriate recommendations.

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

Article 111Each Party may refer to the Stabilisation and Association Council

any dispute relating to the application or interpretation of this Agreement. The Stabilisation and Association Council may settle the dispute by means of a binding decision.

Article 112The Stabilisation and Association Council shall be assisted in the

performance of its duties by a Stabilisation and Association Committee, composed of representatives of the Council of the European Union and of representatives of the Commission of the European Communities, on the one hand, and of representatives of the former Yugoslav Republic of Macedonia on the other.

Article 113The Stabilisation and Association Committee may create

subcommittees. The Transport Committee established under the Transport Agreement shall assist the Stabilisation and Association Committee.

Article 114A Stabilisation and Association Parliamentary Committee is hereby

established. It shall be a forum for Members of the former Yugoslav Republic of Macedonian Parliament and the European Parliament to meet and exchange views. It shall meet at intervals that it shall itself determine.

The Stabilisation and Association Parliamentary Committee shall consist of members of the European Parliament, on the one hand, and of Members of the Parliament of the former Yugoslav Republic of Macedonia, on the other.

The Stabilisation and Association Parliamentary Committee shall establish its rules of procedure.

The Stabilisation and Association Parliamentary Committee shall be chaired in turn by the European Parliament and the Parliament of the former Yugoslav Republic of Macedonia, in accordance with the provisions to be laid down in its rules of procedure.

Article 115Within 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.

Article 116Nothing in this Agreement shall prevent a Party from taking any

measures: (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to the production 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.

Article 117