21999A0917(01)

21999A0917(01) 21999A0917(01) Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part - Protocol on mutual assistance between authorities in customs matters - Final Act - Joint Declarations - Exchange of Letters in relation to the establishment of companies - Declaration of the French Government Official Journal L 246 , 17/09/1999 p. 0003 - 0051  Dates: OF DOCUMENT:   22/04/1999 OF EFFECT:   01/07/1999; ENTRY INTO FORCE SEE ART 104 AND OJ L 261/99 P. 41 OF SIGNATURE:   22/04/1996; LUXEMBOURG OF END OF VALIDITY:   99/99/9999 Authentic language: THE OFFICIAL LANGUAGES ; DANISH ; GERMAN ; GREEK ; SPANISH ; FRENCH ; ITALIAN ; DUTCH ; PORTUGUESE ; FINNISH ; SWEDISH ; ENGLISH ; OTHER THAN COMMUNITY LANGUAGE ; AZERBAIJANI Author: EUROPEAN COAL AND STEEL COMMUNITY ; EUROPEAN ATOMIC ENERGY COMMUNITY ; THE 15 MEMBER STATES ; BELGIUM ; DENMARK ; FEDERAL REPUBLIC OF GERMANY ; GREECE ; SPAIN ; FRANCE ; IRELAND ; FRANCE ; LUXEMBOURG ; NETHERLANDS ; AUSTRIA ; PORTUGAL ; FINLAND ; SWEDEN ; UNITED KINGDOM ; AZERBAIJAN Subject matter: EXTERNAL RELATIONS ; PROVISIONS IMPLEMENTING ARTICLE 95 - ECSC ; COOPERATION Directory code: 11406000 EUROVOC descriptor: cooperation agreement ; Azerbaijan ; EC agreement ; EC countries Legal basis: 197E044-P2................ ADOPTION 197E047-P2F3.............. ADOPTION 197E055................... ADOPTION 197E071................... ADOPTION 197E080-P2................ ADOPTION 197E093................... ADOPTION 197E094................... ADOPTION 197E133................... ADOPTION 197E308................... ADOPTION 197E300-P2F2.............. ADOPTION 197E300-P3L2.............. ADOPTION 151K095................... ADOPTION 157A101-L2................ ADOPTION Instruments cited: 294A1231(52).............. 294A1231(53).............. 294A1223(01).............. 294A1223(09).............. 279A0412(06).............. 294A1223(16).............. 396R1279.................. 298A1022(02).............. Amendment to: 290A0315(01)...... AMENDMENT..... PARTIAL REPLACEMENT Amended by: ADOPTED-BY.... 399D0614.......... PARTNERSHIP AND COOPERATION AGREEMENT between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, 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 and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as "Member States", and THE EUROPEAN COMMUNITY, THE EUROPEAN COAL AND STEEL COMMUNITY, AND THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "the Community", of the one part, and THE REPUBLIC OF AZERBAIJAN, of the other part, CONSIDERING the links between the Community, its Member States and the Republic of Azerbaijan and the common values that they share, RECOGNISING that the Community and the Republic of Azerbaijan wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past in particular by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and commercial and economic cooperation, signed on 18 December 1989, which, since the dissolution of the USSR, applies mutatis mutandisto bilateral relations between the European Communities and each of the Independent States, CONSIDERING the commitment of the Community and its Member States and of the Republic of Azerbaijan to strengthening the political and economic freedoms which constitute the very basis of the partnership, RECOGNISING in that context that support of the independence, sovereignty and territorial integrity of the Republic of Azerbaijan will contribute to the safeguarding of peace and stability in Europe, CONSIDERING the commitment of the Parties to promote international peace and security, as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Organisation for Security and Cooperation in Europe (OSCE), DESIROUS of encouraging the process of regional cooperation in the areas covered by this Agreement with neighbouring countries in order to promote the prosperity and stability of the region and in particular initiatives aimed at fostering cooperation and mutual confidence among Independent States of the Transcaucasus region and other neighbouring States, CONSIDERING the firm commitment of the Community and its Member States and of the Republic of Azerbaijan to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the Madrid and Vienna Follow-up Meetings, the Document of the CSCE Bonn Conference on Economic Cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki Document 1992 "The challenges of change", and other fundamental documents of the OSCE, CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of persons belonging to minorities, the establishment of a multiparty system with free and democratic elections and economic liberalisation aimed at setting up a market economy, BELIEVING that full implementation of this Partnership and Cooperation Agreement will both depend on and contribute to continuation and accomplishment of the political, economic and legal reforms in the Republic of Azerbaijan, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of establishing and developing regular political dialogue on bilateral, regional and international issues of mutual interest, RECOGNISING AND SUPPORTING the wish of the Republic of Azerbaijan to establish close cooperation with European Institutions, CONSIDERING the necessity of promoting investment in the Republic of Azerbaijan, including in the energy sector, and in this context the importance attached by the Community and its Member States to equitable conditions for access to and transit for export of energy products; confirming the attachment of the Community and its Member States and of the Republic of Azerbaijan to the European Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects, TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and technical assistance as appropriate, BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between the Republic of Azerbaijan and a wider area of cooperation in Europe and neighbouring regions and its progressive integration into the open international system, CONSIDERING the commitment of the Parties to liberalise trade, in conformity with World Trade Organisation (WTO) rules, CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements, CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernisation, DESIROUS of establishing close cooperation in the area of environment protection taking into account the interdependence existing between the Parties in this field, RECOGNISING that cooperation for the prevention and control of illegal immigration constitutes one of the primary objectives of this Agreement, DESIROUS of establishing cultural cooperation and improving the flow of information, HAVE AGREED AS FOLLOWS: Article 1 A partnership is hereby established between the Community and its Member States of the one part, and the Republic of Azerbaijan, of the other part. The objectives of this partnership are: - to provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations, - to support the Republic of Azerbaijan's efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy, - to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development, - to provide a basis for legislative, economic, social, financial, civil scientific, technological and cultural cooperation. TITLE I GENERAL PRINCIPLES Article 2 Respect for democracy, principles of international law and human rights as defined in particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute essential elements of partnership and of this Agreement. Article 3 The Parties consider that it is essential for their future prosperity and stability that the newly independent States which have emerged from the dissolution of the Union of Soviet Socialist Republics, hereinafter called "Independent States", should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process. Article 4 The Parties shall as appropriate review changing circumstances in the Republic of Azerbaijan, in particular regarding economic conditions there and implementation of market-oriented economic reforms. The Cooperation Council may make recommendations to the Parties concerning development of any part of this Agreement in the light of these circumstances. TITLE II POLITICAL DIALOGUE Article 5 A regular political dialogue shall be established between the Parties which they intend to develop and intensify. It shall accompany and consolidate the rapprochement between the Community and the Republic of Azerbaijan, support the political and economic changes underway in that country and contribute to the establishment of new forms of cooperation. The political dialogue: - will strengthen the links of the Republic of Azerbaijan with the Community and its Member States, and thus with the community of democratic nations as a whole. The economic convergence achieved through this Agreement will lead to more intense political relations, - will bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability in the region and promoting the future development of the Independent States of the Transcaucasus, - shall foresee that the Parties endeavour to cooperate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, and the respect and promotion of human rights, particularly those of persons belonging to minorities and shall hold consultations, if necessary, on relevant matters. Such dialogue may take place on a regional basis, with a view to contributing towards the resolution of regional conflicts and tensions. Article 6 At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 81 and on other occasions by mutual agreement. Article 7 Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in particular in the following forms: - regular meetings at senior official level between representatives of the Community and its Member States, on the one hand, and representatives of the Republic of Azerbaijan, on the other hand, - taking full advantage of diplomatic channels between the Parties including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, OSCE meetings and elsewhere, - any other means, including the possibility of expert meetings which would contribute to consolidating and developing this dialogue. Article 8 Political dialogue at parliamentary level shall take place within the framework of the Parliamentary Cooperation Committee established in Article 86. TITLE III TRADE IN GOODS Article 9 1. The Parties shall accord to one another most-favoured-nation treatment in all areas in respect of: - customs duties and charges applied to imports and exports, including the method of collecting such duties and charges, - provisions relating to customs clearance, transit, warehouses and transhipment, - taxes and other internal charges of any kind applied directly or indirectly to imported goods, - methods of payment and the transfer of such payments, - the rules relating to the sale, purchase, transport, distribution and use of goods on the domestic market. 2. The provisions of paragraph 1 shall not apply to: (a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area; (b) advantages granted to particular countries in accordance with WTO rules and with other international arrangements in favour of developing countries; (c) advantages accorded to adjacent countries in order to facilitate frontier traffic. 3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on the date of the Republic of Azerbaijan acceding to the WTO or on 31 December 1998, whichever is earlier, to advantages defined in Annex I granted by the Republic of Azerbaijan to other states which have emerged from the dissolution of the USSR. Article 10 1. The Parties agree that the principle of free transit is an essential condition of attaining the objectives of this Agreement. In this connection each Party shall secure unrestricted transit via or through its territory of goods originating in the customs territory or destined for the customs territory of the other Party. 2. The rules described in Article V, paragraphs 2, 3, 4 and 5, of the GATT are applicable between the two Parties. 3. The rules contained in this Article are without prejudice to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties, or to the provisions of Article 90. Article 11 Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall furthermore grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by any other international convention on this matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions under which the obligations stemming from such a convention have been accepted by the Party in question. Article 12 1. Goods originating in the Republic of Azerbaijan shall be imported into the Community free of quantitative restrictions without prejudice to the provisions of Articles 14, 17 and 18 of this Agreement. 2. Goods originating in the Community shall be imported into the Republic of Azerbaijan free of all quantitative restrictions and measures of equivalent effect without prejudice to the provisions of Articles 14, 17 and 18 of this Agreement. Article 13 Goods shall be traded between the Parties at market-related prices. Article 14 1. Where any product is being imported into the territory of one of the Parties in such increased quantities or under such conditions as to cause or threaten to cause injury to domestic producers of like or directly competitive products, the Community or the Republic of Azerbaijan, whichever is concerned, may take appropriate measures in accordance with the following procedures and conditions. 2. Before taking any measures, or in cases to which paragraph 4 applies as soon as possible thereafter, the Community or the Republic of Azerbaijan as the case may be, shall supply the Cooperation Council with all relevant information with a view to seeking a solution acceptable to both Parties as provided for in Title XI. 3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Council on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures. 4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action. 5. In the selection of measures under this Article, the Contracting Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement. 6. Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal legislation. Article 15 The Parties undertake to consider development of the provisions in this Agreement on trade in goods between them, as circumstances allow, including the situation arising from the accession of the Republic of Azerbaijan to the WTO. The Cooperation Council may make recommendations on such developments to the Parties which could be put into effect, where accepted, by virtue of agreement between the Parties in accordance with their respective procedures. Article 16 This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of natural resources; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties. Article 17 This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the Combined Nomenclature. Trade in these products shall be governed by a separate agreement, initialled on 18 December 1995 and applied provisionally as from 1 January 1996. Article 18 1. Trade in products covered by the Treaty establishing the European Coal and Steel Community shall be governed by the provisions of this Title, with the exception of Article 12. 2. A contact group on coal and steel matters shall be set up, comprising representatives of the Community on the one hand, and representatives of the Republic of Azerbaijan on the other. The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties. Article 19 Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty establishing the European Atomic Energy Community. If necessary, trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and the Republic of Azerbaijan. TITLE IV PROVISIONS AFFECTING BUSINESS AND INVESTMENT CHAPTER I LABOUR CONDITIONS Article 20 1. Subject to the laws, conditions and procedures applicable in each Member State, the Community and the Member States shall endeavour to ensure that the treatment accorded to Azerbaijani nationals legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. 2. Subject to the laws, conditions and procedures applicable in the Republic of Azerbaijan, the Republic of Azerbaijan shall ensure that the treatment accorded to nationals of a Member State, legally employed in the territory of the Republic of Azerbaijan, shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. Article 21 The Cooperation Council shall examine which improvements can be made in working conditions for business people consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference. Article 22 The Cooperation Council shall make recommendations for the implementation of Articles 20 and 21. CHAPTER II CONDITIONS AFFECTING THE ESTABLISHMENT AND OPERATION OF COMPANIES Article 23 1. The Community and its Member States shall grant treatment no less favourable than that accorded to any third country for the establishment of Azerbaijani companies as defined in Article 25(d). 2. Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Azerbaijani companies established in their territories a treatment no less favourable than that granted to any Community companies, in respect of their operation. 3. The Community and its Member States shall grant to branches of Azerbaijani companies established in their territories treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation. 4. Without prejudice to the reservations listed in Annex V, the Republic of Azerbaijan shall grant for the establishment of Community companies as defined in Article 25(d) treatment no less favourable than that accorded to Azerbaijani companies or to any third-country companies, whichever is the better, and shall grant to subsidiaries and branches of Community companies established in its territory treatment no less favourable than that accorded to its own companies or branches or to any third-country company or branch, whichever is the better, in respect of their operations. Article 24 1. Without prejudice to the provisions of Article 100, the provisions of Article 23 shall not apply to air transport, inland waterways transport and maritime transport. 2. However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including intermodal transport operations involving a sea-leg, each Party shall permit the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party. 3. Such activities include but are not limited to: (a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements; (b) purchase and use, on their own account or on behalf of their customers (and the resale to their customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service; (c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported; (d) provision of business information by any means, including computerised information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications); (e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency; (f) acting on behalf of the companies, inter alia in organising the call of the vessel or taking over cargoes when required. Article 25 For the purpose of this Agreement: (a) a "Community Company" or an "Azerbaijani company" respectively shall mean a company set up in accordance with the laws of a Member State or of the Republic of Azerbaijan respectively and having its registered office or central administration, or principal place of business in the territory of the Community or the Republic of Azerbaijan respectively. However, should the company, set up in accordance with the laws of a Member State or the Republic of Azerbaijan respectively, have only its registered office in the territory of the Community or the Republic of Azerbaijan respectively, the company shall be considered a Community or Azerbaijani company respectively if its operations possess a real and continuous link with the economy of one of the Member States or the Republic of Azerbaijan respectively; (b) "subsidiary" of a company shall mean a company which is effectively controlled by the first company; (c) "branch" of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension; (d) "establishment" shall mean the right of Community or Azerbaijani companies, as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in the Republic of Azerbaijan or in the Community respectively; (e) "operation" shall mean the pursuit of economic activities; (f) "economic activities" shall mean activities of an industrial, commercial and professional character. With regard to international maritime transport, including intermodal operations involving a sea-leg, nationals of the Member States or of the Republic of Azerbaijan established outside the Community or the Republic of Azerbaijan respectively, and shipping companies established outside the Community or the Republic of Azerbaijan and controlled by nationals of a Member State or Azerbaijani nationals 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 Republic of Azerbaijan respectively in accordance with their respective legislation. Article 26 1. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the obligations of a Party under this Agreement. 2. Nothing in this Agreement shall be construed as requiring a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities. 3. For the purpose of this Agreement, "financial services" shall mean those activities described in Annex III. Article 27 The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third-country access to its market, through the provisions of this Agreement. Article 28 1. Notwithstanding the provisions of Chapter I of this Title, a Community company or an Azerbaijani company established in the territory of the Republic of Azerbaijan 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 Republic of Azerbaijan and the Community respectively, employees who are nationals of Community Member States and the Republic of Azerbaijan respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, or branches. The residence and work permits of such employees shall only cover the period of such employment. 2. Key personnel of the abovementioned companies, herein referred to as "organisations" are "intra-corporate transferees" as defined in (c) in the following categories, provided that the organisation is a legal person and that the persons concerned have been employed by it or have been partners in it (other than majority shareholders), for at least the year immediately preceding such movement: (a) persons working in a senior position with an organisation, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including: - directing the establishment or a department or subdivision of the establishment, - supervising and controlling the work of other supervisory, professional or managerial employees, - having the authority personally to hire and fire or recommend hiring, firing or other personnel actions; (b) persons working within an organisation who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession; (c) an "intra-corporate transferee" is defined as a natural person working within an organisation in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organisation concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organisation, effectively pursuing like economic activities in the territory of the other Party. Article 29 1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of this Agreement. 2. The provisions of this Article are without prejudice to those of Article 37: the situations covered by such Article 37 shall be solely governed by its provisions to the exclusion of any other. 3. Acting in the spirit of partnership and cooperation and in the light of the provisions of Article 43 the Government of the Republic of Azerbaijan shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in the Republic of Azerbaijan of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of this Agreement. The Community may request the Republic of Azerbaijan to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts. 4. Where new legislation or regulations introduced in the Republic of Azerbaijan would result in rendering the conditions for operation of subsidiaries and branches of Community companies established in the Republic of Azerbaijan more restrictive than the situation existing on the day of signature of this Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in the Republic of Azerbaijan at the time of entry into force of the relevant act. CHAPTER III CROSS-BORDER SUPPLY OF SERVICES BETWEEN THE COMMUNITY AND THE REPUBLIC OF AZERBAIJAN Article 30 1. The Parties undertake in accordance with the provisions of this chapter to take the necessary steps to allow progressively the supply of services by Community or Azerbaijani companies which are established in a Party other than that of the person for whom the services are intended taking into account the development of the service sectors in the Parties. 2. The Cooperation Council shall make recommendations for the implementation of paragraph 1. Article 31 The Parties shall cooperate with the aim of developing a market-oriented service sector in the Republic of Azerbaijan. Article 32 1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis: (a) the above provision does not prejudice the rights and obligations arising from the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable to one or other Contracting Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis; (b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade. 2. In applying the principles of paragraph 1, the Parties shall: (a) not apply, as from the entry into force of this Agreement, any cargo sharing provisions of bilateral agreements between any Member States of the Community and the former Soviet Union; (b) not introduce cargo-sharing clauses into future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned; (c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade; (d) abolish upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport. 3. Each party shall grant, inter alia, no less favourable treatment, for the ships operated by nationals or companies of the other Party, than that accorded to a Party's own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. 4. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of the Republic of Azerbaijan and vice versa. Article 33 With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties after entry into force of this Agreement. CHAPTER IV GENERAL PROVISIONS Article 34 1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health. 2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority. Article 35 For the purpose of this Title, nothing in this Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. The above provision does not prejudice the application of Article 34. Article 36 Companies which are controlled and exclusively owned by Azerbaijani companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV. Article 37 Treatment granted by either Party to the other thereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, subsector and mode of supply. Article 38 For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or the Republic of Azerbaijan pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS. Article 39 1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements. 2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measures aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation. 3. Nothing in this Title shall be construed to prevent Member States or the Republic of Azerbaijan from distinguishing, in the application of the relevant provisions of their fiscal legislation, between tax payers who are not in identical situations, in particular as regards their place of residence. Article 40 Without prejudice to Article 28, no provision of Chapters II, III and IV shall be interpreted as giving the right to: - nationals of the Member States or of the Republic of Azerbaijan respectively to enter, or stay in, the territory of the Republic of Azerbaijan or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employee thereof or supplier or recipient of services, - Community subsidiaries or branches of Azerbaijani companies to employ or have employed in the territory of the Community nationals of the Republic of Azerbaijan, - Azerbaijani subsidiaries or branches of Community companies to employ or have employed in the territory of the Republic of Azerbaijan nationals of the Member States, - Azerbaijani companies or Community subsidiaries or branches of Azerbaijani companies to supply Azerbaijani persons to act for and under the control of other persons by temporary employment contracts, - Community companies or Azerbaijani subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts. CHAPTER V CURRENT PAYMENTS AND CAPITAL Article 41 1. The Parties undertake to authorise in freely convertible currency, any current payments between residents of the Community and of the Republic of Azerbaijan connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement. 2. With regard to transactions on the capital account of balance of payments, from entry into force of this Agreement, the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured. 3. The provisions of paragraph 2 shall not prevent the Republic of Azerbaijan from applying restrictions on outward direct investment by Azerbaijani residents. Such restrictions shall not apply to subsidiaries and branches of Community companies. Five years after the entry into force of this Agreement, the Parties agree to consult over the maintenance of these restrictions, taking into account all the relevant monetary, fiscal and financial considerations. 4. Without prejudice to paragraph 2 or to paragraph 6, as from the entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and the Republic of Azerbaijan shall be introduced and the existing arrangements shall not become more restrictive. 5. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 above between the Community and the Republic of Azerbaijan in order to promote the objectives of this Agreement. 6. With reference to the provisions of this Article, until a full convertibility of the Azerbaijani currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, the Republic of Azerbaijan may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on the Republic of Azerbaijan for the granting of such credits and are permitted according to the Republic of Azerbaijan's status under the IMF. The Republic of Azerbaijan 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. The Republic of Azerbaijan shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein. 7. Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movement of capital between the Community and the Republic of Azerbaijan cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or the Republic of Azerbaijan, the Community and the Republic of Azerbaijan, respectively, may take safeguard measures with regard to movements of capital between the Community and the Republic of Azerbaijan for a period not exceeding six months if such measures are strictly necessary. CHAPTER VI INTELLECTUAL, INDUSTRIAL AND COMMERCIAL PROPERTY PROTECTION Article 42 1. Pursuant to the provisions of this Article and of Annex II, the Republic of Azerbaijan shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of this Agreement, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights. 2. By the end of the fifth year after entry into force of this Agreement, the Republic of Azerbaijan shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex II to which Member States are parties or which are de facto applied by Member States, according to the relevant provisions contained in these conventions. TITLE V LEGISLATIVE COOPERATION Article 43 1. The Parties recognise that an important condition for strengthening the economic links between the Republic of Azerbaijan and the Community is the approximation of the Republic of Azerbaijan's existing and future legislation to that of the Community. The Republic of Azerbaijan shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community. 2. The approximation of laws shall extend to the following areas in particular: customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment and legislation regarding the exploitation and utilisation of natural resources, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations and transport. 3. The Community shall provide the Republic of Azerbaijan with technical assistance for the implementation of these measures, which may include inter alia: - the exchange of experts, - the provision of early information especially on relevant legislation, - organisation of seminars, - training activities, - aid for translation of Community legislation in the relevant sectors. 4. The Parties agree to examine ways to apply their respective competition laws on a concerted basis in such cases where trade between them is affected. TITLE VI ECONOMIC COOPERATION Article 44 1. The Community and the Republic of Azerbaijan shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of the Republic of Azerbaijan. Such cooperation shall strengthen existing economic links, to the benefit of both parties. 2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic and trading systems in the Republic of Azerbaijan and will be guided by the requirements of sustainability and harmonious social development; they will also fully incorporate environmental considerations. 3. To this end, cooperation will concentrate, in particular, on economic and social development, human resources development, support for enterprises (including privatisation, investment and development of financial services), agriculture and food, energy, transport, tourism, environmental protection, regional cooperation and monetary policy. 4. Special attention shall be devoted to measures, as in conformity with the legislation in force in the Republic of Azerbaijan capable of fostering cooperation among the Independent States of the Transcaucasus region, and with other neighbouring states, with a view to stimulating a harmonious development of the region. 5. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to the Republic of Azerbaijan and its established coordination and implementation procedures. Article 45 Cooperation in the field of trade in goods and services The Parties will cooperate with a view to ensuring that the Republic of Azerbaijan's international trade is conducted in conformity with the rules of the WTO. Such cooperation shall include specific issues directly relevant to trade facilitation, including: - formulation of policy on trade and trade-related questions, including payments, and clearing mechanisms, - drafting of relevant legislation, - assistance to prepare for the Republic of Azerbaijan's eventual accession to the WTO. Article 46 Industrial Cooperation 1. Cooperation shall aim at promoting the following in particular: - the development of business links between economic operators of both sides, - Community participation in the Republic of Azerbaijan's efforts to restructure its industry, - the improvement of management, - the development of appropriate market-based commercial rules and practices, as well as the transfer of know-how, - environmental protection. 2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings. Article 47 Construction The Parties shall cooperate in the field of construction industry. This cooperation shall, inter alia, aim at modernising and restructuring the construction sector in the Republic of Azerbaijan in line with the principles of a market economy and duly taking into account related health, safety and environmental aspects. Article 48 Investment promotion and protection 1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for private investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities. 2. The aims of cooperation shall be in particular: - the conclusion, where appropriate, between the Member States and the Republic of Azerbaijan of agreements for the promotion and protection of investment, - the conclusion, where appropriate, between the Member States and the Republic of Azerbaijan of agreements to avoid double taxation, - the creation of favourable conditions for attracting foreign investments into the Azerbaijani economy, - to establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment, - to exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events. Article 49 Public procurement The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders. Article 50 Cooperation in the field of standards and conformity assessment 1. Cooperation between the Parties shall promote alignment with internationally agreed criteria, principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of the quality of Azerbaijani products. 2. To this end the Parties shall seek to cooperate in technical assistance projects which will: - promote appropriate cooperation with organisations and institutions specialised in these fields, - promote the use of Community technical regulations and the application of European standards and conformity assessment procedures, - permit the sharing of experience and technical information in the field of quality management. Article 51 Mining and raw materials 1. The Parties shall aim at increasing investment and trade in mining and raw materials. 2. The cooperation shall focus in particular on the following areas: - exchange of information on the prospects of the mining and non-ferrous metals sectors, - the establishment of a legal framework for cooperation, - trade matters, - the adoption and implementation of environmental legislation, - training, - safety in the mining industry. Article 52 Cooperation in science and technology 1. The Parties shall promote cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes and subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR). 2. Science and technology cooperation shall cover: - the exchange of scientific and technical information, - joint RTD activities, - training activities and mobility programmes for scientists, researchers and technicians engaged in RTD on both sides. Where such cooperation takes the form of activities involving education and/or training, it should be carried out in accordance with the provisions of Article 53. The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in science and technology. 3. The cooperation covered by this Article shall implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party, and which shall set out, inter alia, appropriate IPR provisions. Article 53 Education and training 1. The Parties shall cooperate with the aim of raising the level of general education and professional qualifications in the Republic of Azerbaijan, both in the public and private sectors. 2. The cooperation shall focus in particular on the following areas: - updating higher education and training systems in the Republic of Azerbaijan including the system of certification of higher educational establishments and diplomas of higher education, - the training of public and private sector executives and civil servants in priority areas to be determined, - cooperation between educational establishments and between educational establishments and firms, - mobility for teachers, graduates, administrators, young scientists and researchers, and young people, - promoting teaching in the field of European studies within the appropriate institutions, - teaching Community languages, - post-graduate training of conference interpreters, - training of journalists, - training of trainers, - exchange of teaching methods, encouraging the utilisation of modern educational programmes and technical means of education. 3. The possible participation of one Party in the respective programmes in the field of education and training of the other Party could be considered in accordance with their respective procedures and, where appropriate, institutional frameworks and plans of cooperation will then be established building on participation of the Republic of Azerbaijan in the Community's Tempus programme. Article 54 Agriculture and the agro-industrial sector The purpose of cooperation in this area shall be the pursuance of agrarian reform, the modernisation, privatisation and restructuring of agriculture, the agro-industrial and service sectors in the Republic of Azerbaijan, development of domestic and foreign markets for Azerbaijani products, in conditions that ensure the protection of the environment, taking into account the necessity to improve security of food supply as well as the development of agribusiness, the processing and distribution of agricultural products. The Parties shall also aim at the gradual approximation of Azerbaijani standards to Community technical regulations concerning industrial and agricultural food products including sanitary and phytosanitary standards. Article 55 Energy 1. Cooperation shall take place within the principles of the market economy and the European Energy Charter and bearing in mind the Energy Charter Treaty and the Protocol on energy efficiency and related environmental aspects, against a background of progressive integration of the energy markets in Europe. 2. The cooperation shall include among others the following areas: - formulation and development of energy policy, - improvement in management and regulation of the energy sector in line with a market economy, - improvement of energy supply, including security of supply, in an economic and environmentally sound manner, - promotion of energy saving and energy efficiency and implementation of the Energy Charter Protocol on energy efficiency and related environmental aspects, - modernisation of energy infrastructures, - improvement of energy technologies in supply and end-use across the range of energy types, - management and technical training in the energy sector, - transportation and transit of energy materials and products, - the introduction of the range of institutional, legal, fiscal and other conditions necessary to encourage increased energy trade and investment, - development of hydroelectric and other renewable energy resources. 3. The Parties shall exchange relevant information relating to investment projects in the energy sector, in particular concerning the construction and refurbishing of oil and gas pipelines or other means of transporting energy products. They shall cooperate with a view to implementing as efficaciously as possible the provisions of Title IV and of Article 48, in respect of investments in the energy sector. Article 56 Environment 1. Bearing in mind the European Energy Charter and the Declaration of the Lucerne Conference of 1993, and taking into account the Energy Charter Treaty, and especially its Article 19, and the Energy Charter Protocol on energy efficiency and related environmental aspects, the Parties shall develop and strengthen their cooperation on environment and human health. 2. Cooperation shall aim at combating the deterioration of the environment and in particular: - effective monitoring of pollution levels and assessment of environment; system of information on the state of the environment, - combating local, regional and transboundary air and water pollution, - ecological restoration, - sustainable, efficient and environmentally effective production and use of energy, - ecological safety of industrial plants, - classification and safe handling of chemicals, - water quality, - waste reduction, recycling and saf …