21998A0219(02)

21998A0219(02) 21998A0219(02) Partnership and Cooperation Agreement between the European Communities and their Member States, and Ukraine - 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 049 , 19/02/1998 p. 0003 - 0046  Dates: OF DOCUMENT:   14/06/1994 OF EFFECT:   01/03/1998; ENTRY INTO FORCE SEE ART 108.2 AND 398D0149 OF SIGNATURE:   14/06/1994; LUXEMBOURG OF END OF VALIDITY:   99/99/9999 Authentic language: THE OFFICIAL LANGUAGES ; GERMAN ; ENGLISH ; DANISH ; SPANISH ; FRENCH ; GREEK ; ITALIAN ; DUTCH ; PORTUGUESE ; OTHER THAN COMMUNITY LANGUAGE ; UKRAINIAN ; FINNISH ; SWEDISH Author: EUROPEAN COMMUNITY ; EUROPEAN COAL AND STEEL COMMUNITY ; EUROPEAN ATOMIC ENERGY COMMUNITY ; THE 12 MEMBER STATES ; BELGIUM ; DENMARK ; FEDERAL REPUBLIC OF GERMANY ; GREECE ; SPAIN ; FRANCE ; IRELAND ; ITALY ; LUXEMBOURG ; NETHERLANDS ; PORTUGAL ; UNITED KINGDOM ; UKRAINE Subject matter: EXTERNAL RELATIONS ; COOPERATION ; PROVISIONS UNDER ARTICLE 235 EEC ; PROVISIONS IMPLEMENTING ARTICLE 95 - ECSC Directory code: 11401030 EUROVOC descriptor: cooperation agreement ; European Community ; EC countries ; Ukraine Legal basis: 192E054-P2................ ADOPTION 192E057-P2F3.............. ADOPTION 192E066................... ADOPTION 192E073C-P2............... ADOPTION 192E075................... ADOPTION 192E084-P2................ ADOPTION 192E099................... ADOPTION 192E100................... ADOPTION 192E113................... ADOPTION 192E235................... ADOPTION 192E228-P2F2.............. ADOPTION 192E228-P3L2.............. ADOPTION 151K095................... ADOPTION 157A101-L2................ ADOPTION Instruments cited: 185I077................... 185I081................... 185I244................... 185I249................... 185I280................... 294A1223(09).............. 279A0412(06).............. 296A0330(16).............. 294A1223(16).............. 390D0233.................. 294A1223(01).............. 279A0412(07).............. 294A0517(20).............. 294A1231(51).............. 393R2053.................. Amendment to: 290A0315(01)...... AMENDMENT..... PARTIAL REPLACEMENT FR 01/03/1998 Amended by: ADOPTED-BY.... 398D0149.......... LINKED-TO..... 200A1109(02)...... PARTNERSHIP AND COOPERATION AGREEMENT between the European Communities and their Member States, and Ukraine PARTNERSHIP AND COOPERATION AGREEMENT establishing a partnership between the European Communities and their Member States, of the one part, and Ukraine, of the other part THE KINGDOM OF BELGIUM, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE PORTUGUESE REPUBLIC, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, Contracting Parties to the Treaty establishing the European Community, the Treaty 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 UKRAINE, of the other part, TAKING ACCOUNT of the wish of the Parties to establish close relations building upon the existing historical links between them, CONSIDERING the importance of developing cooperative links between the Community, its Member States and Ukraine and the common values that they share, RECOGNIZING that the Community and Ukraine wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past, in particular, by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on trade and commercial and economic cooperation, signed on 18 December 1989, CONSIDERING the commitment of the Community and its Member States and of Ukraine to strengthening the political and economic freedoms which constitute the very basis of the partnership, CONSIDERING the commitment of the Parties to promote international peace and security as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Conference on Security and Cooperation in Europe, CONSIDERING the firm commitment of the Community and its Member States and of Ukraine to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the concluding documents of the Madrid and Vienna follow-up meetings, the document of the CSCE Bonn Conference on economic cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki Document 1992, 'The challenges of change`, RECOGNIZING in that context that support of independence, sovereignty and territorial integrity of Ukraine will contribute to the safeguarding of peace and stability in the region of Central and Eastern Europe and on the European continent as a whole, CONFIRMING the attachment of the Community and its Member States and of Ukraine to the European Energy Charter and to the Declaration of the Lucerne Conference, April 1993, CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of minorities, the establishment of a multiparty system with free and democratic elections and economic liberalization aimed at setting up a market economy, BELIEVING that there is a necessary connection between full implementation of partnership on the one hand, and continuation of the actual accomplishment of Ukraine's political, economic and legal reforms on the other hand, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference, DESIROUS of encouraging the process of regional cooperation in the areas covered by this Agreement with the neighbouring countries in order to promote the prosperity and stability of the region, DESIROUS of establishing and developing regular political dialogue on bilateral and international issues of mutual interest, RECOGNIZING AND SUPPORTING the wish of Ukraine to establish close cooperation with European institutions, TAKING ACCOUNT of the Community's willingness to develop economic cooperation and provide technical assistance, as appropriate, for the implementation of economic reform in Ukraine, BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between Ukraine and a wider area of cooperation in Europe and neighbouring regions and Ukraine's progressive integration into the open international trading system, CONSIDERING the commitment of the Parties to liberalize trade, based on the principles contained in the General Agreement on Tariffs and Trade (GATT), as amended by the Uruguay Round, CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements, WELCOMING AND RECOGNIZING the importance of Ukraine's efforts, aimed at transition of its economy away from a State trading country with a centrally planned economy into a market economy, CONVINCED that continued progress towards a market economy will be fostered by cooperation between the Parties in the forms set out in this Agreement, CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernization, DESIROUS of establishing close cooperation in the area of environmental protection taking into account the interdependence existing between the Parties in this field, BEARING in mind the intention of the Parties to develop their cooperation in the field of civil science and technologies, including space research, in view of the complementarity of their activities in this area; DESIROUS of establishing cultural cooperation and improving 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 Ukraine, 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 close political relations, - to promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable development, - to provide a basis for mutually advantageous economic, social, financial, civil scientific technological and cultural cooperation, - to support Ukrainian efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy. TITLE I GENERAL PRINCIPLES Article 2 Respect for the democratic principles and human rights as defined in particular in the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute an essential element of partnership and of this Agreement. Article 3 The Parties consider that it is essential for the future prosperity and stability of the region of the former Soviet Union that the newly independent States which have emerged from the dissolution of the Union of Soviet Socialist Republics (hereinafter called 'Independent States`) should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process. In view of the above, the Parties consider that the development of their relations should take due account of Ukraine's wish to maintain cooperative relations with other Independent States. Article 4 The Parties undertake to consider, in particular when Ukraine has further advanced in the process of economic reform, developments of the relevant Titles of this Agreement, in particular Title III and Article 49, with a view to the establishment of a free-trade area between them. The Cooperation Council may make recommendations on such developments to the Parties. Such developments shall only be put into effect by virtue of an agreement between the Parties in accordance with their respective procedures. The Parties shall consult each other in the year 1998 whether circumstances, and in particular Ukraine's advances in market-oriented economic reforms and the economic conditions prevailing there at that time, allow the beginning of negotiations on the establishment of a free-trade area. Article 5 The Parties undertake to examine together, by mutual consent, amendments which it may be appropriate to make to any part of the Agreement in view of changes in circumstances, and in particular of the situation arising from Ukraine's accession to GATT. The first examination shall take place three years after the entry into force of the Agreement or when Ukraine becomes a Contracting Party of GATT, whichever is earlier. TITLE II POLITICAL DIALOGUE Article 6 A regular political dialogue shall be established between the Parties which they intend to develop and intensify. It shall accompany and consolidate the rapprochement between the Community and Ukraine, support the political and economic changes under way in that country and contribute to the establishment of new forms of cooperation. The political dialogue: - shall strengthen the links of Ukraine with the Community, and thus with the community of democratic nations. The economic convergence achieved through this Agreement will lead to more intense political relations, - shall bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability, - shall foresee that the Parties endeavour to cooperate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, the respect and promotion of human rights, particularly those of minorities and shall hold consultations, if necessary, on the relevant matters. Article 7 Consultations, as appropriate, shall be held between the Parties at the highest political level. At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 85 and on other occasions including with the Union Troika by mutual agreement. Article 8 Other procedures and mechanisms for political dialogue shall be set up by the Parties by establishing appropriate contacts, exchanges and consultations, in particular in the following forms: - regular meetings at the level of the senior officials between representatives of Ukraine and representatives of the Community, - taking full advantage of all diplomatic channels between the Parties, including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, CSCE meetings and elsewhere, - exchanging regular information on matters of mutual interest concerning political cooperation in Europe, - any other means which would contribute to consolidating and developing political dialogue. Article 9 Political dialogue at parliamentary level shall take place within the framework of the Parliamentary Cooperation Committee which shall be established under Article 90. TITLE III TRADE IN GOODS Article 10 1. The Parties shall accord to one another most-favoured-nation treatment according to Article I, paragraph 1 of the GATT. 2. The provisions of paragraph 1 shall not apply to: (a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area; (b) advantages granted to particular countries in accordance with the GATT and with other international arrangements in favour of developing countries; (c) advantages accorded to adjacent countries in order to facilitate frontier traffic. Article 11 1. The Parties agree that the principle of freedom of transit of goods is an essential condition of attaining the objectives of this Agreement. In this connection each Party shall provide for unrestricted transit, via or through its territory, of goods originating in the customs territory or destined for the customs territory of the other Party. 2. The rules described in Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable between the two Parties. 3. The rules contained in this Article are without prejudice to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties. Article 12 The provisions of Article 10 (1) and Article 11 (2) shall not apply, during a transitional period expiring on 31 December 1998 or the accession of Ukraine to the GATT, whichever is earlier, to advantages defined in Annex I granted by Ukraine to other Independent States as from the day preceding the date of entry into force of the Agreement. Article 13 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 14 Goods originating in Ukraine and the Community, respectively, shall be imported into the Community and Ukraine respectively, free of quantitative restrictions, without prejudice to the provisions of Articles 18, 21, 22 and Annex II to this Agreement and to the provisions of Articles 77, 81, 244, 249 and 280 of the Act of Accession of Spain and Portugal to the Community. Article 15 1. The products of the territory of one Party imported into the territory of the other Party shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. 2. Moreover, these products shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provision of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product. Article 16 The following Articles of the GATT shall be applicable mutatis mutandis between the two Parties. 1. Article VII, paragraphs 1, 2, 3, 4a, 4b, 4d, 5; 2. Article VIII; 3. Article IX; 4. Article X. Article 17 Goods shall be traded between the Parties at market-related prices. Article 18 1. Where any product is being imported into the territory of one of the Parties in such increased quantities and under such conditions as to cause or threaten to cause substantial injury to domestic producers of like or direct competitive products, the Community or Ukraine, 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 Ukraine, as the case may be, shall supply the Cooperation Committee with all relevant information with a view to seeking a solution acceptable to both Parties. 3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Committee on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures. 4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action. 5. In the selection of measures under this Article, the Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement. Article 19 Nothing in this Title, and in Article 18 in particular shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal legislation. In respect of anti-dumping or subsidies investigations, each Party agrees to examine submissions by the other Party and to inform the interested parties concerned of the essential facts and considerations on the basis of which a final decision is to be made. Before definitive anti-dumping and countervailing duties are imposed, the Party shall do the utmost to bring about a constructive solution to the problem. Article 20 The 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 21 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 5 May 1993 and applied provisionally since 1 January 1993. Article 22 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 14 and upon entry into force, by the provisions of an agreement on quantitative arrangements concerning exchanges of ECSC steel products. 2. A contact group on coal and steel matters has been set up, comprising representatives of the Community on the one hand, and representatives of Ukraine on the other. The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties. Article 23 Trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and Ukraine. TITLE IV PROVISIONS AFFECTING BUSINESS AND INVESTMENT CHAPTER I LABOUR CONDITIONS Article 24 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 Ukrainian nationals, legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. 2. Subject to the laws, conditions and procedures applicable in Ukraine, Ukraine shall endeavour to ensure that the treatment accorded to nationals of a Member State, legally employed in the territory of Ukraine shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals. Article 25 Coordination of social security The Parties shall conclude agreements in order: 1. to adopt, subject to the conditions and modalities applicable in each Member State, the provisions necessary for the coordination of social security systems for workers of Ukrainian nationality, legally employed in the territory of a Member State. These provisions will, in particular, ensure that: - all periods of insurance, employment or residence completed by such workers in the various Member States shall be added together for the purpose of pensions in respect of old age, invalidity and death and for the purpose of medical care for such workers, - any pensions in respect of old age, death, invalidity, industrial accidents or occupational disease, with the exception of the special non-contributory benefits, shall be freely transferable at the rate applied by virtue of the law of the debtor Member State or States; 2. to adopt, subject to the conditions and modalities applicable in Ukraine, the provisions necessary to accord to workers who are nationals of a Member State and legally employed in Ukraine, treatment similar to that specified in the second indent of paragraph 1. Article 26 The measures to be taken in accordance with Article 25 shall not affect any rights or obligations arising from bilateral agreements linking Ukraine and the Member States where those agreements provide for more favourable treatment of nationals of Ukraine or of the Member States. Article 27 The Cooperation Council shall examine which joint efforts can be made to control illegal immigration taking into account the principle and practice of readmission. Article 28 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 29 The Cooperation Council shall make recommendations for the implementation of Articles 24, 27 and 28. CHAPTER II CONDITIONS AFFECTING THE ESTABLISHMENT AND OPERATION OF COMPANIES Article 30 1. (a) The Community and its Member States shall grant for the establishment of Ukrainian companies in their territories treatment no less favourable than that accorded to companies of any third country, and this in conformity with their legislation and regulations. (b) Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Ukrainian companies established in their territories a treatment no less favourable than that granted to any Community company, in respect of their operation, and this in conformity with their legislation and regulations. (c) The Community and its Member States shall grant to branches of Ukrainian companies established in their territories a treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation, and this in conformity with their legislation and regulations. 2. (a) Without prejudice to the reservations listed in Annex V, Ukraine shall grant for the establishment of Community companies in its territory, a treatment no less favourable than that accorded to its own companies or to companies of any third country whichever is the better, and this in conformity with its legislation and regulations. (b) Ukraine shall grant to subsidiaries and branches of Community companies, established in its territory, treatment no less favourable than that accorded to its own companies or branches respectively or to companies or branches of any third country respectively, whichever is the better, in respect of their operations, and this in conformity with its legislation and regulations. 3. The provisions of paragraphs 1 and 2 cannot be used so as to circumvent a Party's legislation and regulations applicable to access to specific sectors or activities by subsidiaries of companies of the other Party established in the territory of such first Party. The treatment referred to in paragraph 1 and 2 shall benefit companies established in the Community and Ukraine respectively at the date of entry into force of this Agreement and companies established after that date once they are established. Article 31 1. The provisions of Article 30 shall not apply to air transport, inland waterways transport and maritime transport, without prejudice to the provisions of Article 104. 2. However, in respect of activities undertaken by shipping agencies for the provision of international maritime transport services, including intermodal activities involving a sea leg, each Party shall permit to the companies of the other Party their commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better. 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, particulary 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 of any means, including computerized information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications); (e) setting-up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency; (f) acting on behalf of the companies, organizing the call of the ship or taking over cargoes when required. Article 32 For the purposes of this Agreement: (a) A 'Community company` or a 'Ukrainian company` respectively, shall mean a company set up in accordance with the laws of a Member State or of Ukraine respectively and having its registered office or central administration or principal place of business in the territory of the Community or Ukraine respectively. However, should the company, set up in accordance with the laws of a Member State or Ukraine respectively, have only its registered office in the territory of the Community or Ukraine respectively, the company shall be considered a Community or Ukrainian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Ukraine respectively. (b) 'Subsidiary` of a company shall mean a company which is effectively controlled by the first company. (c) 'Branch` of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will, if necessary, be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension. (d) 'Establishment` shall mean the right of Community or Ukrainian companies as referred to in (a) to take up economic activities by means of the setting-up of subsidiaries and branches in Ukraine or in the Community respectively. (e) 'Operation` shall mean the pursuit of economic activities. (f) 'Economic activities` shall mean activities of an industrial, commercial and professional character. (g) With regard to international maritime transport, including intermodal operations involving a sea leg, nationals of the Member States or of Ukraine, established outside the Community or Ukraine respectively, and shipping companies established outside the Community or Ukraine and controlled by nationals of a Member State or Ukrainian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Ukraine respectively in accordance with their respective legislations. Article 33 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, policyholders 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 to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities. Article 34 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 35 1. Notwithstanding the provisions of Chapter I, a Community company or a Ukrainian company established in the territory of Ukraine or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Ukraine and the Community respectively, employees who are nationals of Community Member States and Ukraine respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall only cover the period of such employment. 2. Key personnel of the abovementioned companies herein referred to as 'organizations` are 'intracorporate transferees` as defined in (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least the year immediately preceding such movement: (a) Persons working in a senior position with an organization, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including: - directing the establishment or a department or subdivision of the establishment, - supervising and controlling the work of other supervisory, professional or managerial employees, - having the authority personally to engage and dismiss or recommend engaging, dismissing or other personnel actions. (b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession. (c) An 'intracorporate transferee` is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party. Article 36 1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. 2. The provisions of this Article are without prejudice to those of Article 44: the situations covered by such Article 44 shall be solely governed by its provisions to the exclusion of any other. 3. Acting in the spirit of partnership and cooperation and in light of provisions contained in Article 51, the Government of Ukraine shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in Ukraine of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. The Community may request Ukraine to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts. 4. Where new legislation or regulations introduced in Ukraine would result in rendering the conditions for establishment of Community companies into its territory and for the operation of subsidiaries and branches of Community companies established in Ukraine more restrictive than the situation existing on the day of signature of the Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in Ukraine at the time of entry into force of the relevant act. CHAPTER III CROSS-BORDER SUPPLY OF SERVICES BETWEEN THE COMMUNITY AND UKRAINE Article 37 1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Ukrainian companies who are established in a Party other than that of the person for whom the services are intended, taking into account the development of the service sectors in the Parties. 2. The Cooperation Council shall make recommendations for the implementation of paragraph 1. Article 38 The Parties shall cooperate with the aim of developing a market-oriented service sector in Ukraine. Article 39 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 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 entry into force of this Agreement, any cargo sharing provisions of bilateral agreements between any Member State of the Community and the former Soviet Union; (b) not introduce cargo-sharing clauses in future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to 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, on entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport. Each Party shall grant, inter alia, no less favourable treatment, than that accorded to a Party's own ships for the ships flying the flag of the other Party with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. The same treatment shall also be accorded by each Party in respect of ships operated by the other Party's nationals and companies, which fly the flag of a third country, after a transitional period, but not later than 1 July 1997. 3. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of Ukraine and vice versa. Article 40 With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties as defined in Article 99 after entry into force of this Agreement. CHAPTER IV GENERAL PROVISIONS Article 41 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 42 For the purpose of this Title, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that - in so doing - they do not apply them in a manner so as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement. This provision does not prejudice the application of Article 41. Article 43 Companies which are controlled and exclusively owned by Ukrainian companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV. Article 44 Treatment granted by either Party to the other hereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, subsector and mode of supply. Article 45 For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or Ukraine pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS. Article 46 1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements. 2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation. 3. Nothing in this Title shall be construed to prevent Member States or Ukraine from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in identical situations, in particular as regards their place of residence. Article 47 Without prejudice to Article 35, no provisions of Chapters II, III and IV hereof shall be interpreted as giving the right to: - nationals of the Member States or of Ukraine respectively to enter, or stay in, the territory of Ukraine or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employed thereof or supplier or recipient of services, - Community subsidiaries or branches of Ukrainian companies to employ or have employed in the territory of the Community nationals of Ukraine, - Ukrainian subsidiaries or branches of Community companies to employ or have employed in the territory of Ukraine nationals of the Member States, - Ukrainian companies or Community subsidiaries or branches of Ukrainian companies to supply Ukrainian persons to act for and under the control of other persons by temporary employment contracts, - Community companies or Ukrainian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts. TITLE V CURRENT PAYMENTS AND CAPITAL Article 48 1. The Parties undertake to authorize in freely convertible currency, any payments on the current account of balance of payments between residents of the Community and of Ukraine connected with the movement of goods, services or persons made in accordance with the provisions of 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 of Title IV, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured. 3. Without prejudice to paragraph 2 or to paragraph 5, as from 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 Ukraine shall be introduced and the existing arrangements shall not become more restrictive. 4. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 between the Community and Ukraine in order to promote the objectives of this Agreement. 5. With reference to the provisions of this Article, until a full convertibility of Ukrainian currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, Ukraine may, in exceptional circumstances, apply exchange restrictions connected with the granting or taking-up of short- and medium-term financial credits to the extent that such restrictions are imposed on Ukraine for the granting of such credits and are permitted according to Ukraine's status under the IMF. Ukraine shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. Ukraine shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein. 6. Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movements of capital between the Community and Ukraine cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Ukraine, the Community and Ukraine, respectively, may take safeguard measures with regard to movements of capital between the Community and Ukraine for a period not exceeding six months if such measures are strictly necessary. TITLE VI COMPETITION, INTELLECTUAL, INDUSTRIAL AND COMMERCIAL PROPERTY PROTECTION AND LEGISLATIVE COOPERATION Article 49 1. The Parties agree to work to remedy or remove through the application of their competition laws or otherwise, restrictions on competition by enterprises or caused by State intervention in so far as they may affect trade between the Community and the Ukraine. 2. In order to attain the objectives mentioned in paragraph 1: 2.1. The Parties shall ensure that they have and enforce laws addressing restrictions on competition by enterprises within their jurisdiction. 2.2. The Parties shall refrain from granting State aid favouring certain undertakings or the production of goods other than primary products as defined in the GATT, or the provision of services, which distort or threaten to distort competition in so far as they affect trade between the Community and Ukraine. 2.3. Upon request by one Party, the other Party shall provide information on its aid schemes or on particular individual cases of State aid. No information needs to be provided which is covered by legislative requirements of the Parties on professional or commercial secrets. 2.4. In the case of State monopolies of a commercial character, the Parties declare their readiness, as from the fourth year from the date of entry into force of this Agreement, to ensure that there is no discrimination between nationals of the Parties regarding the conditions under which goods are procured or marketed. 2.5. In the case of public undertakings or undertakings to which Member States or Ukraine grant exclusive rights, the Parties declare their readiness, as from the fourth year from the date of entry into force of this Agreement, to ensure that there is neither enacted nor maintained any measure distorting trade between the Community and Ukraine to an extent contrary to the Parties' respective interests. This provision shall not obstruct the performance, in law or fact, of the particular tasks assigned to such undertakings. 2.6. The period defined in paragraphs 2.4 and 2.5 may be extended by agreement of the Parties. 3. Consultations may take place within the Cooperation Committee at the request of the Community or Ukraine on the restrictions or distortions of competition referred to in paragraphs 1 and 2 and on the enforcement of their competition rules, subject to limitations imposed by laws regarding disclosure of information, confidentiality and business secrecy. Consultations may also comprise questions on the interpretation of paragraphs 1 and 2. 4. The Parties with experience in applying competition rules shall give full consideration to providing other Parties, upon request and within available resources, technical assistance for the development and implementation of competition rules. 5. The above provisions in no way affect the Parties' rights to apply adequate measures, notably those referred to in Article 19, in order to address distortions of trade in goods or services. Article 50 1. Pursuant to the provisions of this Article and of Annex III, Ukraine shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement for a level of protection similar to that existing in the Community, including effective means of enforcing such rights. 2. By the end of the fifth year after entry into force of the Agreement, Ukraine shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex III to which Member States are parties or which are de facto applied by Member States according to the relevant provisions contained in these conventions. Article 51 1. The Parties recognize that an important condition for strengthening the economic links between Ukraine and the Community is the approximation of Ukraine's existing and future legislation to that of the Community. Ukraine shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community. 2. The approximation of laws shall extend to the 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, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations, transport. 3. The Community shall provide Ukraine with technical assistance as appropriate for the implementation of these measures which may include in particular: - the exchange of experts, - the provision of early information especially on relevant legislation, - organization of seminars, - training activities, - aid for translation of Community legislation in the relevant sectors. TITLE VII ECONOMIC COOPERATION Article 52 1. The Community and Ukraine shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of Ukraine. Such cooperation shall strengthen and develop economic links, to the benefit of both Parties. 2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic system in Ukraine and will be guided by the requirements of sustainability and harmonious social development; they will also fully incorporate environmental considerations. 3. To this end the cooperation will concentrate on industrial cooperation, investment promotion and protection, public procurement, standards and conformity assessments, mining and raw materials, science and technology, education and training, agriculture and agro-industrial sector, energy, civil nuclear sector, environment, transport, space, telecommunications, financial services, money laundering, monetary policy, regional development, social cooperation, tourism, small and medium-sized enterprises, information and communication, consumer protection, customs, statistical cooperation, economics and drugs. 4. Special attention shall be devoted to measures capable of fostering cooperation between the independent States and other neighbouring countries with a view to stimulating a harmonious development of the region. 5. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council Regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to Ukraine and its established coordination and implementation procedures. 6. The Cooperation Council shall make recommendations as to the development of cooperation in fields identified in paragraph 3. Article 53 Industrial cooperation 1. Cooperation shall aim at promoting, in particular, the following: - the development of business links between economic operators of both sides, for example in view of the transfer of technologies and know-how, - Community participation in Ukraine's efforts to restructure and technically upgrade its industry, - the improvement of management, - the development of appropriate commercial rules and practices, including product marketing, - environmental protection, - adaptation of the structure of industrial production to the standards of an advanced market economy, - the conversion of the military-industrial complex. 2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings. Article 54 Investment promotion and protection 1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities. 2. The aims of this cooperation shall be in particular: - the conclusion, where appropriate, between the Member States and Ukraine, of agreements for the promotion and protection of investment, - the conclusion, where appropriate, between the Member States and Ukraine, of agreements to avoid double taxation, - the creation of favourable conditions for attracting foreign investment into the Ukrainian economy, - to establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment, - to exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events. Article 55 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 56 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 action will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of Ukrainian product quality. 2. To this end they shall seek: - to promote appropriate cooperation with organizations and institutions specialized in these fields, - to promote the use of Community technical regulations and the application of European standards and conformity assessment procedures, - to permit the sharing of experience and technical information in the field of quality management. Article 57 Mining and raw materials 1. The Parties shall aim at increasing investment and trade in mining and raw materials. 2. The cooperation shall focus in particular on the following areas: - exchange of information on the developments in the mining and non-ferrous metals sectors, - the establishment of a legal framework for cooperation, - trade matters, - the development of legislative and other measures in the field of environmental protection, - training, - safety in the mining industry. Article 58 Cooperation in science and technology 1. The Parties shall promote cooperation in civil scientific research and technological development (R+TD) 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 R+TD activities, - training activities and mobility programmes for scientists, researchers and technicians engaged in R+TD in both sides. Where such cooperation takes the form of activities involving education and/or training, it should be carried out in accordance with the provisions of Article 59. The Parties, on the basis of mutual agreement, can engage in other forms of cooperation in science and technology. In carrying out such cooperation activities, special attention shall be devoted to the redeployment of scientists, engineers, researchers and technicians who are or have been engaged in research on and production of weapons of mass destruction. 3. The cooperation covered by this article shall be implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party, and which shall set out, inter alia, appropriate IPR provisions. Article 59 …