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

THE EUROPEAN ECONOMIC COMMUNITY, and

The EUROPEAN ATOMIC ENERGY COMMUNITY,

hereinafter together called 'the Community', of the one part, and

THE UNION Of SOVIET SOCIALIST REPUBLICS,

hereinafter called 'the USSR', of the other part,

RECOGNIZING that the Community and the USSR desire to establish direct contractual relations with one another which will permit further development at a later stage,

CONSIDERING that the development of relations between the Contracting Parties will complement and extend bilateral relations between the Community's Member States and the USSR,

HAVING REGARD to the importance of giving full effect to the Final Act of the Conference on Security and Cooperation in Europe and the Concluding Documents of subsequent meetings of the CSCE participating States,

DESIROUS of creating favourable conditions for the harmonious development and diversification of trade and the promotion of commercial and economic cooperation in areas of mutual interest on the basis of equality, mutual benefit and reciprocity,

BELIEVING that the volume and structure of trade between the Contracting Parties do not correspond to the potential represented by their current levels of economic development and their future prospects,

TAKING INTO ACCOUNT the favourable implications for trade and economic relations between the Contracting Parties of the economic restructuring under way in the USSR,

RECALLING the Joint Declaration on the establishment of official relations between the Council for Mutual Economic Assistance and the European Economic Community,

HAVE DECIDED to conclude an Agreement on trade and commercial and economic cooperation between the European Economic Community and the European Atomic Energy Community, of the one part, and the Union of Soviet Socialist Republics, of the other part, and to this end have designated as their Plenipotentiaries:

THE EUROPEAN ECONOMIC COMMUNITY:

Roland DUMAS,

Ministre d'Etat,

Minister for Foreign Affairs of the French Republic,

President-in-Office of the Council of the European Communities;

Frans ANDRIESSEN,

Vice-President of the Commission of the European Communities;

THE EUROPEAN ATOMIC ENERGY COMMUNITY:

Frans ANDRIESSEN,

Vice-President of the Commission of the European Communities;

THE UNION OF SOVIET SOCIALIST REPUBLICS

Eduard SHEVARDNADZE,

Minister for Foreign Affairs of the Union of Soviet Socialist Republics;

WHO, having exchanged their full powers, found in good and due form,

HAVE AGREED AS FOLLOWS

TITLE I

General

Article 1

Within the framework of their respective laws and regulations, the Contracting Parties shall use their best endeavours to facilitate and promote

- the harmonious development and diversification of their trade, and

- the development of various types of commercial and economic cooperation.

To that end, they confirm their resolve to consider favourably, each for its own part, suggestions made by the other Party with a view to attaining these objectives.

TITLE II

Trade and commercial cooperation

Article 2

1. This Agreement shall apply to trade in all goods originating in the Community or in the USSR, with the exception of the products covered by the Treaty establishing the European Coal and Steel Community.

2. This Agreement shall not affect the provisions of the Agreement between the European Economic Community and the USSR on trade in textile products initialled on 11 December 1989 and applied provisionally as from 1 January 1990, nor the provisions of any exchange of letters, any

other arrangements concluded in connection therewith and any agreements on trade in textile products subsequently concluded, for the period of application of these provisions.

Article 3

1. The Contracting 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 the General Agreement on Tariffs and Trade and with other international arrangements in favour of developing countries;

(c) advantages granted to neighbouring countries to facilitate frontier-zone trade.

Article 4

The Contracting Parties undertake to allow relief from

duties, taxes and other charges, and to grant licences in respect of goods temporarily remaining in their territories for re-exportation either in the unaltered state or after inward processing.

Article 5

The USSR shall grant imports of products originating in the Community non-discriminatory treatment as regards the application of quantitative restrictions, the granting of licences and the allocation of the currency needed to pay for such imports.

Article 6

Unless otherwise specified in this Agreement, trade and other commercial cooperation between the Contracting Parties shall be conducted in accordance with their respective regulations.

Article 7

Without prejudice to the provisions of Article 5, each Contracting Party shall accord the highest possible degree of

liberalization to imports of the other's products. The process of liberalization shall take account of the development of trade between the Contracting Parties, market conditions, changes in the rules concerning trade in the Community

or in the USSR and progress made in implementing the Agreement.

Article 8

To this end the Community undertakes:

- to make efforts to ensure progress towards the progressive abolition of 'specific quantitative restrictions', namely those quantitative restrictions applied to imports originating in the USSR under Regulation (EEC) No 3420/83 which concern products other than those to which quantitative restrictions are applied under Regulation (EEC) No 288/82,

- to eliminate, within one year of the entry into force of this Agreement, quantitative restrictions on imports into those regions of the Community and of those products listed in Annex I,

- to suspend, within one year of the entry into force of this Agreement, the application of quantitative restrictions on imports into those regions of the Community and of those products listed in Annex II on the terms and conditions specified therein.

Article 9

As regards the specific quantitative restrictions not contained in Annexes I and II, the Contracting Parties shall examine, before 30 June 1992, in the framework of the joint committee referred to in Article 22, the further changes which can be made in the then existing import arrangements. The changes to be considered may include any of the following measures:

- liberalization,

- liberalization with surveillance of imports,

- adoption of appropriate measures by the USSR such as the issue of export licences or certificates to ensure that exports to the Community remain within specified levels,

- measures that may be required to adapt existing Community import arrangements.

Article 10

1. For each calendar year, the Community shall open import quotas for products which are of interest for the USSR and which are subject to quantitative restrictions.

2. The Contracting Parties shall hold consultations each year in the joint committee provided for in Article 22 to determine what increases can be made in the quotas referred to in paragraph 1 and whether quotas can be opened for other products for the following year.

Article 11

1. The Community undertakes to abolish by 31 December 1995 at the latest the remaining specific quantitative restrictions with the exception of those concerning a limited number of products which might be deemed sensitive at that time.

2. The joint committee set up pursuant to Article 22 shall, during its meeting in 1995, draw up the arrangements which shall apply for a prescribed period after 31 December 1995 to the imports of the sensitive products referred to in paragraph 1.

Article 12

Imports into the Community of products covered by this Agreement shall not be charged against the quotas referred to in Article 10 where they are declared as being intended for re-export and are actually re-exported from the Community either in the unaltered state or after inward processing, under the administrative control arrangements in force in the Community.

Article 13

The Parties shall inform one another of any changes in their tariff or statistical nomenclature or of any decision taken in accordance with the procedures in force concerning the classification of products covered by this Agreement.

Article 14

Goods shall be treated between the Contracting Parties at market-related prices.

Article 15

1. The Contracting Parties shall try to avoid conflict situations requiring safeguard measures in mutual trade. If problems nevertheless arise in trade between the Contracting Parties, the Parties shall open consultations not later than 30 days after the submission by one of them of an appropriate request within the framework of the joint committee set up in accordance with Article 22. Such consultations will aim at seeking mutually satisfactory solutions to these problems. Each Contracting Party will ensure that, except in critical circumstances, as defined in paragraph 4, no action is taken before consultations are held.

2. In particular, the provisions of paragraph 1 shall apply if any product is being imported into the territory of one of the Contracting 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. In this case, the Contracting Party requesting the consultations shall provide the other Party with all the information required for a detailed examination of the situation.

3. If, as a result of the consultations, the Contracting Parties do not reach agreement on actions to avoid the situation, the Party which requested consultations shall be free to restrict the imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury. The other Contracting Party shall then be free to deviate from its obligations towards the first Party in respect of substantially equivalent trade.

4. In critical circumstances where delay would cause damage difficult to repair, the Contracting Parties may take safeguard actions provisionally before the consultations, on the condition that consultations shall be effected 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.

Article 16

1. This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, law and order or public security, the protection of life and health of humans, animals or plants, the protection of industrial, commercial and intellectual property, or rules relating to gold or silver or imposed for the protection of national treasures of artistic, historic or archaeological value.

Such prohibitions and restrictions must not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Contracting Parties.

2. This Agreement shall not preclude the taking of action justified on grounds of protection of essential security interests:

(i) relating to fissionable materials or the materials from which they are derived;

(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

(iii) taken in time of war or other emergency in international relations.

TITLE III

Commercial and economic cooperation

Article 17

1. The Contracting Parties shall make every effort to promote, expand and diversify their trade. The joint committee set up by Article 22 shall attach special importance to ways of encouraging the reciprocal and harmonious expansion of trade.

2. The Contracting Parties undertake to facilitate exchange of commercial and economic information on all matters which would assist the development of trade and economic cooperation.

To this end, the Contracting Parties agree to ensure the publication of comprehensive data on commercial and financial issues, including production, consumption and foreign trade statistics.

3. The Contracting Parties undertake to facilitate cooperation between their respective customs services, in particular in the following areas:

- vocational training,

- simplification of customs documentation and procedures, and

- within the limits of their respective competences, administrative cooperation in order to prevent and detect infringements of the rules on customs matters, including the rules governing application of import quotas.

4. The Contracting Parties, within the limits of their respective powers, undertake to facilitate their trade and economic cooperation, inter alia, by the following:

- encouraging trade promotion activities in favour of their enterprises, including advertising, consulting, factoring and other business services,

- providing natural and legal persons of the other Party with guarantees of their individual and property rights, including non-discriminatory access for that purpose to courts and appropriate administrative bodies of the Community and the USSR,

- encouraging contacts between business associations of the Community and the USSR.

5. The Contracting Parties will encourage forms of trade compatible with the efficient conduct of international business relations and will also encourage business partners to decide independently upon their trading patterns.

The Contracting Parties therefore agree that counter-trade practices should be regarded as temporary and exceptional.

They further agree not to compel companies established in the Community or in the USSR to engage in such trade practices. Nevertheless, where firms or companies decide to resort to counter-trade operations, the Contracting Parties will encourage them to furnish all relevant information to facilitate the transaction.

6. In furtherance of the aims of this Article, the Contracting Parties agree to maintain and improve favourable business regulations, facilities and practices for each other's firms or companies on their respective markets, inter alia as indicated in Annex III.

Article 18

Within the limits of their respective powers, the Contracting Parties:

- shall encourage the adoption of arbitration for the settlement of disputes arising out of commercial and cooperation transactions concluded by firms, enterprises and economic organizations of the Community and those of the USSR,

- agree that where a dispute is submitted to arbitration, each party to the dispute may, except where the rules of the arbitration centre chosen by the parties provide otherwise, choose its own arbitrator, irrespective of his nationality, and that the presiding third arbitrator or the sole arbitrator may be a citizen of a third State,

- will recommend their economic operators to choose by mutual consent the law applicable to their contracts,

- shall encourage recourse to the arbitration rules elaborated by the United Nations Commission on International Trade Law (Uncitral) and to arbitration

by any centre of a State signatory to the Convention

on Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June 1958.

Article 19

Within the limits of their respective powers, the Contracting Parties undertake to:

- ensure adequate protection and enforcement of industrial, commercial and intellectual property rights,

- ensure that their international commitments in the field of industrial, commercial and intellectual property rights are honoured,

- encourage appropriate arrangements between undertakings and institutions within the Community and the USSR with a view to due protection of industrial, commercial and intellectual property rights.

TITLE IV

Economic cooperation

Article 20

1. In the light of their respective economic policies and objectives, the Contracting Parties shall foster economic cooperation on as broad a base as possible in all fields deemed to be in their mutual interest.

Such cooperation shall be aimed in particular at:

- strengthening and diversifying economic links between the Contracting Parties, taking into consideration the complementarity of their economies,

- contributing to the development of their respective economies and standards of living,

- opening up new sources of supply and new markets,

- encouraging cooperation between economic operators, with a view to promoting investment and joint ventures, licensing agreements and other forms of industrial cooperation to develop their respective industries,

- encouraging participation of small and medium-sized enterprises in trade and co-operation

- encouraging environmentally sound policies,

- encouraging scientific and technological progress.

2. In order to achieve these objectives, the Contracting Parties shall encourage economic cooperation in areas of mutual interest, in particular in the following areas:

- statistics,

- standardization,

- industry,

- raw materials and mining,

- agriculture, including the food-processing industries,

- environmental protection and the management of natural resources,

- energy, including nuclear energy and nuclear safety (physical safety and radiation protection),

- science and technology in areas in which the Contracting Parties are active and which they consider to be of mutual interest, including nuclear research,

- economic, monetary, banking, insurance and other financial services,

- transport, tourism and other service activities,

- management and vocational training.

3. To give effect to the objectives of economic cooperation and within the limits of their respective powers and in accordance with their respective laws and policies, the Contracting Parties shall encourage the adoption of measures aimed at creating favourable conditions for economic and industrial cooperation, in particular by:

- facilitating exchanges and contacts between persons and delegations representing commercial, economic, business or other appropriate organizations,

- encouraging and facilitating trade promotion activities, such as the organization of seminars, fairs and exhibitions,

- facilitating the conduct of market research and other marketing activities on their respective territories,

- promoting activities involving the provision of technical expertise in appropriate areas,

- promoting the exchange of information and contacts on scientific subjects of mutual interest,

- fostering a favourable climate for investment, joint ventures and licensing arrangements, notably by the extension by the Community Member States and the USSR of arrangements for investment promotion and protection, in particular for the transfer of profits and repatriation of invested capital, on the basis of the principles of non-discrimination and reciprocity.

Article 21

Without prejudice to the relevant provisions of the Treaties establishing the European Communities, this Agreement and any action taken thereunder shall in no way affect the powers of the Member States of the Community to undertake bilateral activities with the USSR in the field of economic cooperation and to conclude, where appropriate, new economic cooperation agreements with the USSR.

TITLE V

Joint committee

Article 22

1. (a) A joint committee shall be set up comprising representatives of the Community, on the one hand, and representatives of the USSR, on the other.

(b) The joint committee shall formulate recommendations by mutual consent.

(c) The joint committee shall, as necessary, adopt its own rules of procedure and programme of work.

(d) The joint committee shall meet once a year in Brussels and Moscow alternately. Special meetings may be convened by mutual agreement, at the request of either Contracting Party. The office of chairman of the joint committee shall be held alternately by each of the Contracting Parties. Wherever possible, the agenda for meetings of the joint committee shall be agreed beforehand.

2. (a) The joint committee shall ensure the proper functioning of this Agreement and shall devise and recommend measures for achieving its objectives, keeping in view the economic and social policies of the Contracting Parties.

(b) The joint committee shall endeavour to find ways of encouraging the development of trade and commercial and economic cooperation between the Contracting Parties. In particular, it shall:

- examine the various aspects of trade between the Parties, notably its overall pattern, rate of growth, structure and diversification, the trade balance and the various forms of trade and trade promotion,

- make recommendations on any commercial or economic cooperation problem of mutual concern,

- seek appropriate means of avoiding possible difficulties in the fields of trade and cooperation and encourage various forms of commercial and economic cooperation in areas of mutual interest,

- consider measures likely to develop and diversify trade and economic cooperation, notably by improving import opportunities in the Community and in the USSR,

- exchange information on macro-economic plans and, where they exist, foreign trade plans and forecasts for the economies of the Parties which have an impact on trade and cooperation and, by extension, on the scope for developing complementarity between their respective economies and also on proposed economic development programmes,

- exchange information about amendments and developments in the laws, regulations and formalities of the Contracting Parties in the areas covered by this Agreement,

- seek methods of arranging and encouraging the exchange of information and contacts in matters relating to cooperation in the economic field between the Contracting Parties on a mutually advantageous basis, and work towards the creation of favourable conditions for such cooperation,

- examine favourably ways of improving conditions for the development of direct contacts between firms established in the Community and those established in the USSR,

- formulate and submit to the authorities of the Contracting Parties recommendations for solving any problems that arise, where appropriate by concluding arrangements or agreements.

- examine the situation with regard to the award of contracts for the supply of goods or services consequent upon international invitations to tender.

TITLE VI

General and final provisions

Article 23

Subject to the provisions concerning economic cooperation in Article 21, the provisions of this Agreement shall replace the provisions of the Agreements concluded between the Member States of the Community and the USSR, to the extent to which the latter provisions are either incompatible with, or identical to, the former.

Article 24

This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European

Economic Community and the European Atomic Energy Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of the Union of Soviet Socialist Republics.

Article 25

1. This Agreement shall enter into force on the first day of the second month following the date on which the Contracting Parties have notified each other that the legal procedures necessary to this end have been completed. The Agreement shall be concluded for an initial period of 10 years. The Agreement shall be automatically renewed year by year provided that neither Contracting Party gives the other Party written notice of denunciation of the Agreement six months before it expires.

The Contracting Parties may expand and/or amend this Agreement or elaborate further on its specific provisons by mutual consent in order to take account of new developments.

The Annexes, the Joint Declaration and the exchange of letters attached to this Agreement shall form an integral part thereof.

Article 26

This Agreement shall be drawn up in duplicate in the

Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Russian languages, each text being equally authentic.

En fe de lo cual, los plenipotenciarios abajo firmantes han suscrito el presente Acuerdo.

Til bekræftelse heraf har undertegnede befuldmægtigede underskrevet denne aftale.

Zu Urkund dessen haben die unterzeichneten Bevollmächtigten ihre Unterschriften unter dieses Abkommen gesetzt.

Åéò ðßóôùóç ôùí áíùôÝñù, ïé õðïãñÜöïíôåò ðëçñåîïýóéïé Ýèåóáí ôéò õðïãñáöÝò ôïõò êÜôù áðü ôçí ðáñïýóá óõìöùíßá.

In witness whereof the undersigned Plenipotentiaries have affixed their signatures below this Agreement.

En foi de quoi, les plénipotentiaires soussignés ont apposé leurs signatures au bas du présent accord.

In fede di che, i plenipotenziari sottoscritti hanno apposto le loro firme in calce al presente accordo.

Ten blijke waarvan de ondergetekende gevolmachtigden hun handtekening onder dit Akkoord hebben gesteld.

Em fé do que, os plenipotenciários abaixo assinados apuseram as suas assinaturas no final do presente Acordo.

Hecho en Bruselas, el dieciocho de diciembre de mil novecientos ochenta y nueve.

Udfærdiget i Bruxelles, den attende december nitten hundrede og niogfirs.

Geschehen zu Brüssel am achtzehnten Dezember neunzehnhundertneunundachtzig.

éÅãéíå óôéò ÂñõîÝëëåò, óôéò äÝêá ïêôþ Äåêåìâñßïõ ÷ßëéá åííéáêüóéá ïãäüíôá åííÝá.

Done at Brussels on the eighteenth day of December in the year one thousand nine hundred and eighty-nine.

Fait à Bruxelles, le dix-huit décembre mil neuf cent quatre-vingt-neuf.

Fatto a Bruxelles, addì diciotto dicembre millenovecentottantanove.

Gedaan te Brussel, de achttiende december negentienhonderd negenentachtig.

Feito em Bruxelas, em dezoito de Dezembro de mil novecentos e oitenta e nove.

Por la Comunidad Económica Europea

For Det Europæiske Økonomiske Fællesskab

Für die Europäische Wirtschaftsgemeinschaft

Ãéá ôçí ÅõñùðáúêÞ ÏéêïíïìéêÞ Êïéíüôçôá

For the European Economic Community

Pour la Communauté économique européenne

Per la Comunità economica europea

Voor de Europese Economische Gemeenschap

Pela Comunidade Económica Europeia

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Por la Comunidad Europea de la Energía Atómica

For Det Europæiske Atomenergifællesskab

Für die Europäische Atomgemeinschaft

Ãéá ôçí ÅõñùðáúêÞ Êïéíüôçôá ÁôïìéêÞò ÅíÝñãåéáò

For the European Atomic Energy Community

Pour la Communauté européenne de l'énergie atomique

Per la Comunità europea dell'energia atomica

Voor de Europese Gemeenschap voor Atoomenergie

Pela Comunidade Europeia da Energia Atómica

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Por la Unión de Repúblicas Socialistas Soviéticas

For Unionen af Socialistiske Sovjetrepublikker

Für die Union der Sozialistischen Sowjetrepubliken

Ãéá ôçí éÅíùóç Óïâéåôéêþí Óïóéáëéóôéêþí Äçìïêñáôéþí

For the Union of Soviet Socialist Republics

Pour l'Union des républiques socialistes soviétiques

Per l'Unione delle Repubbliche socialiste sovietiche

Voor de Unie van Socialistische Sowjetrepublieken

Pela União das Repúblicas Socialistas Soviéticas

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ANNEX I

List of regions of the Community and products referred to in the second indent of Article 8

>TABLE>

ANNEX II

List of regions of the Community and products referred to in the third indent of Article 8

The schemes for the suspension of quantitative restrictions referred to below have been established in order to permit the import of the products concerned without a quantitative limit on an experimental and temporary basis. Consequently, in particular instances, as a result of USSR exports to the regions of the Community concerned, market trends may make it necessary for the Community to discontinue this practice; in this event, the USSR will be informed to this effect immediately.

>TABLE>

ANNEX III

Declaration by the USSR on the implementation of Article 17 (6)

Bearing in mind the provisions of the Final Act of the Conference on Security and Cooperation in Europe and the concluding documents of the subsequent meetings of the CSCE Participating States, and in the context of its economic reforms, the USSR, within the limits of its powers, undertakes, in order to facilitate commercial and economic cooperation and to encourage mutual trade, to take measures such as:

(a)

facilitating the entry, stay and movement of Community businessmen in the USSR;

(b)

facilitating direct access of Community businessmen to business contacts and end-users in the USSR;

(c)

facilitating, on a non-discriminatory basis and on the basis of non-discriminatory prices, the establishment and operation of representative offices of Community firms in the USSR, including the renting of commercial premises and living space, the acquisition of equipment and transport facilities, access to telecommunications, utilities and social services;

(d)

facilitating on a non-discriminatory basis the free recruitment of local staff required by such firms;

(e)

not encouraging barter transactions by firms established in the USSR;

(f)

centralizing licensing in the USSR within one competent State body in order to ensure the proper implementation of the provisions of Article 5.

Joint Declaration by the Community and the USSR concerning Article 23

It is understood that the Agreements concluded between the Member States of the Community and the USSR, referred to in Article 23, may include inter alia agreements on trade and navigation.