AGREEMENT on free trade and trade-related matters between the European Community, the European Atomic Energy Community and the European Coal and Steel Community, of the one part, and the Republic of Latvia, of the other part

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

hereinafter referred to as 'the Community', of the one part,

and the REPUBLIC OF LATVIA,

hereinafter referred to as 'Latvia'; of the other part,

WHEREAS the Parties recall the historical links between them and the common values they share; whereas they wish to reinforce these links, to establish close and lasting relations on a basis of reciprocity allowing Latvia to participate in the process of European integration, in reinforcing and further developing the relations previously established, in particular via the trade and cooperation agreement;

WHEREAS this Agreement contributes to the attainment of the objective of association;

WHEREAS the Parties are committed to the intensification of political and economic liberties which constitute the basis of the new trade agreement and to the necessary transition of Latvia to a new economic and political system which respects - in accordance inter alia with the undertakings made within the context of the Conference on Security and Cooperation in Europe (CSCE) - the rule of law and human rights, including the rights of persons belonging to minorities, a multiparty system with free and democratic elections and liberalization aimed at setting up a market economy;

WHEREAS the Parties share the understanding that Latvia has made considerable and successful reform efforts in the political and economic fields and that these efforts will be pursued;

WHEREAS the Parties are committed to the implementation of commitments made in the framework of the CSCE, in particular those set out in the Helsinki Final Act, the concluding documents of the Madrid, Vienna and Copenhagen meetings, those of the Charter of Paris for a New Europe, the conclusions of the CSCE's Bonn Conference, the CSCE Helsinki document 1992, the European Energy Charter; as well as the principles of the European Convention on Human Rights;

WHEREAS trade is important for the creation of a system of stability in Europe on the basis of cooperation, of which one of the pillars is the European Community;

WHEREAS there is a need to continue, with the Community's help, Latvia's political and economic reform;

WHEREAS the Community wishes to contribute to the implementation of the reforms and to assist Latvia in facing the economic and social consequences of structural adjustment;

WHEREAS full implementation of the agreement is linked to the implementation of a coherent programme of economic and political reform by Latvia;

WHEREAS the Parties recognize the need for regional cooperation among the Baltic States, taking into account that closer integration between the European Union (EU) and the Baltic States, and the Baltic States among themselves should proceed in parallel;

WHEREAS the Parties are committed to liberalize trade based on GATT principles;

WHEREAS the Parties expect that this Agreement will create a new climate for economic relations between them and above all for the development of trade and trade-related matters and investment, which are essential to economic restructuring and the renewal of technology;

WHEREAS it is important that political dialogue between the Parties should be enhanced;

WHEREAS the Parties recognize the fact that Latvia's ultimate objective is to become a member of the EU and that the step towards association through this Agreement, in the view of the Parties, will help Latvia to achieve this objective;

HAVE DECIDED to conclude this Agreement and to this end have designated as their plenipotentiaries,

THE EUROPEAN COMMUNITY and THE EUROPEAN ATOMIC ENERGY COMMUNITY:

Klaus Kinkel,

Federal Minister for Foreign Affairs and Deputy Federal Chancellor of the Federal Republic of Germany, President-in-Office of the Council of the European Union,

Sir Leon BRITTAN,

Member of the Commission of the European Communities,

THE EUROPEAN COAL AND STEEL COMMUNITY:

Sir Leon BRITTAN,

Member of the Commission of the European Communities,

THE REPUBLIC OF LATVIA:

Valdis BIRKAVS,

Prime Minister and Minister for Foreign Affairs,

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

HAVE AGREED AS FOLLOWS:

TITLE I GENERAL PRINCIPLES

Article 1

1. Respect for democratic principles and human rights, established by the Helsinki Final Act and in the Charter of Paris for a New Europe, as well as the principles of market economy, inspire the domestic and external policies of the Parties and constitute essential elements of this Agreement.

2. The Parties consider that it is essential for the prosperity and stability of the region that the Baltic States should maintain and develop cooperation among themselves and will make every effort to enhance this process.

3. The Parties regard the implementation of this Agreement as a decisive step towards the early conclusion of a Europe Agreement between Latvia and the European Community.

TITLE II FREE MOVEMENT OF GOODS

Article 2

1. The Community and Latvia shall gradually establish a free trade area in a transitional period lasting a maximum of four years starting from the entry into force of this Agreement, in accordance with the provisions of this Agreement and in conformity with those of the General Agreement on Tariffs and Trade (GATT).

2. The combined nomenclature of goods based on the Harmonized System shall be applied to the classification of goods in trade between the two Parties.

3. For each product the basic duty to which the successive reductions set out in this Agreement are to be applied shall be that set out in Annexes II to IV and X, or that actually applied erga omnes on 1 January 1995, whichever is the lower.

4. If, after the entry into force of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular, reductions resulting from the tariff agreement concluded as a result of the GATT Uruguay Round, such reduced duties shall replace the basic duties referred to in paragraph 3 as from the date when such reductions are applied.

5. The Community and Latvia shall communicate to each other their respective basic duties.

CHAPTER I Industrial products

Article 3

1. The provisions of this chapter shall apply to products originating in the Community and in Latvia listed in Chapters 25 to 97 of the combined nomenclature with the exception of the products listed in Annex I.

2. The provisions of Articles 4 to 8 inclusive do not apply to products mentioned in Article 10.

3. Trade between the Parties in items covered by the Treaty establishing the European Atomic Energy Community will be conducted in accordance with the provisions of that Treaty.

Article 4

1. Customs duties on imports applicable in the Community to products originating in Latvia shall be abolished on the entry into force of this Agreement.

2. Quantitative restrictions on imports to the Community and measures having an equivalent effect shall be abolished on the date of entry into force of this Agreement with regard to products originating in Latvia.

Article 5

1. Customs duties on imports applicable in Latvia to products originating in the Community other than those listed in Annexes II and III shall be abolished on the date of entry into force of this Agreement.

2. Customs duties on imports applicable in Latvia to products originating in the Community which are listed in Annex II shall be progressively reduced in accordance with the following timetable:

- one year after the entry into force of this Agreement, each duty shall be reduced to 50 % of the basic duty,

- two years after the entry into force of this Agreement, the remaining duties shall be eliminated.

3. Customs duties on imports applicable in Latvia to products originating in the Community which are listed in Annex III shall be progressively reduced in accordance with the following timetable:

- two years after the entry into force of this Agreement, each duty shall be reduced to 50 % of the basic duty,

- four years after the entry into force of this Agreement, the remaining duties shall be eliminated.

4. Quantitative restrictions on imports into Latvia of products originating in the Community and measures having an equivalent effect shall be abolished upon entry into force of this Agreement.

Article 6

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

Article 7

The Community and Latvia shall abolish upon entry into force of this Agreement in trade between themselves, any charges having an effect equivalent to customs duties on imports.

Article 8

1. Customs duties on exports and charges having equivalent effect shall be abolished between the Community and Latvia upon entry into force of this Agreement, with the exception of those listed in Annex IV, which shall be abolished by Latvia at the latest by the end of the fourth year after the entry into force of this Agreement.

2. Quantitative restrictions on exports to Latvia and any measures having equivalent effect shall be abolished by the Community upon entry into force of this Agreement.

3. Quantitative restrictions on exports to the Community and any measures having equivalent effect shall be abolished by Latvia upon entry into force of this Agreement.

Article 9

Each Party declares its readiness to reduce its customs duties in trade with the other Party more rapidly than is provided for in Articles 4 and 5 if its general economic situation and the situation of the economic sector concerned so permit.

The Joint Committee referred to in Article 37 (hereinafter referred to as 'the Joint Committee') may make recommendations to this effect.

Article 10

1. The textile products of Latvian origin listed in Annex V to this Agreement shall benefit from a suspension of customs duties on imports into the Community, under the conditions set out in that Annex. The Annex may be revised by decision of the Joint Committee, in accordance with the procedures set out in Article 38.

2. Protocol 1 lays down the other arrangements applicable to the textile products referred to therein.

Article 11

1. The provisions of this chapter do not preclude the retention by the Community of an agricultural component in the duties applicable to products listed in Annex VI in respect of products originating in Latvia.

2. The provisions of this chapter do not preclude the introduction of an agricultural component by Latvia in the duties applicable to the products listed in Annex VI in respect of products originating in the Community.

CHAPTER II Agriculture

Article 12

1. The provisions of this chapter shall apply to agricultural products originating in the Community and in Latvia.

2. The term 'agricultural products' means the products listed in Chapters 1 to 24 of the combined nomenclature and the products listed in Annex I, but excluding fishery products as defined by Article 16 (2).

Article 13

Protocol 2 lays down the trade arrangements for processed agricultural products which are listed therein.

Article 14

1. As from the date of entry into force of this Agreement no quantitative restrictions shall apply to imports into the Community of agricultural products originating in Latvia nor to imports into Latvia of agricultural products originating in the Community.

2. The Community and Latvia shall grant each other the concessions referred to in Annexes VII to XI in accordance with the conditions laid down therein.

3. The concessions referred to in paragraph 2 may be subject to revision by agreement between the Parties within three years after entry into force of this Agreement and on the basis of the principles and procedures set out in paragraph 4.

4. Taking account of the volume of trade in agricultural products between them, of their particular sensitivity, of the rules of the common agricultural policy of the Community, of the rules of the agricultural policy in Latvia, of the role of agriculture in Latvia's economy, of the production and export potential of its traditional branches and markets, the Community and Latvia shall examine in the Joint Committee, product by product and on an orderly and reciprocal basis, the possibilities of granting each other further concessions.

Article 15

Notwithstanding other provisions of this Agreement, and in particular Article 24, if, given the particular sensitivity of the agricultural markets, imports of products originating in one Party, which are the subject of concessions granted pursuant to Article 14, cause serious disturbance to the markets in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such a solution, the Party concerned may take the measures it deems necessary.

CHAPTER III Fisheries

Article 16

1. The provisions of this chapter shall apply to fishery products originating in the Community and in Latvia.

2. The term 'fishery products' means the products listed in Chapter 3 of the combined nomenclature and product groups covered by the combined nomenclature codes 0511 91 10, 0511 91 90, 1604, 1605, 1902 20 10 and 2301 20 00.

Article 17

1. The Community and Latvia shall grant each other the concessions referred to in Annexes XII and XIII in accordance with the conditions laid down therein.

2. The provisions of Articles 14 (4) and 15 shall apply mutatis mutandis to fishery products.

CHAPTER IV Common provisions

Article 18

The provisions of this Title shall apply to trade in all products originating in both Parties except where otherwise provided herein or in Protocols 1 and 2.

Article 19

1. In trade between the Community and Latvia from the date of entry into force of this Agreement:

- no new customs duties on imports or exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased,

- no new quantitative restrictions on imports or exports or measures having equivalent effect shall be introduced nor shall those existing be made more restrictive.

2. Without prejudice to the concessions granted pursuant to Article 14, the provisions of paragraph 1 of this Article shall not restrict in any way the pursuance of the respective agricultural and fisheries policies of Latvia and the Community or the taking of any measures under such policies.

Article 20

1. The two Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

2. Products exported to the territory of one of the two Parties may not benefit from repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them.

Article 21

1. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.

2. Consultations between the Parties shall take place within the Joint Committee concerning agreements establishing such customs unions or free trade areas and, where requested, on other major issues related to their respective trade policies with third countries. In particular in the event of a third country acceding to the Community, such consultations shall take place so as to ensure that account can be taken of the mutual interests of the Community and Latvia stated in this Agreement.

Article 22

Exceptional measures of limited duration which derogate from the provisions of Article 5 and Article 19 (1), first indent, may be taken by Latvia in the form of increased customs duties.

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

Customs duties on imports applicable in Latvia to products originating in the Community introduced by these measures may not exceed 25 % ad valorem and shall maintain an element of preference for products originating in the Community.

The total value of imports of the products which are subject to these measures may not exceed 15 % of total imports of industrial products from the Community as defined in Chapter I during the last year for which statistics are available.

These measures shall be applied for a period not exceeding three years unless a longer duration is authorized by the Joint Committee. They shall cease to apply at the latest on expiry of the transitional period.

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

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

Article 23

If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the General Agreement on Tariffs and Trade, it may take appropriate measures against this practice in accordance with the Agreement relating to the application of Article VI of the General Agreement on Tariffs and Trade, with related internal legislation and with the conditions and procedures laid down in Article 27.

Article 24

Where any product is being imported in such increased quantities and under such conditions as to cause or threaten to cause:

- serious injury to domestic producers of like or directly competitive products in the territory of one of the Parties, or

- serious disturbances in any sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region,

the Community or Latvia, whichever is concerned, may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27.

Article 25

Where compliance with the provisions of Article 8 and 19 leads to:

(i) re-export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties or measures having equivalent effect; or

(ii) a serious shortage, or threat thereof, of a product essential to the exporting Party;

and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 27. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.

Article 26

The Member States of the European Union (hereinafter referred to as 'the Member States') and Latvia shall progressively adjust any State monopolies of a commercial character so as to ensure that, by the end of the fourth year following the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of Latvia. The Joint Committee will be informed about the measures adopted to implement this objective.

Article 27

1. In the event of the Community or Latvia subjecting imports of products liable to give rise to the difficulties referred to in Article 24 to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.

2. In the cases specified in Articles 23, 24 and 25, before taking the measures provided for therein or, in cases to which paragraph 3 (d) applies, as soon as possible, the Community or Latvia, as the case may be, shall supply the Joint Committee with all relevant information with a view to seeking a solution acceptable to the two Parties.

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

The safeguard measures shall be notified immediately to the Joint Committee and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their abolition as soon as circumstances permit.

3. For the implementation of paragraph 2, the following provisions shall apply:

(a) As regards Article 24, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Joint Committee, which may take any decision needed to put an end to such difficulties.

If the Joint Committee or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures must not exceed the scope of what is necessary to remedy the difficulties which have arisen.

(b) As regards Article 23, the Joint Committee shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. If no end has been put to the dumping or if no other satisfactory solution has been reached within 30 days of the matter being referred to the Joint Committee, the importing Party may adopt the appropriate measures.

(c) As regards Article 25, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Joint Committee.

The Joint Committee may take any decision needed to put an end to the difficulties. If it has not taken such a decision within 30 days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned.

(d) Where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Latvia whichever is concerned may, in the situations specified in Articles 23, 24 and 25, apply forthwith the precautionary measures strictly necessary to deal with the situation.

Article 28

Protocol 3 lays down rules of origin for the application of the tariff preferences provided for in this Agreement as well as the methods of administrative cooperation therewith.

Article 29

This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

Article 30

Protocol 4 lays down the specific provisions to apply to trade between Latvia of the one part and Spain and Portugal of the other part, and it will be valid until 31 December 1995.

TITLE III PAYMENTS, COMPETITION AND OTHER ECONOMIC PROVISIONS

Article 31

The Parties untertake to authorize, in freely convertible currency, any payments on the current account of balance of payments to the extent that the transaction underlying the payments concerns movements of goods between the Parties which have been liberalized pursuant to this Agreement.

Article 32

1. The following are incompatible with the proper functioning of this Agreement, in so far as they may affect trade between the Community and Latvia:

(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;

(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or of Latvia as a whole or in a substantial part thereof;

(iii) any public aid, which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.

2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 85, 86 and 92 of the Treaty establishing the European Community or, for products covered by the ECSC Treaty, on the basis of corresponding rules of the ECSC Treaty including secondary legislation.

3. The Joint Committee shall, within three years of the entry into force of this Agreement, adopt by decision the necessary rules for the implementation of paragraphs 1 and 2.

Until these rules are adopted, the provisions of this Agreement on interpretation and application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade shall be applied as the rules for the implementation of paragraph 1 point (iii) and related parts of paragraph 2.

4. (a) For the purposes of applying the provisions of paragraph 1 point (iii), the Parties recognize that during the first five years after the entry into force of this Agreement, any public aid granted by Latvia shall be assessed taking into account the fact that Latvia shall be regarded as an area identical to those areas of the Community described in Article 92 (3) (a) of the Treaty establishing the European Community. The Joint Committee shall, taking into account the economic situation of Latvia, decide whether that period should be extended by further periods of five years.

(b) Each Party shall ensure transparency in the area of public aid, inter alia by reporting annually to the other Party on the total amount and the distribution of the aid given and by providing, upon request, information on aid schemes. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.

5. With regard to products referred to in Chapters II and III of Title II:

- the provision of paragraph 1 point (iii) does not apply,

- any practices contrary to paragraph 1 point (i) should be assessed according to the criteria established by the Community on the basis of Articles 42 and 43 of the Treaty establishing the European Community and in particular of those established in Council Regulation No 26.

6. If the Community or Latvia considers that a particular practice is incompatible with the terms of the first paragraph of this Article, and

- is not adequately dealt with under the implementing rules referred to in paragraph 3, or

- in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to the interests of the other Party or material injury to its domestic industry, including its services industry,

it may take appropriate measures after consultation within the Joint Committee or after 30 working days following referral for such consultation.

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

7. Notwithstanding any provisions to the contrary adopted in conformity with paragraph 3, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.

Article 33

1. The Parties shall endeavour to avoid the imposition of restrictive measures including measures relating to imports for balance of payments purposes. In the event of their introduction, the Party having introduced the same shall present to the other Party as soon as possible, a time schedule for their removal.

2. Where one or more Member States or Latvia is in serious balance of payments difficulties, or under imminent threat thereof, the Community or Latvia, as the case may be, may, in accordance with the conditions established under the General Agreement on Tariffs and Trade, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is necessary to remedy the balance of payments situation. The Community or Latvia, as the case may be, shall inform the other Party forthwith.

Article 34

With regard to public undertakings, and undertakings to which special or exclusive rights have been granted, the Joint Committee shall ensure that as from the fourth year following the date of entry into force of this Agreement, the principles of the Treaty establishing the European Community, notably Article 90, and the relevant CSCE principles, in particular entrepreneurs' freedom of decision, are upheld.

Article 35

1. The Parties commit themselves to developing customs cooperation in order to achieve the approximation of Latvia's customs system to that of the Community.

2. Cooperation shall include the following in particular:

- the exchange of information,

- the organization of seminars and placements,

- the introduction of the single administrative document and the interconnection between the transit system of the Community and that of Latvia,

- the simplification of the inspections and formalities in respect of the carriage of goods,

- exchange of information on the methods of investigation.

Technical assistance shall be provided where appropriate and required.

3. The Parties will provide mutual administrative assistance in accordance with the provisions of Protocol 5.

Article 36

1. The Parties recognize that an important condition for the establishment of free trade between Latvia and the Community and the further economic integration of the former into the Community is the approximation of Latvia's existing and future legislation to that of the Community. Latvia shall endeavour to ensure that its trade and trade-related legislation will be gradually made compatible with that of the Community.

2. The approximation of laws shall extend to trade-related matters, in particular dumping, rules on competition, customs legislation, statistics, technical rules and standards.

3. The Community shall provide Latvia 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,

- organization of seminars,

- training activities,

- aid for the translation of legislation in the relevant sectors,

- aid for improving customs procedures and statistics,

- aid for trade-related legislation in the context of approximation of Latvia's legislation to European Union laws.

TITLE IV INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

Article 37

The Joint Committee set up by the Agreement on Trade and Commercial and Economic Cooperation signed between the European Economic Community and Latvia on 11 May 1992 shall perform the duties assigned to it by this Agreement.

Article 38

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

It shall draw up its decisions and recommendations by consensus.

Article 39

1. Each of the two Parties may refer to the Joint Committee any dispute relating to the application or interpretation of this Agreement.

2. The Joint Committee may settle the dispute by means of a decision.

3. Each Party shall be bound to take the measures involved in carrying out the decision referred to in paragraph 2.

4. In the event of it not being possible to settle the dispute in accordance with paragraph 2, either Party may notify the other of the appointment of an arbitrator; the other Party must then appoint a second arbitrator within two months.

The Joint Committee shall appoint a third arbitrator.

The arbitrators' decisions shall be taken by majority vote.

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

Article 40

Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights, including those concerning intellectual, industrial and commercial property.

Article 41

Nothing in this Agreement shall prevent a Contracting Party from taking any measures:

(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;

(b) which relate to the production of, or trade in, arms, ammunition or war materials or to research, development or production indispensable for defense purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes;

(c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security;

(d) which it considers necessary to respect its international obligations and commitments on the control of dual use industrial goods and technologies.

Article 42

In the fields covered by this Agreement and without prejudice to any special provisions contained therein:

- the arrangements applied by Latvia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals, or their companies or firms,

- the arrangements applied by the Community in respect of Latvia shall not give rise to any discrimination between Latvian nationals or its companies or firms.

Article 43

Products originating in Latvia shall not enjoy more favourable treatment when imported into the Community than that applied by Member States among themselves.

Article 44

1. The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.

2. If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Joint Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties.

In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. These measures shall be notified immediately to the Joint Committee and shall be the subject of consultations within the Joint Committee if the other Party so requests.

Article 45

Protocols 1, 2, 3, 4, 5 and 6 and Annexes I to XIII shall form an integral part of this Agreement.

Article 46

This Agreement is concluded for an unlimited period.

Either Party may denounce this Agreement by notifying the other Party. This Agreement shall cease to apply six months after the date of such notification.

Article 47

This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community, the European Atomic Energy Community and the European Coal and Steel Community are applied and under the conditions laid down in those Treaties and, on the other hand, to the territory of the Republic of Latvia.

Article 48

The Secretariat-General of the Council of the European Union shall be the depository of this Agreement.

Article 49

This Agreement is drawn up in the Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Latvian languages, each of these texts being equally authentic.

Article 50

This Agreement will be approved by the Parties in accordance with their own procedures.

This Agreement shall enter into force on 1 January 1995.

Upon its entry into force, the Agreement between the European Economic Community and Latvia on trade and economic and commercial cooperation signed in Brussels on 11 May 1992 shall be modified as follows:

- Articles 3 and 5 to 12 inclusive as well as Article 13 (1) and (4) are rescinded,

- in Article 4 the words 'trade and other' are rescinded,

- in Article 13 (2) the words 'In furtherance of the aims of this Article and' are rescinded.

Article 51

1. In the event that this Agreement enters into force after 1 January but at the latest on 31 December 1995 for the purposes of Titles II and III of this Agreement and Protocols 1, 2, 3, 4, 5 and 6 hereto, the terms 'date of entry into force of this Agreement' shall mean:

- the date of entry into force in relation to obligations taking effect on that date,

and

- 1 January 1995 in relation to obligations taking effect after the date of entry into force by reference to the date of entry into force.

2. In the case of entry into force after 1 January 1995, the provisions of Protocol 6 shall apply.

Hecho en Bruselas, el dieciocho de julio de mil novecientos noventa y cuatro.

Udfærdiget i Bruxelles, den attende juli nitten hundrede og fireoghalvfems.

Geschehen zu Brüssel am achtzehnten Juli neunzehnhundertvierundneunzig.

¸ãéíå óôéò ÂñõîÝëëåò, óôéò äÝêá ïêôþ Éïõëßïõ ÷ßëéá åííéáêüóéá åíåíÞíôá ôÝóóåñá.

Done at Brussels on the eighteenth day of July in the year one thousand nine hundred and ninety-four.

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

Fatto a Bruxelles, addì diciotto luglio millenovecentonovantaquattro.

Gedaan te Brussel, de achttiende juli negentienhonderd vierennegentig.

Feito em Bruxelas, em dezoito de Julho de mil novecentos e noventa e quatro.

osl Eegts Brisel Ee t Eukstos devi Kni simti devi Kndesmit ceturt Ea gada asto Knpadsmitaj Ea j Eulij Ea.

Por las Comunidades Europeas

For De Europæiske Fællesskaber

Für die Europäischen Gemeinschaften

Ãéá ôéò ÅõñùðáúêÝò Êïéíüôçôåò

For the European Communities

Pour les Communautés européennes

Per le Comunità europee

Voor de Europese Gemeenschappen

Pelas Comunidades Europeias

Eiropas kopienu v Eard Ea

XTB:SCHLAKT100 Por la República de Letonia

For Republikken Letland

Für die Republik Lettland

Ãéá ôç Äçìïêñáôßá ôçò Ëåôïíßáò

For the Republic of Latvia

Pour la république de Lettonie

Per la Repubblica di Lettonia

Voor de Republiek Letland

Pela República da Letónia

Latvijas Republikas v Eard Ea

XTB:SCHLAKT200

ANNEX I

List of products referred to in Articles 3 and 12 of the Agreement

>TABLE>

ANNEX II

>TABLE>

ANNEX III

>TABLE>

ANNEX IV

>TABLE>

ANNEX V

>TABLE>

ANNEX VI

Goods referred to in Article 11 Goods for which the Community and Latvia retain an agricultural component in the duties

>TABLE>

ANNEX VII

List of products referred to in Article 14 (2)

>TABLE>

Annex to Annex VII

Minimum import price arrangement for certain soft fruit for processing

1. Minimum import prices are fixed for each marketing year for the following products:

>TABLE>

The minimum import prices are fixed by the Community in consultation with Latvia taking into consideration the price evolution, imported quantities and market development in the Community.

2. The minimum import prices shall be respected in accordance with the following criteria:

- during each three-month period of the marketing year the average unit value for each product listed in paragraph 1, imported into the Community, shall not be lower than the minimum import price for that product,

- during any period of two weeks the average unit value for each product listed in paragraph 1, imported in the Community shall not be lower than 90 % of the minimum import price for that product, in so far as the quantities imported during this period are not less than 4 % of the normal annual import.

3. I case of non-respect of one of these criteria the Community may introduce measures ensuring that the minimum import price is respected for each consignment of the product concerned imported from Latvia.

ANNEX VIII

Products referred to in Article 14 (2)

Arrangements for imports of live bovine animals, bovine meat, sheep- and goatmeat into the Community

1. Independently of the balance sheet arrangements foreseen in Regulation (EEC) No 805/68, a global tariff quota of 3 500 head of live bovine animals for fattening or for slaughter, with a live weight of not less than 160 kg and not more than 300 kg, falling within CN code 01 02, shall be opened to imports from Latvia, Lithuania and Estonia.

The reduced levy or specific duty rate applicable to animals under this quota shall be fixed at 25 % of the full amount of the levy or the specific duty rate.

2. In case forecasts show that imports into the Community may exceed 425 000 head for any given year, the Community may take safeguard measures in accordance with Regulation (EEC) No 805/68, notwithstanding any other rights given under the Agreement.

3. A global tariff quota of 1 500 tonnes of meat of bovine animals, fresh, chilled or frozen, falling within CN codes 02 01 and 02 02, shall be opened to imports from Latvia, Lithuania and Estonia.

The reduced duty rate and levy or specific duty rate applicable under this quota shall be fixed at 40 % of their full amount.

4. Within the framework of the autonomous import arrangements provided for in Regulation (EEC) No 3643/85, a global quota of 100 tonnes of meat of sheep or groats, fresh, chilled or frozen, falling wihtin CN code 02 04, shall be reserved for Latvia, Lithuania an Estonia.

ANNEX IX

Products referred to in Article 14 (2)

>TABLE>

ANNEX X

List of products referred to in Article 14 (2)

1. Imports into Latvia of the following products originating in the Community shall be subject to the duties set out below.

2. Tariffs adopted from 1995 to 2000 shall be reduced by equal annual amounts.

3. If a more favourable trade system is in force in Latvia, then this shall be applied to imports from the Community.

4. Imports into Latvia of those agricultural products originating in the Community other than those listed in this Annex, are free of duty or of any charges having equivalent effect.

>TABLE>

ANNEX XI

List of products referred to in Article 14 (2)

>TABLE>

ANNEX XII

>TABLE>

ANNEX XIII

>TABLE>

PROTOCOL 1 referred to in Article 10 (2) laying down other arrangements applicable to textile products

This Protocol consists of the Agreement between the European Economic Community and the Republic of Latvia on trade in textile products, initialled in Brussels on 15 June 1993, and annexed hereto.

AGREEMENT between the European Economic Community and the Republic of Latvia on trade in textile products

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

of the one part, and

THE GOVERNMENT OF THE REPUBLIC OF LATVIA

of the other part,

DESIRING to promote, with a view to permanent cooperation and in conditions providing every security for trade, the orderly and equitable development of trade in textile products between the European Economic Community (hereinafter referred to as 'the Community') and the Republic of Latvia (hereinafter referred to as 'Latvia'),

RESOLVED to take the fullest possible account of the serious economic and social problems at present affecting the textile industry in both importing and exporting countries, and in particular, to eliminate real risks of market disruption on the market of the Community and real risks of disruption to the textile trade of Latvia,

HAVE DECIDED to conclude this Agreement and to this end have designated as their plenipotentiaries:

THE COUNCIL OF THE EUROPEAN COMMUNITIES,

THE GOVERNMENT OF THE REPUBLIC OF LATVIA,

WHO HAVE AGREED AS FOLLOWS:

Article 1

1. Trade in textile products listed in Annex I and originating within the Contracting Parties shall be liberalized for the duration of this Agreement under the conditions set out therein.

2. Subject to the provisions of this or any successive Agreement, the Community undertakes, in respect of the products listed in Annex I, to suspend the application of quantitative import restrictions currently in force and not to introduce new quantitative restrictions.

Quantitative import restrictions shall be reintroduced in case of denunciation or non-replacement of the present Agreement.

3. Measures having equivalent effect to quantitative restrictions on the importation into the Community of the products listed in Annex I shall be prohibited for the duration of this Agreement.

Article 2

1. Exports from Latvia to the Community of products listed in Annex I and originating in Latvia shall, at the time of entry into force of this Agreement, be free from quantitative limits. However, quantitative limits may subsequently be introduced under conditions specified in Article 5.

2. Should quantitative limits be introduced, exports of the textile products made subject to quantitative limits shall be subject to a double-checking system as specified in Protocol A.

3. As the time of entry into force of this Agreement, exports of products listed in Annex II not subject to quantitative limits shall be subject to the double-checking system referred to in paragraph 2.

4. Following consultations in accordance with the procedures set out in Article 15, exports of products in Annex I not subject to quantitative limits other than those listed in Annex II may be subject, subsequently to the entry into force of this Agreement, to the double-checking system referred to in paragraph 2 or to a prior surveillance system introduced by the Community.

Article 3

1. Imports into the Community of textile products covered by this Agreement shall not be subject to the quantitative limits established under this Agreement, provided that they are declared to be for re-export outside the Community in the same state or after processing, within the framework of the administrative system of control which exists within the Community.

However, the release for home use of products imported into the Community under the conditions referred to above shall be subject to the production of an export licence issued by the authorities of Latvia, and to proof of origin in accordance with the provisions of Protocol A.

2. Where the Community authorities ascertain that imports of textile products have been set off against a quantitative limit established under this Agreement, but that the products have subsequently been re-exported outside the Community, the authorities shall inform the Latvian authorities within four weeks of the quantities, involved and authorize imports of identical quantities of the same products, which shall not be set off against the quantitative limit established under this Agreement for the current or the following year, as appropriate.

3. The Community and Latvia recognize the special and differential character of reimports of textile products into the Community after processing in Latvia as a specific form of industrial and trade cooperation.

Should quantitative limits be establishhed pursuant to Article 5, provided that they are effected in accordance with the regulations on economic outward processing in force in the Community, these reimports shall not be subject to these quantitative limits if they are subject to the specific arrangements laid down in Protocol C.

Article 4

Should quantitative limits be introduced pursuant to Article 5, the following provisions shall apply:

1. In any Agreement year advance use of a portion of the quantitative limit established for the following Agreement year is authorized for each category of products up to 5 % of the quantitative limit for the current Agreement year.

Amounts delivered in advance shall be deducted from the corresponding quantitative limits established for the following Agreement year.

2. Carry-over to the corresponding quantitative limit for the following Agreement year of the amounts not used during any Agreement year is authorized for each category of products up to 7 % of the quantitative limit for the current Agreement year.

3. Transfers in respect of categories in Group I shall not be made from any category except as follows:

- transfers between categories 2 and 3 and from category 1 to categories 2 and 3 may be made up to 4 % of the quantitative limits for the category to which the transfer is made,

- transfers between categories 4, 5, 6, 7 and 8 may be made to 4 % of the quantitative limit for the category to which the transfer is made.

Transfers into any category in Groups II, III, IV and V may be made from any category or categories in Groups I, II, III, IV and V up to 5 % of the quantitative limit for the category to which the transfer is made.

4. The table of equivalence applicable to the transfers referred to above is given in Annex I to this Agreement.

5. The increase in any category of products resulting from the cumulative application of the provisions in paragraphs 1, 2 and 3 above during an Agreement year shall not exceed the following limits:

- 13 % for categories of products in Group I;

- 13,5 % for categories of products in Groups II, III, IV and V.

6. Prior notification shall be given by the Latvian authorities in the event of recourse to the provisions of paragraphs 1, 2 and 3 above, at least 15 days in advance.

Article 5

1. Exports of textile products listed in Annex I to this Agreement may be made subject to quantitative limits on the conditions laid down in the following paragraphs.

2. Where the Community finds, under the system of administrative control set up, that the level of imports of products in a given category listed in Annex I originating in Latvia exceeds, in relation to the preceding year's total imports into the Community from all sources of products in that category, the following rates:

- 0,4 % for categories of products in Group I,

- 2,4 % for categories of products in Group II,

- 8 % for categories of products in Groups III, IV and V,

it may request the opening of consultations in accordance with the procedure described in Article 15 of this Agreement, with a view to reaching agreement on an appropriate restraint level for the products in such category.

3. Pending a mutually satisfactory solution, Latvia undertakes, from the date of notification of the request for consultations, to suspend or limit at the level indicated by the Community exports of the category of products in question to the Community or to the region or regions of the Community market specified by the Community.

The Community shall authorize the importation of products of the said category shipped from Latvia before the date on which the request for consultations was submitted.

4. Should the Contracting Parties be unable in the course of consultations to reach a satisfactory solution within the period specified in Article 15 the Community shall have the right to introduce a definitive quantitative limit at an annual level not lower than the level resulting from the application of the formula set out in paragraph 2, or 106 % of the level of imports reached during the calendar year preceding that in which imports exceeded the level resulting from the application of the formula set out in paragraph 2 and gave rise to the request for consultations, whichever is the higher.

The annual level so fixed shall be revised upwards after consultations in accordance with the procedure referred to in Article 15, with a view to fulfilling the conditions set out in paragraph 2, should the trend of total imports into the Community of the product in question make this necessary.

5. The annual growth rate for the quantitative limits introduced pursuant to this Article shall be determined in accordance with the provisions of Protocol D.

6. The provisions of this Article shall not apply where the percentages specified in paragraph 2 have been reached as a result of a fall in total imports into the Community, and not as a result of an increase in exports of products originating in Latvia.

7. In the event of the provisions of paragraph 2, 3 or 4 being applied, Latvia undertakes to issue export licences for products covered by contracts concluded before the introduction of the quantitative limit, up to the volume of the quantitative limit fixed.

8. Up to the date of communication of the statistics referred to in Article 12 (6), the provisions of paragraph 2 of this Article shall apply on the basis of the annual statistics previously communicated by the Community.

Article 6

1. In view of ensuring the effective functioning of this Agreement, the Community and Latvia agree to cooperate fully in order to prevent, to investigate and to take any necessary legal and/or administrative action against circumvention by transhipment, rerouting, false declaration concerning the country or place of origin, falsification of documents, false declaration concerning fibre content, quantities description or classification of merchandise any by whatever other means. Accordingly, Latvia and the Community agree to establish the necessary legal provisions and administrative procedures permitting effective action to be taken against such circumvention, which shall include the adoption of legally binding corrective measures against exporters and/or importers involved.

2. Should the Community believe on the basis of information available that the present Agreement is being circumvented, the Community will consult with Latvia with a view to reaching a mutually satisfactory solution. These consultations will be held as early as possible and at the latest within 30 days from the date of request.

3. Pending the results of the consultation referred to in paragraph 2, Latvia shall, as a precautionary measure, if so requested by the Community, take all necessary measures to ensure that, where sufficient evidence of circumvention is provided, adjustments of quantitative limits established pursuant to Article 5 liable to be agreed following the consultations referred to in paragraph 2 may be carried out for the quota year in which the request to open consultations in accordance with paragraph 2 was made, or for the following year if the quota for the current year is exhausted.

4. Should the Parties be unable, in the course of the consultation referred to in paragraph 2 to reach a mutually satisfactory solution, the Community shall have the right:

(a) where there is sufficient evidence that products originating in Latvia have been imported in circumvention of the present Agreement, to set off the relevant quantities against the quantitative limits established pursuant to Article 5;

(b) where sufficient evidence shows that a false declaration concerning fibre content, quantities, description or classification of products originating in Latvia has occurred, to refuse to import the products in question;

(c) should it appear that the territory of Latvia is involved in transhipment or rerouting of products not originating in Latvia, to introduce quantitative limits against the same products originating in Latvia if they are not already subject to quantitative limits, or to take any other appropriate measures.

5. The Parties agree to establish a system of administrative cooperation to prevent and to address effectively all problems arising from circumvention in accordance with the provisions of Protocol A to this Agreement.

Artile 7

1. The quantitative limits established pursuant to this Agreement on imports into the Community of textile products of Latvian origin will not be broken down by the Community into regional shares.

2. The Parties shall cooperate in order to prevent sudden and prejudicial changes in traditional trade flows resulting in regional concentration of direct imports into the Community.

3. Latvia shall monitor its exports of products under restraint or surveillance into the Community. Should a sudden and prejudicial change in traditional trade flows arise, the Community will be entitled to request consultations in order to find a satisfactory solution to those problems. Such consultations must be held within 15 working days of their being requested by the Community.

4. Latvia shall endeavour to ensure that exports of textile products subject to quantitative limits into the Community are spaced out as evenly as possible over the year due account being taken in particular of seasonal factors.

Article 8

In the event of denunciation of this Agreement as provided for in Article 19 (3), the quantitative limits established pursuant to this Agreement shall be reduced on a pro rata temporis basis unless the Contracting Parties decide otherwise by common agreement.

Article 9

Latvia exports of cottage-industry fabrics woven on hand- or foot-operated looms, garments or other made-up articles obtained manually from such fabrics and of traditional folklore handicraft products shall not be subject to quantitative limits, provided that these products originating in Latvia meet the conditions laid down in Protocol B.

Article 10

1. Should the Community consider that a texile product covered by this Agreement is being imported into the Community from Latvia at a price abnormally lower than the normal competitive level and is for this reason causing or threatening to cause serious injury to Community producers of like or directly competing products, it may request consultations pursuant to Article 15, and in that event the following specific provisions shall be applicable.

2. If following such consultations it is acknowledged by common accord that the situation described in paragraph 1 exists, Latvia shall take, within the limits of its powers, the necessary steps, notably as regards the price at which the product in question will be sold, to remedy the situation.

3. In order to determine whether the price of a textile product is abnormally lower than the normal competitive level, it may be compared with:

- the prices generally charged for like products sold under the ordinary conditions by other exporting countries on the market of the importing country,

- the prices of like national products at a comparable marketing stage on the market of the importing country,

- the lowest prices charged by a third country for the same product in the course of ordinary commercial dealings in the three months preceding the request for consultations, and not having led to the adoption of any measure by the Community.

4. Should the consultations referred to in paragraph 2 above fail to lead to an agreement within 30 days of the Community's request for consultations, the Community may, until these consultations have produced a mutually satisfactory solution, temporarily refuse consignments of the product in question at prices under the conditions referred to in paragraph 1.

5. In totally exceptional and critical circumstances, where consignments of products are being imported from Latvia into the Community at prices abnormally lower than the normal competitive level, such as to cause injury which it would be difficult to repair, the Community may temporarily suspend imports of the products concerned pending agreement on a solution in the course of consultations, which shall be opened immediately. The Contracting Parties shall do their utmost to reach a mutually acceptable solution within 10 working days' notice of the opening of such consultations.

6. Should the Community have recourse to the measures referred to in paragraphs 4 and 5, Latvia may at any time request the opening of consultations to examine the possibility of eliminating or modifying these measures where the causes which made them necessary no longer exist.

Article 11

1. The classification of the products covered by this Agreement is based on the tariff and statistical nomenclature of the Community (herinafter called the 'combined nomenclature', or in abbreviated form 'CN') and any amendments thereof.

Where any decision on classification results in a change of classification practice or a change of category of any product subject to this Agreement the affected products shall follow the trade regime applicable to the practice or category they fall into after such changes.

Any amendment to the combined nomenclature (CN) made in accordance with the procedures in force in the Community concerning categories of products covered by this Agreement or any decision relating to the classification of goods shall not have the effect of reducing quantitative limits introduced pursuant to this Agreement.

2. The origin of the products covered by this Agreement shall be determined in accordance with the rules in force in the Community.

Any amendement to these rules of origin shall be communicated to Latvia and shall not have the effect of reducing any quantitative limit established pursuant to this Agreement.

The procedures for control of the origin of the products referred to above are laid down in Protocol A.

Article 12

1. Latvia shall supply the Commission with precise statistical information on all export licences issued for categories of textile products subject to the quantitative limits established pursuant to this Agreement, or to a double-checking system expressed in quantities and in terms of value and broken down by Member States of the Community, as well as on all certificates issued by the competent Latvian authorities for products referred to in Article 9 and subject to the provisions of Protocol B.

2. The Community shall likewise transmit to the Latvian authorities precise statistical information on import authorizations issued by the Community authorities and import statistics for products covered by the system referred to in Article 5 (2).

3. The information referred to above shall, for all categories of products, be forwarded before the end of the month following the month to which the statistics relate.

4. Upon request by the Community, Latvia shall supply import statistics for all products covered by Annex I.

5. Should it be found on analysis of the information exchanged that there are significant discrepancies between the returns for exports and those for imports, consultations may be initiated in accordance with the procedure specified in Article 15 of this Agreement.

6. For the purpose of applying the provisions of Article 5, the Community undertakes to provide the Latvian authorities before 15 April of each year with the preceding year's statistics on imports of all textile products covered by this Agreement, broken down by supplying country and Community Member State.

Article 13

1. Latvia shall create favourable conditions for imports of textile products originating in the Community listed in Annex I and, where appropriate inter alia, accord to them non-discriminatory treatment as regards the application of quantitative restrictions, and the granting of licences and the allocation of currency needed to pay for such imports. Latvia will also recommend to its importers to use the possibilities offered by the Community producers of textiles mentioned above while according the highest possible degree of liberalization to those imports taking into account the development of trade between the Contracting Parties.

2. Where a need for additional supplies arises and in particular a need leading to the diversification on imports of textile products in Latvia, Latvia shall accord non-discriminatory treatment to imports of textile products originating in the Community.

Article 14

1. The Contracting Parties agree to examine the trend of trade in textile products and garments each year, in the framework of the consultations provided for in Article 15 and on the basis of the statistics referred to in Article 12.

2. If the Community finds that in the cases foreseen in Article 13 (2) of this Agreement it is placed in an unfavourable position as compared with a third country, it may request consultations with Latvia in accordance with the procedure specified in Article 15 with a view to taking appropriate action.

Article 15

1. Save where it is otherwise provided for in this Agreement, the consultation procedures referred to in this Agreement shall be governed by the following provisions:

- as far as possible consultations shall be held periodically. Specific additional consultations may also be held,

- any request for consultations shall be notified in writing to the other Contracting Party,

- where appropriate, the request for consultations shall be followed within a reasonable period and in any case not later than 15 days following the notification by a report setting out the circumstances which, in the opinion of the requesting Party, justify the submission of such a request,

- the Contracting Parties shall enter into consultations within one month of notification of the request at the latest, with a view to reaching agreement or a mutually acceptable conclusion within one further month at the latest,

- the period of one month referred to above for the purpose of reaching agreement or a mutually acceptable conclusion may be extended by common accord.

2. The Community may request consultations in accordance with paragraph 1 when it ascertains that during a particular year of application of the Agreement difficulties arise in the Community or one of its regions due to a sharp and substantial increase, by comparison to the preceding year, in imports of a given category of Group I subject to the quantitative limits established pursuant to this Agreement.

3. At the request of either of the Contracting Parties, consultations shall be held on any problems arising from the application of this Agreement. Any consultations held pursuant to this Article shall take place in a spirit of cooperation and with a desire to reconcile the differences between the Contracting Parties.

Article 16

The Contracting Parties undertake to promote the exchange of visits by persons, groups and delegations from business, trade and industry, to facilitate contacts in the industrial, commercial and technical fields connected with trade and cooperation in textile industry and textile products and garments, and to assist in the organization of fairs and exhibitions of mutual interest.

Article 17

As regards intellectual property, at the request of either Contracting Party, consultations shall be held in accordance with the procedure laid down in Article 15 with a view to finding an equitable solution to problems relating to the protection of marks, designs or models of articles of apparel and textile products.

Article 18

This Agreement shall apply, on the one hand, to the territories in which the Treaty establishing the European Economic Community is applied and under the conditions laid down in that Treaty and, on the other hand, to the territory of the Republic of Latvia.

Article 19

1. This Agreement shall enter into force on the first day of the month following the date on which the Parties notify each other of the completion of the procedures necessary for that purpose. It shall be applicable until 31 December 1997.

2. This Agreement shall apply with effect from 1 January 1993.

3. Either Contracting Party may at any time propose modifications to this Agreement or denounce it, provided that at least six months's notice is given. In that event, the Agreement shall come to an end on the expiry of the period of notice.

4. The Contracting Parties agree to enter into consultations not later than six months before the expiration of the present Agreement with a view to possibly concluding a new Agreement.

5. The Annexes, Protocols, Agreed Minutes and letters exchanged or attached to this Agreement, shall form an integral part thereof.

Article 20

This Agreement shall be drawn up in two copies in the Danish, Dutch, English, French, German, Greek, Italian, Portuguese, Spanish and Latvian languages, each of these texts being equally authentic.

For the Government

of the

Republic of Latvia

For the Council

of the European Communities

ANNEX I

PRODUCTS REFERRED TO IN ARTICLE 1

1. Without prejudice to the rules for the interpretation of the combined nomenclature, the wording of the description of goods is considered to be of indicative value only, since the products covered by each category are determined, within this Annex, by CN codes. Where there is an 'ex' symbol in front of a CN code, the products covered in each category are determined by the scope of the CN code and by that of the corresponding description.

2. Garments which are not recognizable as being garments for men or boys or as being garments for women or girls are classified with the latter.

3. Where the expression 'babies' garments' is used, this is meant to cover garments up to and including commercial size 86.

>TABLE>

>TABLE>

>TABLE>

>TABLE>

>TABLE>

>TABLE>

>TABLE>

>TABLE>

ANNEX II

294A1231(43).1

Products without quantitative limits subject to the double-checking system referred to in Article 2 (3) of the Agreement.

(The full product descriptions of the categories listed in this Annex are to be found in Annex I to the Agreement)

Category:

1

2

3

4

5

6

7

8

9

12

15

24

26

27

31

Protocol A

TITLE I CLASSIFICATION

Article 1

1. The competent authorities of the Community undertake to inform Latvia of any changes in the combined nomenclature (CN) before the date of their entry into force in the Community.

2. The competent authorities of the Community undertake to inform the competent authorities of Latvia of any decisions relating to the classification of products subject to the present Agreement, within one month of their adoption at the latest. Such communication shall include:

(a) a description of the products concerned;

(b) the relevant category and the related CN codes;

(c) the reasons which have led to the decision.

3. Where a decision on classification results in a change of classification practice or a change of category of any product subject to the Agreement, the competent authorities of the Community shall provide 30 days' notice, from the date of the Community's communication, before the decision is put into effect. Products shipped before the date of entry into effect of the decision shall remain subject to the earlier classification practice, provided that the goods in question are presented for importation into the Community within 60 days of that date.

4. Where a Community decision on classification resulting in a change of classification practice or a change of categorization of any product subject to the Agreement affects a category subject to quantitative limits, the Contracting Parties agree to enter into consultation in accordance with the procedures described in Article 15 of the Agreement with a view to honouring the obligation under the second subparagraph of Article 11 (1) of the Agreement.

5. In case of divergent opinions between Latvia and the competent Community and Estonian authorities at the point of entry into the Community on the classification of products covered by the present Agreement, classification shall provisionally be based on indications provided by the Community, pending consultations in accordance with Article 15 with a view to reaching agreement on definitive classification of the products concerned.

TITLE II ORIGIN

Article 2

1. Products originating in Latvia for export to the Community in accordance with the arrangements established by this Agreement shall be accompanied by a certificate of Latvian origin conforming to the model annexed to this Protocol.

2. The certificate of origin shall be certified by the competent Latvian organizations authorized under the Latvian legislation if the products in question can be considered products originating in that country within the meaning of the relevant Community rules.

3. However, the products in Groups III, IV and V may be imported into the Community in accordance with the arrangements established by this Agreement on production of a declaration by the exporter on the invoice or other commercial document relating to the products to the effect that the products in question originate in Latvia within the meaning of the relevant Community rules.

4. The certificate of origin referred to in paragraph 1 shall not be required for import of goods covered by a certificate of origin Form A or Form APR completed in accordance with the relevant Community rules in order to qualify for generalized tariff preferences.

Article 3

The certificate of origin shall be issued only on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorized representative. The competent Latvian organizations authorized under Latvian legislation shall ensure that the certificate of origin is properly completed and for this purpose they shall call for any necessary documentary evidence or carry out any check which they consider appropiate.

Article 4

Where different criteria for determining origin are laid down for products falling within the same category, the certificates or declarations of origin must contain a sufficiently detailed description of the goods so as to enable Latvian criterion to be determined, on the basis of which the certificate was issued or the declaration drawn up.

Article 5

The discovery of slight discrepancies between the statements made in the certificate of origin and those made in the documents produced to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto cast doubt upon the statements in the certificate.

TITLE III DOUBLE-CHECKING SYSTEM

Section I Exportation

Article 6

The competent authorities of Latvia shall issue an export licence in respect of all consignments from Latvia of textile products subject to any definitive or provisional quantitative limits established pursuant to Article 5 of the Agreement, up to the relevant quantitative limits as may be modified by Articles 4, 6 and 8 of the Agreement, as well as of all consignments of textile products subject to a double-checking system without quantitative limits as provided for in Article 2 (3) and (4) of the Agreement.

Article 7

1. For products subject to quantitative limits under this Agreement the export licence shall conform to Model 1 annexed to this Protocol and it shall be valid for exports throughout the customs territory to which the Treaty establishing the European Economic Community applies. However, where the Community has made recourse to the provisions of Articles 5 and 7 of the Agreement in accordance with the provision of the Agreed Minute No 1, or to the Agreed Minute No 2, the textile products covered by the export licences can only be put into free circulation in the region(s) of the Community indicated in those licences.

2. Where quantitative limits have been introduced pursuant to this Agreement, each export licence must certify inter alia that the quantity of the product in question has been set off against the quantitative limit established for the category of the products concerned and shall only cover one category of products subject to quantitative limits. It may be used for one or more consignments of the products in question.

3. For products subject to a double-checking system without quantitative limits the export licence shall conform to Model 2 annexed to this Protocol. It shall only cover one category of products and may be used for one or more consignments of the products in question.

Article 8

The competent authorities of the Community must be informed immediately of the withdrawal or modification of any export licence already issued.

Article 9

1. Exports of textile products subject to quantitative limits pursuant to this Agreement shall be set off against the quantitative limits established for the year in which the shipment of the goods has been effected, even if the export licence is issued after such shipment.

2. For the purpose of applying paragraph 1, shipment of the goods is considered to have taken place on the date of their loading onto the exporting aircraft, vehicle or vessel.

Article 10

The presentation of an export licence, in application of Article 12 hereafter, shall be effected not later than 31 March of the year following that in which the goods covered by the licence have been shipped.

Section II Importation

Article 11

Importation into the Community of textile products subject to quantitative limits or to a double-checking system pursuant to this Agreement shall be subject to the presentation of an import authorization.

Article 12

1. The competent authorities of the Community shall issue the import authorization referred to in Article 11 above, within five working days of the presentation by the importer of the original of the corresponding export licence.

2. The import authorizations concerning products subject to quantitative limits under this Agreement shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Economic Community is applied. However, where the Community has recourse to the provisions af Articles 5 and 7 of the Agreement in accordance with the provisions of the Agreed Minute No 1, or to the Agreed Minute No 2, the products covered by the import licences can only be put into free circulation in the region(s) of the Community indicated in those licences.

3. The import authorizations for products subject to a double-checking system without quantitative limits shall be valid for six months from the date of their issue for imports throughout the customs territory to which the Treaty establishing the European Economic Community is applicable.

4. The competent authorities of the Community shall cancel the import authorization already issued whenever the corresponding export licence has been withdrawn.

However, if the competent authorities of the Community are notified of the withdrawal or the cancellation of the export licence only after the importation of the products into the Community, the relevant quantities shall be set off against the quantitative limits established for the category and the quota year concerned.

Article 13

1. If the competent authorities of the Community find that the total quantities covered by export licences issued by the competent authorities of Latvia for a particular category in any year exceed the quantitative limit established in accordance with Article 5 of the Agreement for that category, as may be modified by Articles 4, 6 and 8 of the Agreement, the said authorities may suspend the further issue of import authorizations. In this event, the competent authorities of the Community shall immediately inform the authorities of Latvia and the special consultation procedure set out in Article 15 of the Agreement shall be initiated forthwith.

2. Exports of products of Latvian origin subject to quantitative limits or double-checking system and not covered by Latvian export licences issued in accordance with the provisions of this Protocol may be refused an import authorization by the competent Community authorities.

However, without prejudice to Article 6 of the Agreement if the import of such products is allowed into the Community by the competent authorities of the Community, the quantities involved shall not be set off against the appropiate quantitative limits established pursuant to this Agreement, without the express agreement of the competent authorities of Latvia.

TITLE IV FORM AND PRODUCTION OF EXPORT LICENCES AND CERTIFICATES OF ORIGIN, AND COMMON PROVISIONS CONCERNING EXPORTS TO THE COMMUNITY

Article 14

1. The export licence and the certificate of origin may comprise additional copies duly indicated as such. They shall be made out in English or French. If they are completed by hand, entries must be in ink and in printed script.

These documents shall measure 210 x 297 mm. The paper used shall be white writing paper, sized, not containing mechanical pulp, and weighing not less than 25 g/m². If the documents have several copies only the top copy, which is the original, shall be printed with the guilloche pattern background. This copy shall be clearly marked as 'original' and the other copies as 'copies'. Only the original shall be accepted by the competent authorities of the Community as being valid for the purpose of export to the Community in accordance with the provisions of the Agreement.

2. Each document shall bear a standardized serial number, whether or not printed, by which it can be identified.

This number shall be composed of the following elements:

- two letters identifying the exporting country as follows: LV,

- two letters identifying the intended Member State of customs clearance as follows:

BL = Benelux,

DE = Federal Republic of Germany

DK = Denmark

EL = Greece

ES = Spain

FR = France

GB = United Kingdom

IE = Ireland

IT = Italy

PT = Portugal

- a one-digit number identifying quota year, corresponding to the last figure in the respective year, e.g. 4 for 1994,

- a two-digit number from 01 to 99, identitying the particular issuing office concerned in the exporting country,

- a five-digit number running consecutively from 00001 to 99999 allocated to the intended Member State of customs clearance.

Article 15

The export licence and the certificate of origin may be issued after the shipment of the products to which they relate. In such cases they must bear the endorsement 'délivré a posteriori' or the endorsement 'issued retrospectively'.

Article 16

1. In the event of a theft, loss or destruction of an export licence or a certificate of origin, the exporter may apply to the competent Latvian authorities which issued the document for a duplicate to be made out on the basis of the export documents in his possession. The duplicate of any such certificate or licence so issued shall bear the endorsement 'duplicata' or 'duplicate'.

2. The duplicate shall bear the date of the original export licence or certificate of origin.

TITLE V ADMINISTRATIVE COOPERATION

Article 17

The Community and Latvia shall cooperate closely in the implementation of the provisions of this Protocol. To this end, contacts and exchange of views, including on technical matters, shall be facilitated by both Parties.

Article 18

In order to ensure the correct application of this Protocol, the Community and Latvia offer mutual assistance for the checking of the authenticity and the accuracy of export licences and certificates of origin issued or of any declarations made within the terms of this Protocol.

Article 19

Latvia shall transmit to the Commission of the European Communities the names and addresses of the authorities competent to issue and verify the export licences and the certificates of origin, together with specimens of the stamps used by these authorities and specimen signatures of officials responsible for signing the export licences and the certificates of origin. Latvia shall also notify the Community of any change in this information.

Article 20

1. Subsequent verification of certificates of origin or export licences shall be carried out at random, or whenever the competent Community authorities have reasonable doubt as to the authenticity of the certificate or licence or as to the accuracy of the information regarding the true origin of the products in question.

2. In such cases, the competent authorities in the Community shall return the certificate of origin or the export licence or a copy thereof to the competent Latvian authorities, giving, where appropriate, the reasons of form or substance which justify an enquiry. If the invoice has been submitted, such invoice or a copy thereof shall be attached to the certificate or to the licence or their copies. The authorities shall also forward any information that has been obtained suggesting that the particulars given on the said certificate or licence are inaccurate.

3. The provisions of paragraph 1 above shall also apply to subsequent verifications of the declarations of origin provided for in Article 2 of this Protocol.

4. The results of the sebsequent verifications carried out in accordance with paragraphs 1 and 2 above shall be communicated to the competent authorities of the Community within three months at the latest. The information communicated shall indicate whether the disputed certificate, licence or declaration, applies to the goods actually exported and whether these goods are eligible for export under the arrangements established by the Agreement. The information shall also include, at the request of the Community, copies of all documentation necessary to fully determine the facts, and in particular, the true origin of the goods.

Should such verifications reveal systematic irregularities in the use of declarations of origin, the Community may subject imports of the products in question to the provisions of Article 2 (1) of this Protocol.

5. For the purpose of subsequent verification of certificates of origin, copies of the certificates as well as any export documents referring to them shall be kept for at least two years by the competent Latvian authorities.

6. Recourse to the random verification procedure specified in this Article must not constitute an obstacle to the release for home use of the products in question.

Article 21

1. Where the verification procedure referred to in Article 20 or where information available to the competent authorities of the Community or of Latvia indicates or appears to indicate that the provisions of this Agreement are being circumvented or infringed, the two Contracting Parties shall cooperate closely and with the appropriate urgency in order to prevent any such circumvention or infringement.

2. To this end, the competent authorities of Latvia shall, on their own initiative or at the request of the Community, carry out appropriate inquiries, or arrange for such inquiries to be carried out, concerning operations which are, or appear to the Community to be, in circumvention or infringement of this Protocol. Latvia shall communicate the results of these inquiries to the Community, including any other pertinent information enabling the cause of the circumvention or infringement, including the true origin of the goods, to be determined.

3. By agreement between the Community and Latvia, officials designated by the Community may be present at the inquiries referred to in paragraph 2 above.

4. Pursuant to the cooperation referred to in parapraph 1 above, the competent authorities of the Community and Latvia shall exchange any information considered by either Contracting Party to be of use in preventing circumvention or infringement of the provisions of this Agreement. These exchanges may include information on the production of textile products in Latvia and on the trade in the type of products covered by this Agreement between Latvia and third countries, particularly where the Community has reasonable grounds to consider that the products in question may be in transit across the territory of Latvia prior to their importation into the Community. This information may include at the request of the Community, copies of all available relevant documentation.

5. Where sufficient evidence shows that the provisions of this Protocol have been circumvented or infringed, the competent authorities of Latvia and the Community may agree to take the measures set out in Article 6 (4) of the Agreement, and any other measures as are necessary to prevent a recurrence of such circumvention or infringement.

Annex to Protocol A, Article 2 (1)

>START OF GRAPHIC>

>END OF GRAPHIC>

Annex to Protocol A, Article 7 (1): Model 1

>START OF GRAPHIC>

>END OF GRAPHIC>

Annex to Protocol A, Article 7 (3): Model 2

>START OF GRAPHIC>

>END OF GRAPHIC>

Protocol B referred to in Article 9

Cottage industry and folklore products originating in Latvia

1. The exemption provided for in Article 9 in respect of cottage industry products shall apply to the following types of products only:

(a) fabrics woven on looms operated solely by hand or foot, being fabrics of a kind traditionally made in the cottage industry of Latvia;

(b) garments or other textile articles of a kind traditionally made in the cottage industry of Latvia obtained manually from the fabrics referred to above and sewn exclusively by hand without the aid of any machine;

(c) traditional folklore products of Latvia made by hand, in a list to be agreed between the Community and Latvia.

Exemption shall be granted in respect only of products covered by a certificate conforming to the specimen attached to this Protocol and issued by the competent authorities in Latvia. These certificates must indicate the reasons justifying their issuance; the competent authorities of the Community will accept them after having checked that the products concerned have fulfilled the conditions established in this Protocol. The certificates concerning the products envisaged in (c) above must bear a stamp 'FOLKLORE' marked clearly. In the case of a difference of opinion between the Parties concerning the nature of these products, consultations shall be held within one month in order to resolve these differences.

Should imports of any product covered by this Protocol reach proportions liable to cause problems within the Community, consultations with Latvia shall be initiated as soon as possible, with a view to resolving the situation by the adoption if necessary of a quantitative limit, in accordance with the procedure laid down in Article 15 of this Agreement.

2. The provisions of Titles IV and V of Protocol A shall apply mutatis mutandis to the products covered by paragraph 1 of this Protocol.

Annex to Protocol B

>START OF GRAPHIC>

>END OF GRAPHIC>

Protocol C

Reimports into the Community, within the meaning of Article 3 (3) of this Agreement, of products listed in the Annex to this Protocol shall be subject to the provisions of this Agreement, unless the special provisions below provide otherwise:

1. Subject to paragraph 2, only reimports into the Community of products affected by the specific quantitative limits laid down in the Annex to this Protocol shall be considered reimports within the meaning of Article 3 (3) of the Agreement.

2. Reimports not covered by the Annex to this Protocol may be made subject to specific quantitative limits following consultations in accordance with the procedures set out in Article 15 of the Agreement, provided the products concerned are subject to quantitative limits pursuant to the Agreement, to a double-checking system or to surveillance measures.

3. Having regard to the interests of both Parties, the Community may at its discretion, or in response to a request pursuant to Article 15 of the Agreement:

(a) examine the possibility of transferring from one category to another, using in advance or carrying over from one year to the next, portions of specific quantitative limits;

(b) consider the possibility of increasing specific quantitative limits.

4. However, the Community may apply automatically the flexibility rules set out in paragraph 3 above within the following limits:

(a) transfers between categories may not exceed 20 % of the quantity for the category to which the transfer is made;

(b) carry-over of a specific quantitative limit from one year to the next may not exceed 10,5 % of the quantity set for the year of actual utilization;

(c) advance use of specific quantitative limits from one year to another may not exceed 7,5 % of the quantity set for the year of actual utilization.

5. The Community shall inform Latvia of any measures taken pursuant to the preceding paragraphs.

6. The competent authorities in the Community shall debit the specific quantitative limits referred to in paragraph 1 at the time of issue of the prior authorization required by Council Regulation (EEC) No 636/82 which governs economic outward processing arrangements. A specific quantitative limit shall be debited for the year in which a prior authorization is issued.

7. A certificate of origin made out by the organizations authorized to do so under Latvian law shall be issued, in accordance with Protocol A to the Agreement, for all products covered by this Protocol. This certificate shall bear a reference to the prior authorization mentioned in paragraph 6 above as evidence that the processing operation it describes has been carried out in Lativia.

8. The Community shall provide Latvia with the names and addresses of, and specimens of the stamps used by, the competent authorities of the Community which issue the prior authorizations referred to in paragraph 6 above.

9. Without prejudice to the provisions of paragraphs 1 to 8 above, Latvia and the Community shall continue consultations with a view to seeking a mutually acceptable solution enabling both Contracting Parties to benefit from the Agreement's provisions on outward processing traffic and so ensure the effective development of trade in textile products between Latvia and the Community.

Annex to Protocol C

(The product descriptions of the categories listed in this Annex are to be found in Annex I of this Agreement)

OPT QUOTAS COMMUNITY QUANTITATIVE LIMITS

Category (pm)

Unit (pm)

1993 (pm)

1994 (pm)

1995 (pm)

1996 (pm)

1997 (pm)

Protocol D

The annual growth rate for the quantitative limits which may be introduced pursuant to Article 5 of the Agreement for the products covered by the Agreement shall be fixed by Agreement between the Parties in accordance with the consultation procedures established in Article 15 of the Agreement.

Agreed Minute No 1

In the context of the Agreement between the European Economic Community and the Republic of Latvia on trade in textile and clothing products, initialled at Brussels on 15 June 1993, the Parties agreed that Article 5 of the Agreement does not preclude the Community, if the conditions are fulfilled, from applying the safeguard measures for one or more of its regions in conformity with the principles of the internal market.

In such an event, Latvia shall be informed in advance of the relevant provisions of Protocol A to the Agreement to be applied, as appropriate.

For the Government of the Republic of Latvia

For the Council of the European Communities

Agreed Minute No 2

Notwithstanding Article 7 (1) of this Agreement, for imperative technical or administrative reasons or to find a solution to economic problems resulting from regional concentration of imports, or in order to combat circumvention and fraud of the provisions of this Agreement, the Community will establish for a limited period of time a specific management system in conformity with the principles of the Internal Market.

However, if the Parties are unable to reach a satisfactory solution during the consultations provided for in Article 7 (3), Latvia undertakes, if so requested by the Community, to respect temporary export limits for one or more regions of the Community. In such a case, these limits shall not preclude the importation into the region(s) concerned of products which were shipped from Latvia on the basis of export licences obtained before the date of formal notification to Latvia by the Community about the introduction of the above limits.

The Community shall inform Latvia of the technical and administrative measures, that need to be introduced by both Parties in order to implement the above paragraphs in conformity with the principles of the Internal Market.

For the Government of the Republic of Latvia

For the Council of the European Communities

Agreed Minute No 3

In the context of the Agreement between the European Economic Community and the Republic of Latvia on trade in textile and clothing products, initialled at Brussels on 15 June 1993, the Parties agreed that Latvia shall endeavour not to deprive certain regions of the Community which have traditionally had relatively small shares of Community quotas of imports of products serving as inputs for their processing industry.

The Community and Latvia further agreed to hold consultations, should the need arise, in order to avert any problems which might occur in this respect.

For the Government of the Republic of Latvia

For the Council of the European Communities

Agreed Minute No 4

In the context of the Agreement between the European Economic Community and the Republic of Latvia on trade in textile and clothing products, initialled at Brussels on 15 June 1993, Latvia agreed that, from the date of request for and pending the consultations referred to in Article 7 (3), it shall cooperate by not issuing export licences that would further aggravate the problems resulting from the regional concentration of direct imports into the Community.

For the Government of the Republic of Latvia

For the Council of the European Communities

Exchange of notes

The Directorate-General for External Relations of the Commission of the European Communities presents its compliments to the Minister of Foreign Affairs of the Republic of Latvia and has the honour to refer to the Agreement on textile products between Latvia and the Community initialled at Brussels on 15 June 1993.

The Directorate-General wishes to inform the Ministry that, whilst awaiting the completion of the necessary procedures for the conclusion and the coming into force of the Agreement, the Community is prepared to allow the provisions of the Agreement to apply de facto from 1 January 1993. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement provided that 120 days' notice is given.

The Directorate-General for External Relations would be grateful if the Minister would confirm its Agreement to the foregoing.

The Directorate-General for External Relations avails itself of the opportunity to renew to the Ministry of Foreign Affairs of the Republic of Latvia the assurance of its highest consideration.

Exchange of notes

The Ministry of Foreign Affairs of the Republic of Latvia presents its compliments to the Directorate-General for External Relations of the Commission of the European Communities and has the honour to refer to the Agreement on textile products between Latvia and the Community initialled at Brussels on 15 June 1993.

The Ministry of Foreign Affairs of the Republic of Latvia wishes to confirm to the Directorate-General that whilst awaiting the completion of the necessary procedures for the conclusion and the coming into force of the Agreement, the Government of the Republic of Latvia is prepared to allow the provisions of the Agreement to apply de facto from 1 January 1993. This is on the understanding that either Party may at any time terminate this de facto application of the Agreement provided that 120 days' notice is given.

The Ministry of Foreign Affairs of the Republic of Latvia to the European Communities avails itself of this opportunity to renew to the Directorate-General for External Relations of the Commission of the European Communities the assurance of its highest consideration.

PROTOCOL 2 on trade between the Community and Latvia in processed agricultural products

Article 1

1. The Community shall grant tariff concessions referred to in Annex I for processed agricultural products originating in Latvia. In the case of the goods referred to in Annex II, however, reductions of the agricultural component shall be granted within the quantity limits referred to therein.

2. Latvia shall grant tariff concessions determined in accordance with Article 4.

3. The Joint Committee may:

- add to the list of processed agricultural products referred to in this Protocol,

- increase the quantities of processed agricultural products eligible for the tariff concessions established by this Protocol.

4. The Joint Committee may replace the concessions with a system of compensatory amounts with no quantity limits, established on the basis of the difference found between the prices on the Community and Latvian markets of the agricultural products actually used to produce the processed agricultural products covered by this Protocol. The Joint Committee shall draw up a list of the products to which the compensatory amounts are applicable and a list of basic products. It shall adopt general implementing rules to that end.

Article 2

For the purposes of this Protocol, the following definitions shall apply:

- 'goods' means the processed agricultural products referred to in this Protocol,

- 'agricultural component' means the part of the charge corresponding to the difference between the prices on the internal market of the Contracting Parties of the agricultural products considered to have been used for the production of the goods and the prices of those agricultural products incorporated in imports from third countries,

- 'non-agricultural component' means the part of the charge remaining when the agricultural component is deducted from the total charge,

- 'basic products' means the agricultural products considered as having been used in the production of goods within the meaning of Regulation (EC) No 3448/93,

- 'base quantity' means the quantity of a basic product calculated in the manner stipulated in Article 3 of Regulation (EC) No 3448/93 and which is used to determine the agricultural component applicable to goods of a given type, in accordance with the terms of the same Regulation.

Article 3

1. The Community grants to Latvia the following concessions:

- the non-agricultural component of the charge shall be reduced as per Annex I,

- for the goods for which Annex I stipulates a reduced agricultural component (MOBR) the level of the latter shall be calculated by reducing the base quantities of the basic products for which a levy reduction is granted by 20 % in 1995, 40 % in 1996 and 60 % from 1997. For the other basic products of those goods, the corresponding reductions, for the same years, shall be 10 %, 20 % and 30 %. These reductions shall be granted within the limits of tariff quotas stipulated in Annex II. For quantities in excess of those quotas the agricultural component applicable to third countries shall apply.

2. The agricultural components shall be replaced by reduced agricultural components in the case of goods added in accordance with the procedure described in Article 1 (3).

Article 4

1. Before 31 December 1996 Latvia shall determine the agricultural component of the charge on the goods falling within Regulation (EC) No 3448/93 on the basis of the MFN import duties indicated in Annex III and applicable to the basic agricultural products originating in the Community considered to have been used in the production of these goods. It shall forward that information to the Joint Committee.

2. Latvia shall apply the duty indicated in Annex III to imports of processed agricultural products originating in the Community and falling within Regulation (EC) No 3448/93. However, if reform of Latvian agriculture policy causes the agricultural component of the charge defined in Article 2 to increase, Latvia shall inform the Joint Committee accordingly, which may agree to the rate of duty concerned which corresponds to the size of the agricultural component.

3. Latvia shall reduce the duties applicable to goods falling within Regulation (EC) No 3448/93 in accordance with the following timetable:

- the non-agricultural component of the charge shall be removed by 31 December 2001,

- the agricultural component shall be reduced by the Joint Committee in accordance with the principles referred to in Article 3.

ANNEX I

>TABLE>

ANNEX II

>TABLE>

ANNEX III

List of products referred to in Article 4

1. Imports into Latvia of the following products originating in the Community shall be subject to the duties set out below. However, if a more favourable trade regime is in force in Latvia, this shall be applied to imports from the Community.

2. Tariff reductions from the year 1995 to 2000 shall be implemented in annual equal steps if the reductions are higher than 1 %, in other cases the reductions shall be implemented in one step in the year 2000.

3. Imports into Latvia of those processed agricultural products originating in the Community other than those listed in this Annex, are free of duty.

>TABLE>

ANNEX IV

List of products referred to in Article 4

>TABLE>

PROTOCOL 3 concerning the definition of originating products and methods of administrative cooperation

TITLE I GENERAL PROVISIONS

Article 1

Definitions

For the purposes of this Protocol:

(a) 'manufacture' means any kind of working or processing including assembly or specific operations;

(b) 'material' means any ingredient, raw material, component or part, etc., used in the manufacture of the product;

(c) 'product' means the product being manufactured, even if it is intended for later use in another manufacturing operation;

(d) 'goods' means both materials and products;

(e) 'customs value' means the value as determined in accordance with the Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade, done at Geneva on 12 April 1979;

(f) 'ex-works price' means the price paid for the product ex-works to the manufacturer in whose undertaking the last working or processing is carried out provided the price includes the value of all the materials used, minus all internal taxes which are, or may be, repaid when the product obtained is exported;

(g) 'value of materials' means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the territories concerned;

(h) 'value of originating materials' means the customs value of such materials as defined in subparagraph (g) applied mutatis mutandis;

(i) 'added value' shall be taken to be the ex-works price minus the customs value of each of the products incorporated which did not originate in the country in which those products were obtained;

(j) 'chapters' and 'headings' means the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonized Commodity Description and Coding System, referred to in this Protocol as 'the Harmonized System' or 'HS';

(k) 'classified' refers to the classification of a product or material under a particular heading;

(l) 'consignment' means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice.

TITLE II DEFINITION OF THE CONCEPT OF 'ORIGINATING PRODUCTS'

Article 2

Origin Criteria

For the purpose of implementing this Agreement, and without prejudice to the provisions of Articles 3 and 4 of this Protocol, the following products shall be considered as:

1. products originating in the Community:

(a) products wholly obtained in the Community, within the meaning of Article 5 of this Protocol;

(b) products obtained in the Community which contain materials not wholly obtained there, provided that the said materials have undergone sufficient working and processing in the Community within the meaning of Article 6, of this Protocol;

2. products originating in Latvia:

(a) products wholly obtained in Latvia, within the meaning of Article 5 of this Protocol;

(b) products obtained in Latvia which contain materials not wholly obtained there, provided that the said materials have undergone sufficient working or processing in Latvia within the meaning of Article 6 of this Protocol.

Article 3

Bilateral cumulation

1. Notwithstanding Article 2 (1) (b), materials originating in Latvia within the meaning of this Protocol shall be considered as materials originating in the Community and it shall not be necessary that such materials have undergone sufficient working or processing there, provided however that they have undergone working or processing going beyond that referred to in Article 7 of this Protocol.

2. Notwithstanding Article 2 (2) (b), materials originating in the Community within the meaning of this Protocol shall be considered as materials originating in Latvia and it shall not be necessary that such materials have undergone working or processing there, provided however that they have undergone working or processing going beyond that referred to in Article 7 of this Protocol.

Article 4

Cumulation with materials originating in Estonia and Lithuania

1. (a) Notwithstanding Article 2 (1) (b) and subject to the provisions of paragraphs 2 and 3, materials originating in Estonia or Lithuania within the meaning of Protocol 3 annexed to the Agreements between the Community and these countries shall be considered as originating in the Community and it shall not be necessary that such materials have undergone sufficient working or processing, on condition however that they have undergone working or processing beyond that referred to in Article 7 of this Protocol.

(b) Notwithstanding Article 2 (2) (b) and subject to the provisions of paragraphs 2 and 3, materials originating in Estonia or Lithuania within the meaning of Protocol 3 annexed to the Agreements between the Community and these countries shall be considered as originating in Latvia and it shall not be necessary that such materials have undergone sufficient working or processing, on condition however that they have undergone working or processing beyond that referred to in Article 7 of this Protocol.

2. Products which have acquired originating status by virtue of paragraph 1 shall only continue to be considered as originating in the Community or in Latvia, when the value added there exceeds the value of the materials used originating in Estonia or Lithuania.

If this is not so, the products concerned shall be considered for the purposes of implementing this Agreement or of the Agreement between the Community and Estonia or Lithuania as originating in Estonia or Lithuania according to which of these countries accounts for the highest value of originating materials used.

3. For the purposes of this Article, identical rules of origin to those in this Protocol shall be applied in trade between the Community and Estonia and Lithuania and between Latvia and those two countries and also between each of these three countries themselves.

Article 5

Wholly obtained products

1. Within the meaning of Article 2 (1) (a) and (2) (a), the following shall be considered as wholly obtained either in the Community or in Latvia:

(a) mineral products extracted from their soil or from their seabed;

(b) vegetable products harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

(e) products obtained by hunting or fishing there;

(f) products of sea fishing and other products taken from the sea by their vessels;

(g) products made aboard their factory ships exclusively from products referred to in subparagraph (f);

(h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or use as waste;

(i) waste and scrap resulting from manufacturing operations conducted there;

(j) products extracted from marine soil or subsoil outside their territorial waters provided that they have sole rights to work that soil or subsoil;

(k) goods produced exclusively from products specified in subparagraphs (a) to (j).

2. The term 'their vessels' and 'their factory ships' in paragraph 1 (f) and (g) shall apply only to vessels and factory ships:

- which are registered or recorded in Latvia or in a Member State of the Community,

- which sail under the flag of Latvia or of a Member State of the Community,

- which are owned to an extent of at least 50 % by nationals of Latvia or of a Member State of the Community, or by a company with its head office in one of these States or in Latvia, of which the manager or managers, chairman of the board of directors or the supervisory board, and the majority of the members of such boards are nationals of Latvia or of Member States of the Community and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to these States, to Latvia, to their public bodies or to their nationals,

- of which the master and officers are nationals of Latvia or of Member States of the Community,

- of which at least 75 % of the crew are nationals of Latvia or of Member States of the Community.

3. The terms 'Latvia' and 'the Community' shall also cover the territorial waters which surround Latvia and the Member States of the Community.

Sea-going vessels, including factory ships on which the fish caught is worked or processed, shall be considered as part of the territory of the Community or of Latvia provided that they satisfy the conditions set out in paragraph 2.

Article 6

Sufficiently worked or processed products

1. For the purposes of Article 2, non-originating materials are considered to be sufficiently worked or processed when the product obtained is classified in a heading which is different from that in which all the non-originating materials used in its manufacture are classified, subject to paragraphs 2 and 3.

2. For a product mentioned in columns 1 and 2 of the list in Annex II, the conditions set out in column 3 for the product concerned must be fulfilled instead of the rule in paragraph 1.

Where in the list in Annex II a percentage rule is applied in determining the originating status of a product obtained in the Community or in Latvia the value added by the working or processing shall correspond to the ex-works price of the product obtained, less the value of third-country materials imported into the Community or Latvia.

3. These conditions indicate, for all products covered by this Agreement, the working or processing which must be carried out on the non-originating materials used in the manufacture of these products, and apply only in relation to such materials. Accordingly, it follows that if a product which has acquired originating status by fulfilling the conditions set out in the list for that product, is used in the manufacture of another product, the conditions applicable to the product in which it is incorporated do not apply to it, and no account shall be taken of the non-originating materials which may have been used in its manufacture.

Article 7

Insufficient working or processing operations

For the purpose of implementing Article 6 the following shall be considered as insufficient working or processing to confer the status of originating products, whether or not there is a change of heading:

(a) operations to ensure the preservation of products in good condition during transport and storage (ventilation, spreading out, drying, chilling, placing in salt, sulphur dioxide or other aqueous solutions, removal of damaged parts, and like operations);

(b) simple operations consisting of removal of dust, sifting or screening, sorting, classifying, matching (including the making-up of sets of articles), washing, painting, cutting up;

(c) (i) changes of packaging and breaking up and assembly of packages;

(ii) simple placing in bottles, flasks, bags, cases, boxes, fixing on cards or boards, etc., and all other simple packaging operations;

(d) affixing marks, labels and other like distinguishing signs on products or their packaging;

(e) simple mixing of products, whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in this Protocol to enable them to be considered as originating in the Community or in Latvia;

(f) simple assembly of parts to constitute a complete product;

(g) a combination of two or more operations specified in subparagraphs (a) to (f);

(h) slaughter of animals.

Article 8

Unit of qualification

1. The unit of qualification for the application of the provisions of this Protocol shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonized System.

Accordingly, it follows that:

(a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonized System in a single heading, the whole constitutes the unit of qualification;

(b) when a consignment consists of a number of identical products classified under the same heading of the Harmonized System, each product must be taken individually when applying the provisions of this Protocol.

2. Where, under General Rule 5 of the Harmonized System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.

Article 9

Accessories, spare parts and tools

Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

Article 10

Sets

Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 % of the ex-works price of the set.

Article 11

Neutral elements

In order to determine whether a product originates in the Community or in Latvia, it shall not be necessary to establish whether the electrical energy, fuel, plant and equipment as well as machines and tools used to obtain such product, or whether any goods, used in the course of production which do not enter and which were not intended to enter into the final composition of the product, are originating or not.

TITLE III TERRITORIAL REQUIREMENTS

Article 12

Principle of territoriality

The conditions set out in Title II relative to the acquisition of originating status must be fulfilled without interruption in the Community or in Latvia without prejudice to the provisions of Articles 3 or 4.

Article 13

Reimportation of goods

If originating products exported from the Community or Latvia to another country are returned, except in so far as provided for in Articles 3 or 4 they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

(a) the goods returned are the same goods as those exported; and

(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported.

Article 14

Direct transport

1. The preferential treatment provided for under the Agreement applies only to products or materials which are transported between the territories of the Community and Latvia or, when the provisions of Article 4 are applied, of Estonia or Lithuania without entering any other territory. However, goods originating in Latvia or in the Community and constituting one single consignment which is not split up may be transported through territory other than that of the Community or Latvia or, when the provisions of Article 4 apply, of Estonia or Lithuania with, should the occasion arise, transhipment or temporary warehousing in such territory, provided that the goods have remained under the surveillance of the customs authorities in the country of transit or of warehousing and that they have not undergone operations other than unloading, reloading or any operation designed to preserve them in good condition.

Products originating in Latvia or in the Community may be transported by pipeline across territory other than that of the Community or that of Latvia.

2. Evidence that the conditions set out in paragraph 1 have been fulfilled may be supplied to the customs authorities of the importing country by the production of:

(a) a through bill of lading issued in the exporting country covering the passage through the country of transit; or

(b) a certificate issued by the customs authorities of the country of transit:

(i) giving an exact description of the products;

(ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships used; and

(iii) certifying the conditions under which the products remained in the transit country; or

(c) failing these, any substantiating documents.

Article 15

Exhibitions

1. Products sent from one of the Contracting Parties for exhibition in a third country and sold after the exhibition for importation in another Party shall benefit on importation from the provisions of this Agreement on condition that the products meet the requirements of this Protocol entitling them to be recognized as originating in the Community or in Latvia and provided that it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from one of the Contracting Parties to the country in which the exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person in another Contracting Party;

(c) the products have been consigned during the exhibition or immediately thereafter to the latter Contracting Party in the state in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.

2. A proof of origin must be issued or made out in accordance with the provisions of Title IV and submitted to the customs authorities of the importing State in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the nature of the products and the conditions under which they have been exhibited may be required.

3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

TITLE IV PROOF OF ORIGIN

Article 16

Movement certificate EUR.1

Evidence of originating status of products, within the meaning of this Protocol, shall be given by a movement certificate EUR.1, a specimen of which appears in Annex III to this Protocol.

Article 17

Normal procedure for the issue of a movement certificate EUR.1

1. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting State on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorized representative.

2. For this purpose, the exporter or his authorized representative shall fill out both the movement certificate EUR.1 and the application form, specimens of which appear in Annex III.

These forms shall be completed in one of the languages in which this Agreement is drawn up, in accordance with the provisions of the domestic law of the exporting State. If they are handwritten, they shall be completed in ink in capital letters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled a horizontal line must be drawn below the last line of the description, the empty space being crossed through.

3. The exporter applying for the issue of a movement certificate EUR.1 shall be prepared to submit at any time, at the request of the customs authorities of the exporting State where the movement certificate EUR.1 is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

The exporter must retain for at least three years the documents referred to in the preceding paragraph.

Applications for movement certificates EUR.1 must be preserved for at least three years by the customs authorities of the exporting State.

4. The movement certificate EUR.1 shall be issued by the customs authorities of a Member State of the Community if the goods to be exported can be considered as products originating in the Community within the meaning of Article 2 (1) of this Protocol. The movement certificate EUR.1 shall be issued by the customs authorities of Latvia, if the goods to be exported can be considered as products originating in Latvia within the meaning of Article 2 (2) of this Protocol.

5. Where the cumulation provisions of Articles 2 to 4 are applied, the customs authorities of the Member State of the Community or of Latvia may issue movement certificates EUR.1 under the conditions laid down in this Protocol if the goods to be exported can be considered as originating products within the meaning of this Protocol and provided that the goods covered by the movement certificates EUR.1 are in the Community or in Latvia.

In these cases movement certificates EUR.1 shall be issued subject to the presentation of the proof of origin previously issued or made out. This proof of origin must be kept for at least three years by the customs authorities of the exporting State.

6. The issuing customs authorities shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Protocol. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check which they consider appropriate.

The issuing customs authorities shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions.

7. The date of issue of the movement certificate EUR.1 shall be indicated in the part of the certificate reserved for the customs authorities.

8. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting State when the products to which it relates are exported. It shall be made available to the exporter as soon as actual exportation has been effected or ensured.

Article 18

Movement certificates EUR.1 issued retrospectively

1. Notwithstanding Article 17 (8), a movement certificate EUR.1 may exceptionally be issued after exportation of the products to which it relates if:

(a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or

(b) it is demonstrated to the satisfaction of the customs authorities that a movement certificate EUR.1 was issued but was not accepted at importation for technical reasons.

2. For the implementation of paragraph 1, the exporter must indicate in this application the place and date of exportation of the products to which the movement certificate EUR.1 relates, and state the reasons for his request.

3. The customs authorities may issue a movement certificate EUR.1 retrospectively only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file.

4. Movement certificates EUR.1 issued retrospectively must be endorsed with one of the following phrases: 'NACHTRÄGLICH AUSGESTELLT', 'DELIVRE A POSTERIORI', 'RILASCIATO A POSTERIORI', 'AFGEGEVEN A POSTERIORI', 'ISSUED RETROSPECTIVELY', 'UDSTEDT EFTERFØLGENDE', 'ÅÊÄÏÈÅÍ ÅÊ ÔÙÍ ÆÓÔÅÑÙÍ', 'EXPEDIDO A POSTERIORI', 'EMITADO A POSTERIORI', 'ZDOTS P EEC PRECU EKSPORTA'.

5. The endorsement referred to in paragraph 4 shall be inserted in the 'Remarks' box of the movement certificate EUR.1.

Article 19

Issue of a duplicate movement certificate EUR.1

1. In the event of theft, loss or destruction of a movement certificate EUR.1, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession.

2. The duplicate issued in this way must be endorsed with one of the following words:

'DUPLIKAT', 'DUPLICATA', 'DUPLICATO', 'DUPLICAAT', 'DUPLICATE', 'ÁÍÔÉÃÑÁÖÏ', 'DUPLICADO', 'SEGUNDA VIA', 'DUPLIKATS'.

3. The endorsement referred to in paragraph 2, and the date of issue and the serial number of the original certificate shall be inserted in the 'Remarks' box of the duplicate movement certificate EUR.1.

4. The duplicate, which must bear the date of issue of the original movement certificate EUR.1, shall take effect as from that date.

Article 20

Replacement of certificates

1. It shall at any time be possible to replace one or more movement certificates EUR.1 by one or more other certificates provided that this is done by the customs office responsible for controlling the goods.

2. The replacement certificate shall be regarded as a definite movement certificate EUR.1 for the purpose of the application of this Protocol, including the provisions of this Article.

3. The replacement certificate shall be issued on the basis of a written request from the re-exporter, after the authorities concerned have verified the information supplied in the applicant's request. The date and serial number of the original movement certificate EUR.1 shall be given in box 7.

Article 21

Simplified procedure for the issue of certificates

1. By way derogation from Articles 17, 18 and 19 of this Protocol, a simplified procedure for the issue of EUR.1 movement certificates can be used in accordance with the following provisions.

2. The customs authorities in the exporting State may authorize any exporter, hereinafter referred to as 'approved exporter', making frequent shipments for which EUR.1 movement certificates may be issued and who offers, to the satisfaction of the competent authorities, all guarantees necessary to verify the originating status of the products, not to submit to the customs office of the application for an EUR.1 certificate relating to those goods, for the purpose of obtaining an EUR.1 certificate under the conditions laid down in Article 17 of this Protocol.

3. The authorization referred to in paragraph 2 shall stipulate, at the choice of the competent authorities, that box No 11 'Customs endorsement' of the EUR.1 movement certificate must:

(a) either be endorsed beforehand with the stamp of the competent customs office of the exporting State and the signature, which may be a facsimile, of an official of that office; or

(b) be endorsed by the approved exporter with a special stamp which has been approved by the customs authorities of the exporting State and corresponds to the specimen given in Annex V of this Protocol. Such stamp may be pre-printed on the forms.

4. In the cases referred to in paragraph 3 (a), one of the following phrases shall be entered in box No 7 'Remarks' of the EUR.1 movement certificate: 'PROCEDIMIENTO SIMPLIFICADO', 'FORENKLET PROCEDURE', 'VEREINFACHTES VERFAHREN', 'ÁÐËÏÕÓÔÅÕÌÅÍÇ ÄÉÁÄÉÊÁÓÉÁ', 'SIMPLIFIED PROCEDURE', 'PROCEDURE SIMPLIFIEE', 'PROCEDURA SEMPLIFICATA', 'VEREENVOUDIGDE PROCEDURE', 'PROCEDIMENTO SIMPLIFICADO', 'IENK EARSOTA PROCED EURA'.

5. Box No 11 'Customs endorsement' of the EUR.1 certificate shall be completed if necessary by the approved exporter.

6. The approved exporter shall, if necessary, indicate in box No 13 'Request for verification' of the EUR.1 certificate the name and address of the authority competent to verify such a certificate.

7. Where the simplified procedure is applied, the customs authorities of the exporting State may prescribe the use of EUR.1 certificates bearing a distinctive sign by which they may be identified.

8. In the authorization referred to in paragraph 2 the competent authorities shall specify in particular:

(a) the conditions under which the applications for EUR.1 certificates are to be made;

(b) the conditions under which these applications are to be kept for at least three years;

(c) in the cases referred to in paragraph 3 (b) the authority competent to carry out the subsequent verification referred to in Article 30 of this Protocol.

9. The customs authorities of the exporting State may declare certain categories of goods ineligible for the special treatment provided for in paragraph 2.

10. The customs authorities shall refuse the authorization referred to in paragraph 2 to exporters who do not offer all the guarantees which they consider necessary. The competent authorities may withdraw the authorization at any time. They must do so where the approved exporter no longer satisfies the conditions or no longer offers these guarantees.

11. The approved exporter may be required to inform the competent authorities, in accordance with the rules which they lay down, of the goods to be dispatched by him, so that such authorities may make any verification they think necessary before the departure of the goods.

12. The customs authorities of the exporting State may carry out any check on approved exporters which they consider necessary. Such exporters must allow this to be done.

13. The provisions of this Article shall be without prejudice to the application of the rules of the Community, the Member States and Latvia concerning customs formalities and the use of customs documents.

Article 22

Validity of proof of origin

1. A movement certificate EUR.1 shall be valid for four months from the date of issue in the exporting State, and must be submitted within the said period to the customs authorities of the importing State.

2. Movement certificates EUR.1 which are submitted to the customs authorities of the importing State after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to reasons of force majeure or exceptional circumstances.

3. In other cases of belated presentation, the customs authorities of the importing State may accept the movement certificates EUR.1 where the products have been submitted to them before the said final date.

Article 23

Submission of proof of origin

Movement certificates EUR.1 shall be submitted to the customs authorities of the importing State in accordance with the procedures applicable in that State. The said authorities may require a translation of a movement certificate EUR.1 or an invoice declaration. They may also require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of the Agreement.

Article 24

Importation by instalments

Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing State, dismantled or non-assembled products within the meaning of general rule 2 (a) of the Harmonized System falling within Chapters 84 and 85 of the Harmonized System are imported by instalments, a single proof of origin for such products shall be submitted to the customs authorities upon importation of the first instalment.

Article 25

Form EUR.2

1. Notwithstanding Article 16, the evidence of originating status, within the meaning of this Protocol, for consignments containing only originating products and whose value does not exceed ECU 3 000 per consignment, may be given by a form EUR.2, a specimen of which appears in Annex IV to this Protocol.

2. The form EUR.2 shall be completed and signed by the exporter or, under the exporters responsibility, by his authorized representative in accordance with this Protocol.

3. A form EUR.2 shall be completed for each consignment.

4. The exporter who applied for the form EUR.2 shall submit at the request of the customs authorities of the exporting State all supporting documents concerning the use of this form.

5. Articles 22 and 23 shall apply mutatis mutandis to forms EUR.2.

Article 26

Exemptions from formal proof of origin

1. Products sent as small packages from private persons to private persons or forming part of travellers' personal luggage shall be admitted as originating products without requiring the submission of a formal proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Protocol and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration can be made on the customs declaration C2/CP3 or on a sheet of paper annexed to that document.

2. Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if it is evident from the nature and quantity of the products that no commercial purpose is in view.

3. Furthermore, the total value of these products must not exceed ECU 300 in the case of small packages or ECU 800 in the case of products forming part of travellers' personal luggage.

Article 27

Discrepancies and formal errors

1. The discovery of slight discrepancies between the statements made in a movement certificate EUR.1 or in a form EUR.2 and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the movement certificate EUR.1, or the form EUR.2 null and void if it is duly established that this document does correspond to the products submitted.

2. Obvious formal errors such as typing errors on a movement certificate EUR.1, or a form EUR.2 should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.

Article 28

Amounts expressed in ecus

1. Amounts in the national currency of the exporting State equivalent to the amounts expressed in ecus shall be fixed by the exporting State and communicated to the other Contracting Parties.

When the amounts exceed the corresponding amounts fixed by the importing State, the latter shall accept them if the products are invoiced in the currency of the exporting State or in the currency of one of the other States referred to in Article 4 of this Protocol.

If the goods are invoiced in the currency of another Member State of the Community the importing State shall recognize the amount notified by the country concerned.

2. Up to and including 30 April 2000, the amounts to be used in any given national currency shall be the equivalent in that national currency of the amounts expressed in ecus as at 1 October 1994.

For each successive period of five years, the amounts expressed in ecus and their equivalents in the national currencies of the States shall be reviewed by the Joint Committee on the basis of the exchange rates of the ecu as at the first working day in October in the year immediately preceding that five-year period.

When carrying out this review, the Joint Committee shall ensure that there will be no decrease in the amounts to be used in any national currency and shall furthermore consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in ecus.

TITLE V

ARRANGEMENTS FOR ADMINISTRATIVE COOPERATION

Article 29

Communication of stamps and addresses

The customs authorities of the Member States and of Latvia shall provide each other, through the Commission of the European Communities, with specimen impressions of stamps used in their customs offices for the issue of EUR.1 certificates and with the addresses of the customs authorities responsible for issuing movement certificates EUR.1 and for verifying those certificates and forms EUR.2.

Article 30

Verification of movement certificates EUR.1 and of forms EUR.2

1. Subsequent verification of movement certificates EUR.1 and forms EUR.2 shall be carried out randomly or whenever the customs authorities of the importing State have reason to doubt the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Protocol.

2. For the purposes of implementing the provisions of paragraph 1, the customs authorities of the importing State shall return the movement certificate EUR.1, the form EUR.2, or a copy of these documents, to the customs authorities of the exporting State giving, where appropriate, the reasons of substance or form for an inquiry.

3. The verification shall be carried out by the customs authorities of the exporting State. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check which they consider appropriate.

4. If the customs authorities of the importing State decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, they shall offer to release the products to the importer subject to any precautionary measures judged necessary.

5. The customs authorities requesting the verification shall be informed of the results of this verification within a maximum of 10 months. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as originating products and fulfil the other requirements of this Protocol.

6. If in cases of reasonable doubt there is no reply within 10 months or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in the case of force majeure or in exceptional circumstances, refuse entitlement to the preferences.

Article 31

Dispute settlement

Where disputes arise in relation to the verification procedures of Article 30 which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification or where they raise a question as to the interpretation of this Protocol, they shall be submitted to the Joint Committee.

In all cases the settlement of disputes between the importer and the customs authorities of the importing State shall be under the legislation of the said State.

Article 32

Penalties

Penalties shall be imposed on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining a preferential treatment for products.

Article 33

Free zones

1. The Member States and Latvia shall take all necessary steps to ensure that products traded under cover of a movement certificate EUR.1, which in the course of transport use a free zone situated in their territory, are not substituted by other goods and that they do not undergo handling other than normal operations designed to prevent their deterioration.

2. By means of an exemption to the provisions contained in paragraph 1, when products originating in the Community or in Latvia and imported into a free zone under cover of an EUR.1 certificate and undergo treatment or processing, the authorities concerned must issue a new EUR.1 certificate at the exporter's request, if the treatment or processing undergone is in conformity with the provisions of this Protocol.

TITLE VI CEUTA AND MELILLA

Article 34

Application of the Protocol

1. The term 'Community' used in this Protocol does not cover Ceuta or Melilla. The term 'products originating in the Community' does not cover products originating in these zones.

2. This Protocol shall apply mutatis mutandis to products originating in Ceuta and Melilla, subject to particular conditions set out in Article 35.

Article 35

Special conditions

1. The following provisions shall apply instead of Article 2 and references to that Article shall apply mutatis mutandis to this Article.

2. Providing they have been transported directly in accordance with the provisions of Article 14, the following shall be considered as:

1. products originating in Ceuta and Melilla:

(a) products wholly obtained in Ceuta and Melilla;

(b) products obtained in Ceuta and Melilla in the manufacture of which products other than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 6 of this Protocol; or that

(ii) those products are originating in Latvia or the Community within the meaning or this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 7;

2. products originating in Latvia:

(a) products wholly obtained in Latvia;

(b) products obtained in Latvia, in the manufacture of which products other than those referred to in (a) are used, provided that:

(i) the said products have undergone sufficient working or processing within the meaning of Article 6 of this Protocol; or that

(ii) those products are originating in Ceuta and Melilla or the Community within the meaning of this Protocol, provided that they have been submitted to working or processing which goes beyond the insufficient working or processing referred to in Article 7.

3. Ceuta and Melilla shall be considered as a single territory.

4. The exporter or his authorized representative shall enter 'Latvia' and 'Ceuta and Melilla' in box 2 of movement certificates EUR.1. In addition, in the case of products originating in Ceuta and Melilla, this shall be indicated in box 4 of movement certificates EUR.1.

5. The Spanish customs authorities shall be responsible for the application of this Protocol in Ceuta and Melilla.

TITLE VII FINAL PROVISIONS

Article 36

Amendments to the Protocol

The Joint Committee shall examine at two-yearly intervals, or whenever Latvia or the Community so request, the application of the provisions of this Protocol, with a view to making any necessary amendments or adaptations.

Such examination shall take into account in particular the participation of the Parties in free-trade zones or customs unions with third countries.

Article 37

Customs Cooperation Committee

1. A Customs Cooperation Committee shall be set up, charged with carrying out administrative cooperation with a view to the correct and uniform application of this Protocol and with carrying out any other tasks in the customs field which may be entrusted to it.

2. The Committee shall be composed, on the one hand, of experts of the Member States and of officials of the Commission of the European Communities who are responsible for customs questions and, on the other hand, of experts nominated by Latvia.

Article 38

Annexes

The Annexes to this Protocol shall form an integral part thereof.

Article 39

Implementation of the Protocol

The Community and Latvia shall each take the steps necessary to implement this Protocol.

Article 40

Arrangements with Estonia and Lithuania

The Contracting Parties shall take any measures necessary for the conclusion of arrangements with Estonia and Lithuania enabling this Protocol to be applied. The Contracting Parties shall notify each other of measures taken to this effect.

Article 41

Goods in transit or storage

The provisions of this Agreement may be applied to goods which comply with the provisions of this Protocol and which on the date of entry into force of this Agreement are either in transit or are in the Community or in Latvia or, in so far as the provisions of Article 2 are applicable, in Estonia or Lithuania in temporary storage in bonded warehouses or in free zones, subject to the submission to the customs authorities of the importing State, within four months of that date, of a certificate EUR.1 endorsed retrospectively by the competent authorities of the exporting State together with the documents showing that the goods have been transported directly.

ANNEX I

INTRODUCTORY NOTES

Foreword

These notes shall apply, where appropriate, to all manufactured products using non-originating materials, even if they are not subject to specific conditions contained in the list in Annex II but are subject instead to the change of heading rule set out in Article 6 (1).

Note 1

1.1. The first two columns in the list describe the product obtained. The first column gives the heading number, or the chapter number, used in the Harmonized System and the second column gives the description of goods used in that system for that heading or chapter. For each entry in the first two columns a rule is specified in column 3. Where, in some cases, the entry in the first column is preceded by an 'ex', this signifies that the rule in column 3 only applies to the part of that heading or chapter as described in column 2.

1.2. Where several heading numbers are grouped together in column 1 or a chapter number is given and the description of product in column 2 is therefore given in general terms, the adjacent rule in column 3 applies to all products which, under the Harmonized System, are classified within headings of the chapter or within any of the headings grouped together in column 1.

1.3. Where there are different rules in the list applying to different products within a heading, each indent contains the description of that part of the heading covered by the adjacent rule in column 3.

Note 2

2.1. In the case of any heading not in the list or any part of a heading that is not in the list, the 'change of heading' rule set out in Article 6 (1) applies. If a 'change of heading' condition applies to any entry in the list, then it is contained in the rule in column 3.

2.2. The working or processing required by a rule in column 3 has to be carried out only in relation to the non-originating materials used. The restrictions contained in a rule in column 3 likewise apply only to the non-originating materials used.

2.3. Where a rule states that 'materials of any heading' may be used, materials of the same heading as the product may also be used, subject, however, to any specific limitations which may also be contained in the rule. However, the expression 'manufacture from materials of any heading, including other materials of heading No . . .' means that only materials classified in the same heading as the product of a different description than that of the product as given in column 2 of the list may be used.

2.4. If a product made from non-originating materials which has acquired originating status during manufacture by virtue of the change of heading rule or its own list rule is used as a material in the process of manufacture of another product, then the rule applicable to the product in which it is incorporated does not apply to it.

For example:

An engine of heading No 8407, for which the rule states that the value of the non-originating materials which may be incorporated may not exceed 40 % of the ex-works price, is made from 'other alloy steel roughly shaped by forging' of heading No 7224.

If this forging has been forged in the country concerned from a non-originating ingot then the forging has already acquired origin by virtue of the rule for heading No ex 7224 in the list. It can then count as originating in the value calculation for the engine regardless of whether it was produced in the same factory or another. The value of the non-originating ingot is thus not taken into account when adding up the value of the non-originating materials used.

2.5. Even if the change of heading rule or the other rules contained in the list are satisfied, a product shall not acquire originating status if the processing carried out, taken as a whole, is insufficient within the meaning of Article 7.

Note 3

3.1. The rule in the list represents the minimum amount of working or processing required and the carrying out of more working or processing also confers originating status; conversely, the carrying out of less working or processing cannot confer origin. Thus if a rule says that non-originating material at a certain level of manufacture may be used, the use of such material at an earlier stage of manufacture is allowed and the use of such material at a later stage is not.

3.2. When a rule in the list specifies that a product may be manufactured from more than one material, this means that any one or more materials may be used. It does not require that all be used.

For example:

The rule for fabrics say that natural fibres may be used and that chemical materials, among other materials, may also be used. This does not mean that both have to be used; one can use one or the other or both.

If, however, a restriction applies to one material and other restrictions apply to other materials in the same rule, then the restrictions only apply to the materials actually used.

For example:

The rule for sewing machines specifies that both the thread tension mechanism used and the zigzag mechanism used must originate; these two restrictions only apply if the mechanisms concerned are actually incorporated into the sewing machine.

3.3. When a rule in the list specifies that a product must be manufactured from a particular material, the condition obviously does not prevent the use of other materials which, because of their inherent nature, cannot satisfy the rule.

For example:

The rule for heading No 1904 which specifically excludes the use of cereals or their derivatives does not prevent the use of mineral salts, chemicals and other additives which are not produced from cereals.

For example:

In the case of an article made from non-woven materials, if the use of only non-originating yarn is allowed for this class of article, it is not possible to start from non-woven cloth - even if non-woven cloths cannot normally be made from yarn. In such cases, the starting material would normally be at the stage before yarn - that is the fibre stage.

See also Note 6.3 in relation to textiles.

3.4. If in a rule in the list two or more percentages are given for the maximum value of non-originating materials that can be used, then these percentages may not be added together. The maximum value of all the non-originating materials used may never exceed the highest of the percentages given. Furthermore, the individual percentages must not be exceeded in relation to the particular materials they apply to.

Note 4

4.1. The term 'natural fibres' is used in the list to refer to fibres other than artificial or synthetic fibres and is restricted to the stages before spinning takes place, including waste, and, unless otherwise specified, the term 'natural fibres' includes fibres that have been carded, combed or otherwise processed but not spun.

4.2. The term 'natural fibres' includes horsehair of heading No 0503, silk of heading Nos 5002 and 5003 as well as the wool fibres, fine or coarse animal hair of heading Nos 5101 to 5105, the cotton fibres of heading Nos 5201 to 5203 and the other vegetable fibres of heading Nos 5301 to 5305.

4.3. The terms 'textile pulp', 'chemical materials' and 'paper-making materials' are used in the list to describe the materials not classified in Chapters 50 to 63, which can be used to manufacture artificial, synthetic or paper fibres or yarns.

4.4. The term 'man-made staple fibres' is used in the list to refer to synthetic or artificial filament tow, staple fibres or waste, of headings Nos 5501 to 5507.

Note 5

5.1. In the case of the products classified within those headings in the list to which a reference is made to this Note, the conditions set out in column 3 of the list shall not be applied to any basic textile materials used in their manufacture which, taken together, represent 10 % or less of the total weight of all the basic textile materials used (but see also Notes 5.3 and 5.4 below).

5.2. However, this tolerance may only be applied to mixed products which have been made from two or more basic textile materials.

The following are the basic textile materials:

- silk,

- wool,

- coarse animal hair,

- fine animal hair,

- horsehair,

- cotton,

- paper-making materials and paper,

- flax,

- true hemp,

- jute and other textile bast fibres,

- sisal and other textile fibres of the genus Agave,

- coconut, abaca, ramie and other vegetable textile fibres,

- synthetic man-made filaments,

- artificial man-made filaments,

- synthetic man-made staple fibres,

- artificial man-made staple fibres.

For example:

A yarn of heading No 5205 made from cotton fibres of heading No 5203 and synthetic staple fibres of heading No 5506 is a mixed yarn. Therefore, non-originating synthetic staple fibres that do not satisfy the origin rules (which require manufacture from chemical materials or textile pulp) may be used up to a weight of 10 % of the yarn.

For example:

A woollen fabric of heading No 5112 made from woollen yarn of heading No 5107 and synthetic yarn of staple fibres of heading No 5509 is a mixed fabric. Therefore synthetic yarn which does not satisfy the origin rules (which require manufacture from chemical materials or textile pulp) or woollen yarn that does not satisfy the origin rules (which require manufacture from natural fibres, not carded or combed or otherwise prepared for spinning) or a combination of the two may be used up to a weight of 10 % of the fabric.

For example:

Tufted textile fabric of heading No 5802 made from cotton yarn of heading No 5205 and cotton fabric of heading No 5210 is only a mixed product if the cotton fabric is itself a mixed fabric being made from yarns classified in two separate headings or if the cotton yarns used are themselves mixtures.

For example:

If the tufted textile fabric concerned had been made from cotton yarn of heading No 5205 and synthetic fabric of heading No 5407, then, obviously, the yarns used are two separate basic textile materials and the tufted textile fabric is accordingly a mixed product.

For example:

A carpet with tufts made from both artificial yarns and cotton yarns and with a jute backing is a mixed product because three basic textile materials are used. Thus, any non-originating materials that are at a later stage of manufacture than the rule allows may be used, provided their total weight taken together does not exceed 10 % of the weight of the textile materials in the carpet. Thus, both the jute backing and/or the artificial yarns could be imported at that stage of manufacture, provided the weight conditions are met.

5.3. In the case of fabrics incorporating 'yarn made of polyurethane segmented with flexible segments of polyether whether or not gimped' this tolerance is 20 % in respect of this yarn.

5.4. In the case of fabrics incorporating strip consisting of a core of aluminium foil or of a core of plastic film whether or not coated with aluminium powder, of a width not exceeding 5 mm, sandwiched by means of an adhesive between two films of plastic film, this tolerance is 30 % in respect of this strip.

Note 6

6.1. In the case of those textile products which are marked in the list by a footnote referring to this note, textile materials with the exception of linings and interlinings which do not satisfy the rule set out in the list in column 3 for the made up products concerned may be used provided that they are classified in a heading other than that of the product and that their value does not exceed 8 % of the ex-works price of the product.

6.2. Materials which are not classified within Chapters 50 to 63 may be used freely, whether or not they contain textiles.

Example:

If a rule in the list provides that for a particular textile item, such as trousers, yarn must be used, this does not prevent the use of metal items, such as buttons, because buttons are not classified within Chapters 50 to 63. For the same reason, it does not prevent the use of slide-fasteners even though slide-fasteners normally contain textiles.

6.3. Where a percentage rule applies, the value of trimmings and accessories must be taken into account when calculating the value of the non-originating materials incorporated.

Note 7

7.1. For the purposes of heading Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, the 'specific processes' are the following:

(a) vacuum distillation;

(b) redistillation by a very thorough fractionation process (1);

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralization with alkaline agents; decolorization and purification with naturally active earth, activated earth, activated charcoal or bauxite;

(g) polymerization;

(h) alkylation;

(i) isomerization.

7.2. For the purposes of heading Nos 2710, 2711 and 2712, the 'specific processes' are the following:

(a) vacuum distillation;

(b) redistillation by a very thorough fractionation process;

(c) cracking;

(d) reforming;

(e) extraction by means of selective solvents;

(f) the process comprising all the following operations: processing with concentrated sulphuric acid, oleum or sulphuric anhydride; neutralization with alkaline agents; decolorization and purification with naturally active earth, activated earth, activated charcoal or bauxite;

(g) polymerization;

(h) alkylation;

(ij) isomerization;

(k) (in respect of heavy oils falling within heading No ex 2710 only) desulphurization with hydrogen resulting in a reduction of at least 85 % of the sulphur content of the products processed (ASTM D 1266-59 T method);

(l) (in respect of products falling within heading No 2710 only) deparaffining by a process other than filtering;

(m) (in respect of heavy oils falling within heading No ex 2710 only) treatment with hydrogen at a pressure of more than 20 bar and a temperature of more than 250 °C with the use of a catalyst, other than to effect desulphurization, when the hydrogen constitutes an active element in a chemical reaction. The further treatment with hydrogen of lubricating oils of heading No ex 2710 (e.g. hydrofinishing or decolorization) in order, more especially, to improve colour or stability shall not, however, be deemed to be a specific process;

(n) (in respect of fuel oils falling within heading No ex 2710 only) atmospheric distillation, on condition that less than 30 % of these products distils, by volume, including losses, at 300 °C by the ASTM D 86 method;

(o) (in respect of heavy oils other than gas oils and fuel oils falling within heading No ex 2710 only) treatment by means of a high-frequency electrical brush-discharge.

7.3. For the purposes of heading Nos ex 2707, 2713 to 2715, ex 2901, ex 2902 and ex 3403, simple operations such as cleaning, decanting, desalting, water separation, filtering, colouring, marketing obtaining a sulphur content as a result of mixing products with different sulphur contents, any combination of these operations or like operations do not confer origin.

(1) See Additional Explanatory Note 4 (b) to Chapter 27 of the combined nomenclature.

ANNEX II

LIST OF WORKING OR PROCESSING REQUIRED TO BE CARRIED OUT ON NON-ORIGINATING MATERIALS IN ORDER THAT THE PRODUCT MANUFACTURED CAN OBTAIN ORIGINATING STATUS

>TABLE>

ANNEX III

MOVEMENT CERTIFICATES EUR.1

1. Movement certificates EUR.1 shall be made out on the form of which a specimen appears in this Annex. This form shall be printed in one or more of the languages in which the Agreement is drawn up. Certificates shall be made out in one of these languages and in accordance with the provisions of the domestic law of the exporting State. If they are handwritten, they shall be completed in ink and in capital letters.

2. Each certificate shall measure 210 × 297 mm; a tolerance of up to minus 5 mm or plus 8 mm in the length may be allowed. The paper used must be white, sized for writing, not containing mechanical pulp and weighing not less than 25 g/m²

. It shall have a printed green guilloche pattern background making any falsification by mechanical or chemical means apparent to the eye.

3. The competent authorities of the Member States of the Community and of Latvia may reserve the right to print the certificates themselves or may have them printed by approved printers. In the latter case each certificate must include a reference to such approval. Each certificate must bear the name and address of the printer or a mark by which the printer can be identified. It shall also bear a serial number, either printed or not, by which it can be identified.

>REFERENCE TO A FILM>

>REFERENCE TO A FILM>

>REFERENCE TO A FILM>

>REFERENCE TO A FILM>

ANNEX IV

FORM EUR.2

1. Form EUR.2 shall be made out on the form of which a specimen appears in this Annex. This form shall be printed in one or more of the languages in which the Agreement is drawn up. Forms shall be made out in one of these languages and in accordance with the provisions of the domestic law of the exporting State. If they are handwritten, they shall be completed in ink and in capital letters.

2. Each form EUR.2 shall measure 210 × 148 mm; a maximum tolerance of up to minus 5 mm or plus 8 mm in the length may be allowed. The paper used must be white, sized for writing, not containing mechanical pulp and weighing not less than 64 g/m2.

3. The competent authorities of the Member States of the Community and of Latvia may reserve the right to print the forms themselves or may have them printed by approved printers. In the latter case each form must include a reference to such approval. Each form must bear the name and address of the printer or a mark by which the printer can be identified. It shall also bear a serial number, either printed or not, by which it can be identified.

>REFERENCE TO A FILM>

>REFERENCE TO A FILM>

ANNEX V

Specimen impression of the stamp mentioned in Article 21 (3) (b)

>START OF GRAPHIC>

(1) Initials or coat of arms of the exporting State.

(2) Such information as is necessary for the identification of the approved exporter.

>END OF GRAPHIC>

PROTOCOL 4 on specific provisions relating to trade between Latvia and Spain and Portugal

CHAPTER I Specific provisions relating to trade between Spain and Latvia

Article 1

The provisions of the Agreement relating to trade in Title II shall be amended as follows in order to take account of the measures and undertakings listed in the Act of Accession of the Kingdom of Spain to the European Communities (hereinafter called 'the Act of Accession').

Article 2

Under the Act of Accession, Spain shall not grant to products originating in Latvia more favourable treatment than it provides for imports originating or in free circulation in other Member States.

Article 3

The implementation by Spain of the undertakings covered by Article 4 (2) of the Agreement shall take place at the time set for the remaining Member States always provided that Latvia has been removed from the scope of Regulation (EC) No 519/94 on common rules for imports from certain third countries.

Article 4

Quantitative restrictions may be applied to imports into Spain of products originating in Latvia until 31 December 1995 in respect of the products listed in Annex A hereto.

Article 5

Application of the provisions of this Protocol shall be without prejudice to Council Regulation (EEC) No 1911/91 of 26 June 1991 on the application of the provisions of Community law to the Canary Islands or Council Decision 91/314/EEC of 26 June 1991 setting up a programme of options specific to the remote and insular nature of the Canary Islands (Poseican).

CHAPTER II Specific provisions relating to trade between Portugal and Latvia

Article 6

The provisions of the Agreement relating to trade in Title II shall be amended as follows in order to take account of the measures and undertakings listed in the Act of Accession of the Portuguese Republic to the European Communities (hereinafter called 'the Act of Accession').

Article 7

Under the Act of Accession, Portugal shall not grant to products originating in Latvia more favourable treatment than it provides for imports originating or in free circulation in other Member States.

Article 8

The implementation by Portugal of the undertakings covered by Article 4 (2) of the Agreement shall take place at the time set for the remaining Member States always provided that Latvia has been removed from the scope of Regulation (EC) No 519/94 on common rules for imports from certain third countries.

Article 9

Quantitative restrictions may be applied to imports into Portugal of products originating in Latvia until 31 December 1995 in respect of the products listed in Annex B hereto.

ANNEX A

CN code

ex 0102 90 10 (1)

ex 0102 90 31 (2)

ex 0102 90 33 (3)

ex 0102 90 35 (4)

ex 0102 90 37 (5)

------------------

0103 91 10

0103 92 11

0103 92 19

------------------

0203 11 10

0203 12 11

0203 12 19

0203 19 11

0203 19 13

0203 19 15

0203 19 55

0203 19 59

0203 21 10

0203 22 11

0203 22 19

0203 29 11

0203 29 13

0203 29 15

0203 29 55

0203 29 59

------------------

0206 30 21

0206 30 31

0206 41 91

0206 49 91

------------------

0208 10 10

------------------

0209 00 11

0209 00 19

0209 00 30

------------------

0210 11 11

0210 11 19

0210 11 31

0210 11 39

0210 12 11

0210 12 19

0210 19 10

0210 19 20

0210 19 30

0210 19 40

0210 19 51

0210 19 59

0210 19 60

0210 19 70

0210 19 81

0210 19 89

0210 90 31

0210 90 39

ex 0210 90 90 (6)

------------------

ex 0401 (7)

------------------

0403 10 22

0403 10 24

0403 10 26

ex 0403 90 51

ex 0403 90 53 (8)

ex 0403 90 59 (9)

------------------

0404 10 91

0404 90 11

0404 90 13

0404 90 19

0404 90 31

0404 90 33

0404 90 39

------------------

ex 1601 (10)

------------------

ex 1602 10 00 (11)

ex 1602 20 90 (12)

1602 41 10

1602 42 10

1602 49 11

1602 49 13

1602 49 15

1602 49 19

1602 49 30

1602 49 50 ex

1602 90 10 (13)

1602 90 51

------------------

ex 1902 20 30 (14)

(1) Excluding animals for bullfights.

(2) Domestic swine only.

(3) In packings of a net content not exceeding two litres.

(4) Not preserved or concentrated or packed, destined for human consumption only.

(5) Only those containing meat or edible offal of domestic swine.

(6) Only those containing pig blood.

(7) Only:

- sausage made of meat, edible offal or blood of domestic swine,

- any preparation or preserved product containing meat or edible offal of domestic swine.

ANNEX B

CN code

0701 10 00

0701 90 10

0701 90 51

0701 90 59

PROTOCOL 5 on mutual assistance between administrative authorities in customs matters

Article 1

Definitions

For the purposes of this Protocol:

(a) 'customs legislation' shall mean provisions adopted by the Community and Lativa, governing the import, export, transit of goods and their placing under any customs procedure, including measures of prohibition, restriction and control;

(b) 'customs duties' shall mean all duties, taxes, fees or other charges which are levied and collected in the territories of the Contracting Parties, in application of customs legislation, but not including fees and charges which are limited in amount to the approximate costs of services rendered;

(c) 'applicant authority' shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which makes a request for assistance in customs matters;

(d) 'requested authority' shall mean a competent administrative authority which has been appointed by a Contracting Party for this purpose and which receives a request for assistance in customs matters;

(e) 'contravention' shall mean any violation of the customs legislation as well as any attempted violation of such legislation.

Article 2

Scope

1. The Contracting Parties shall assist each other, within their competences, in the manner and under the conditions laid down in this Protocol, in ensuring that customs legislation is correctly applied, in particular by the prevention, detection and investigation of contraventions of this legislation.

2. Assistance in customs matters, as provided for in this Protocol, applies to any administrative authority of the Contracting Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of the judicial authority, unless those authorities so agree.

Article 3

Assistance on request

1. At the request of the applicant authority, the requested authority shall furnish it with all relevant information to enable it to ensure that customs legislation is correctly applied, including information regarding operations noted or planned which contravene or would contravene such legislation.

2. At the request of the applicant authority, the requested authority shall inform it whether goods exported from the territory of one of the Contracting Parties have been properly imported into the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods.

3. At the request of the applicant authority, the requested authority shall take the necessary steps to ensure that a surveillance is kept on:

(a) natural or legal persons of whom there are reasonable grounds for believing that they are contravening or have contravened customs legislation;

(b) places where stocks of goods have been assembled in such a way that there are reasonable grounds for supposing that they are intended as supplies for operations contrary to the legislation of the other Party;

(c) movements of goods notified as possibly giving rise to substantial contraventions of customs legislation;

(d) means of transport for which there are reasonable grounds for believing that they have been, are or may be used in the contravening of customs legislation.

Article 4

Spontaneous assistance

Without prior request, the Contracting Parties shall provide each other, in accordance with their laws, rules and other legal instruments, with assistance if they consider that to be necessary for the correct application of customs legislation, particularly when they obtain information pertaining to:

- operations which have contravened, contravene or would contravene such legislation and which may be of interest to the other Contracting Party,

- new means or methods employed in realizing such operations,

- goods known to be subject to substantial contravention of customs legislation.

Article 5

Delivery/Notification

At the request of the applicant authority, the requested authority shall in accordance with its legislation take all necessary measures in order:

- to deliver all documents,

- to notify all decisions,

falling within the scope of this Protocol to an addressee, residing or established in its territory. In such a case Article 6 (3) is applicable.

Article 6

Form and substance of requests for assistance

1. Requests pursuant to this Protocol shall be made in writing. Documents necessary for the execution of such requests shall accompany the request. When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing immediately.

2. Requests pursuant to paragraph 1 shall include the following information:

(a) the applicant authority making the request;

(b) the measure requested;

(c) the object of and the reason for the request;

(d) the laws, rules and other legal elements involved;

(e) indications as exact and comprehensive as possible on the natural or legal persons being the target of the investigations;

(f) a summary of the relevant facts and of the enquiries already carried out, except in cases provided for in Article 5.

3. Requests shall be submitted in an official language of the requested authority or in a language acceptable to such authority.

4. If a request does not meet the formal requirements, its correction or completion may be demanded; the ordering of precautionary measures may, however, take place.

Article 7

Execution of requests

1. In order to comply with a request for assistance, the requested authority or, when the latter cannot act on its own, the administrative department to which the request has been addressed by this authority, shall proceed, within its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Contracting Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out.

2. Requests for assistance will be executed in accordance with the laws, rules and other legal instruments of the requested Contracting Party.

3. Duly authorized officials of a Contracting Party may, with the agreement of the other Contracting Party involved and within the conditions laid down by the latter, obtain from the offices of the requested authority or other authority for which the requested authority is responsible, information relating to the contravention of customs legislation which the applicant authority needs for the purposes of this Protocol.

4. Officials of a Contracting Party may, with the agreement of the other Contracting Party involved and within the conditions laid down by the latter, be present at enquiries carried out in the latter's territory.

Article 8

Form in which information is to be communicated

1. The requested authority shall communicate results of enquiries to the applicant authority in the form of documents, certified copies of documents, reports and the like.

2. The documents provided for in paragraph 1 may be replaced by computerized information produced in any form for the same purpose.

Article 9

Exceptions to the obligation to provide assistance

1. The Contracting Party may refuse to give assistance as provided for in this Protocol, where to do so would:

(a) be likely to prejudice sovereignty, public policy, security or other essential interests; or

(b) involve currency or tax regulations other than regulations concerning customs duties; or

(c) violate an industrial, commercial or professional secret.

2. Where the applicant authority asks for assistance which it would itself be unable to provide if so asked, it shall draw attention to that fact in its request. It shall then be left to the requested authority to decide how to respond to such a request.

3. If assistance is withheld or denied, the decision and the reasons therefor must be notified to the applicant authority without delay.

Article 10

Obligation to observe confidentiality

1. Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential nature. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to like information under the relevant legislation of the Contracting Party which received it and the corresponding provisions applying to the Community authorities.

2. Nominative data shall not be transmitted whenever there are reasonable grounds to believe that the transfer or the use made of the data transmitted would be contrary to the basic legal principles of one of the Parties, and, in particular, if the person concerned would suffer undue disadvantages. Upon request, the receiving Party shall inform the furnishing Party of the use made of the information supplied and of the results achieved.

3. Nominative data may only be transmitted to customs authorities and, in the case of need for prosecution purposes, to public prosecution and judicial authorities. Other persons or authorities may obtain such information only upon previous authorization by the furnishing authority.

4. The furnishing Party shall verify the accuracy of the information to be transferred. Whenever it appears that the information supplied was inaccurate or to be deleted, the receiving Party shall be notified without delay. The latter shall be obliged to carry out the correction or deletion.

5. Without prejudice to cases of prevailing public interest, the person concerned may obtain, upon request, information on the data stores and the purpose of this storage.

Article 11

Use of information

1. Information obtained shall be used solely for the purposes of this Protocol and may be used within each Contracting Party for other purposes only with the prior written consent of the administrative authority which furnished the information and shall be subject to any restrictions laid down by that authority. These provisions are not applicable when the information obtained for the purposes of this Protocol could also be used for the purposes of fighting against illicit traffic related to narcotic drugs and psychotropic substances. Such information may be communicated to other authorities directly involved in the combating of illicit drug traffic, within the limits of Article 2.

2. Paragraph 1 shall not impede the use of information in any judicial or administrative proceedings subsequently instituted for failure to comply with customs legislation.

3. The Contracting Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol.

Article 12

Experts and witnesses

An official of a requested authority may be authorized to appear, within the limitations of the authorization granted, as expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol in the jurisdiction of the other Contracting Party, and produce such objects, documents or authenticated copies thereof, as may be needed for the proceedings. The request for an appearance must indicate specifically on what matters and by virtue of what title or qualification the official will be questioned.

Article 13

Assistance expenses

The Contracting Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses and to interpreters and translators who are not dependent upon public services.

Article 14

Implementation

1. The management of this Protocol shall be entrusted to the central customs authorities of Latvia on the one hand and the competent services of the Commission of the European Communities and, where appropriate, the customs authorities of the Member States of the European Union on the other. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration rules in the field of data protection. They may recommend to the Joint Committee amendments which they consider be made to this Protocol.

2. The Contracting Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol.

Article 15

Complementarity

1. This Protocol shall complement and not impede the application of any agreements on mutual assistance which have been concluded or may be concluded between individual or several Member States of the European Union and Latvia. Nor shall it preclude more extensive mutual assistance granted under such agreements.

2. Without prejudice to Article 11, these agreements do not prejudice Community provisions governing the communication between the competent services of the Commission and the customs authorities of the Member States of any information obtained in customs matters which could be of Community interest.

PROTOCOL 6 on concessions with annual limits

The Parties agree that if this Agreement comes into force after 1 January in any year, any concession given within the limits of annual quantities will be adjusted pro rata with the exception of those Community concessions contained in Annex V.

In respect of Annex V, products for which import certificates have been issued under the EC Council Regulations applying generalized tariff preferences between 1 January and the entry into force of the Agreement will be counted against the tariff quota or tariff ceiling quantities contained in such Annex.

FINAL ACT

The plenipotentiaries of the 'EUROPEAN COMMUNITY', the 'EUROPEAN ATOMIC ENERGY COMMUNITY' and the 'EUROPEAN COAL AND STEEL COMMUNITY'

hereinafter referred to as 'the Community',

of the one part, and

the plenipotentiaries of the 'REPUBLIC OF LATVIA',

hereinafter referred to as 'Latvia',

of the other part,

meeting at Brussels, on the eighteenth day of July in the year one thousand nine hundred and ninety-four for the signature of the Agreement on free trade and trade-related matters between the European Community, the European Atomic Energy Community and the European Coal and Steel Community, of the one part, and the Republic of Latvia, of the other part, hereinafter referred to as 'the Agreement', have adopted the following texts:

The Agreement and the following Protocols:

Protocol 1 referred to in Article 10 (2) laying down other arrangements applicable to textile products

Protocol 2 on trade between the Community and Latvia in processed agricultural products

Protocol 3 concerning the definition of the concept of originating products and methods of administrative cooperation

Protocol 4 on specific provisions relating to trade between Latvia and Spain and Portugal

Protocol 5 on mutual assistance between administrative authorities in customs matters

Protocol 6 on concessions with annual limits

The plenipotentiaries of the Community and the plenipotentiaries of Latvia have adopted the texts of the joint declarations listed below and annexed to this Final Act:

Joint Declaration on Article 1 of the Agreement

Joint Declaration on Protocol 3 to the Agreement

Joint Declaration on Protocol 5 to the Agreement

The plenipotentiaries of the Community and the plenipotentiaries of Latvia have also taken note of the following exchanges of letters annexed to this Final Act:

Agreement in the form of an exchange of letters on maritime transport

Agreement in the form of an exchange of letters concerning the recognition of regionalization of African swine fever in the Kingdom of Spain

The plenipotentiaries of the Community have taken note of the declaration listed below and annexed to this Final Act:

Declaration by Latvia concerning a Europe Agreement

Hecho en Bruselas, el dieciocho de julio de mil novecientos noventa y cuatro.

Udfærdiget i Bruxelles, den attende juli nitten hundrede og fireoghalvfems.

Geschehen zu Brüssel am achtzehnten Juli neunzehnhundertvierundneunzig.

¸ãéíå óôéò ÂñõîÝëëåò, óôéò äÝêá ïêôþ Éïõëßïõ ÷ßëéá åííéáêüóéá åíåíÞíôá ôÝóóåñá.

Done at Brussels on the eighteenth day of July in the year one thousand nine hundred and ninety-four.

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

Fatto a Bruxelles, addì diciotto luglio millenovecentonovantaquattro.

Gedaan te Brussel, de achttiende juli negentienhonderd vierennegentig.

Feito em Bruxelas, em dezoito de Julho de mil novecentos e noventa e quatro.

Nosl Eegts Brisel Ee t Eukstos devi Kni simti devi Kndesmit ceturt Ea gada asto Knpadsmitaj Ea j Eulij Ea.

Por las Comunidades Europeas

For De Europæiske Fællesskaber

Für die Europäischen Gemeinschaften

Ãéá ôéò ÅõñùðáúêÝò Êïéíüôçôåò

For the European Communities

Pour les Communautés européennes

Per le Comunità europee

Voor de Europese Gemeenschappen

Pelas Comunidades Europeias

Eiropas kopienu v Eard Ea

XTB:SCHLAKT100 Por la República de Letonia

For Republikken Letland

Für die Republik Lettland

Ãéá ôç Äçìïêñáôßá ôçò Ëåôïíßáò

For the Republic of Latvia

Pour la république de Lettonie

Per la Repubblica di Lettonia

Voor de Republiek Letland

Pela República da Letónia

Latvijas Republikas v Eard Ea

XTB:SCHLAKT200

JOINT DECLARATIONS

1. Article 1

The Parties will take all necessary steps with the aim of negotiating and concluding a Europe Agreement as soon as possible in recognition of the fact that Latvia's ultimate objective is to become a member of the European Union through a Europe Agreement.

2. Protocol 3 to the Agreement

The Parties agree that future developments in regional cooperation between the Baltic States could lead to a deepening of effects of rules of origin.

3. Protocol 5 to the Agreement

The Parties agree that assistance under this Protocol does not extend to the collection of customs duties, taxes, fines and other charges on behalf of the other Party.

UNILATERAL DECLARATION

Declaration by Latvia

Taking into account the intention of both Parties to start negotiations on a Europe Agreement as soon as possible, Latvia expressed its interest that during these negotiations trade in textile and agricultural products could be renegotiated with an aim to provide appropriate adjustment to deepen mutual trade liberalization following the accession of the Scandinavian countries to the European Union.