2. If serious disturbances occur in any sector of the economic activity of the Community or of one or more Member States, or if their external financial stability is threatened, and if difficulties arise which could bring about serious deterioration in the economic situation of a region, the Community may take or authorize the Member State(s) concerned to take, by way of derogation from the provisions of Articles 2 and 5, such measures as may be necessary in their relations with the associated States.
The Association Council shall be notified forthwith of such measures and the detailed rules for their application.
3. In applying paragraphs 1 and 2 of this Article, priority shall be given to such measures as will least disturb the functioning of the Association. These measures shall not exceed the scope strictly necessary to remedy the difficulties which have arisen.
4. Consultations shall take place within the Association Council on the measures taken under paragraphs 1 and 2 of this Article.
They shall take place at the request of the Community for measures under paragraph 1 and at the request of one or more associated States for measures under paragraph 2.
Chapter 5. General Provisions
Article 14.
Without prejudice to the special provisions laid down in this Convention and in particular those contained in Article 3 above, each Contracting Party shall refrain from any measure or practice of an internal fiscal nature which directly or indirectly discriminates between its products and like products originating in the other Contracting Parties.
Title II. Financial and Technical Cooperation
Article 15.
The Community shall participate, under the conditions set out below, in measures to promote the economic and social development of the associated States by making an effort complementary to that made by those States.
Article 16.
For the purposes specified in Article 15, and for the duration of this Convention, a total amount of 730 million units of account shall be provided :
a) 666 million units of account by the Member States; 620 million units of account of this amount, paid into the "European Development Fund" hereinafter called the Fund, shall be used in the form of grants and the balance in the form of loans on special terms;
b) up to 64 million units of account by the European Investment Bank, hereinafter referred to as the Bank, in the form of loans granted by the Bank under the conditions laid down in Protocol No. 5 on the management of financial assistance annexed to this Agreement.
Article 17.
Under the conditions laid down in this Agreement and in Protocol No. 5, the amount fixed in Article 16 above shall be used:
1. In the field of economic and social investment :
- for economic and social infrastructure projects,
- for productive projects of general interest,
- for projects of a productive nature with a normal financial return,
- for preparatory, concomitant and post-investment technical assistance;
2. In the field of general technical cooperation :
- for studies on the development prospects of the economies of the associated States
- for management and vocational training programmes;
3. In the field of aid for diversification and production :
- for measures designed essentially to enable marketing at competitive prices on all Community markets, in particular by encouraging the rationalization of crops and sales methods and by helping producers to make the necessary adjustments;
4. In the field of price regularization :
- for advances to help mitigate the consequences of temporary fluctuations in world prices.
Article 18.
Grants and loans shall be allocated
(a) up to a maximum of 500 million units of account to finance the measures referred to in Article 17 (1) and (2) ;
(b) up to 230 million units of account for the financing of the measures referred to in Article 17 (3).
Article 19.
The Bank's loans referred to in Article 16 (b) may be accompanied by interest rate subsidies. The rate of such subsidies may be up to 3 % for loans with a maximum duration of 25 years.
The amounts required for the payment of interest rate subsidies shall, for the duration of the Fund's existence, be deducted from the amount of grant aid provided for in Article 16(a).
Article 20.
1. The Community may grant advances from the Fund's cash resources up to a maximum of 50 million units of account for the operations provided for in Article 17 (4).
2. These advances shall be granted under the conditions laid down in Protocol No 5.
Article 21.
For the financing of the operations referred to in Article 17, the associated State or group of associated States concerned shall draw up, in accordance with the conditions laid down in Protocol No 5, a file for each project or programme for which it applies for financial assistance. It shall send this file to the Community at the address of the Commission.
Article 22.
The Community shall examine applications for financing submitted to it under the provisions of the preceding Article. It shall maintain the necessary contacts with the associated States concerned in order to take a fully informed decision on the projects or programmes submitted to it. The associated State or group of associated States concerned shall be informed of the outcome of its request.
Article 23.
Community assistance for the implementation of certain projects or programmes may take the form of participation in financing arrangements involving, in particular, third States, international financial organisations or authorities and credit and development institutes of the associated States or Member States.
Article 24.
1. The beneficiaries of aid from the Fund shall be :
(a) In the case of grants :
- for economic and social investment projects, either the associated States or legal persons which are not primarily profit-making, which are of a general or social interest and which are subject in those States to public control
- for executive and vocational training programmes and economic studies, the governments of the associated States, specialised institutes or bodies or, exceptionally, scholarship holders and trainees;
- for production aid, producers;
- in the case of aid for diversification, the associated States, producer groups or similar bodies approved by the Community or, failing these, the producers themselves;
(b) as regards loans on special terms and interest rate subsidies :
- for economic and social investment projects, either the associated States or legal persons which are not primarily profit-making, which are of a general or social interest and which are subject in those States to public authority control, or possibly private undertakings by special decision of the Community;
- in the case of aid for diversification, the associated States, producer groups or similar bodies approved by the Community or, in the absence of such bodies, the producers themselves and, where appropriate, private undertakings by special decision of the Community.
2. Financial aid may not be used to cover current administrative, maintenance and operating expenditure.
Article 25.
For operations financed by the Fund or the Bank, participation in invitations to tender, contracts and tenders shall be open on equal terms to all natural and legal persons who are nationals of Member States or of associated States.
Article 26.
The use of the amounts allocated for the financing of projects or programmes, pursuant to the provisions of this Title, shall be in accordance with the allocations decided upon and shall be carried out under the best economic conditions.
Article 27.
The Association Council shall determine the general approach to financial and technical cooperation within the framework of the Association in the light, in particular, of an annual report submitted to it by the body responsible for managing the Community's financial and technical assistance.
Article 28.
Failure by an associated State to ratify this Convention under the conditions laid down in Article 57 or denunciation of the Convention in accordance with Article 62 shall entail an obligation on the part of the Contracting Parties to adjust the amount of financial assistance fixed in Articles 16 and 18.
Title III. Right of Establishment, Services, Payments and Capital
Article 29.
Without prejudice to the implementation of measures taken pursuant to the Treaty, nationals and companies or firms of all the Member States shall, in each associated State, progressively and at the latest three years after the entry into force of this Convention, be placed on an equal footing as regards the right of establishment and the provision of services.
The Association Council may authorise an Associated State, at its request, to suspend the application of the provisions of the preceding paragraph for a specified period and activity.
However, nationals and companies or firms of a Member State may not benefit, in respect of a given activity, from the provisions of the first paragraph in an Associated State unless the State to which they belong grants, in respect of the same activity, advantages of the same kind to nationals and companies or firms of the Associated State in question.
Article 30.
Where an associated State grants to nationals or companies of a State which is neither a Member State of the Community nor an associated State within the meaning of this Convention treatment more favourable than that which would result for nationals or companies of Member States from the application of the provisions of this Title, such treatment shall be extended to nationals or companies of Member States, except where it results from regional agreements.
Article 31.
The right of establishment within the meaning of this Convention shall include, subject to the provisions relating to capital movements, the taking up and pursuit of activities as self-employed persons, the formation and management of undertakings, in particular companies, and the setting up of agencies, branches or subsidiaries.
Article 32.
For the purposes of this Convention, services shall be deemed to be those normally provided for remuneration in so far as they are not governed by the provisions relating to trade, the right of establishment and capital movements. Services include, in particular, industrial activities, commercial activities, craft activities and activities of the professions, but exclude employed activities.
Article 33.
For the purposes of this Convention, "companies" means companies constituted under civil or commercial law, including cooperative societies and other legal persons governed by public or private law, with the exception of companies which do not operate for profit.
Companies of a Member State or of an Associated State are companies formed in accordance with the law of a Member State or of an Associated State and having their registered office, central administration or principal place of business in a Member State or an Associated State; however, if they have only their registered office in a Member State or in an Associated State, their activity must have an effective and continuous link with the economy of that Member State or Associated State.
Article 34.
The Association Council shall take all necessary decisions to promote the implementation of Articles 29 to 33 above.
Article 35.
Each Signatory State undertakes, within the limits of its competence in the matter, to authorise payments in respect of trade in goods, services and capital and salaries, as well as the transfer of such payments to the Member State or Associated State in which the creditor or beneficiary resides, in so far as the movement of goods, services, capital and persons is liberated pursuant to this Convention.
Article 36.
Throughout the period of the loans and advances referred to in Chapters III, IV and V of Protocol No. 5, the associated States undertake to place at the disposal of the debtors the currency necessary to service the interest and repayment of loans granted for projects to be carried out in their territory and to repay the advances made to the stabilisation funds.
Article 37.
1. The associated States shall endeavour not to introduce any new exchange restrictions affecting the system of investments and current payments relating to capital movements resulting therefrom when effected by persons residing in the Member States, nor to make existing regulations more restrictive.
2. To the extent necessary to achieve the objectives of this Convention, the associated States undertake to treat nationals and companies of the Member States on an equal footing by 1 January 1965 at the latest in respect of investments made by them after the entry into force of the Convention and in respect of movements of capital resulting therefrom.
Article 38.
The Association Council shall make all appropriate recommendations to the Contracting Parties concerning the application of Articles 35, 36 and 37 above.
Title IV. The Institutions of the Association
Article 39.
The institutions of the Association shall be :
- the Association Council of the Association Committee
- the Parliamentary Conference of the Association,
- the Court of Arbitration of the Association.
Article 40.
The Association Council shall consist of the members of the Council of the European Economic Community and of members of the Commission of the European Economic Community, on the one hand, and of a member of the government of each associated State, on the other.
Any member of the Association Council unable to attend may be represented. The representative shall exercise all the rights of the full member.
The Association Council may validly deliberate only with the participation of half the members of the Council of the Community, one member of the Commission and half the full members representing the governments of the associated States.
Article 41.
The Association Council shall be chaired in turn by a member of the Council of the European Economic Community and a member of the government of an associated State.
Article 42.
The Association Council shall meet once a year on the initiative of its President.
It shall also meet whenever necessary in accordance with the conditions laid down in its rules of procedure.
Article 43.
The Association Council shall act by common agreement between the Community on the one hand and the Associated States on the other.
The Community, on the one hand, and the associated States, on the other hand, shall each determine, by means of an internal protocol, the manner in which their respective positions shall be established.
Article 44.
In the cases provided for in this Convention, the Association Council shall have the power to take decisions; these decisions shall be binding on the Contracting Parties which shall be required to take the measures necessary to implement them.
The Association Council may also formulate such resolutions, recommendations or opinions as it deems appropriate for the achievement of the common objectives and the proper functioning of the Association Agreement.
The Association Council shall periodically review the performance of the Association Scheme in the light of its objectives.
The Association Council shall adopt its rules of procedure.
Article 45.
The Association Council shall be assisted in the performance of its duties by an Association Committee composed of one representative of each Member State and one representative of the Commission, on the one hand, and of one representative of each associated State, on the other.
Article 46.
The Association Committee shall be chaired by the State holding the Presidency of the Association Council.
The Association Committee shall adopt its rules of procedure which shall be submitted to the Association Council for approval.
Article 47.
1. The Association Council shall in its rules of procedure determine the duties and powers of the Association Committee, in particular with a view to ensuring the continuity of the cooperation necessary for the proper functioning of the Association.
2. The Association Council may, where necessary, delegate to the Association Committee, under such conditions and within such limits as it shall lay down, the exercise of the powers conferred upon it by this Agreement.
In that case, the Association Committee shall take a decision as provided for in Article 43.
Article 48.
The Association Committee shall report to the Association Council on its activities, particularly in the areas in which competence has been delegated.
It shall also submit any useful proposals to the Association Council.
Article 49.
The secretariat of the Association Council and of the Association Committee shall be provided on a parity basis as laid down in the rules of procedure of the Association Council.
Article 50.
The Parliamentary Conference of the Association shall meet once a year. It shall be composed, on a parity basis, of members of the Assembly and members of the Parliaments of the associated States.
The Association Council shall submit an annual progress report to the Parliamentary Conference.
The Parliamentary Conference may pass resolutions on matters concerning the association. It shall appoint its President and officers and adopt its rules of procedure.
The Parliamentary Conference shall be prepared by a joint committee.
Article 51.
1. Disputes concerning the interpretation or application of this Convention which arise between a Member State, several Member States or the Community on the one hand, and one or more Associated States on the other, shall be submitted by one of the parties to the dispute to the Association Council, which shall seek an amicable settlement of the dispute at its next meeting. If this cannot be done and if the Parties have not agreed on an appropriate method of settlement, the dispute shall, at the request of the earliest Party, be referred to the Arbitration Court of the Association.
2. The Court of Arbitration shall be composed of five members: a Chairman who shall be appointed by the Association Council and four judges chosen from persons offering every guarantee of independence and competence. The judges shall be appointed within three months of the entry into force of the Convention and for the duration thereof by the Association Council. Two of them shall be appointed upon nomination by the Council of the European Economic Community, the other two upon nomination by the associated States. The Association Council shall, by the same procedure, appoint an alternate judge for each judge who shall sit when the titular judge is prevented from attending.
3. The Court of Arbitration shall decide by majority vote.
4. The decisions of the Court of Arbitration shall be binding on the parties to the dispute, who shall be obliged to take the measures necessary for their implementation.
5. Within three months of the appointment of the Judges, the Statute of the Court of Arbitration shall be adopted by the Association Council on a proposal from the Court.
6. Within the same period the Arbitration Court shall adopt its rules of procedure.
Article 52.
The Association Council may make any useful recommendation to facilitate contacts between the Community and the representatives of the professional interests of the associated States.
Article 53.
The operating costs of the institutions of the Association shall be borne under the conditions laid down in Protocol 6 annexed to this Convention.
Title V. General and Final Provisions
Article 54.
Treaties, conventions, agreements or arrangements between one or more Member States and one or more Associated States, whatever their form or nature, shall not prevent the application of the provisions of this Convention.
Article 55.
This Convention shall apply to the European territory of the Member States of the Community, on the one hand, and to the territory of the Associated States, on the other.
Title I of this Convention shall also apply to relations between the French overseas departments and the Associated States.
Article 56.
This Convention shall, as far as the Community is concerned, be validly concluded by a decision of the Council of the Community taken in accordance with the provisions of the Treaty and notified to the Parties. It shall be ratified by the signatory States in accordance with their respective constitutional requirements.