Article 25.
For the purpose of this Agreement:
(a) A "Community company" or a "Georgian company" respectively shall mean a company set up in accordance with the laws of a Member State or of Georgia respectively and having its registered office or central administration, or principal place of business in the territory of the Community or Georgia respectively. However, should the company, set up in accordance with the laws of a Member State or Georgia respectively, have only its registered office in the territory of the Community or Georgia respectively, the company shall be considered a Community or Georgian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Georgia respectively.
(b) "Subsidiary" of a company shall mean a company which is effectively controlled by the first company.
(c) "Branch" of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension.
(d) "Establishment" shall mean the right of Community or Georgian companies as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in Georgia or in the Community respectively.
(e) "Operation" shall mean the pursuit of economic activities.
(f) "Economic activities" shall mean activities of an industrial, commercial and professional character.
With regard to international maritime transport, including inter modal operations involving a sea-leg, nationals of the Member States or of Georgia established outside the Community or Georgia respectively, and shipping companies established outside the Community or Georgia and controlled by nationals of a Member State or Georgian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III if their vessels are registered in that Member State or in Georgia respectively in accordance with their respective legislation.
Article 26.
1. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the obligations of a Party under this Agreement.
2. Nothing in this Agreement shall be construed as requiring a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
3. For the purpose of this Agreement, "financial services" shall mean those activities described in Annex III.
Article 27.
The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement.
Article 28.
1. Notwithstanding the provisions of Chapter I of this Title, a Community company or a Georgian company established in the territory of Georgia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Georgia and the Community respectively, employees who are nationals of Community Member States and Georgia respectively, provided that such employees are key personnel as defined in paragraph 2, and that they are employed exclusively by companies, or branches. The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the abovementioned companies herein referred to as "organizations" are "intra-corporate transferees" as defined in (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than majority shareholders), for at least the year immediately preceding such movement:
(a) Persons working in a senior position with an organization, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including:
- Directing the establishment or a department or subdivision of the establishment,
- Supervising and controlling the work of other supervisory, professional or managerial employees,
- Having the authority personally to hire and fire or recommend hiring, firing or other personnel actions;
(b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;
(c) An "intra-corporate transferee" is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party.
Article 29.
1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of this Agreement.
2. The provisions of this Article are without prejudice to those of Article 37: the situations covered by such Article 37 shall be solely governed by its provisions to the exclusion of any other.
3. Acting in the spirit of partnership and cooperation and in the light of the provisions of Article 43 the Government of Georgia shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in Georgia of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of this Agreement. The Community may request Georgia to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts.
4. Where new legislation or regulations introduced in Georgia would result in rendering the conditions for operation of subsidiaries and branches of Community companies established in Georgia more restrictive than the situation existing on the day of signature of this Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in Georgia at the time of entry into force of the relevant act.
Article 30.
1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Georgian companies which are established in a Party other than that of the person for whom the services are intended taking into account the development of the service sectors in the Parties.
2. The Cooperation Council shall make recommendations for the implementation of paragraph 1.
Article 31.
The Parties shall cooperate with the aim of developing a market oriented service sector in Georgia.
Article 32.
1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis:
(a) the above provision does not prejudice the rights and obligations arising from the United Nations Convention on a Code of Conduct for Liner Conferences, as applicable to one or other Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis;
(b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade.
2. In applying the principles of paragraph 1, the Parties shall:
(a) not apply, as from the entry into force of this Agreement, any cargo sharing provisions of bilateral agreements between any Member States of the Community and the former Soviet Union;
(b) not introduce cargo sharing clauses into future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned;
(c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade;
(d) abolish upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport.
3. Each party shall grant, inter alia, no less favourable treatment, for the ships operated by nationals or companies of the other Party, than that accorded to a Party's own ships, with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading.
4. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of Georgia and vice versa.
Article 33.
With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties after entry into force of this Agreement.
Article 34.
1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health.
2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority.
Article 35.
For the purpose of this Title, nothing in this Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. The above provision does not prejudice the application of Article 34.
Article 36.
Companies which are controlled and exclusively owned by Georgian companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV.
Article 37.
Treatment granted by either Party to the other thereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, sub-sector and mode of supply.
Article 38.
For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or Georgia pursuant to commitments entered into in Economic integration agreements in accordance with the principles of Article V of the GATS.
Article 39.
1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements.
2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation.
3. Nothing in this Title shall be construed to prevent Member States or Georgia from distinguishing, in the application of the relevant provisions of their fiscal legislation, between tax payers who are not in identical situations, in particular as regards their place of residence.
Article 40.
Without prejudice to Article 28, no provision of Chapters II, III and IV shall be interpreted as giving the right to:
- Nationals of the Member States or of Georgia respectively to enter, or stay in, the territory of Georgia or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employee thereof or supplier or recipient of services;
- Community subsidiaries or branches of Georgian companies to employ or have employed in the territory of the Community nationals of Georgia;
- Georgian subsidiaries or branches of Community companies to employ or have employed in the territory of Georgia nationals of the Member States;
- Georgian companies or Community subsidiaries or branches of Georgian companies to supply Georgian persons to act for and under the control of other persons by temporary employment contracts;
- Community companies or Georgian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts.
Article 41.
1. The Parties undertake to authorize in freely convertible currency, any current payments between residents of the Community and of Georgia connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement.
2. With regard to transactions on the capital account of balance of payments, from entry into force of this Agreement, the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured.
3. Without prejudice to paragraph 2 or to paragraph 5, as from the entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and Georgia shall be introduced and the existing arrangements shall not become more restrictive.
4. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 above between the Community and Georgia in order to promote the objectives of this Agreement.
5. With reference to the provisions of this Article, until a full convertibility of the Georgian currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, Georgia may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on Georgia for the granting of such credits and are permitted according to Georgia's status under the IMF. Georgia shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. Georgia shall inform the Cooperation Council promptly of the introduction of such measures and of any changes therein.
6. Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movement of capital between the Community and Georgia cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Georgia, the Community and Georgia, respectively, may take safeguard measures with regard to movements of capital between the Community and Georgia for a period not exceeding six months if such measures are strictly necessary.
Article 42.
1. Pursuant to the provisions of this Article and of Annex II, Georgia shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of this Agreement, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights.
2. By the end of the fifth year after entry into force of this Agreement, Georgia shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex II to which Member States are parties or which are de facto applied by Member States, according to the relevant provisions contained in these conventions.
Article 43.
1. The Parties recognize that an important condition for strengthening the economic links between Georgia and the Community is the approximation of Georgia's existing and future legislation to that of the Community. Georgia shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community.
2. The approximation of laws shall extend to the following areas in particular: laws and regulations governing investments by companies, customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations and transport.
3. The Community shall provide Georgia 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 translation of Community legislation in the relevant sectors.
Article 44.
1. Further to Article 43, the Community shall provide Georgia with technical assistance regarding the formulation and implementation of legislation in the field of competition, in particular as concerns:
- Agreements and associations between undertakings and concerted practices which may have the effect of preventing, restricting or distorting competition,
- Abuse by undertakings of a dominant position in the market,
- State aids which have the effect of distorting competition,
- State monopolies of a commercial character,
- Public undertakings and undertakings with special or exclusive rights,
- Review and supervision of the application of competition laws and means of ensuring compliance with them.
2. The Parties agree to examine ways to apply their respective competition laws on a concerted basis in such cases where trade between them is affected.
Article 45.
1. The Community and Georgia shall establish economic cooperation aimed at contributing to the process of economic reform and recovery and sustainable development of Georgia. Such cooperation shall strengthen existing economic links, to the benefit of both parties.
2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic and trading systems in Georgia and will be guided by the requirements of sustainability and harmonious social development; they will also fully incorporate environmental considerations.
3. To this end, cooperation will concentrate, in particular, on economic and social development, human resources development, support for enterprises (including privatization, investment and development of financial services), agriculture and food, energy, transport, tourism, environmental protection, regional cooperation and monetary policy.
4. Special attention shall be devoted to measures capable of fostering cooperation among the Independent States of the Transcaucasus region, and with other neighbouring states, with a view to stimulating a harmonious development of the region.
5. Where appropriate, economic cooperation and other forms of cooperation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to Georgia and its established coordination and implementation procedures.
Article 46.
Cooperation in the field of trade in goods and services
The Parties will cooperate with a view to ensuring that Georgia's international trade is conducted in conformity with the rules of the WTO.
Such cooperation shall include specific issues directly relevant to trade facilitation, including:
- Formulation of policy on trade and trade-related questions, including payments, and clearing mechanisms,
- Drafting of relevant legislation,
- Assistance to prepare for Georgia's eventual accession to the WTO.
Article 47. Industrial Cooperation
1. Cooperation shall aim at promoting the following in particular:
- The development of business links between economic operators of both sides;
- Community participation in Georgia's efforts to restructure its industry;
- The improvement of management;
- The development of appropriate commercial rules and practices;
- Environmental protection;
- Conversion of the military-industrial complex.
2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings.
Article 48. Construction
The Parties shall cooperate in the field of construction industry.
This cooperation shall, inter alia, aim at modernizing and restructuring the construction sector in Georgia in line with the principles of a market economy and duly taking into account related health, safety and environmental aspects.
Article 49. Investment Promotion and Protection
1. Bearing in mind the respective powers and competences of the Community and the Member States, cooperation shall aim to establish a favourable climate for private investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities.
2. The aims of cooperation shall be in particular:
- The conclusion, where appropriate, between the Member States and Georgia of agreements for the promotion and protection of investment;
- The conclusion, where appropriate, between the Member States and Georgia of agreements to avoid double taxation;
- The creation of favourable conditions for attracting foreign investments into the Georgian economy;
- To establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment;
- To exchange information on investment opportunities in the form of, inter alia, trade fairs, exhibitions, trade weeks and other events.
Article 50. Public Procurement
The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders.
Article 51. Cooperation In the Field of Standards and Conformity Assessment
1. Cooperation between the Parties shall promote alignment with internationally agreed criteria, principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of the quality of Georgian products.
2. To this end the Parties shall seek to cooperate in technical assistance projects which will:
– promote appropriate cooperation with organizations and institutions specialized in these fields;
– promote the use of Community technical regulations and the application of European standards and conformity assessment procedures;
– permit the sharing of experience and technical information in the field of quality management.
Article 52. Mining and Raw Materials
1. The Parties shall aim at increasing investment and trade in mining and raw materials.
2. The cooperation shall focus in particular on the following areas:
- exchange of information on the prospects of the mining and non-ferrous metals sectors,
- The establishment of a legal framework for cooperation,
- Trade matters,
- The adoption and implementation of environmental legislation,
- Training,
- Safety in the mining industry.
Article 53. Cooperation In Science and Technology
1. The Parties shall promote cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes and subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR).
In carrying out such cooperation activities, special attention shall be devoted to the redeployment of scientists, engineers, researchers and technicians which are or have been engaged in research and/or production of weapons of mass destruction.