4. Provisions on transit
(a) For the purposes of this Agreement, the transit rules and definitions as set out in the WTO provisions (Article V of GATT 1994, and related provisions, including any clarification or improvement resulting from the Doha Round negotiations on trade facilitation) shall apply. These provisions also apply when the transit of goods begins or ends in the territory of a Party (inland transit).
(b) The Parties shall pursue the progressive interconnectivity of their respective customs transit systems, with a view to Ukraine participating in the future in the common transit system set out in the Convention of 20 May 1987 on a common transit procedure.
(c) The Parties shall ensure cooperation and coordination between all relevant authorities and agencies in their territories in order to facilitate traffic in transit and promote cooperation across borders. Parties shall also promote cooperation between authorities and the private sector in relation to transit.
Article 77. Relations with the Business Community
The Parties agree:
(a) to ensure that their respective legislation and procedures are transparent and made publicly available, as far as possible through electronic means, together with the justification for them. There should be a consultation mechanism in place and a reasonable time period between the publication of new or amended provisions and their entry into force;
(b) on the need for timely and regular consultations with trade representatives on legislative proposals and procedures relating to customs and trade issues. To this end, mechanisms for appropriate and regular consultation between administrations and the business community shall be established by each Party;
(c) to make publicly available relevant notices of an administrative nature, including agency requirements and entry procedures, hours of operations and operating procedures for customs offices at ports and border crossing points, and points of contact for information enquiries;
(d) to foster cooperation between operators and relevant administrations via the use of non-arbitrary and publicly accessible procedures, such as Memoranda of Understanding based, in particular, on those promulgated by the WCO;
(e) to ensure that their respective customs and related requirements and procedures continue to meet the legitimate needs of the trading community, follow best practices, and remain the least trade-restrictive possible.
Article 78. Fees and Charges
The Parties shall prohibit administrative fees having an equivalent effect to import or export duties and charges.
With regard to all fees and charges of whatever character imposed by the customs authorities of each Party, including fees and charges for tasks undertaken by another instance on behalf of the said authorities, on or in connection with import or export and without prejudice to the relevant Articles in Chapter 1 (National Treatment and Market Access for Goods) of Title IV of this Agreement, the Parties agree that:
(a) fees and charges may only be imposed for services provided outside of appointed hours and in places other than those referred to in customs regulations, at the request of the declarant in connection with the import or export in question or for any formality required for undertaking such import or export;
(b) fees and charges shall not exceed the cost of the service provided;
(c) fees and charges shall not be calculated on an ad valorem basis;
(d) information on fees and charges shall be published. This information shall include the reason for the fee or charge for the service provided, the authority responsible, the fees and charges that will be applied, and when and how payment is to be made.
The information on fees and charges shall be published via an officially designated medium, and where feasible and possible, on an official website;
(e) new or amended fees and charges shall not be imposed until information on them is published and made readily available.
Article 79. Customs Valuation
1. The Agreement on the Implementation of Article VI of GATT 1994 contained in Annex 1A to the WTO Agreement, including any subsequent amendments, shall govern the customs valuation of goods in trade between the Parties. Its provisions are hereby incorporated into, and made part of, this Agreement. Minimum customs values shall not be used.
2. The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.
Article 80. Customs Cooperation
The Parties shall strengthen cooperation to ensure implementation of the objectives of this Chapter, striking a reasonable balance between simplification and facilitation and effective control and security. To this end, the Parties will use, where appropriate, the EC Customs Blueprints as a benchmarking tool.
In order to ensure compliance with the provisions of this Chapter, the Parties shall inter alia:
(a) exchange information concerning customs legislation and procedures;
(b) develop joint initiatives relating to import, export and transit procedures, as well as work towards ensuring that an effective service is provided to the business community;
(c) cooperate on the automation of customs and other trade procedures;
(d) exchange, where appropriate, relevant information and data subject to respect of confidentiality of sensitive data and personal data protection;
(e) exchange information and/or enter into consultations with a view to establishing where possible, common positions in international organisations in the field of customs such as the WTO, the WCO, the UN, the United Nations Conference on Trade And Development and the United Nations Economic Commission for Europe;
(f) cooperate in the planning and delivery of technical assistance, in particular to facilitate customs and trade facilitation reforms in line with the relevant provisions of this Agreement;
(g) exchange best practices in customs operations focusing in particular on intellectual property rights enforcement, especially in relation to counterfeit products;
(4) promote coordination between all border agencies, both internally and across borders, to facilitate border-crossing processes and enhance control, taking into account joint border controls where feasible and appropriate;
(i) mutually recognise, where relevant and appropriate, authorised traders and customs controls. The scope of this cooperation, the implementation and the practical arrangements shall be decided by the Customs Sub-Committee provided for in Article 83 of this Agreement.
Article 81. Mutual Administrative Assistance In Customs Matters
Notwithstanding Article 80 of this Agreement, the administrations of the Parties shall provide mutual administrative assistance in customs matters in accordance with the provisions laid down in Protocol II to this Agreement on Mutual Administrative Assistance in Customs Matters.
Article 82. Technical Assistance and Capacity-building
The Parties shall cooperate with a view to providing technical assistance and capacity-building for the implementation of trade facilitation and customs reforms.
Article 83. Customs Sub-Committee
The Customs Sub-Committee is hereby established. It shall report on its activities to the Association Committee in its configuration under Article 465(4) of this Agreement. The function of the Customs Sub-Committee shall include regular consultations and monitoring of implementation and administration of this Chapter, including the issues of customs cooperation, cross-border customs cooperation and management, technical assistance, rules of origin, and trade facilitation, as well as mutual administrative assistance in customs matters.
The Customs Sub-Committee shall inter alia:
(a) see to the proper functioning of this Chapter and of Protocols 1 and 2 to this Agreement;
(b) decide measures and practical arrangements for implementing this Chapter and Protocols 1 and 2 to this Agreement including on exchange of information and data, mutual recognition of customs controls and trade partnership programmes, and mutually agreed benefits;
(c) exchange views on any points of common interest, including future measures and the resources for them;
(d) make recommendations where appropriate; and
(e) adopt its internal rules of procedures.
Article 84. Approximation of Customs Legislation
Gradual approximation to the EU Customs legislation as laid down in the EU and international standards shall be carried out, as set out in Annex XV to this Agreement.
Chapter 6. Establishment, Trade In Services and Electronic Commerce
Section 1. General Provisions
Article 85. Objective, Scope and Coverage
1. The Parties, reaffirming their respective rights and obligations under the WTO Agreement, hereby lay down the necessary arrangements for the progressive reciprocal liberalisation of establishment and trade in services and for cooperation on electronic commerce.
2. Government procurement is dealt with by Chapter 8 (Government Procurement) of Title IV of this Agreement and nothing in this Chapter shall be construed in such a way as to impose any obligation with respect to government procurement.
3. Subsidies are dealt with in Chapter 10 (Competition) of Title IV of this Agreement and the provisions of this Chapter shall not apply to subsidies granted by the Parties.
4. Each Party shall retain the right to regulate and to introduce new regulations to meet legitimate policy objectives, provided they are compatible with this Chapter.
5. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.
Without prejudice to the provisions on movement of persons set out in Title I (Justice Freedom and Security) of this Agreement, nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of natural persons, and to ensure their orderly movement across its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Party under the terms of this Chapter (1).
Article 86. Definitions
For the purposes of this Chapter:
1. "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
2. "measures adopted or maintained by a Party" means measures taken by:
(a) central, regional or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
3. "natural person of a Party" means a national of an EU Member State or a national of Ukraine according to the respective legis- lation;
4. "legal person" means any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
5. "legal person of the EU Party" or "legal person of Ukraine" means:
a legal person set up in accordance with the laws of a Member State of the European Union or of Ukraine respectively, and having its registered office, central administration, or principal place of business in the territory to which the Treaty on the Functioning of the European Union applies or in the territory of Ukraine, respectively;
Should this legal person have only its registered office or central administration in the territory to which the Treaty on the Functioning of the European Union applies or in the territory of Ukraine respectively, it shall not be considered as a legal person of the EU Party or a legal person of Ukraine respectively, unless its operations possess a real and continuous link with the economy of the EU Party or of Ukraine, respectively;
6. Notwithstanding the preceding paragraph, shipping companies established outside the EU Party or Ukraine and controlled by nationals of a Member State of the European Union or of Ukraine, respectively, shall also be beneficiaries of the provisions of this Agreement, if their vessels are registered in accordance with their respective legislation, in that Member State or in Ukraine and carry the flag of a Member State or of Ukraine;
7. "subsidiary" of a legal person of a Party means a legal person which is effectively controlled by another legal person of that Party (1);
8. "branch" of a legal person means a place of business not having legal personality which:
(a) has the appearance of permanency such as the extension of a parent body;
(b) has a management structure; and
(c) 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;
9. "establishment" means:
(a) as regards legal persons of the EU Party or of Ukraine, the right to take up and pursue economic activities by means of setting up, including the acquisition of, a legal person and/or create a branch or a representative office in Ukraine or in the EU Party respectively;
(b) as regards natural persons, the right of natural persons of the EU Party or of Ukraine to take up and pursue economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control.
10. "investor" means any natural or legal person of a Party that seeks to perform or performs an economic activity through setting up an establishment;
11. "economic activities" includes activities of an industrial, commercial and professional character and activities of craftsmen and do not include activities performed in the exercise of governmental authority;
12. "operations" means the pursuit of economic activities;
13. "services" includes any service in any sector except services supplied in the exercise of governmental authority;
"services and other activities performed in the exercise of govern- mental authority" are services or activities which are performed neither on a commercial basis nor in competition with one or more economic operators;
14. "cross-border supply of services" means the supply of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party to a service consumer of the other Party.
15. "service supplier" of a Party means any natural or legal person of a Party that seeks to supply or supplies a service, including through an establishment;
16. "key personnel" means natural persons employed within a legal person of one Party other than a non-profit organisation and who are responsible for the setting-up or the proper control, administration and operation of an establishment.
17. "Key personnel" comprise business visitors responsible for setting up an establishment and intra-corporate transfers.
(a) "Business visitors" means natural persons working in a senior position who are responsible for setting up an establishment. They do not engage in direct transactions with the general public and do not receive remuneration from a source located within the host Party;
(b) "Intra-corporate transferees" means natural persons who have been employed by a legal person of one Party or have been partners in it (other than as majority shareholders) for at least one year and who are temporarily transferred to an estab- lishment in the territory of the other Party. The natural person concerned must belong one of the following categories:
(i) Managers:
Persons working in a senior position within a legal person 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 sub-division thereof;
- supervising and controlling the work of other supervisory, professional or managerial employees;
- having the authority personally to recruit and dismiss personnel or recommend recruiting and dismissing personnel or take other related actions.
(ii) Specialists:
Persons working within a legal person, who possess uncommon knowledge essential to the establishment's production, research equipment, techniques or management. In assessing such knowledge, account will be taken not only of knowledge specific to the establishment, but also whether the person has a high level of qualification for a type of work or trade requiring specific technical knowledge, including membership of an accredited profession.
18. "graduate trainees" means natural persons of a Party who have been employed by a legal person of that Party for at least one year, possess a university degree and are temporarily transferred to an establishment in the territory of the other Party for career development purposes or to obtain training in business techniques or methods (1);
19. "business services sellers" means natural persons who are representatives of a service supplier of one Party seeking entry into and temporary stay in the territory of the other Party for the purpose of negotiating the sale of services or entering into agreements to sell services for that service supplier. They do not engage in making direct sales to the general public and do not receive remuneration from a source located within the host Party;
20. "contractual services suppliers" means natural persons employed by a legal person of one Party which has no establishment in the territory of the other Party and which has concluded a bona fide contract (2) to supply services with a final consumer in the latter Party requiring the presence on a temporary basis of its employees in that Party in order to fulfil the contract to provide services;
21. "independent professionals" means natural persons engaged in the supply of a service and established as self-employed in the territory of a Party who have no establishment in the territory of the other Party and who have concluded a bona fide contract (3) to supply services with a final consumer in the latter Party requiring their presence on a temporary basis in that Party in order to fulfil the contract to provide services.
Section 2. Establishment
Article 87. Scope
This Section applies to measures adopted or maintained by the Parties affecting establishment (1) in respect of all economic activities with the exception of:
(a) mining, manufacturing and processing (2) of nuclear materials;
(b) production of or trade in arms, munitions and war material;
(c) audio-visual services;
(d) national maritime cabotage (3), and
(e) domestic and international air transport services (4), whether scheduled or un-scheduled and services directly related to the exercise of traffic rights, other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system (hereinafter referred to as "CRS") services;
(iv) ground handling services;
(v) airport operation services.
Article 88. National Treatment and Most Favourable Nation Treatment
1. Subject to reservations listed in Annex XVI-D to this Agreement, Ukraine shall grant, upon entry into force of this Agreement:
(i) as regards the establishment of subsidiaries, branches and representative offices of legal persons of the EU Party, treatment no less favourable than that accorded to its own legal persons, branches and representative offices or to any third-country legal persons, branches and representative offices, whichever is the better;
(ii) as regards the operation of subsidiaries, branches and representative offices of legal persons of the EU Party in Ukraine, once established, treatment no less favourable than that accorded to its own legal persons, branches and representative offices; or to any third- country legal persons, branches and representative offices, whichever is the better (1).
2. Subject to reservations listed in Annex XVI-A to this Agreement, the EU Party shall grant, upon entry into force of this Agreement:
(i) as regards the establishment of subsidiaries, branches and represen- tative offices of legal persons of Ukraine, treatment no less favourable than that accorded by the EU Party to its own legal persons, branches and representative offices or to any third- country legal persons, branches and representative offices, whichever is the better;
(ii) as regards the operation of subsidiaries, branches and representative offices of legal persons of Ukraine in the EU Party, once established, treatment no less favourable than that accorded to its own legal persons, branches and representative offices; or to any third- country legal persons, branches and representative offices, whichever is the better (2).
3. Subject to reservations listed in Annexes XVI-A and XVI-D to this Agreement, the Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of legal persons of the EU Party or of Ukraine on their territory or in respect of their operation, once established, by comparison with their own legal persons.
Article 89. Review
1. With a view to progressively liberalising the establishment conditions, the Parties shall regularly review the establishment legal framework (1) and the establishment climate, consistent with their commitments under international agreements.
2. In the context of the review referred to in paragraph 1 of this Article, the Parties shall assess any obstacles to establishment that have been encountered and shall undertake negotiations to address such obstacles, with a view to deepening the provisions of this Chapter and to including investment protection provisions and investor-to-state dispute settlement procedures.
Article 90. Other Agreements
Nothing in this Chapter shall be taken to limit the rights of investors of the Parties to benefit from any more favourable treatment provided for in any existing or future international agreement relating to investment to which a Member State of the European Union and Ukraine are parties.
Article 91. Standard of Treatment for Branches and Representative Offices
1. The provisions of Article 88 of this Agreement do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches and representative offices of legal persons of the other Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches and representative offices as compared to branches and representative offices of companies incorporated in its territory or, as regards financial services, for prudential reasons.
2. The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences or, as regards financial services, for prudential reasons.
Section 3. Cross-Border Supply of Services
Article 92. Scope
This Section applies to measures of the Parties affecting the cross border supply of all services sectors with the exception of
(a) audio-visual services (1);
(b) national maritime cabotage (2); and
(c) domestic and international air transport services (3), whether scheduled or unscheduled, and services directly related to the exercise of traffic rights other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;