Title
PARTNERSHIP AND COOPERATION AGREEMENT BETWEEN THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND THE REPUBLIC OF AZERBAIJAN, OF THE OTHER PART
Preamble
Partnership and cooperation agreement
Establishing a partnership between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part,
THE KINGDOM OF BELGIUM,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC
IRELAND,
THE ITALIAN REPUBLIC,
THE GRAND DUCHY OF LUXEMBOURG,
THE KINGDOM OF THE NETHERLANDS,
THE REPUBLIC OF AUSTRIA,
THE PORTUGUESE REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN,
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
Contracting Parties to the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community and the Treaty establishing the European Atomic Energy Community,
Hereinafter referred to as "Member States", and
The European community, the European coal and steel community, and the European atomic energy community,
Hereinafter referred to as "the Community", of the one part, and THE REPUBLIC OF AZERBAIJAN of the other part,
CONSIDERING the links between the Community, its Member States and the Republic of Azerbaijan and the common values that they share,
RECOGNIZING that the Community and the Republic of Azerbaijan wish to strengthen these links and to establish partnership and cooperation which would strengthen and widen the relations established in the past in particular by the Agreement between the European Economic Community and the European Atomic Energy Community and the Union of Soviet Socialist Republics on Trade and Commercial and Economic Cooperation, signed on 18 December 1989, which, since the dissolution of the USSR, applies mutatis mutandis to bilateral relations between the European Communities and each of the Independent States,
CONSIDERING the commitment of the Community and its Member States and of the Republic of Azerbaijan to strengthening the political and economic freedoms which constitute the very basis of the partnership,
RECOGNIZING in that context that support of the independence, sovereignty and territorial integrity of the Republic of Azerbaijan will contribute to the safeguarding of peace and stability in Europe,
CONSIDERING the commitment of the Parties to promote international peace and security, as well as the peaceful settlement of disputes and to cooperate to this end in the framework of the United Nations and the Organization for Security and Cooperation in Europe (OSCE),
DESIROUS of encouraging the process of regional cooperation in the areas covered by this Agreement with neighbouring countries in order to promote the prosperity and stability of the region and in particular initiatives aimed at fostering cooperation and mutual confidence among Independent States of the Transcaucasus region and other neighbouring States,
CONSIDERING the firm commitment of the Community and its Member States and of the Republic of Azerbaijan to the full implementation of all principles and provisions contained in the Final Act of the Conference on Security and Cooperation in Europe (CSCE), the Concluding Documents of the Madrid and Vienna Follow Up Meetings, the Document of the CSCE Bonn Conference on Economic Cooperation, the Charter of Paris for a New Europe and the CSCE Helsinki Document 1992 "The Challenges of Change", and other fundamental documents of the OSCE,
CONVINCED of the paramount importance of the rule of law and respect for human rights, particularly those of persons belonging to minorities, the establishment of a multiparty system with free and democratic elections and economic liberalization aimed at setting up a market economy,
BELIEVING that full implementation of this Partnership and Cooperation Agreement will both depend on and contribute to continuation and accomplishment of the political, economic and legal reforms in the Republic of Azerbaijan, as well as the introduction of the factors necessary for cooperation, notably in the light of the conclusions of the CSCE Bonn Conference,
DESIROUS of establishing and developing regular political dialogue on bilateral, regional and international issues of mutual interest,
RECOGNIZING AND SUPPORTING the wish of the Republic of Azerbaijan to establish close cooperation with European Institutions,
CONSIDERING the necessity of promoting investment in the Republic of Azerbaijan, including in the energy sector, and in this context the importance attached by the Community and its Member States to equitable conditions for access to and transit for export of energy products; confirming the attachment of the Community and its Member States and of the Republic of Azerbaijan to the European Energy Charter, and to the full implementation of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects,
TAKING ACCOUNT of the Community's willingness to provide for economic cooperation and technical assistance as appropriate,
BEARING IN MIND the utility of the Agreement in favouring a gradual rapprochement between the Republic of Azerbaijan and a wider area of cooperation in Europe and neighbouring regions and its progressive integration into the open international system,
CONSIDERING the commitment of the Parties to liberalize trade, in conformity with World Trade Organization (WTO) rules,
CONSCIOUS of the need to improve conditions affecting business and investment, and conditions in areas such as establishment of companies, labour, provision of services and capital movements,
CONVINCED that this Agreement will create a new climate for economic relations between the Parties and in particular for the development of trade and investment, which are essential to economic restructuring and technological modernization,
DESIROUS of establishing close cooperation in the area of environment protection taking into account the interdependence existing between the Parties in this field,
RECOGNIZING that cooperation for the prevention and control of illegal immigration constitutes one of the primary objectives of this Agreement,
DESIROUS of establishing cultural cooperation and improving the flow of information,
HAVE AGREED AS FOLLOWS:
Body
Article 1.
A Partnership is hereby established between the Community and its Member States of the one part, and the Republic of Azerbaijan, of the other part. The objectives of this partnership are:
- To provide an appropriate framework for the political dialogue between the Parties allowing the development of political relations;
- To support the Republic of Azerbaijan's efforts to consolidate its democracy and to develop its economy and to complete the transition into a market economy;
- To promote trade and investment and harmonious economic relations between the Parties and so to foster their sustainable economic development;
- To provide a basis for legislative, economic, social, financial, civil scientific, technological and cultural cooperation.
Part I. General Principles
Article 2.
Respect for democracy, principles of international law and human rights as defined in particular in the United Nations Charter, the Helsinki Final Act and the Charter of Paris for a New Europe, as well as the principles of market economy, including those enunciated in the documents of the CSCE Bonn Conference, underpin the internal and external policies of the Parties and constitute essential elements of partnership and of this Agreement.
Article 3.
The Parties consider that it is essential for their future prosperity and stability that the newly independent states which have emerged from the dissolution of the Union of Soviet Socialist Republics, hereinafter called "Independent States", should maintain and develop cooperation among themselves in compliance with the principles of the Helsinki Final Act and with international law and in the spirit of good neighbourly relations and will make every effort to encourage this process.
Article 4.
The Parties shall as appropriate review changing circumstances in the Republic of Azerbaijan, in particular regarding economic conditions there and implementation of market-oriented economic reforms. The Cooperation Council may make recommendations to the Parties concerning development of any part of this Agreement in the light of these circumstances.
Part II. Political Dialogue
Article 5.
A regular political dialogue shall be established between the Parties which they intend to develop and intensify. It shall accompany and consolidate the rapprochement between the Community and the Republic of Azerbaijan, support the political and economic changes underway in that country and contribute to the establishment of new forms of cooperation. The political dialogue:
- Will strengthen the links of the Republic of Azerbaijan with the Community and its Member States, and thus with the community of democratic nations as a whole. The economic convergence achieved through this Agreement will lead to more intense political relations;
- Will bring about an increasing convergence of positions on international issues of mutual concern thus increasing security and stability in the region and promoting the future development of the Independent States of the Transcaucasus,
- Shall foresee that the Parties endeavour to cooperate on matters pertaining to the strengthening of stability and security in Europe, the observance of the principles of democracy, and the respect and promotion of human rights, particularly those of persons belonging to minorities and shall hold consultations, if necessary, on relevant matters.
Such dialogue may take place on a regional basis, with a view to contributing towards the resolution of regional conflicts and tensions.
Article 6.
At ministerial level, political dialogue shall take place within the Cooperation Council established in Article 81 and on other occasions by mutual agreement.
Article 7.
Other procedures and mechanisms for political dialogue shall be set up by the Parties, and in particular in the following forms:
- Regular meetings at senior official level between representatives of the Community and its Member States on the one hand, and representatives of the Republic of Azerbaijan on the other hand;
- Taking full advantage of diplomatic channels between the Parties including appropriate contacts in the bilateral as well as the multilateral field, such as United Nations, OSCE meetings and elsewhere;
- Any other means, including the possibility of expert meetings which would contribute to consolidating and developing this dialogue.
Article 8.
Political dialogue at parliamentary level shall take place within the framework of the Parliamentary Cooperation Committee established in Article 86.
Part III. Trade In Goods
Article 9.
1. The Parties shall accord to one another most-favoured-nation treatment in all areas in respect of:
- Customs duties and charges applied to imports and exports, including the method of collecting such duties and charges,
- Provisions relating to customs clearance, transit, warehouses and transhipment,
- Taxes and other internal charges of any kind applied directly or indirectly to imported goods,
- Methods of payment and the transfer of such payments,
- The rules relating to the sale, purchase, transport, distribution and use of goods on the domestic market.
2. The provisions of paragraph 1 shall not apply to:
(a) advantages granted with the aim of creating a customs union or a free-trade area or pursuant to the creation of such a union or area;
(b) advantages granted to particular countries in accordance with WTO rules and with other international arrangements in favour of developing countries;
(c) advantages accorded to adjacent countries in order to facilitate frontier traffic.
3. The provisions of paragraph 1 shall not apply, during a transitional period expiring on the date of the Republic of Azerbaijan acceding to the WTO or on 31 December 1998, whichever is earlier, to advantages defined in Annex I granted by the Republic of Azerbaijan to other states which have emerged from the dissolution of the USSR.
Article 10.
1. The Parties agree that the principle of free transit is an essential condition of attaining the objectives of this Agreement.
In this connection each Party shall secure unrestricted transit via or through its territory of goods originating in the customs territory or destined for the customs territory of the other Party.
2. The rules described in Article V, paragraphs 2, 3, 4 and 5 of the GATT are applicable between the two Parties.
3. The rules contained in this Article are without prejudice to any special rules relating to specific sectors, in particular such as transport, or products agreed between the Parties, or to the provisions of Article 90.
Article 11.
Without prejudice to the rights and obligations stemming from international conventions on the temporary admission of goods which bind both Parties, each Party shall furthermore grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by any other international convention on this matter binding upon it, in conformity with its legislation. Account shall be taken of the conditions under which the obligations stemming from such a convention have been accepted by the Party in question.
Article 12.
1. Goods originating in the Republic of Azerbaijan shall be imported into the Community free of quantitative restrictions without prejudice to the provisions of Articles 14, 17 and 18 of this Agreement.
2. Goods originating in the Community shall be imported into the Republic of Azerbaijan free of all quantitative restrictions and measures of equivalent effect without prejudice to the provisions of Articles 14, 17 and 18 of this Agreement.
Article 13.
Goods shall be traded between the Parties at market-related prices.
Article 14.
1. Where any product is being imported into the territory of one of the Parties in such increased quantities or under such conditions as to cause or threaten to cause injury to domestic producers of like or direct competitive products, the Community or the Republic of Azerbaijan, whichever is concerned, may take appropriate measures in accordance with the following procedures and conditions.
2. Before taking any measures, or in cases to which paragraph 4 applies as soon as possible thereafter, the Community or the Republic of Azerbaijan as the case may be, shall supply the Cooperation Council with all relevant information with a view to seeking a solution acceptable to both Parties as provided for in Title XI.
3. If, as a result of the consultations, the Parties do not reach agreement within 30 days of referral to the Cooperation Council on actions to avoid the situation, the Party which requested consultations shall be free to restrict imports of the products concerned to the extent and for such time as is necessary to prevent or remedy the injury, or to adopt other appropriate measures.
4. In critical circumstances where delay would cause damage difficult to repair, the Parties may take the measures before the consultations, on the condition that consultations shall be offered immediately after taking such action.
5. In the selection of measures under this Article, the Contracting Parties shall give priority to those which cause least disturbance to the achievement of the aims of this Agreement.
6. Nothing in this Article shall prejudice or affect in any way the taking, by either Party, of anti-dumping or countervailing measures in accordance with Article VI of the GATT, the Agreement on implementation of Article VI of the GATT, the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT or related internal legislation.
Article 15.
The Parties undertake to consider development of the provisions in this Agreement on trade in goods between them, as circumstances allow, including the situation arising from the accession of the Republic of Azerbaijan to the WTO. The Cooperation Council may make recommendations on such developments to the Parties which could be put into effect, where accepted, by virtue of agreement between the Parties in accordance with their respective procedures.
Article 16.
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 natural resources; 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 17.
This Title shall not apply to trade in textile products falling under Chapters 50 to 63 of the Combined Nomenclature. Trade in these products shall be governed by a separate agreement, initialled on 18 December 1995 and applied provisionally as from 1 January 1996.
Article 18.
1. Trade in products covered by the Treaty establishing the European Coal and Steel Community shall be governed by the provisions of this Title, with the exception of Article 12.
2. A contact group on coal and steel matters shall be set up, comprising representatives of the Community on the one hand, and representatives of the Republic of Azerbaijan on the other.
The contact group shall exchange, on a regular basis, information on all coal and steel matters of interest to the Parties.
Article 19.
Trade in nuclear materials will be conducted in accordance with the provisions of the Treaty establishing the European Atomic Energy Community. If necessary, trade in nuclear materials shall be subject to the provisions of a specific Agreement to be concluded between the European Atomic Energy Community and the Republic of Azerbaijan.
Part IV. Provisions Affecting Business and Investment
Chapter I. Labour Conditions
Article 20.
1. Subject to the laws, conditions and procedures applicable in each Member State, the Community and the Member States shall endeavour to ensure that the treatment accorded to Azerbaijani nationals legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals.
2. Subject to the laws, conditions and procedures applicable in the Republic of Azerbaijan, the Republic of Azerbaijan shall ensure that the treatment accorded to nationals of a Member State, legally employed in the territory of the Republic of Azerbaijan, shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals.
Article 21.
The Cooperation Council shall examine which improvements can be made in working conditions for business people consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference.
Article 22.
The Cooperation Council shall make recommendations for the implementation of Articles 20 and 21.
Chapter II. Conditions Affecting the Establishment and Operation of Companies
Article 23.
1. The Community and its Member States shall grant treatment no less favourable than that accorded to any third country for the establishment of Azerbaijani companies as defined in Article 25(d).
2. Without prejudice to the reservations listed in Annex IV, the Community and its Member States shall grant to subsidiaries of Azerbaijani companies established in their territories a treatment no less favourable than that granted to any Community companies, in respect of their operation.
3. The Community and its Member States shall grant to branches of Azerbaijani companies established in their territories treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation.
4. Without prejudice to the reservations listed in Annex V, the Republic of Azerbaijan shall grant for the establishment of Community companies as defined in Article 25(d) treatment no less favourable than that accorded to Azerbaijani companies or to any third country companies, whichever is the better, and shall grant to subsidiaries and branches of Community companies established in its territory treatment no less favourable than that accorded to its own companies or branches or to any third country company or branch, whichever is the better, in respect of their operations.
Article 24.
1. Without prejudice to the provisions of Article 100, the provisions of Article 23 shall not apply to air transport, inland waterways transport and maritime transport.
2. However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including intermodal transport operations involving a sea-leg, each Party shall permit the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party.
3. Such activities include but are not limited to:
(a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements;
(b) purchase and use, on their own account or on behalf of their customers (and the resale to their customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service;
(c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported;
(d) provision of business information by any means, including computerized information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications);
(e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency;
(f) acting on behalf of the companies, inter alia in organizing the call of the vessel or taking over cargoes when required.
Article 25.
For the purpose of this Agreement:
(a) a "Community Company" or an "Azerbaijani company" respectively shall mean a company set up in accordance with the laws of a Member State or of the Republic of Azerbaijan respectively and having its registered office or central administration, or principal place of business in the territory of the Community or the Republic of Azerbaijan respectively. However, should the company, set up in accordance with the laws of a Member State or the Republic of Azerbaijan respectively, have only its registered office in the territory of the Community or the Republic of Azerbaijan respectively, the company shall be considered a Community or Azerbaijani company respectively if its operations possess a real and continuous link with the economy of one of the Member States or the Republic of Azerbaijan 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 Azerbaijani companies as referred to in point (a), to take up economic activities by means of the setting up of subsidiaries and branches in the Republic of Azerbaijan or in the Community respectively.