Title

Agreement on free trade in services, establishment, activities, and investment

Preamble

The States Parties to the Commonwealth of Independent States, hereinafter referred to as the Parties,

Taking into account the Free Trade Area Agreement of October 18, 2011,

Recognizing the need to further expand the scope of economic integration,

Taking into account the growing importance of the service sector for economic development,

Desiring to create conditions for the expansion of mutual trade in services and the enhancement of its liberalization,

Desiring to create favorable conditions for investment by persons of one Party in the territories of the other Parties,

Guided by the desire to continuously improve the standard of living of the populations of their States,

Guided by the universally recognized principles and norms of international law and based on the provisions of the General Agreement on Trade in Services of April 15, 1994  (GATS), including Article V of the GATS,

Considering that the provisions of this Agreement are aimed at promoting trade in services, the establishment and operation of companies, and investment cooperation between the Parties,

Have agreed as follows:

Body

Article 1. Definitions

The terms used in this Agreement shall have the following meanings:

WTO - World Trade Organization, established in accordance with the Marrakesh Agreement Establishing the World Trade Organization of April 15, 1994;

GATS - General Agreement on Trade in Services 1994, contained in Annex 1B to the Marrakesh Agreement Establishing the World Trade Organization of April 15, 1994.

When references are made in this Agreement to the provisions of the GATS or other international agreements concluded within the framework of the WTO, the terms “Contracting Party/Contracting Parties” or “member/members” contained therein shall mean the Party/Parties as defined in the preamble to this Agreement;

activity means commercial or professional activities of legal entities, branches, representative offices referred to in subparagraphs (a) to (c), and (or) natural persons specified in subparagraph “d” of the definition of the term “institution,” including trade in services and the production of goods and (or) services, except for activities carried out in the exercise of public authority functions;

income means funds received from investments, including, among other things, profits, dividends, interest, capital gains, royalties, and other remuneration;

legislation of a Party means the laws and other normative legal acts of a Party;

investments - assets invested by an investor of one Party in the territory of the other Party in accordance with the latter's legislation, which have the characteristics of investments, including such characteristics as an obligation in respect of capital or other resources, an expectation of profit and the assumption of risk, including, but not limited to:

cash, securities, movable and immovable property;

rights to engage in business activities granted under the legislation of the Parties or under a contract, including, in particular, rights to explore, develop, extract, and exploit natural resources;

property rights and other rights that have a monetary value, including intellectual property rights.

The term “investment” does not include:

(a) loans to a Party or to a legal entity owned or controlled by a Party;

(b) claims to money arising exclusively from commercial contracts for the sale or lease of goods or services;

c) claims for money arising exclusively from the extension of credit in connection with a commercial transaction, such as trade financing.

No change in the form of an investment shall affect its qualification as an investment, unless such change is contrary to the law of the Party in whose territory the investment was made.

The term “investments” includes investments made by investors of one Party in the territory of the other Party in the form of an establishment, as defined and regulated by Chapter III “Establishment and Operations” of this Agreement;

investor of a Party means any person of one Party who has made or is making an investment in the territory of the other Party.

The term “investor of a Party” does not include:

(a) any natural person who is a national of the Party in whose territory the investment is made or was made;

(b) any natural person who was a national of the Party in whose territory the investment was made on the date when such investment was made;

c) any legal entity of a Party that is owned or controlled, directly or indirectly, by a person of the other Party;

d) any legal entity of a Party, if such legal entity does not carry out substantial business activities in the territory of the other Party or if such legal entity is owned or controlled, directly or indirectly, by persons of a third State;

third-country investor means any natural or legal person of a third country that is not a Party to this Agreement;

individual entrepreneur means a natural person of a Party registered as an individual entrepreneur in accordance with national law;

exclusive service provider means any person of a Party, whether public or private, which is authorised or established de facto as one of a limited number of providers of a service in the market of that Party, and competition among such service providers in the territory of the Party is substantially limited;

licensing means the procedure and activities of the competent authorities established by the legislation of a Party for the granting, renewal, and extension of the validity of licenses (permits);

person means any natural or legal person of the Parties;

measure of a Party means the legislation of a Party, as well as a decision, action or omission of an authority or official of that Party, taken at any level of government of that Party, its local authorities or organizations in the exercise of powers delegated to them by such authorities;

a measure of a Party affecting trade in services includes measures relating to:

1) the purchase, payment, and use of a service;

2) access to services and use in connection with the supply of services for which the Parties have established requirements for their wide availability to the public;

a measure of a Party affecting the establishment and operation includes measures relating to the establishment and operation of legal entities, branches, representative offices, and individual entrepreneurs of one Party to this Agreement in the territory of any other Party to this Agreement;

monopoly service provider means any person of a Party, whether public or private, which is authorized by law or established in practice as the sole provider of a service in the market of that Party;

service provider means any person of a Party who supplies a service;

service consumer means any person of a Party who receives or uses a service;

authorization means confirmation by a competent authority of a Party, as provided for by the legislation of that Party, of the right of a person to trade in services, to establish and operate;

freely usable currency means a freely usable currency as defined by the International Monetary Fund in accordance with the Articles of Agreement of the IMF;

service sector is defined and classified on the basis of the Central Product Classification approved by the Statistical Commission of the United Nations Secretariat in 1991 and means:

(a) in relation to an individual commitment, one or more or all of the subsectors of that service, as specified in the list of the Party;

(b) in other respects, the entire sector of that service, including all its subsectors;

Articles of the IMF Agreement - the Articles of Agreement of the International Monetary Fund of July 22, 1944;

territory of a Party means the territory of a Party, as well as its spaces over which it exercises sovereign rights and jurisdiction in accordance with international law and its legislation;

economic feasibility test means the granting of authorization for the establishment, operation, or trade of services, depending on the existence of a market need and demand, through an economic assessment of the effectiveness of the service supplier's activities in relation to the economic planning objectives of a specific sector or the interests of the national labor market, if provided for by the national legislation of the Parties. Compliance with the interests of the national labor market shall be determined by verifying that there are no natural persons of the Party on the national labor market who meet the requirements of the service provider;

trade in services means the supply of services, including production, distribution, marketing, sale, and delivery of services, and carried out in the following ways:

a) from the territory of one Party to the territory of any other Party;

b) in the territory of one Party to a consumer of services of any other Party;

c) by a service provider of one Party through the presence of natural persons of that Party in the territory of any other Party;

service supplied in the exercise of governmental authority means any service supplied on a non-commercial basis and not subject to competition with one or more service suppliers;

services include any service in any sector, except for services supplied in the exercise of governmental authority;

establishment:

(a) the creation, organization, and/or acquisition of a legal entity (participation in the capital of a created or established legal entity) of any organizational and legal form and form of ownership provided for in accordance with the legislation of the Party in whose territory such legal entity is created;

b) acquiring control over a legal entity of a Party, expressed in obtaining the ability to directly or through third parties determine and (or) influence the decisions made by such legal entity, including by disposing of the votes attached to voting shares (stakes); by participating in the governing bodies of such legal entity (including the board of directors, supervisory board, and other governing bodies); or

c) establishing a branch or opening a representative office in accordance with the legislation of the Parties;

d) registering as an individual entrepreneur in accordance with the legislation of the Parties;

natural person means a citizen of a Party in accordance with its legislation;

legal entity means an organisation established or incorporated in the territory of a Party in any organisational and legal form in accordance with the legislation of that Party.

Other terms and definitions used in the individual lists of the Parties shall be determined in accordance with the national legislation of the Party concerned.

Chapter I. General Obligations

Article 2. Internal Regulation

1. For the purposes of this Article, measures of the Parties affecting trade in services, establishment and operations in sectors and activities shall mean licensing requirements and procedures, as well as qualification requirements and procedures.

2. With regard to measures of the Parties affecting trade in services, establishment and operations in sectors and activities for which commitments have been made or for which there are no exclusions in accordance with the individual lists of the Parties in Annexes B, C and D to this Agreement:

(a) each Party shall ensure that any measures of that Party affecting trade in services, establishment, and operations are applied in a reasonable, objective, and non-discriminatory manner;

(b) Where authorization for trade in services, establishment, and operations is required, the competent authorities of a Party shall, within a reasonable period of time after the submission of an application that is considered complete in accordance with the requirements of that Party's legislation, inform the applicant of the decision on the application. Upon request of the applicant, the competent authorities of a Party shall provide information on the status of the application within a reasonable time and no later than the time specified in national law;

(c) The Parties shall not apply licensing or qualification requirements that nullify or reduce the benefits provided under the terms and conditions set out in Annexes B and C to this Agreement in a manner that:

is not based on objective and transparent criteria such as competence and ability to supply the service;

in the case of licensing procedures, is not in itself a restriction on the supply of the service;

is not more burdensome than necessary to ensure the quality of the service.

Where, in accordance with the individual lists of the Parties in Annexes B and C to this Agreement, commitments (without exceptions) are included in relation to professional services, each Party shall apply procedures in accordance with its legislation to verify the competence of professionals of any other Party.

3. With regard to measures of the Parties affecting trade in services, establishment and operations:

3.1. If a Party applies licensing procedures and requirements (authorization procedures), that Party shall ensure that:

a) the names of the competent authorities responsible for issuing licenses (authorizations) to carry out activities are published or otherwise made generally available;

(b) licensing (authorization) procedures are not in themselves a restriction on trade in services, establishment and operation, and that licensing (authorization) requirements directly related to the right to trade in services or to operate are not in themselves an unjustified barrier to trade in services or operation;

c) all licensing procedures and requirements were established by law and the legislation establishing or applying the licensing procedures or requirements was published in advance, but not later than its entry into force (commencement of operation) in accordance with the provisions of Article 4 of this Agreement;

d) the competent authorities decide whether to grant (or refuse) a licence (authorisation) within the period specified in the relevant legislation, and any fees charged in connection with the submission and consideration of an application for a licence (authorisation) shall be in accordance with the legislation and shall not in themselves constitute a restriction on trade in services, establishment and activities, and shall be based on the costs incurred by the authorized body in issuing (refusing to issue) the license (permit) in connection with the consideration of the application and the issuance of the license (permit); except for license fees for the use of radio frequency spectrum and numbering resources, the amount of which is determined by national legislation;

(e) upon expiry of the period specified in subparagraph (d) of this paragraph and at the request of the applicant, the relevant competent authority of the Party shall inform the applicant of the status of the examination of its application and whether the application is considered to be duly completed. In any case, the applicant shall be given the opportunity to make technical corrections to the application. The application shall not be considered duly completed until all the information and documents specified in the relevant legislation of the Party have been received;

e) upon written request of the applicant whose application has been refused, the competent authority that refused to accept the application shall inform the applicant in writing of the reasons for such refusal. However, this provision shall not be interpreted as requiring the competent authority to disclose information whose disclosure would impede the enforcement of the law or otherwise be contrary to the public interest or essential security interests;

(g) where an application has been refused, the applicant may submit a new application for a licence (permit) or amend the old application in such a way as to remove any problems that may have prevented the licence (permit) from being granted.

3.2. Each Party shall maintain or establish, as soon as practicable, judicial, arbitral, or administrative bodies or procedures that, upon request of the service supplier or the person whose interests are affected, provide for prompt review and, where justified, appropriate redress of administrative decisions affecting the trade in services, establishment, and operation. Where such procedures are not independent of the authority authorized to take such administrative decisions, the Party shall ensure that the matters are reviewed impartially and objectively within such procedures.

4. Specific provisions on financial services are set out in Annex D to this Agreement.

5. Specific features of regulation in the field of telecommunications services are set out in Annex E to this Agreement.

Article 3. Recognition

1. In order to meet its respective standards or criteria for the authorization, licensing, or certification of service providers, as well as the establishment and operation of service providers, each Party shall give due consideration to any request from the other Party for the recognition of education or experience obtained, or of the compliance of licenses (authorizations) or certificates issued by the other Party. Such recognition may be based on an agreement or arrangement with the other Party or granted unilaterally by a Party.

2. When a Party, on the basis of an agreement or arrangement, recognizes education or experience, compliance with requirements, or licenses (permits) and certificates obtained in the territory of a third Party, such first Party shall provide any other Party with the opportunity to negotiate its accession to such agreement or arrangement or to negotiate comparable agreements or arrangements. If a Party grants recognition unilaterally, it shall provide any other Party with an appropriate opportunity to demonstrate that the education, experience, licenses (permits), and certificates obtained in its territory should be recognized in accordance with the legislation of the Parties.

3. Recognition shall be granted in such a way that it does not constitute a means of discrimination between the Parties in the application of standards or criteria for the authorization, licensing, or certification of service suppliers, or a disguised restriction on trade in services, including in relation to establishment and operation.

Article 4. Transparency

1. Each Party shall ensure that its legislation and international agreements to which it is a party and which affect or may affect matters covered by this Agreement are published in an official source and/or on a website designated by the Party in such a manner that any person whose rights and/or obligations may be affected by such legislative acts and international agreements of the Party, has the opportunity to familiarize themselves with them.

2. The legislative acts referred to in paragraph 1 of this article shall be published without delay within a period ensuring legal certainty and legitimate expectations of persons whose rights and (or) obligations may be affected by such legislation, but in any case not later than the date of its entry into force (commencement).

Where such publication is impracticable, the legislative acts referred to in paragraph 1 of this article shall be made generally available by other means provided for by national law.

3. Each Party shall ensure that written requests from any person concerning existing and/or planned legislative acts on matters covered by this Agreement are answered. Responses to requests shall be provided to the interested person in accordance with the national legislation of the Party, but no later than 30 working days from the date of receipt of the written request. In exceptional cases, the Party shall notify the interested person of the extension of the deadline.

Article 5. Disclosure of Confidential Information

1. Nothing in this Agreement shall require any Party to provide confidential information whose disclosure would prevent it from applying its national legislation or would otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of individual legal entities and individual entrepreneurs.

2. Disclosure of confidential information in the field of financial services shall be governed by Annex D to this Agreement.

Article 6. Monopoly and Exclusive Service Suppliers

1. Each Party shall ensure that any monopoly supplier of a service, in the course of its monopoly supply of a service and/or other monopoly activities in the relevant market, does not act in a manner inconsistent with the obligations of that Party under Chapters II, III, and IV of this Agreement.

2. If a legal entity that is a monopoly supplier of a service in the territory of one Party competes directly or through a legal entity controlled by it outside the scope of its monopoly rights with persons of other Parties, the first Party shall ensure that such legal entity does not abuse its monopoly position by acting in the territory of the first Party in a manner inconsistent with the obligations of such first Party under this Agreement.

3. The provisions of this Article shall also apply to exclusive service suppliers.

Article 7. Principle of Equality

1. Where persons in which a Party has a capital interest or which are controlled by a Party remain in the territory of the other Party, that Party shall ensure that such persons:

(a) conduct their activities on the basis of commercial considerations, including price, quality, availability of services or goods, their marketability, transport conditions and other conditions of purchase, sale or supply, and act in relations governed by this Agreement:

on the basis of equality with other participants in these relations;

on the basis of the principle of non-discrimination against other participants in these relations on the grounds of their nationality, place of registration (establishment), organizational and legal form or form of ownership, and

b) did not receive rights, privileges, or obligations solely by virtue of this Party's participation in their capital or control over them by this Party,

except in cases where the activities of such persons in whose capital the state participates or which are controlled by the state are aimed at solving social policy tasks,

and except for the cases specified in the individual lists of the Parties in Annexes B and C to this Agreement.

2. The provisions of paragraph 1 of this Article shall also apply to persons vested with exclusive rights, either formally or in fact, except for persons vested with exclusive rights and included on the basis of subparagraphs “b” and (c) of paragraph 1 of Article 21 of this Agreement in the individual lists of the Parties in Annexes B and C to this Agreement, and persons enjoying monopoly rights in accordance with paragraph 1 of Article 6 of this Agreement.

3. Each Party shall ensure that all its bodies at any level of state authority or local self-government are independent, not controlled by, and not accountable to any person engaged in economic activities in the sector of the economy regulated by the relevant body. The measures taken by a Party, including the decisions of the authority referred to in this paragraph, and the rules and procedures established and applied by it, shall be impartial and objective in relation to all persons engaged in economic activities.

4. The provisions of this Article shall not apply to public procurement and services provided in the exercise of public authority.

Article 8. Restrictions or Prohibitions

1. If one of the Parties maintains restrictions or prohibitions against a third country with respect to the establishment, operation, trade in services, or investment, nothing in this Agreement shall be construed as obliging such Party to extend the provisions of this Agreement to persons of the other Party if such persons are wholly owned or controlled by a person of the third country concerned and the extension of the provisions of this Agreement would result in the circumvention or violation of the above-mentioned prohibitions and restrictions.

2. A Party may not extend its obligations under this Agreement to persons of the other Party in respect of the establishment, operation, trade in services, or investment if such persons of the other Party do not carry out substantial business operations in the territory of such other Party, and it is owned or controlled by a person of the first Party or by a person of a state that is not a Party to this Agreement.

Article 9. General Exceptions

Provided that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between States or a disguised restriction on trade in services, establishment and operations, nothing in this Agreement shall prevent a Party from adopting or applying measures:

(a) necessary to protect public morals or to maintain public order.

Exceptions on grounds of public policy may be applied only in cases where there is a real and sufficiently serious threat to one of the fundamental interests of society;

(b) necessary to protect the life or health of humans, animals or plants;

(c) necessary to comply with the laws of the Parties not inconsistent with the provisions of this Agreement, including those relating to:

the prevention of misleading and unfair practices or the consequences of non-compliance with civil law contracts;

the protection of the privacy of individuals in the processing and dissemination of personal data and the protection of the confidentiality of personal data and bank accounts;

security;

(d) incompatible with Articles 15, 20, 25, and 30 of this Agreement, provided that such measures are aimed at non-discriminatory taxation of persons of the other Party in respect of trade in services, establishment, and activities.

Article 10. Exceptions for Security Reasons

1. Nothing in this Agreement shall be construed as preventing either Party from taking any action it considers necessary to protect its essential interests in the field of national defense or security:

(a) relating to the supply of services or goods, directly or indirectly, for the purpose of supplying the armed forces;

(b) relating to nuclear or thermonuclear weapons or to materials from which they are derived;

(c) taken in time of war or other emergency in international relations.

2. Nothing in this Agreement shall be interpreted as requiring the disclosure of any information which a Party considers contrary to its essential security interests.

3. Nothing in this Agreement shall be interpreted as preventing either Party from taking any action to fulfill its obligations under the Charter of the United Nations to maintain or restore international peace and security.

Article 11. Restrictions for the Purpose of Protecting the Balance of Payments

1. In the event of a serious deterioration in the balance of payments, external financial difficulties, a significant reduction in gold and foreign exchange reserves, sharp fluctuations in the exchange rate of the national currency, or the threat thereof, a Party may adopt and apply restrictions on transfers and payments.

2. The restrictions referred to in paragraph 1 of this Article:

(a) shall not discriminate between the Parties;

(b) shall be consistent with the Articles of Agreement of the IMF;

(c) shall not cause undue damage to the commercial, economic, and financial interests of any other Party;

(d) shall not be more burdensome than necessary to overcome the circumstances referred to in paragraph 1 of this Article;