Chapter 6. TRADE IN SERVICES AND INVESTMENT
Article 70. Objective, Scope and Coverage
1. The Parties, affirming their respective commitments under the WTO Agreement, hereby lay down the necessary arrangements with a view to improving reciprocal conditions for trade in services and investment.
2. Nothing in this Chapter shall be construed as imposing any obligation with respect to government procurement subject to Chapter 9.
3. This Chapter shall not apply to subsidies granted by either Party.
4. The Parties reaffirm the right to regulate within their respective territory to achieve legitimate policy objectives, such as the protection of public health, social services, public education, safety, the environment, including climate change, public morals, social or consumer protection, privacy and data protection, and the promotion and protection of cultural diversity.
5. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of the Parties or to measures regarding citizenship, residence or employment on a permanent basis.
6. This Chapter shall not prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to the other Party under this Chapter. The sole fact of requiring a visa for natural persons of a certain country and not for those of others shall not be regarded as nullifying or impairing benefits accrued under this Chapter.
7. For the purposes of this Chapter, no account shall be taken of treatment accorded by a Party:
(a) pursuant to an agreement which substantially liberalises trade in services (including establishment in the area of services) meeting the criteria of Articles V and V bis of the GATS or to an agreement which substantially liberalises establishment in other economic activities, meeting the same criteria, in respect of such activities;
(b) resulting from measures providing for recognition, including of the standards or criteria for the authorisation, licencing or certification of a natural person or enterprise to carry out an economic activity, or of prudential measures.
8. This Chapter does not apply to the audio-visual sector.
Article 71. Definitions
For the purposes of this Chapter:
(a) "activity performed in the exercise of governmental authority" means activity performed, including any service supplied, neither on a commercial basis nor in competition with one or more economic operators;
(b) "branch" means a place of business established in a Party that does not have legal personality, has the appearance of permanency, such as the extension of a parent body established in the other Party, has a management and is materially equipped to negotiate business with third parties so that such third parties, although knowing that there will, if necessary, be a legal link with the parent body the head office of which is in the other Party, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;
(c) "cross-border supply of services" means the supply of a service:
(i) from the territory of a Party into the territory of the other Party; or
(ii) in the territory of a Party to a service consumer of the other Party;
(d) "economic activity" means any service or activity of an industrial, commercial or professional character or activity of a craftsman, except for services or activities performed in the exercise of governmental authority;
(e) "enterprise" means a legal person, branch or representative office set up through establishment;
(f) "establishment" means the setting-up or acquisition of a legal person, including through capital participation, or the creation of a branch or representative office, in the European Union or in the Kyrgyz Republic, with a view to establishing or maintaining lasting economic links;
(g) "intra-corporate transferee" means a natural person who has been employed by a legal person of a Party or has been a partner in it, for a period of not less than one year immediately preceding the date of his or her application for entry and temporary stay in the other Party, and who is temporarily transferred to an enterprise, in the territory of the other Party, which forms part of the same group of the former legal person, including its representative office, subsidiary, branch or head company, provided that:
(i) the natural person concerned belongs to one of the following categories:
(A) managers or executives: persons working in a senior position who primarily direct the management of the enterprise, receiving general supervision or direction principally from the board of directors or from shareholders of the business or their equivalent, and as a minimum:
(1) direct the enterprise or a department thereof;
(2) supervise and control the work of other supervisory, professional or managerial employees; and
(3) have the personal authority to recruit and dismiss or to recommend recruitment, dismissal or other personnel-related actions;
(B) specialists: persons possessing specialised knowledge essential to the enterprise's production, research equipment, techniques, processes, procedures or management; or
(C) trainee employees: persons possessing a university degree who are temporarily transferred for career development purposes or to obtain training in business techniques or methods (8) ;
(ii) for the European Union, in assessing the knowledge referred to in point (i)(B), account is taken not only of knowledge specific to the enterprise, but also of whether the natural person has a high level of qualification in relation to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;
(h) "investor" of a Party means a natural or legal person of that Party that seeks to perform or performs an economic activity through setting up an establishment in the other Party;
(i) "legal person" means any legal entity duly constituted or otherwise organised 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;
(j) "legal person of a Party" means a legal person set up in accordance with the law of the European Union or its Member States or with the law of the Kyrgyz Republic, and having its registered office, its central administration or its principal place of business in the territory of the European Union or in the territory of the Kyrgyz Republic, respectively; in cases where a legal person set up in accordance with the law of the European Union or its Member States or with the law of the Kyrgyz Republic has only its registered office or central administration in the territory of the European Union or in the territory of the Kyrgyz Republic, respectively, it shall not be considered to be a legal person of a Party unless it engages in substantive business operations in the territory of the European Union or in the territory of the Kyrgyz Republic, respectively; shipping companies established outside the European Union or the Kyrgyz Republic and controlled by nationals of a Member State of the European Union or the Kyrgyz Republic, respectively, shall also be beneficiaries of this Chapter if their vessels are registered in accordance with their respective legislation, in a Member State of the European Union or in the Kyrgyz Republic and fly the flag of a Member State of the European Union or the Kyrgyz Republic;
(k) "natural person of the European Union" and "natural person of the Kyrgyz Republic" mean, respectively, a national of one of the Member States of the European Union and a national of the Kyrgyz Republic in accordance with the domestic laws and regulations of that Member State of the European Union (9) or the Kyrgyz Republic, respectively;
(l) "operations" means conduct, management, maintenance, use, enjoyment and sale or other form of disposal of an enterprise;
(m) "services" means any service (10) in any sector except services supplied in the exercise of governmental authority;
(n) "service supplier" means any natural or legal person that seeks to supply or supplies a service;
(o) "subsidiary of a legal person of a Party" means a legal person which is controlled by another legal person of that Party;
(p) "supply of a service" means the production, distribution, marketing, sale or delivery of a service.
Article 72. Most-favoured-nation Treatment and National Treatment
1. With respect to the establishment and operations of an enterprise to perform economic activities in its territory, the European Union shall accord to investors of the Kyrgyz Republic and their enterprises treatment no less favourable than that accorded to investors of any third country and their enterprises.
2. With respect to the establishment and operations of an enterprise to perform economic activities in its territory, the Kyrgyz Republic shall accord to investors of the European Union and their enterprises treatment no less favourable than that accorded to its own investors and their enterprises or to the investors of any third country and their enterprises, whichever is the better.
3. For greater certainty, the treatment referred to in paragraphs 1 and 2 does not include investor-to-state dispute-settlement procedures provided for in other international agreements. Substantive provisions in other international agreements concluded by a Party with a third party do not in themselves constitute treatment under this Article. Measures of a Party pursuant to such provisions (11) may constitute treatment as referred to in paragraphs 1 and 2, and thus may give rise to a breach of this Article.
4. Paragraphs 1, 2 and 3 of this Article shall not apply to air transport, inland waterways and maritime transport.
Article 73. Horizontal Limitation on Services
1. Notwithstanding any other provision of this Chapter, a Party should not be required to accord, in respect of sectors or measures covered by the GATS, treatment which is more favourable than that which that Party is required to accord under the GATS and this in respect of each services sector and sub-sector and mode of supply.
2. For greater certainty, in respect of services, the GATS schedules of specific commitments of the Parties, including the reservations and, for the European Union, its Annex on Article II exemptions (list of MFN exceptions), shall be incorporated into and made part of this Agreement and shall apply.
Article 74. Prudential Carve-out
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures for prudential reasons, such as the protection of investors, depositors, policyholders or persons to whom a fiduciary duty is owed by a financial service supplier, or ensuring the integrity and stability of the financial system. Where such measures do not conform with this Agreement, they shall not be used as a means of avoiding the Party's commitments or obligations under this Agreement.
2. Nothing in this Agreement shall be construed to require 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.
Article 75. Denial of Benefits
A Party may deny the benefits of this Chapter to a legal person of the other Party or to an enterprise established by that legal person in its territory, if the denying Party adopts or maintains measures related to the maintenance of international peace and security, including the protection of human rights, which:
(a) prohibit transactions with that legal person or its enterprise; or
(b) would be violated or circumvented if the benefits under this Chapter were accorded to that legal person or its enterprise, including where the measures prohibit transactions with a natural person who owns or controls that legal person or its enterprise.
Article 76. Intra-corporate Transferees
1. Each Party shall allow investors of the other Party to employ in their enterprises natural persons of that other Party provided that such employees are intra-corporate transferees.
2. The entry and temporary stay of the natural persons referred to in paragraph 1 shall be for the following periods:
(a) for managers or executives, a period of up to three years;
(b) for specialists, a period of up to three years; and
(c) for trainee employees, a period of up to one year.
3. All requirements pursuant to the laws and regulations of the Parties regarding entry, stay, work and social security measures continue to apply, including regulations concerning period of stay, minimum wages and collective wage agreements.
4. This Article does not apply in cases where the intent or effect of the temporary presence of an intra-corporate transferee is to interfere with, or otherwise affect the outcome of, any labour or management dispute or negotiation.
Article 77. Progressive Liberalisation of Investment
The Parties recognise the importance of granting each other's investors national treatment with regard to the establishment and operations of enterprises in their respective territories and will consider the possibility of advancing towards this end on a mutually satisfactory basis, and in the light of any recommendations by the Cooperation Committee.
Article 78. Standstill Clause
1. Each Party shall use its best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operations of enterprises in its territory of each other's investors more restrictive than the situation existing on the day preceding the date of signature of this Agreement.
2. Acting in the spirit of partnership and cooperation and in the light of Chapter 13, the Kyrgyz Republic shall inform the European Union of its intention to adopt new laws or regulations which may render the conditions for the establishment or operations of enterprises in the Kyrgyz Republic of investors of the European Union more restrictive than the situation existing on the day preceding the date of signature of this Agreement.
3. The European Union may request the Kyrgyz Republic to communicate the drafts of new laws or regulations as referred to in paragraph 2 and to enter into consultations about such drafts.
4. Where new laws or regulations introduced in the Kyrgyz Republic would result in rendering the conditions for the operations of enterprises of investors of the European Union more restrictive than the situation existing on the date of signature of this Agreement, such laws or regulations shall not apply for three years following their entry into force to those enterprises already established in the Kyrgyz Republic at the time of their entry into force.
5. For greater certainty, tax measures applied by the Kyrgyz Republic in a non-discriminatory manner shall not be considered to be more restrictive within the meaning of paragraph 4.
Article 79. Cross-border Supply of Services
1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the cross-border supply of services between the Parties, taking into account the development of their respective service sectors.
2. The Cooperation Council shall make recommendations for the implementation of this Article.
Article 80. Cooperation for a Market-oriented Service Sector In the Kyrgyz Republic
The Parties shall cooperate with the aim of developing a market-oriented service sector in the Kyrgyz Republic.
Article 81. Maritime Transport Services
1. The Parties shall apply the principle of unrestricted access to the international maritime markets and trade on a commercial and non-discriminatory basis.
2. In applying the principle referred to in paragraph 1, the Parties shall:
(a) not introduce cargo-sharing arrangements in future bilateral agreements with third countries concerning maritime transport services, including dry and liquid bulk and liner trade, and terminate, within a reasonable period of time, any such cargo-sharing arrangements that exist in previous agreements; and
(b) upon the entry into force of this Agreement, abolish and abstain from introducing any unilateral measures and administrative, technical and other obstacles which could constitute a disguised restriction or have discriminatory effects on the free supply of services in international maritime transport.
Article 82. Other Transport Services
With a view to ensuring the coordinated development of transport between the Parties, adapted to their commercial needs, specific agreements, negotiated between the Parties after the entry into force of this Agreement, may address the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, air transport.
Chapter 7. CAPITAL MOVEMENTS, PAYMENTS AND TRANSFERS AND TEMPORARY SAFEGUARD MEASURES
Article 83. Current Account
Without prejudice to other provisions of this Agreement, the Parties shall allow any payments with regard to transactions on the current account of the balance of payments between the Parties, in freely convertible currency, and in accordance with the Articles of the Agreement of the International Monetary Fund adopted at the United Nations Monetary and Financial Conference on 22 July 1944, as applicable.
Article 84. Capital Movements
1. With regard to transactions on the capital and financial account of the balance of payments, from the date of entry into force of this Agreement, each Party shall ensure the free movement of capital related to direct investments made in accordance with the law applicable in its territory and Chapter 6, as well as the liquidation or repatriation of such invested capital and any profit stemming therefrom.
2. Without prejudice to other provisions of this Agreement, neither Party shall introduce any new restrictions on the movement of capital and current payments between residents of the Member States of the European Union and the Kyrgyz Republic and shall not make the existing arrangements more restrictive.
3. The Parties shall consult each other with a view to facilitating the movement of capital between them in order to promote trade and investment.
Article 85. Application of Laws and Regulations Relating to Capital Movements, Payments or Transfers
1. Articles 82 and 83 shall not preclude a Party from applying its laws and regulations relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in financial instruments;
(c) financial reporting or record-keeping of capital movements, payments or transfers where necessary to assist law-enforcement or financial regulatory authorities;
(d) criminal or penal offences, deceptive or fraudulent practices;
(e) ensuring compliance with orders or judgments in adjudicatory proceedings; or
(f) social security, public retirement or compulsory savings schemes.
2. The laws and regulations referred to in paragraph 1 shall not be applied in an arbitrary or discriminatory manner or in a manner which otherwise constitutes a disguised restriction on capital movements, payments or transfers.
Article 86. Temporary Safeguard Measures
1. In exceptional circumstances of serious difficulties, or threat thereof, for the operation of monetary and exchange rate policy, in the case of the Kyrgyz Republic or a Member State of the European Union whose currency is not the euro, or for the operation of the economic and monetary union, in the case of the European Union, safeguard measures may be adopted or maintained by the concerned Party with regard to capital movements, payments or transfers for a period not exceeding six months.
2. The measures referred to in paragraph 1 shall be limited to the extent they are strictly necessary.
Article 87. Restrictions In Case of Balance-of-payments and External Financing Difficulties
1. Where a Party experiences serious balance-of-payments or external financial difficulties, or the threat thereof, it may adopt or maintain restrictive measures with regard to capital movements, payments or transfers (12).
2. The measures referred to in paragraph 1 shall:
(a) be consistent with the Articles of the Agreement of the International Monetary Fund, as applicable;
(b) not exceed those necessary to deal with serious balance-of-payments or external financial difficulties, or the threat thereof;
(c) be temporary and be phased out progressively as the circumstances referred to in paragraph 1 improve;
(d) avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(e) not treat the other Party less favourably than a non-Party in like situations.
3. In the case of trade in goods, each Party may adopt restrictive measures in order to safeguard its external financial position or balance of payments. Such measures shall be in accordance with GATT and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994.
4. In the case of trade in services, each Party may adopt restrictive measures in order to safeguard its external financial position or balance of payments. Such measures shall be in accordance with Article XII of GATS.
5. A Party maintaining or having adopted measures referred to in paragraphs 1 and 2 shall promptly notify them to the other Party.
6. Where restrictions are adopted or maintained under this Article, consultations shall be held promptly in the Cooperation Committee unless consultations are held in other fora. The consultations shall assess the balance-of-payments or external financial difficulty that led to the respective measures, taking into account, inter alia, such factors as:
(a) the nature and extent of the balance-of-payments or external financial difficulties;
(b) the external economic and trading environment; and
(c) alternative corrective measures which may be available.
7. The consultations referred to in paragraph 6 shall address the compliance of any restrictive measure with paragraphs 1 and 2. All relevant findings of a statistical or factual nature presented by the International Monetary Fund, where available, shall be accepted and conclusions shall take into account the assessment by the International Monetary Fund of the balance of payments and the external financial situation of the Party concerned.
Chapter 8. Intellectual Property Rights
Section A. GENERAL PROVISIONS
Article 88. Objectives
The objectives of this Chapter are to:
(a) facilitate the production and commercialisation of innovative and creative products and services between the Parties contributing to a more sustainable and inclusive economy for the Parties;
(b) facilitate and govern trade between the Parties as well as reduce distortions and impediments to such trade; and
(c) achieve an adequate and effective level of protection and enforcement of intellectual property rights.
Article 89. Nature and Scope of Obligations
1. The Parties shall implement the international treaties dealing with intellectual property rights to which they are parties, including the TRIPS Agreement. This Chapter shall complement and further specify the rights and obligations of each Party under the TRIPS Agreement and other international treaties in the field of intellectual property to which they are Parties.
2. For the purposes of this Chapter, the term "intellectual property rights" refers to all categories of intellectual property that are referred to in Articles 92 to 136 of this Chapter Agreement and Sections 1 to 7 of Part II of the TRIPS Agreement.
3. The protection of intellectual property rights includes protection against unfair competition as referred to in Article 10bis of the Paris Convention for the Protection of Industrial Property of 20 March 1883, as amended on 28 September 1979 (hereinafter referred to as the "Paris Convention").
4. This Chapter does not preclude any Party from applying its law introducing higher standards for the protection and enforcement of intellectual property rights, provided that they are compatible with this Chapter.
Article 90. Exhaustion
1. Each Party shall provide for a regime of national or regional exhaustion of intellectual property rights, in accordance with its law in respect of copyright and related rights and trademarks.
2. In the area of copyright and related rights, exhaustion of rights applies only to the distribution to the public by sale or otherwise of the original of works or of other protected subject matter or copies thereof.
Article 91. National Treatment
1. In respect of the intellectual property rights covered in this Chapter, each Party shall accord to the nationals of the other Party treatment no less favourable than that which it accords to its own nationals with regard to the protection (13) of intellectual property rights, subject to the exceptions already provided for in:
(a) the Paris Convention;
(b) the Berne Convention for the Protection of Literary and Artistic Works adopted on 9 September 1886 (hereinafter referred to as the "Berne Convention");
(c) the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations done at Rome on 26 October 1961 (hereinafter referred to as the "Rome Convention"); or
(d) the Treaty on Intellectual Property in Respect of Integrated Circuits adopted at Washington on 26 May 1989.
In respect of performers, producers of phonograms and broadcasting organisations, the obligation referred to in the first subparagraph only applies in respect of the rights provided for in this Agreement.
2. A Party may avail itself of the exceptions already provided for in the international instruments referred to in paragraph 1 in relation to its judicial and administrative procedures, including requiring a national of the other Party to designate an address for service of process in its territory, or to appoint an agent in its territory, provided that such exceptions are:
(a) necessary to ensure compliance with the Party's laws or regulations that are not inconsistent with this Chapter; and
(b) not applied in a manner that would constitute a disguised restriction on trade.
3. Paragraph 1 does not apply to procedures provided for in multilateral agreements concluded under the auspices of the World Intellectual Property Organisation (hereinafter referred to as the "WIPO") relating to the acquisition or maintenance of intellectual property rights.