Where one of the Parties is in serious balance of payments difficulties, or under imminent threat thereof, the Party concerned may adopt restrictive import measures on an erga omnes basis in accordance with WTO provisions. Such measures shall, in particular, be of limited duration and may not go beyond what is necessary to remedy the balance of payments situation. The measures shall be progressively relaxed as balance of payments conditions improve and they shall be eliminated when conditions no longer justify their maintenance. The Party shall inform the other Parties forthwith of their introduction and, whenever practicable, of a time schedule for their removal.

Chapter VI. NEW TRADE ISSUES

Section A. Services

Article 26. Scope and Definitions

Articles in Part A of this Chapter apply to measures adopted by Parties which affect trade in services. For the purposes of this Agreement, trade in services is defined in accordance with Article I and, if appropriate, Article XXVIII of the General Agreement on Trade in Services (hereinafter referred to as "GATS").

Article 27. Objectives

The Parties will gradually develop and broaden their co-operation with the aim of achieving a progressive liberalisation and mutual opening of their services markets, in the context of European integration, taking into account the relevant provisions of the GATS and commitments entered into under GATS by Parties being WTO members.

Article 28. Electronic Commerce

The Parties, recognizing that the use of electronic means increases trade opportunities in many sectors, agree to promote the development of electronic commerce between them, in particular by cooperating on the market access and regulatory issues raised by electronic commerce.

Article 29. Evolutionary Clause

The Joint Committee shall review on an annual basis the results of the cooperation referred to in Article 27 and, if appropriate, recommend, following its rules of procedure, the launching of negotiations with the aim to achieve progressively a high level of liberalization in accordance with Article V of GATS. The commitments undertaken further to such negotiations shall be set out in schedules forming an integral part of this Agreement.

Section B. Investment

Article 30. Scope

1. The Parties confirm their rights and obligations existing under the bilateral investment agreements enumerated in Annex 6.

2. The provisions of Articles 30-33 of this Agreement are without prejudice to the rights and obligations of the Parties arising from the Agreements enumerated in Annex 6.

3. The Parties agree that any dispute related to the interpretation or application of the provisions of Articles 30-33 shall not be submitted to the arbitral procedure set out in Article 43 if that dispute can be submitted to the arbitration procedures provided for by one of the agreements set out in Annex 6.

Article 31. Objectives

1. The Parties shall create and maintain stable, favourable and transparent conditions for investors of the other Parties that are making or seeking to make investments in their territories.

2. Each Party shall promote as far as possible investments made by investors of the other Parties on its territory and admit such investments in accordance with its domestic laws and regulations.

3. When a Party shall have admitted an investment made by investors from the other Parties, it shall, in accordance with its domestic laws and regulations, grant the necessary permits and administrative authorisations in connection with such an investment.

4. To this extent, the Parties shall exchange, within the framework of the Joint Committee, information about their laws and regulations regarding the establishment of investments, as well as any investment opportunities.

Article 32. Treatment of Investments

1. Each Party shall ensure fair and equitable treatment and full protection and security to investments of the investors of the other Parties.

2. Each Party shall protect investments made in accordance with its domestic laws and regulations by investors of the other Parties and shall not impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment, extension, sale or liquidation of such investments. Nor shall the Parties adopt any new regulations or measures which introduce discrimination as regards the establishment of any other Party's companies on their territory.

3. The Parties shall provide, as regards the establishment and operation of other Parties' investments, a treatment no less favorable than that granted by each Party to investments made by its own investors, or than that granted by each Party to the investments by investors of any third State, if this latter treatment is more favorable.

4. The non-discriminatory treatment, the national treatment and the Most Favoured Nation treatment provisions of this Agreement shall not apply to all actual or future advantages accorded by either Party by virtue of its membership of a customs, economic or monetary union, a common market or a free trade area. Nor shall such treatment relate to any advantage which either Party accords to investors of a third State by virtue of a double taxation agreement or other agreements on a reciprocal basis regarding tax matters.

Article 33. Evolutionary Clause

1. The Parties shall consult within the Joint Committee, aiming for the gradual achievement of a broad coordination of their investment policies.

2. To this extent, the Parties affirm their commitment progressively to review their internal legal framework regarding investments, with the aim of facilitating the investment conditions. The Parties shall exchange information on these aspects within the Joint Committee, according to Article 31, paragraph 4.

3. The Parties shall also examine the possibilities of granting similar supplementary advantages, in accordance with their laws and regulations, to investors of the other Parties or, as the case may be, to investors of third States.

Section C. Government Procurement

Article 34. Scope and Definitions

This Agreement applies to all laws, regulations, procedures or practices regarding any procurement by central or sub-central government entities or other relevant entities. Nothing in Articles 26-29 of this Agreement shall be construed to impose any obligation with respect to government procurement. The definitions of Article I of the WTO Agreement on Government Procurement shall apply.

Article 35. Objectives

1. Each Party shall as of the date of entry into force of this Agreement ensure that the procurement of its entities takes place in a

Transparent and reasonable manner, treats all suppliers of the other Parties equally, and is based on the principle of open and effective competition.

2. Each Party shall no later than 1 May 2010 ensure the progressive and effective opening of its government procurement market so that, with respect to any relevant laws, regulations, procedures and practices, the goods, services and suppliers of the other Parties are granted a treatment no less favourable than that accorded to domestic goods, services and suppliers. In particular, the Parties shall ensure that their entities:

a. do not treat a locally-established supplier less favourably than another locally-established supplier on the basis of the degree of foreign affiliation to, or ownership by, a person of another Party; and

b. do not discriminate against a locally-established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of another Party.

3. This Article shall not apply to measures concerning customs duties or other charges of any kind imposed on or in connection with importation, the method of levying such duties and charges, other import regulations, including restrictions and formalities, nor to measures affecting trade in services other than measures specifically governing procurement.

Article 36. Evolutionary Clause

1. The Parties shall review in the Joint Committee, on a regular basis, progress in the opening of their government procurement markets. The first review shall take place no later than 1 May 2008 and focus on fulfilment of Article 35, paragraph 1. On the basis of these

Reviews, the Joint Committee may recommend further actions to fulfil the objectives of Article 35, paragraph 2.

2. If either Party in the future should grant a third party advantages with regard to access to their respective procurement markets beyond what has been agreed upon in this Agreement, it shall offer adequate opportunities to the other Parties to enter into negotiations with a view to extending these advantages to them on a reciprocal basis.

Section D. Protection of Intellectual Property

Article 37. Scope and Definitions

For the purpose of this Agreement, intellectual property rights embody industrial property rights (patents, trademarks, industrial designs and geographical indications), copyright and related rights, topographies of integrated circuits, as well as protection against such unfair competition as referred to in Article 10 bis of the Paris Convention for the Protection of Industrial Property and the protection of undisclosed information as referred to in Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as "TRIPS").

Article 38. Objectives

1. The Parties shall grant and ensure adequate and effective protection of intellectual property rights in accordance with international standards, in particular with TRIPS, including effective means of enforcing such rights provided for in international conventions and treaties.

2. The Parties shall continue to ensure an adequate and effective implementation of the obligations arising from the conventions listed in Annex 7.

3. Eligible Parties not yet members of the conventions listed in Annex 7 shall accede to them and undertake all necessary measures with a view to implement the obligations arising from them adequately and effectively no later than 1 May 2014.

Article 39. Evolutionary Clause

1. If any Party, after entry into force of this Agreement, should offer a third party additional advantages or preferences with regard to intellectual property rights beyond what has been agreed under Part D of this Chapter, it shall agree to enter into consultations with the other Parties to this Agreement with a view to extending these advantages or preferences to all of them on a reciprocal basis.

Article 40. The Joint Committee

1. The Parties agree to set up a Joint Committee composed of representatives of the Parties.

2. The Joint Committee shall supervise and administer the implementation of this Agreement. The Joint Committee will be supported by a permanent secretariat, located in Brussels. The Joint Committee, will decide on the functions and administrative rules of the secretariat.

3. For the purpose of the proper implementation of this Agreement, the Parties shall exchange information and, at the request of any Party, shall hold consultations within the Joint Committee. The Joint Committee shall keep under review the possibility of further removal of the obstacles to trade between the Parties.

4. The Joint Committee may take decisions in the cases provided for in this Agreement. On other matters the Joint Committee may make recommendations.

Article 41. Procedure of the Joint Committee

1. The Joint Committee shall meet whenever necessary but at least once a year. Each Party may request that a meeting be held.

2. The Joint Committee shall act by consensus.

3. Except for the decision mentioned in Article 14, paragraph 1, a representative of a Party in the Joint Committee may accept a decision with a reservation related to the fulfilment of domestic legal requirements. The decision shall enter into force if no later date is contained therein, on the day the lifting of the reservation is notified to the Depositary.

4. On its first session after entry into force of the Agreement, the Joint Committee shall adopt its rules of procedure that shall, inter alia, contain provisions for convening meetings, for the designation of the Chairman and for his/her term of office.

5. The Joint Committee may decide to set up appropriate organs, such as working groups, task forces, sub-committees, and other bodies it considers necessary to assist it in accomplishing its tasks.

6. The Joint Committee shall adopt a commonly agreed List of Mediators from persons qualified to mediate the dispute in line with UNCITRAL Conciliation Rules.

Article 42. Fulfilment of Obligations and Consultations

1. The Parties shall take all necessary measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in the Agreement are attained. Should any divergence with respect to the interpretation and application of this Agreement arise, the Parties concerned shall make every attempt through co-operation and consultations, if necessary in the Joint Committee, to arrive at a mutually satisfactory resolution.

2. Any Party may request in writing to the Joint Committee that consultations with any other Party regarding any actual or proposed measure or any other matter that it considers might affect the operation of this Agreement take place within the Joint Committee. The Party requesting consultations shall at the same time notify the other Parties in writing thereof and supply all relevant information. The Joint Committee may recommend appropriate measures.

3. These consultations may take place, should the Parties concerned so agree, in the presence of a mediator. If the Parties concerned do not agree on a mediator, the Chairman of the Joint Committee or, if he is a national or resident of one of the Parties concerned, then the first of his predecessors who is not, shall appoint the mediator within 20 calendar days of receipt of the initial written request for mediation in accordance with the rules set out in Annex 8. The mediator shall present a final report to the Joint Committee at the latest 60 calendar days after his/her appointment. If no solution can be found on the basis of the mediator's report, the Joint Committee will deal with the issue with a view to finding a commonly acceptable solution. Should this fail, the Joint Committee shall recommend appropriate measures.

4. If a Party considers that an other Party has failed to fulfil an obligation under this Agreement, and bilateral consultations, mediation or the Joint Committee have failed to arrive at a commonly acceptable solution within 90 calendar days from the receipt of the notification referred to in paragraph 2, the Party concerned may take provisional rebalancing measures under the conditions and in accordance with the procedures laid down in Article 24. The measures taken shall be notified immediately to the Parties and to the Joint Committee, which shall hold regular consultations with a view to their abolition. The measures shall be abolished when conditions no longer justify their maintenance in the view of the Joint Committee, or, if the dispute is submitted to arbitration, when an arbitral award has been rendered and complied with as decided by the Joint Committee.

Article 43. Arbitration

1. Disputes between the Parties, arising after this Agreement enters into force between the Parties concerned and relating to the interpretation or application of rights and obligations under it, which have not been settled through direct consultations in the Joint Committee within 90 calendar days from the date of the receipt of the request for consultations, may be referred to arbitration by any Party to the dispute by means of a written notification addressed to the other Party to the dispute. A copy of this notification shall be communicated to all Parties of this Agreement. Where more than one Party requests the submission to an arbitral tribunal of a dispute with the same Party relating to the same question a single arbitral tribunal should be established to consider such disputes whenever feasible.

2. The Arbitral Tribunal shall settle the dispute in accordance with the provisions of this Agreement and any other applicable rules of international law. The Tribunal will consider amicus curiae briefs from a Party not involved in the dispute.

3. The constitution and functioning of the Arbitral Tribunal shall be governed by Annex 9. The award of the Arbitral Tribunal shall be final and binding upon the Parties to the dispute.

4. Disputes under consultation or arbitration under this Agreement shall not be submitted to the WTO for dispute settlement. Nor shall an issue or a dispute before the WTO Dispute settlement procedure be submitted for arbitration under this Article.

Article 44. Transparency

1. Each Party shall promptly publish any law, regulation, judicial decision and administrative ruling of general application and procedure, including standard contract clauses or any modifications to these, regarding issues covered in this Agreement.

2. Each Party shall respond promptly to all requests by another Party for specific information on any of its measures of general application or international agreements that pertain to or affect this Agreement. Parties shall establish a contact point to which such requests shall be made. Contact points shall forthwith convey the request to the relevant domestic agencies.

Article 45. General Evolutionary Clause

1. Where a Party considers that it would be useful in the interest of the economies of the Parties to develop and deepen the relations established by this Agreement by extending them to fields not covered thereby, it shall submit a reasoned request to the other Parties. The Parties may instruct the Joint Committee to examine such a request and, where appropriate, to make recommendations, particularly with a view to opening negotiations.

2. Agreements resulting from the procedure referred to in paragraph 1 will be subject to ratification or approval by the Parties in accordance with their internal legal procedures.

Article 46. Trade Relations Governed by this and other Agreements

This Agreement shall not prevent the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade to the extent that these do not negatively affect the trade regime and in particular the provisions concerning rules of origin provided for by this Agreement.

Article 47. Annexes

1. Annexes and Joint Declarations to this Agreement are an integral part of it.

2. The Joint Committee may decide to amend Annexes in accordance with the provisions of Article 40, paragraph 4 and in accordance with the domestic legal requirements of the Parties.

3. If the Parties do not otherwise agree, the amendments referred to in paragraph 2 of this Article shall enter into force according to Article 41, paragraph 3 of this Agreement.

Article 48. Amendments

Amendments to this Agreement, other than those referred to in Article 47, shall enter into force on the date of the receipt of the last written notification, through diplomatic channels, by which all the Parties notify the Depositary that their domestic legal requirements for the entry into force of the Amendments have been fulfilled.

Article 49. Accession to the Agreement

1. Accession to this Agreement may take place with the consent of all Parties.

2. Terms and conditions of the accession shall be determined in an accession agreement concluded between all the Parties to this Agreement on one side and the acceding Party on the other side.

Article 50. Entry Into Force

This Consolidated Version of the Central European Free Trade Agreement (CEFTA 2006) shall enter into force on the date of entry into force of the Agreement on Amendment of and Accession to the Central European Free Trade Agreement.

Article 51. Duration and Denunciation

1. This Agreement is concluded for an indefinite period of time.

2. Each Party may denounce this Agreement by a written notification through diplomatic channels to the Depositary. This denunciation will enter into force on the first day of the seventh month after the date of receipt of the notification of denunciation.

3. The Parties agree that in the event of any eligible Party becoming a member of the European Union, that Party will withdraw from this Agreement. Withdrawal shall take place at the latest the day before membership takes effect and without any compensation to the other Parties subject to the altered conditions of trade.

Article 52. Depositary

The Government of the Republic of Croatia, acting as Depositary, shall notify all Parties that have signed this Agreement of any notification received in accordance with Article 4 of the Agreement on Amendment of and Accession to the Central European Free Trade Agreement and any other act or notification relating to this Agreement.

Conclusion

This Consolidated Version of the Central European Free Trade Agreement (CEFTA 2006) is done in a single authentic copy in the English language.

Attachments

JOINT DECLARATIONS

Joint Declaration concerning the Application of WTO Rules and Procedures

To the extent that references are made in the context of this Agreement, to the rules and procedures set out in Annex 1A, Annex 1B and Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, the Parties agree to apply them irrespective of whether or not they are members of WTO.

Joint Declaration on Co-operation and Assistance

The Parties shall endeavour, where appropriate, to develop economic and technical cooperation and assistance in order to provide each other with, in particular, though not exclusively:

a. advice on the ways of organising the appropriate incentive infrastructure for investments, including investment promotion agencies;

b. frameworks and procedures to stimulate joint investments, joint ventures and production for the markets of third countries;

c. training programs with a view to achieving a better understanding of their respective government procurement systems and statistics and better access to their respective markets;

d. one or more of the activities listed below concerning intellectual property rights:

(i) legislative advice (comments on draft laws, judicial and administrative decisions, enforcement and other matters relating to the protection of intellectual property rights);

(ii) advice on the ways of organising administrative infrastructure, such as patent offices, collecting societies and inspection authorities;

(iii) training in the field of intellectual property rights administration and management techniques;

(iv) specific training of judges, prosecutors, lawyers, customs and police officers and inspectors, in order to make the enforcement of laws more effective; and

(v) awareness-building activities for the private sector and civil society on protection and significance of intellectual property rights.

Joint Declaration on Articles 20 and 21

1. Parties to this Agreement shall no later than 1 May 2010 ensure the applicability of appropriate competition provisions in their domestic legislation.

2. The competition provisions in the domestic legislation of the parties concerned shall be brought into compliance with the principles of Articles 81, 82, 86 and 87 of the Treaty Establishing the European Community.

3. The Parties shall within the period referred to in paragraph 1 establish an operationally independent authority in charge of the application of competition and state aid rules.

Joint Declaration on Articles 21, 22 and 23

The Parties declare that they shall not apply anti-dumping, countervailing or safeguard measures until they have issued detailed internal regulations laying down rules and procedures and determining technical issues relating to the application of such measures. The Parties shall ensure full conformity of their internal regulations with the relevant WTO provisions including Article VI and XIX of the GATT and the Agreement on the Implementation of Article VI, the Agreement on Subsidies and Countervailing Measures and the Agreement on Safeguards. After such legislation has been implemented, the Parties shall apply any antidumping duties, countervailing duties and safeguard measures in full conformity with the relevant WTO provisions.