(b) the Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade.
2. In applying the principles of paragraph 1, the Parties shall:
(a) not introduce cargo sharing clauses in future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned;
(b) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade;
(c) abolish, upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport.
3. With a view to assuring a coordinated development and progressive liberalization of transport between the Parties adapted to their reciprocal commercial needs, the conditions of mutual market access in air transport and in inland transport shall be dealt with by special transport agreements to be negotiated between the Parties after the entry into force of this Agreement.
4. Prior to the conclusion of the agreements referred to in paragraph 3, the Parties shall not take any measures or actions which are more restrictive or discriminatory as compared to the situation existing on the day preceding the day of entry into force of this Agreement.
5. During the transitional period, Hungary shall progressively adapt its legislation including administrative, technical and other rules to that of the Community legislation existing at any time in the field of air and inland transport in so far as it serves liberalization purposes and mutual access to markets of the Parties and facilitates the movement of passengers and of goods.
6. In step with the common progress in the achievement of the objectives of this Chapter, the Association Council shall examine ways of creating the conditions necessary for improving freedom to provide air and inland transport services.
Article 57.
The provisions of Article 53 shall apply to the matters covered by this Chapter.
Chapter IV. General Provisions
Article 58.
1. For the purpose of Title IV of this Agreement, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons, and supply of services, provided that, in so doing, they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. This provision does not prejudice the application of Article 53.
2. The provisions of Chapters II, III and IV of Title IV shall be adjusted by decision of the Association Council in the light of the result of the negotiations on services taking place in the Uruguay Round and in particular to ensure that under any provision of this Agreement a Party grants to the other Party a treatment no less favourable than that accorded under the provisions of a future GATT Agreement.
Title V. PAYMENTS, CAPITAL, COMPETITION AND OTHER ECONOMIC PROVISIONS, APPROXIMATION OF LAWS
Chapter I. Current Payments and Movement of Capital
Article 59.
The Contracting Parties undertake to authorize, in freely convertible currency, any payments on the current account of balance of payments to the extent that the transaction underlying the payments concern movements of goods, services or persons between the Parties which have been liberalized pursuant to this Agreement.
Article 60.
1. With regard to transactions on the capital account of balance of payments, from the entry into force of this Agreement, the Member States and Hungary respectively shall ensure the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II of Title IV, and the liquidation or repatriation of these investments and of any profit stemming therefrom. Notwithstanding the above provision, such free movement, liquidation and repatriation shall be ensured by the end of the first stage referred to in Article 6 for all investments linked to establishment of branches and agencies of Community companies and of Community nationals establishing in Hungary as self-employed persons pursuant to Chapter II of Title IV.
2. Without prejudice to paragraph 1, the Member States, as from the entry into force of this Agreement, and Hungary as from the start of the second stage referred to in Article 6, shall not introduce any new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and Hungary and shall not make the existing arrangements more restrictive.
3. The provisions of paragraph 1 and 2 shall not prevent Hungary from applying restrictions on outward investments by Hungarian nationals and companies.
4. The Parties shall consult each other with a view to facilitating the movement of capital between the Community and Hungary in order to promote the objectives of this Agreement.
Article 61.
1. During the first stage referred to in Article 6 the Contracting Parties shall take measures permitting the creation of the necessary conditions for the further gradual application of Community rules on the free movement of capital.
2. During the second stage referred to in Article 6 the Association Council shall examine ways of enabling Community rules on the movement of capital to be applied in full.
Chapter II. Competition and other Economic Provisions
Article 62.
1. The following are incompatible with the proper functioning of the Agreement, in so far as they may affect trade between the Community and Hungary:
(i) all agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition;
(ii) abuse by one or more undertakings of a dominant position in the territories of the Community or of Hungary as a whole or in a substantial part thereof;
(iii) any public aid which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods.
2. Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the rules of Articles 85, 86 and 92 of the Treaty establishing the European Economic Community.
3. The Association Council shall, within three years of the entry into force of this Agreement, adopt by decision the necessary rules for the implementation of paragraphs 1 and 2.
4. (a) For the purposes of applying the provisions of paragraph 1 (iii), the Parties recognize that during the frist five years after the entry into force of this Agreement, any public aid granted by Hungary shall be assessed taking into account the fact that Hungary shall be regarded as an area identical to those areas of the Community described in Article 92 (3) (a) of the Treaty establishing the European Economic Community. The Association Council shall, taking into account the economic situation of Hungary, decide whether that period should be extended by further periods of five years.
(b) Each Party shall ensure transparency in the area of public aid, inter alia by reporting annually to the other Party on the total amount and the distribution of the aid given and by providing, upon request, information on aid schemes. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.
5. With regard to products referred to in Chapters II and III of Title III:
- the provisions of paragraph 1 (iii) do not apply,
- any practices contrary to paragraph 1 (i) should be assessed according to the criteria established by the Community on the basis of Articles 42 and 43 of the Treaty establishing the European Economic Community and in particular of those established in Council Regulation No 26/1962.
6. If the Community or Hungary considers that a particular practice is incompatible with the terms of paragrah 1, and:
- is not adequately dealt with under the implementing rules referred to in paragraph 3, or
- in the absence of such rules, and if such practice causes or threatens to cause serious prejudice to the interest of the other Party or material injury to its domestic industry, including its services industry,
it may take appropriate measures after consultation within the Association Council or after 30 working days following referral for such consultation.
In the case of practices incompatible with paragraph 1 (iii), such appropriate measures may, where the General Agreement on Tariffs and Trade applies thereto, only be adopted in accordance with the procedures and under the conditions laid down by the General Agreement on Tariffs and Trade and any other relevant instrument negotiated under its auspices which are applicable between the Parties.
7. Notwithstanding any provisions to the contrary adopted in accordance with paragraph 3, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.
8. This Article shall not apply to the products covered by the Treaty establishing the European Coal and Steel Community which are the subject of Protocol 2.
Article 63.
1. The Parties shall endeavour to avoid the imposition of restrictive measures including measures relating to imports for balance of payments purposes. In the event of their introduction, the Party having introduced the same shall present to the other Party as soon as possible, a time schedule for their removal.
2. Where one or more Member States of the Community or Hungary is in serious balance of payments difficulties, or under imminent threat thereof, the Community or Hungary as the case may be, may, in accordance with the conditions established under the General Agreement on Tariffs and Trade, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is necessary to remedy the balance of payments situation. The Community or Hungary, as the case may be, shall inform the other Party forthwith.
3. Any restrictive measures shall not apply to transfers related to investment and in particular to the repatriation of amounts invested or reinvested and of any kind of revenues stemming therefrom.
Article 64.
With regard to public undertakings, and undertakings to which special or exclusive rights have been granted, the Association Council shall ensure that as from the third year following the date of entry into force of this Agreement, the principles of the Treaty establishing the European Economic Community, in particular Article 90, and the principles of the concluding document of the April 1990 Bonn meeting of the Conference on Security and Cooperation in Europe, in particular entrepreneurs' freedom of decision, are upheld.
Article 65.
1. Hungary shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year from the entry into force of this Agreement, a level of protection similar to that existing in the Community, including comparable means of enforcing such rights.
2. By the end of the fifth year from the entry into force of this Agreement, Hungary shall apply to accede to the Munich Convention on the Grant of European Patents of 5 October 1973 and shall accede to the other multilateral conventions on intellectual, industrial and commercial property rights referred to in Annex XIII point 1 to which Member States are Parties, or which are de facto applied by Member States.
Article 66.
1. The Contracting Parties consider the opening up of the award of public contracts on the basis of non-discrimination and reciprocity, in particular in the GATT context, to be a desirable objective.
2. Hungarian companies as defined in Article 48, shall be granted access to contract award procedures in the Community pursuant to Community procurement rules under a treatment no less favourable than that accorded to Community companies as of the entry into force of this Agreement.
Community companies as defined in Article 48 shall be granted access to contract award procedures in Hungary under a treatment no less favourable than that accorded to Hungarian companies at the latest at the end of the transitional period referred to in Article 6.
Community companies established in Hungary under the provisions of Chapter II of Title IV shall have from the entry into force of this Agreement access to contract award procedures under a treatment no less favourable than that accorded to Hungarian companies.
The Association Council shall periodically examine the possibility for Hungary to introduce access to award procedures in Hungary for all Community companies prior to the end of the transitional period.
3. As regards establishment, operations, supply of services between the Community and Hungary as well as employment and movement of labour linked to the fulfilment of public contracts, the provisions of Articles 37 to 57 are applicable.
Chapter III. Approximation of Laws
Article 67.
The Contracting Parties recognize that the major precondition for Hungary's economic integration into the Community is the approximation of that country's existing and future legislation to that of the Community. Hungary shall act to ensure that future legislation is compatible with Community legislation as far as possible.
Article 68.
The approximation of laws shall extend to the following areas in particular; customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, protection of health and life of humans, animals and plants, food legislation, consumer protection including product liability, indirect taxation, technical rules and standards, transport and the environment.
Article 69.
The Community shall provide Hungary with technical assistance for the implementation of these measures which may include inter alia:
- the exchange of experts,
- the provision of information,
- organization of seminars,
- training activities,
- aid for the translation of Community legislation in the relevant sectors.
Title VI. ECONOMIC COOPERATION
Article 70.
1. The Community and Hungary shall establish cooperation aimed at strengthening economic links on the widest possible foundation to the benefit of both Parties and at contributing to Hungary's development.
2. Policies designed to bring about the economic and social development of Hungary, in particular policies relating to industry including the mining sector, construction industry, investment, agriculture, energy, transport, telecommunications, regional development and tourism should be guided by the principle of sustainable development. This entails ensuring that environmental considerations are fully incorporated into such policies from the outset.
These policies shall also take into account the requirements of sustainable and harmonious social development.
3. Particular attention should also be devoted to measures capable of fostering regional cooperation.
Article 71. Industrial Cooperation
1. Cooperation shall seek to promote the following in particular:
- industrial cooperation between economic operators in the Community and in Hungary, with the particular aim of strengthening the private sector,
- Community participation in Hungary's efforts in both public and private sectors to modernize and restructure its industry under conditions which ensure that the environment is protected,
- the restructuring of individual sectors,
- the establishment of new undertakings in areas offering potential for growth,
- transfer of the technology and know-how.
2. Industrial cooperation initiatives take into account priorities determined by Hungary. The initiatives should seek in particular to establish a suitable and transparent framework for undertakings and to improve management know-how.
Article 72. Investment Promotion and Protection
1. The cooperation shall aim at maintaining and, if necessary, improving a favourable climate and legal framework for private investment, both domestic and foreign, which is essential to economic and industrial reconstruction in Hungary. The cooperation shall also aim to encourage and promote foreign investment and privatization in Hungary.
2. The cooperation shall take the following forms:
- the conclusion, where appropriate of agreements between Member States and Hungary on investment promotion and protection, including the transfer of benefits and the repatriation of capital,
- further deregulation in Hungary and improving economic infrastructure,
- exchange of information on laws, regulations and administrative practices in the field of investments,
- exchange of information on investment opportunities in the form of trade fairs, exhibitions, trade weeks and other events,
- organization of investment missions both in Hungary and in the Community.
Article 73. Industrial Standards and Conformity Assessment
1. The aim of the cooperation is to reduce differences in the fields of standardization and conformity assessment.
2. To this end, cooperation shall seek:
- to promote the use of Community technical regulations and European standards and conformity assessment procedures,
- where appropriate, to achieve the conclusion of agreements on mutual recognition in these fields,
- to encourage the participation of Hungary in the work of specialized organizations (CEN, Cenelec, ETSI, EOTC),
- to support Hungary in the European measurement and testing programmes,
- to promote the exchange of technical and methodological information in the field of quality control of production and production processes between interested parties.
3. The Community will provide Hungary with technical assistance where appropriate.
Article 74. Cooperation In Science and Technology
1. The Parties shall promote cooperation in research and technological development. They shall devote special attention to the following:
- the exchange of information on each other's science and technology policies,
- the organization of joint scientific and technological development meetings (seminars and workshops),
- joint research and development (R& D) activities aimed at encouraging scientific progress and the transfer of technology and know-how,
- training activities and mobility programmes for researchers and specialists from both sides,
- the development of an environment conducive to research and the application of new technologies and adequate protection of the intellectual property results of research,
- participation in the Community programmes in accordance with paragraph 3,
- support by the Community for Hungary's participation in relevant European research and development (R& D) programmes.
Technical assistance shall be provided where appropriate.
2. The Association Council shall determine the appropriate procedures for developing cooperation.
3. Cooperation under the Community's framework programme in the field of research and technological development shall be implemented according to specific arrangements to be negotiated and concluded in accordance with the procedures adopted by each Party.
Article 75. Education and Training
1. Cooperation shall aim at a harmonized development of human resources and raising the level of general education, training and professional qualifications, taking into consideration the priorities of Hungary.
2. Cooperation shall comprise the following areas:
- reform of the education and training system,
- initial training, vocational training, management training and professional higher education,
- in-service training and continuous education,
- teacher's in-service training,
- re-training and adaptation to the labour market,
- teaching of the Community languages and the Hungarian language,
- promoting teaching in the field of European studies within the appropriate institutions,
- improving the general conditions of foreign language learning,
- development of distance education and new training technologies,
- granting scholarships and fellowships,
- provision of training materials and equipment.
3. There will be established further institutional frameworks and plans of cooperation starting with the European Training Foundation, when established, and Hungary's participation in TEMPUS. Hungary's participation in other Community programmes shall also be examined in this context and in accordance with Community procedures.
4. Cooperation shall foster direct collaboration between educational institutions, and between educational institutions and enterprises, mobility and exchange of teachers, students and administrators, provide professional practice and training periods abroad, assist in developing curricula, elaborating teaching materials and equipping educational institutions.
Cooperation shall also aim at mutual recognition of periods of studies and diplomas.
5. In the field of translation, cooperation shall focus on training of translators and interpreters and promotion of Community linguistic norms and terminology.
Article 76. Agriculture and the Agro-industrial Sector
Cooperation in this area shall have as its aim the modernization, the restructuring and the privatization of agriculture and the agro-industrial sector in Hungary. It shall endeavour in particular to:
- develop private farms and distribution channels, methods of storage, marketing, etc.,
- modernize the rural infrastructure (transport, water supply, telecommunications),
- improve land use planning, including construction and urban planning,
- improve productivity and quality by using appropriate methods and products, provide training and monitoring in the use of anti-pollution methods connected with inputs,
- restructure, develop and modernize processing firms and their marketing techniques,
- promote industrial cooperation in agriculture and the exchange of know-how, particularly between the private sectors in the Community and Hungary,
- develop cooperation on animal health and plant health with the aim of bringing about gradual harmonization with Community standards through assistance for training and the organization of checks,
- establish and promote effective cooperation on agricultural information systems,
- develop and promote effective cooperation on quality insurance systems compatible with the Community models,
- promote integrated rural development in Hungary,
- exchange of information in respect of agricultural policy and legislation,
- technical assistance and transfer of know-how to Hungary concerning the system of milk supply to schools.