Article 54.
1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health.
2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority.
Article 55.
For the purpose of this Title 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 the Agreement.
Article 56.
Companies which are controlled and exclusively owned by Estonian companies or nationals and Community companies or nationals jointly shall also be beneficiaries of the provisions of Chapters II, III and IV of this Title.
Article 57.
1. The most favoured nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements.
2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation.
3. Nothing in this Title shall be construed to prevent Member States or Estonia from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in identical situations, in particular as regards their place of residence.
Article 58.
The provisions of this Title shall be progressively adjusted by the Parties. In formulating recommendations to this effect, the Association Council shall take into account the respective obligations of the Parties under the General Agreement on Trade in Services (GATS), and in particular of its Article V.
Article 59.
The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market through the provisions of this Agreement.
Title V. PAYMENTS, CAPITAL, COMPETITION AND OTHER ECONOMIC PROVISIONS, APPROXIMATION OF LAWS
Chapter I. CURRENT PAYMENTS AND MOVEMENT OF CAPITAL
Article 60.
The Parties undertake to authorise, in freely convertible currency, in accordance with the provisions of Article VIII of the Articles of Agreement of the International Monetary Fund, any payments and transfers on the current account of balance of payments between residents of the Community and Estonia.
Article 61.
1. With regard to transactions on the capital account of balance of payments, from entry into force of the Agreement, the Member States and Estonia 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.
Without prejudice to Article 43(1)(iii), complete free movement of capital relating to establishment and operations of self-employed persons, including the liquidation and repatriation of such investments, shall be ensured from entry into force of this Agreement.
2. With regard to transactions on the capital account of balance of payments, from entry into force of this Agreement the Member States and Estonia respectively shall ensure the free movement of capital relating to portfolio investment. This shall also apply to the free movement of capital relating to credits related to commercial transactions or the provision of services in which a resident of one of the Parties is participating and to financial loans.
3. Without prejudice to paragraph 1, the Member States and Estonia shall not introduce any new restrictions on the movement of capital and current payments connected therewith between residents of the Community and Estonia and shall not make the existing arrangements more restrictive.
4. The Parties shall consult each other with a view to facilitating the movement of capital between the Community and Estonia in order to promote the objective of the present Agreement.
Article 62.
1. The 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. 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 63.
1. The following are incompatible with the proper functioning of this Agreement, insofar as they may affect trade between the Community and Estonia:
(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 Estonia 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 Community or, for products covered by the ECSC Treaty, on the basis of corresponding rules of the ECSC Treaty including secondary legislation.
3. The Association Council shall, by 31 December 1997, adopt by decision the necessary rules for the implementation of paragraphs 1 and 2.
Until these rules are adopted, the provisions of the Agreement on interpretation and application of Articles VI, XVI and XXIII of the GATT shall be applied as the rules for the implementation of paragraph 1(iii) and related parts of paragraph 2.
4. (a) For the purposes of applying the provisions of paragraph 1(iii), the Parties recognise that until 31 December 1999 any public aid granted by Estonia shall be assessed taking into account the fact that Estonia 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 Community. The Association Council shall, taking into account the economic situation of Estonia, 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 provision of paragraph 1(iii) does 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 Community and in particular of those established in Council Regulation No 26.
6. If the Community or Estonia considers that a particular practice is incompatible with the terms of the first paragraph of this Article, 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 interests 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) of this Article, such appropriate measures may, where the GATT applies thereto, only be adopted in conformity with the procedures and under the conditions laid down by the GATT and any other relevant instrument negotiated under its auspices which are applicable between the Parties.
7. Notwithstanding any provisions to the contrary adopted in conformity with paragraph 3, the Parties shall exchange information taking into account the limitations imposed by the requirements of professional and business secrecy.
Article 64.
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 State or Estonia is in serious balance of payments difficulties, or under imminent threat thereof, the Community or Estonia, as the case may be, may, in accordance with the conditions established under the GATT, 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 Estonia, as the case may be, shall inform the other Party forthwith.
3. Any restrictive measures shall not apply to transfers related to investments and in particular to the repatriation of amounts invested or reinvested and of any kind of revenues stemming therefrom.
Article 65.
With regard to public undertakings, and undertakings to which special or exclusive rights have been granted, the Association Council shall ensure that as from 1 January 1998, the principles of the Treaty establishing the European Community, notably Article 90, and the principles of the concluding document of the April 1990 Bonn meeting of the CSCE, notably entrepreneurs' freedom of decision, are upheld.
Article 66.
1. Pursuant to the provisions of this Article and of Annex IX, the Parties confirm the importance that they attach to ensure adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.
2. Estonia shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by 31 December 1999, for a level of protection similar to that existing in the Community, including effective means of enforcing such rights.
3. By 31 December 1999, Estonia shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in paragraph 1 of Annex IX to which Member States of the Community are parties or which are de facto applied by Member States according to the relevant provisions contained in these conventions.
4. If problems in the area of intellectual, industrial and commercial property affecting trading conditions were to occur, urgent consultations will be undertaken, at the request of either Party, with a view to reaching mutually satisfactory solutions.
Article 67.
1. The Parties consider the opening up of the award of public contracts on the basis of non-discrimination and reciprocity, in particular in the GATT and WTO context, to be a desirable objective.
2. The Estonian companies as defined in Article 45 of this Agreement, 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 and branches of Community companies in the sense of Article 45 and subsidiaries of Community companies as described in Article 45 and in the forms of Article 56 shall be granted access to contract award procedures in Estonia under a treatment no less favourable than that accorded to Estonian companies as of the entry into force of this Agreement.
The provisions in this paragraph shall also apply to public contracts covered by Directive 93/38/EEC of 14 June 1993 once Estonia has introduced the appropriate legislation.
3. As regards establishment, operations, supply of services between the Community and Estonia, as well as employment and movement of labour linked to the fulfilment of public contracts, the provisions of Article 36 to 59 of this Agreement are applicable.
Chapter III. APPROXIMATION OF LAWS
Article 68.
The Parties recognise that an important condition for Estonia's economic integration into the Community is the approximation of Estonia's existing and future legislation to that of the Community. Estonia shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community.
Article 69.
The approximation of laws shall extend to the following areas in particular: customs law, company law, banking law, company accounts and taxation, intellectual property, financial services, rules on competition, protection of health and life of humans, animals and plants, protection of workers including health and safety at work, consumer protection, indirect taxation, technical rules and standards, nuclear law and regulation, transport, telecommunications, environment, public procurement, statistics and product liability.
Within these areas rapid progress in the approximation of laws should in particular be made in the fields of the internal market, competition, protection of workers, environmental protection, consumer protection, financial services and technical rules and standards.
Article 70.
The Community shall provide Estonia with technical assistance for the implementation of these measures, which may include, inter alia:
- the exchange of experts,
- the provision of early information especially on relevant legislation,
- organisation of seminars,
- training activities,
- aid for the translation of Community legislation in the relevant sectors.
Title VI. ECONOMIC COOPERATION
Article 71.
1. The Community and Estonia shall further develop economic cooperation aimed at contributing to Estonia's development and growth potential. Such cooperation shall strengthen existing economic links on the widest possible foundation, to the benefit of both Parties.
2. Policies and other measures shall be designed to bring about the economic and social development of Estonia and will be guided by the principle of sustainable development. These policies should ensure that environmental considerations are also fully incorporated from the outset and that they are linked to the requirements of harmonious social development.
3. To this end the cooperation should focus in particular on policies and measures related to industry, investment, agriculture and the agro-industrial sector, energy, transport, regional development and tourism.
4. Special attention shall be devoted to measures capable of fostering cooperation between the three Baltic countries, and with the other countries of central and eastern Europe as well as the other countries bordering the Baltic Sea with a view to an integrated development of the region.
Article 72. Industrial Cooperation
1. Cooperation shall seek to promote the following in particular:
- industrial cooperation between the economic operators of the two Parties, with the particular aim of strengthening the private sector in Estonia,
- Community participation in Estonia's efforts in both public and private sectors to modernise and restructure its industry, which will effect the further development of a market economy 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, particularly in high technology, clean technologies, consumer goods and market services, branches of light industry and the wood industry.
2. Industrial cooperation initiatives shall take into account priorities determined by Estonia. The initiatives should seek in particular to establish a suitable framework for undertakings, to improve management know-how and to promote transparency as regards markets and conditions for undertakings. The Community shall provide Estonia with technical assistance where appropriate.
Article 73. Investment Promotion and Protection
1. Cooperation shall aim at maintaining and, if necessary, improving a legal framework and a favourable climate for private investment and its protection, both domestic and foreign, which is essential to economic and industrial reconstruction and development in Estonia. The cooperation shall also aim to encourage and promote foreign investment and privatisation in Estonia.
2. The particular aims of cooperation shall be:
- for Estonia to further develop and maintain a legal framework which favours and protects investment,
- the conclusion, where appropriate, with Member States of bilateral agreements for the promotion and protection of investment,
- to proceed with deregulation and to improve economic infrastructure,
- to exchange information on investment opportunities in the context of trade fairs, exhibitions, trade weeks and other events.
Assistance from the Community could be granted in the initial stage to agencies which promote inward investment.
3. Estonia shall honour the rules on Trade-Related Aspects of Investment Measures (TRIMs).
Article 74. Small and Medium-sized Enterprises
1. The Parties shall aim to develop and strengthen small and medium-sized enterprises (SMEs) and cooperation between SMEs in the Community and Estonia.
2. They shall encourage the exchange of information and know-how by means of:
- improving, where appropriate, the legal, administrative, technical, tax and financial conditions necessary for the setting-up and expansion of SMEs and for cross-border cooperation,
- providing the specialised services required by SMEs (management training, accounting, marketing, quality control, etc.) and the strengthening of agencies providing such services,
- establishing appropriate links with Community operators via European business cooperation networks, in order to improve the flow of information to SMEs and to promote cross-border cooperation.
3. The cooperation shall include the supply of technical assistance, in particular for the establishment of appropriate institutional back-up for SMEs at both national and regional level, regarding financial, training, advisory, technological and marketing services.
Article 75. Agricultural and Industrial Standards and Conformity Assessment
1. The cooperation between the Parties shall aim in particular to reduce differences in standards, technical regulations and conformity assessment procedures, with Community technical assistance where necessary.
2. To this end, the cooperation shall seek:
- to promote the use of Community technical regulations and European standards and conformity assessment procedures, recognising that, to reach Estonia's objectives of environmental quality, the country is free to develop and implement special (higher) standards if necessary,
- where appropriate, to conclude agreements on mutual recognition in these fields,
- to encourage Estonia's active and regular participation in the work of specialised organisations (CEN, Cenelec, ETSI, EOTC, Euromet),
- technical assistance, where appropriate, in training programmes for Estonian experts in the field of standardisation, metrology, certification and quality systems in the Community,
- to promote the exchange of technical and methodological information in the field of quality control and production process.
3. The Community shall provide Estonia with technical assistance where appropriate.
Article 76. Cooperation In Science and Technology
1. The Parties shall promote cooperation in research and technological development activities. 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 meetings (seminars and workshops),
- joint 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 of results of research,
- Estonia's participation in Community research programmes in accordance with paragraph 3.
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 legal procedures of each Party.
Article 77. Education and Training
1. Cooperation shall aim at a harmonious development of human resources and at raising the level of general education and professional qualifications in Estonia, both in the public and private sectors, taking into consideration the priorities of Estonia. Institutional frameworks and plans of cooperation will be established under the auspices of the European Training Foundation, the Tempus programme and the Eurofaculty. Participation of Estonia in other Community programmes shall also be considered in this context.
2. The cooperation shall focus in particular on the following areas:
- reform of the education and training system in Estonia,
- initial training, in-service training and retraining, including the training of public and private sector executives and senior civil servants, particularly in priority areas to be determined,
- in-service training for teachers,
- cooperation between universities, cooperation between universities and firms, mobility for teachers, students, administrators and young people,
- promoting teaching in the field of European Studies within the appropriate institutions,
- mutual recognition of periods of studies and diplomas,
- promoting language training in Estonia, in particular for resident persons belonging to minorities,
- teaching of Community languages, training of translators and interpreters and promotion of the use of Community standards and terminology,
- development of distance education and new training technologies,
- provision of training materials and equipment,
- cooperation with the European professional education development centre (Cedefop).
Article 78 Agriculture and the agro-industrial sector
1. Cooperation in this field shall aim at modernising, restructuring and privatising agriculture, fresh water (inland) fisheries and the agro-industrial sector as well as forestry. Such cooperation will promote the protection and sustainable use of natural landscapes and non-polluted soils.
To this end cooperation shall endeavour notably 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 town planning,
- develop criteria for areas for extensive and intensive agriculture, forestry and fresh water (inland) fisheries in accordance with national and regional development plans and programmes,
- establish and promote effective cooperation on agricultural information systems,
- improve productivity and quality by using appropriate methods and products, provide training and monitoring in the use of anti-pollution methods connected with inputs,