Title
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND UKRAINE
Preamble
Iceland, the Principality of Liechtenstein, the Kingdom of Norway, the Swiss Confederation (hereinafter referred to as the "EFTA States"), on the one part, and Ukraine, on the other, hereinafter each individual State referred to as "a Party" or collectively referred to as "the Parties":
RECOGNISING the common wish to strengthen the links between the EFTA States on the one part and Ukraine on the other by establishing close and lasting relations;
RECALLING their intention to participate actively in the process of economic integration and expressing their preparedness to cooperate in seeking ways and means to strengthen this process;
REAFFIRMING their commitment to democracy, human rights and fundamental political and economic freedoms in accordance with their obligations under international law, including principles and objectives set out in the United Nations Charter and the Universal Declaration of Human Rights;
REAFFIRMING their commitment to economic and social development, the protection of health and safety, and the respect for the fundamental rights of workers, including the principles set out in the relevant International Labour Organisation (ILO) Conventions;
AIMING to create new employment opportunities, and improve health and living standards in their respective territories;
DESIRING to create favourable conditions for the development and diversification of trade between them and for the promotion of commercial and economic cooperation in areas of common interest on the basis of equality, mutual benefit, non-discrimination and international law;
RECOGNISING the importance of trade facilitation in promoting efficient and transparent procedures to reduce costs and to ensure predictability for the trading communities of the Parties;
DETERMINED to promote and further strengthen the multilateral trading system, building on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organisation (hereinafter referred to as "the WTO") and the other agreements negotiated thereunder, thereby contributing to the harmonious development and expansion of world trade;
DETERMINED to implement this Agreement with the objectives to preserve and protect the environment and to ensure the use of natural resources in accordance with the objective of sustainable development;
AFFIRMING their commitment to the rule of law, to prevent and combat corruption in international trade and investment and to promote the principles of transparency and good governance;
ACKNOWLEDGING the significance of responsible corporate conduct and its contribution to sustainable economic development and affirming their support to efforts for the promotion of relevant international standards;
CONVINCED that this Agreement will enhance the competitiveness of their firms in global markets and create conditions encouraging economic, trade and investment relations between them;
HAVE DECIDED, in pursuit of the above, to conclude the following Agreement (hereinafter referred to as "this Agreement"):
Body
Chapter 1. General Provisions
Article 1.1. Objectives
1. The Parties hereby establish a free trade area by means of this Agreement and the complementary agreements on agriculture, concurrently concluded between Ukraine and each individual EFTA State.
2. The objectives of this Agreement, which is based on trade relations between market economies, are:
(a) to achieve the liberalisation of trade in goods, in conformity with Article XXIV of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the "GATT 1994");
(b) to achieve the liberalisation of trade in services, in conformity with Article V of the General Agreement on Trade in Services (hereinafter referred to as the "GATS");
(c) to substantially increase investment opportunities in the free trade area;
(d) to achieve further liberalisation on a mutual basis of the government procurement markets of the Parties;
(e) to promote competition in their economies, particularly as it relates to economic relations between the Parties;
(f) to ensure adequate and effective protection of intellectual property rights; and
(g) to contribute, by the removal of barriers to trade and investment, to the harmonious development and expansion of world trade.
Article 1.2. Trade Relations Governed by this Agreement
1. This Agreement shall apply to trade relations between, on the one side, the individual EFTA States and, on the other side, Ukraine, but not to the trade relations between individual EFTA States, unless otherwise provided for in this Agreement.
2. As a result of the customs union established by the Treaty of 29 March 1923 between Switzerland and the Principality of Liechtenstein, Switzerland shall represent the Principality of Liechtenstein in matters covered thereby.
Article 1.3. Relation to other International Agreements
1. The Parties confirm their rights and obligations under the Marrakesh Agreement establishing the WTO, the other agreements negotiated under the WTO to which they are a party, and any other international agreement to which they are a party.
2. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas, arrangements for frontier trade and other preferential agreements insofar as they do not have the effect of altering the trade arrangements provided for in this Agreement.
3. When a Party enters into a customs union or free trade agreement with a third party it shall, upon request by any other Party, be prepared to enter into consultations with the requesting Party.
Article 1.4. Territorial Application
1. Without prejudice to the Protocol on Rules of Origin, this Agreement shall apply:
(a) to the land territory, internal waters, and the territorial sea of a Party, and the air-space above the territory of a Party, in accordance with international law; as well as
(b) beyond the territorial sea, with respect to measures taken by a Party in the exercise of its sovereign right or jurisdiction in accordance with international law.
2. This Agreement shall not apply to the Norwegian territory of Svalbard, with the exception of trade in goods.
Article 1.5. Central, Regional and Local Government
Each Party shall ensure within its territory the observance of all obligations and commitments under this Agreement by its respective central, regional and local governments and authorities, and by non-governmental bodies in the exercise of governmental powers delegated to them by central, regional and local governments or authorities.
Article 1.6. Transparency
1. The Parties shall publish or otherwise make publicly available their laws, regulations, judicial decisions, administrative rulings of general application and their respective international agreements that may affect the operation of this Agreement.
2. The Parties shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1. They are not required to disclose confidential information.
Chapter 2. Trade In Goods
Article 2.1. Scope
1. This Chapter applies to the following products traded between the Parties:
(a) all products classified under Chapters 25 to 97 of the Harmonized Commodity Description and Coding System (HS), excluding the products listed in Annex I;
(b) processed agricultural products specified in Annex II, with due regard to the arrangements provided for in that Annex; and
(c) fish and other marine products as provided for in Annex III.
2. Ukraine and each EFTA State have concluded agreements on trade in agricultural products on a bilateral basis. These agreements form part of the instruments establishing a free trade area between the EFTA States and Ukraine.
Article 2.2. Rules of Origin and Methods of Administrative Cooperation
The Protocol on Rules of Origin lays down the rules of origin and methods of administrative cooperation.
Article 2.3. Customs Duties on Imports
1. Upon entry into force of this Agreement, the Parties shall abolish all customs duties on imports of products originating in an EFTA State or in Ukraine covered by paragraph 1 of Article 2.1, except as otherwise provided for in Annex IV. No new customs duties on imports shall be introduced.
2. A customs duty includes any duty or charge of any kind imposed in connection with the importation or exportation of a product, including any form of surtax or surcharge in connection with such importation or exportation, but does not include any charge imposed in conformity with Articles III and VIII of the GATT 1994.
Article 2.4. Customs Duties on Exports
1. Upon entry into force of this Agreement, the Parties shall eliminate customs duties on exports of products covered by paragraph 1 of Article 2.1 to the other Parties; except as provided for in paragraph 2 of this Article. No new customs duties on exports shall be introduced on products exported from the customs territory of one Party into the customs territory of another Party.
2. Customs duties on exports to the EFTA States of products originating in Ukraine shall be gradually reduced in accordance with the commitments of Ukraine within the WTO.
3. If, after the entry into force of this Agreement, Ukraine lowers or eliminates its duties on exports to the European Union, it shall accord to the EFTA States no less favourable treatment.
4. A customs duty on exports includes any duty or charge of any kind imposed in connection with the exportation of a product, including any form of surtax or surcharge in connection with such exportation, but does not include any charge imposed in conformity with Articles VIII of the GATT 1994.
Article 2.5. Basic Duties
1. The basic duty, to which the successive reductions set out in this Agreement are to be applied for imports between the Parties, shall be the most-favoured-nation (hereinafter referred to as the "MFN") rate of duty applied on 1 January 2009.
2. If before, by or after entry into force of this Agreement, any tariff reduction is applied on an erga omnes basis, such reduced duties shall replace the basic duties referred to in paragraph 1 as from the date when such reductions are applied, or from the entry into force of this Agreement, if this is later.
3. Reduced duties calculated in accordance with paragraph 1 of this Article shall be applied rounded to the first decimal place or, in the case of specific duties, to the second decimal place.
Article 2.6. Import and Export Restrictions
The rights and obligations of the Parties in respect of export and import restrictions shall be governed by Article XI of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Article 2.7. Internal Taxation and Regulations
1. The Parties commit themselves to apply any internal taxes and other charges and regulations in accordance with Article III of the GATT 1994 and other relevant WTO Agreements.
2. Exporters may not benefit from repayment of internal taxes in excess of the amount of indirect taxation imposed on products exported to the territory of one of the Parties.
Article 2.8. Sanitary and Phytosanitary Measures
1. The rights and obligations of the Parties in respect of sanitary and phytosanitary measures shall be governed by the WTO Agreement on the Application of Sanitary and Phytosanitary Measures.
2. The Parties shall exchange names and addresses of contact points with sanitary and phytosanitary expertise in order to facilitate communication and the exchange of information.
Article 2.9. Technical Regulations
1. The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment shall be governed by the WTO Agreement on Technical Barriers to Trade (hereinafter referred to as "the TBT Agreement").
2. Without prejudice to paragraph 1, the Parties agree to hold consultations where a Party considers that another Party has taken measures not in conformity with the TBT Agreement which are likely to create, or have created, an obstacle to trade, in order to find an appropriate solution in conformity with the TBT Agreement.
Article 2.10. Trade Facilitation
To facilitate trade between the EFTA States and Ukraine, the Parties shall:
(a) simplify, to the greatest extent possible, procedures for trade in goods and related services;
(b) promote the cooperation of the Parties in multilateral fora in order to enhance their participation in the development and implementation of international conventions and recommendations on trade facilitation; and
(c) cooperate on trade facilitation within the framework of the Joint Committee, in accordance with the provisions set out in Annex V.
Article 2.11. Sub-committee on Rules of Origin, Customs Procedures and Trade Facilitation
1. With reference to Articles 2.2 and 2.10, a Sub-Committee of the Joint Committee on Rules of Origin, Customs Procedures and Trade Facilitation (hereinafter referred to as "the Sub-Committee") is hereby established.
2. The mandate of the Sub-Committee is set out in Annex VI.
Article 2.12. State Trading Enterprises
The rights and obligations of the Parties in respect of state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are hereby incorporated into and made part of this Agreement.
Article 2.13. Subsidies and Countervailing Measures
1. The rights and obligations of the Parties relating to subsidies and countervailing measures shall be governed by Articles VI and XVI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures, except as provided for in paragraph 2.
2. Before an EFTA State or Ukraine, as the case may be, initiates an investigation to determine the existence, degree and effect of any alleged subsidy in Ukraine or in an EFTA State, as provided for in Article 11 of the WTO Agreement on Subsidies and Countervailing Measures, the Party considering initiating an investigation shall notify in writing the Party whose goods are subject to investigation and allow for a 60 day period with a view to finding a mutually acceptable solution. The consultations shall take place in the Joint Committee if any Party so requests within 30 days from the receipt of the notification.
Article 2.14. Anti-dumping
1. A Party shall not apply anti-dumping measures, as provided for under Article VI of the GATT 1994 and the WTO Agreement on Implementation of Article VI of the GATT 1994 in relation to products originating in another Party.
2. Five years after the date of entry into force of this Agreement, the Parties may in the Joint Committee review the operation of paragraph 1. Thereafter the Parties may conduct biennial reviews of this matter in the Joint Committee.
Article 2.15. Global Safeguard Measures
This Agreement does not confer any additional rights or impose any additional obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, except that a Party taking a safeguard measure under Article XIX of GATT 1994 and the WTO Agreement on Safeguards shall, to the extent consistent with the obligations under the WTO Agreements, exclude imports of an originating good from another Party if such imports are not a substantial cause of serious injury or threat thereof.
Article 2.16. Bilateral Safeguard Measures
1. Where, as a result of the reduction or elimination of a customs duty under this Agreement, any product originating in a Party is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take bilateral safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to the provisions of paragraphs 2 to 10.
2. Bilateral safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures laid down in Articles 3 and 4 of the WTO Agreement on Safeguards.
3. The Party intending to take a bilateral safeguard measure under this Article shall immediately, and in any case before taking a measure, make notification to the other Parties. The notification shall contain all pertinent information, which shall include evidence of serious injury or threat thereof caused by increased imports, a precise description of the product involved and the proposed measure, as well as the proposed date of introduction, expected duration and timetable for the progressive removal of the measure. A Party that may be affected by the bilateral safeguard measure shall be offered compensation in the form of substantially equivalent trade liberalisation in relation to the imports from any such Party.
4. If the conditions set out in paragraph 1 are met, the importing Party may take measures consisting in:
(a) suspending the further reduction of any rate of customs duty provided for under this Agreement for the product; or
(b) increasing the rate of customs duty for the product to a level not to exceed the lesser of:
(i) the MFN rate of duty applied at the time the action is taken; or
(ii) the MFN rate of duty applied on the day immediately preceding the date of the entry into force of this Agreement.
5. Bilateral safeguard measures shall be taken for a period not exceeding one year. In very exceptional circumstances, after review by the Joint Committee, measures may be taken up to a total maximum period of three years. No bilateral safeguard measures shall be applied to the import of a product which has previously been subject to such a measure.
6. The Joint Committee shall, within 30 days from the date of notification, examine the information provided under paragraph 3 in order to facilitate a mutually acceptable resolution of the matter. In the absence of such resolution, the importing Party may adopt a measure pursuant to paragraph 4 to remedy the problem, and, in the absence of mutually agreed compensation, the Party against whose product the measure is taken may take compensatory action. The bilateral safeguard measure and the compensatory action shall be immediately notified to the other Parties. In the selection of the bilateral safeguard measure and the compensatory action, priority must be given to the measure which least disturbs the functioning of this Agreement. The compensatory action shall normally consist of suspension of concessions having substantially equivalent trade effects or concessions substantially equivalent to the value of the additional duties expected to result from the bilateral safeguard measure. The Party taking compensatory action shall apply the action only for the minimum period necessary to achieve the substantially equivalent trade effects and in any event, only while the bilateral safeguard measure under paragraph 4 is being applied.
7. Upon the termination of the bilateral safeguard measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
8. In critical circumstances, where delay in the introduction of a bilateral safeguard measure in accordance with this Article would cause damage which would be difficult to repair, a Party may take a provisional bilateral safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The Party intending to take such a measure shall immediately notify the other Parties thereof. Within 30 days of the date of the notification, the procedures set out in paragraphs 2 to 6, including for compensatory action, shall be initiated. Any compensation shall be based on the total period of application of the provisional bilateral safeguard measure and of the bilateral safeguard measure.
9. Any provisional bilateral safeguard measure shall be terminated within 200 days at the latest. The period of application of any such provisional bilateral safeguard measure shall be counted as part of the duration of the bilateral safeguard measure set out in paragraph 5 and any extension thereof. Any tariff increases shall be promptly refunded if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met.
10. Five years after the date of entry into force of this Agreement, the Parties shall review in the Joint Committee whether there is need to maintain the possibility to take bilateral safeguard measures between them. If the Parties decide, after the first review, to maintain such possibility, they shall thereafter conduct biennial reviews of this matter in the Joint Committee.
Article 2.17. General Exceptions
The rights and obligations of the Parties in respect of general exceptions shall be governed by Article XX of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Article 2.18. Security Exceptions
The rights and obligations of the Parties in respect of security exceptions shall be governed by Article XXI of the GATT 1994, which is hereby incorporated into and made part of this Agreement.
Article 2.19. Balance-of-payments
1. The Parties shall endeavour to avoid the imposition of restrictive measures for balance of payments purposes.
2. A Party in serious balance of payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the GATT 1994 and the WTO Understanding on the Balance of Payments Provisions of the GATT 1994, adopt trade restrictive measures, which shall be of limited duration and nondiscriminatory, and may not go beyond what is necessary to remedy the balance of payments situation.
3. The Party introducing a measure under this Article shall promptly notify the other Parties thereof.
Chapter 3. Trade In Services
Article 3.1. Scope and Coverage
1. This Chapter applies to measures by Parties affecting trade in services. It applies to all services sectors.
2. In respect of air transport services, this Chapter shall not apply to measures affecting air traffic rights or measures affecting services directly related to the exercise of air traffic rights, except as provided for in paragraph 3 of the GATS Annex on Air Transport Services. The definitions of paragraph 6 of the GATS Annex on Air Transport Services are hereby incorporated and made part of this Chapter.
3. Articles 3.4, 3.5 and 3.6 shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.
Article 3.2. Incorporation of Provisions from the GATS
Wherever a provision of this Chapter provides that a provision of the GATS is incorporated into and made part of this Chapter, the meaning of the terms used in the GATS provision shall be understood as follows:
(a) "Member" means Party;
(b) "Schedule" means a Schedule referred to in Article 3.17 and contained in Annex VII; and
(c) "specific commitment" means a specific commitment in a Schedule referred to in Article 3.17.
Article 3.3. Definitions
For the purpose of this Chapter:
(a) the following definitions of Article I of the GATS are incorporated into and made part of this Agreement:
(i) "trade in services";
(ii) "services"; and
(iii) "a service supplied in the exercise of governmental authority";
(b) "measures by Parties" means measures taken by the Parties as defined in Article I paragraph 3 (a) (i) and (ii) of the GATS;
(c) "service supplier" means any person that supplies, or seeks to supply, a service; (1)
(d) "natural person of another Party" means a natural person who, under the legislation of that other Party, is:
(i) a national of that other Party who resides in the territory of any WTO Member; or
(ii) a permanent resident of that other Party who resides in the territory of any Party, if that other Party accords substantially the same treatment to its permanent residents as to its nationals in respect of measures affecting trade in services. For the purpose of the supply of a service through presence of natural persons (Mode 4), this definition covers a permanent resident of that other Party who resides in the territory of any Party or in the territory of any WTO Member;
(e) "juridical person of another Party" means a juridical person which is either:
(i) constituted or otherwise organised under the law of that other Party, and is engaged in substantive business operations in the territory of:
(aa) any Party; or
(bb) any Member of the WTO and is owned or controlled by natural persons of that other Party or by juridical persons that meet all the conditions of subparagraph (i) (aa); or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(aa) natural persons of that other Party; or
(bb) juridical persons of that other Party identified under subparagraph (e) (i);
(f) the following definitions of Article XXVIII of the GATS are hereby incorporated into and made part of this Chapter:
(i) "measure";
(ii) "supply of a service";