The measures to be taken in accordance with Article 24 of this Agreement shall not affect any rights or obligations arising from bilateral agreements linking the Member States and Russia where those agreements provide for more favourable treatment of nationals of the Member States or of Russia.
Article 26.
The Cooperation Council shall examine which improvements can be made in working conditions for businessmen consistent with the international commitments of the Parties, including those set out in the document of the CSCE Bonn Conference.
Article 27.
The Cooperation Council shall make recommendations for the implementation of Articles 23 and 26 of this Agreement.
Chapter II. CONDITIONS AFFECTING THE ESTABLISHMENT AND OPERATION OF COMPANIES
Article 28.
1. The Community and its Member States of the one part and Russia of the other part, shall grant to each other treatment no less favourable than that accorded to any third country, with regard to conditions affecting the establishment of companies in their territories and this in conformity with the legislation and regulations applicable in each Party.
2. Without prejudice to the reservations listed in Annex 3, the Community and its Member States shall grant to Community subsidiaries of Russian companies a treatment no less favourable than that granted to other Community companies or to Community companies which are subsidiaries of any third country companies whichever is the better, in respect of their operation and this in conformity with their legislation and regulations.
3. Without prejudice to the reservations listed in Annex 4, Russia shall grant to Russian subsidiaries of Community companies a treatment no less favourable than that granted to other Russian companies or to Russian companies which are subsidiaries of any third country companies whichever is the better, in respect of their operation and this in conformity with its legislation and regulations.
4. The Community and its Member States of the one part and Russia of the other part shall grant to branches of Russian and Community companies respectively a treatment no less favourable than that accorded to branches of companies of any third country, in respect of their operation and this in conformity with their legislation and regulations.
5. The provisions of paragraphs 2 and 3 cannot be used so as to circumvent a Party's legislation and regulations applicable to access to specific sectors or activities by subsidiaries of companies of the other Party established in the territory of such first Party.
The treatment referred to in paragraphs 2 and 3 shall benefit companies established in the Community and Russia respectively at the date of entry into force of this Agreement and companies established after that date once they are established.
Article 29.
The provisions of Article 28 of this Agreement together with the following provisions shall apply in respect of banking and insurance services referred to in Annex 6.
1. In respect of banking services referred to in Annex 6, Part B, the nature of the treatment
Accorded by Russia pursuant to Article 28 (1), with regard to establishment by means of the setting up of subsidiaries only and pursuant to Article 28 (3), is set out in Annex 7, Part A.
In respect of insurance services referred to in Annex 6, Part A (1) and (2), the nature of the treatment accorded by Russia pursuant to Article 28 (1) is set out in Annex 7, Part B.
2. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Such measures shall not be used as a means of avoiding the Party's obligations under the Agreement.
Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
3. Without prejudice to the provisions of Part A (1) (d) and (e) of Annex 7, the Community and the Member States of the one part and Russia of the other part shall not adopt any new regulations or measures which would introduce or worsen discrimination as compared to the situation existing on the date of the signature of the Agreement as regards conditions affecting the establishment of the other Party's companies in their respective territories in comparison to their own companies.
The parties agree that the terms 'worsen discrimination' include the aggravation of discriminatory conditions or their extension or reintroduction after the current period of application.
4. For the purposes of this Agreement, as regards banking activities a company shall be regarded as a Russian subsidiary of a Community company when more than fifty percent (50 %) of its share capital is held by the Community company.
Article 30.
For the purpose of this Agreement:
(a) 'establishment' shall mean the right of Community or Russian companies as referred to in paragraph (h) of this Article to take up economic activities by means of the setting up of subsidiaries and branches in Russia or in the Community respectively.
In respect of financial services mentioned in Article 29, 'establishment' shall mean the right of Community or Russian companies as referred to in paragraph (h) of this Article to take up economic activities by means of the setting up of subsidiaries and branches in Russia or in the Community respectively after receiving a licence from the competent authorities in conformity with the legislation and regulations applicable in each Party;
(b) 'subsidiary' of a company shall mean a company which is controlled by the first company;
(c) 'economic activities' shall mean activities of an industrial, commercial or professional character, including financial services;
(d) 'branch' of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;
(e) 'Community subsidiary' or 'Russian subsidiary' respectively shall mean a 'Community company' or a 'Russian company' respectively, as hereafter defined, which is also a subsidiary of a 'Russian company' or a 'Community company' respectively;
(f) a national of a Member State or of Russia respectively shall mean a natural person who is a national of one of the Member States or of Russia respectively in accordance with their respective legislation;
(g) 'operation' shall mean the pursuit of economic activities;
In respect of financial services mentioned in Article 29, 'operation' shall mean the pursuit of all the economic activities authorized by the licence granted to the company by the competent authorities in conformity with the laws and regulations applicable in each Party;
(h) a 'Community company' or a 'Russian company' respectively shall mean a company set up in accordance with the laws of a Member State or of Russia respectively and having its registered office or central administration, or principal place of business in the territory of the Community or Russia respectively. However, should the company, set up in accordance with the laws of a Member State or Russia respectively, have only its registered office in the territory of the Community or Russia respectively, the company shall be considered a Community or Russian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Russia respectively.
With regard to international maritime transport, shall also be beneficiaires of the provisions of this chapter and Chapter III, shipping companies established outside the Community or Russia and controlled by nationals of a Member State or of Russia respectively, if their vessels are registered in that Member State or in Russia in accordance with their respective legislation. For the purposes of this provision, international maritime transport shall be considered to include intermodal transport operations involving a sea leg without prejudice to applicable nationality restrictions concerning the carriage of goods and passengers by other transport modes;
(i) For the purpose of Article 29 and Annex 7, with regard to banking services referred to in Annex 6, Part B, 'Russian subsidiary' or 'Community subsidiary' as defined in paragraph (e), shall refer to such a subsidiary which is a bank in accordance with the laws of Russia or a Member State respectively.
For the purpose of Article 29 and Annex 7, with regard to banking services referred to in Annex 6, Part B, 'Community company' or 'Russian company' as defined in paragraph (h), shall refer to such a company which is a bank in accordance with the laws of a Member State or Russia respectively.
Article 31.
Notwithstanding Article 100, the provisions of this Title shall not prejudice the application by each Party of any measure necessary to prevent the circumvention, through the provisions of this Agreement, of its measures concerning third country access to its market.
Article 32.
1. Notwithstanding the provisions of Chapter I of this Title, a Community company and a Russian company established in the territory of Russia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries, branches or joint ventures, in accordance with the legislation in force in the host country of establishment, in the territory of Russia and the Community respectively, employees who are nationals of Member States and Russia respectively, provided that such employees are key personnel as defined in paragraph
2 of this Article, and that they are employed exclusively by companies, subsidiaries, branches or joint ventures. The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the abovementioned companies herein referred to as 'organizations' are 'intra-corporate transferees' as defined in paragraph (c) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least the year immediately preceding such movement:
(a) persons working in a senior position with an organization, who primarily direct the
Management of the establishment (branch, subsidiary or joint venture), receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including:
- Directing the establishment or a department or subdivision of the establishment,
- Supervising and controlling the work of other supervisory, professional or managerial employees,
- Having the authority personally to engage and dismiss or recommend engaging, dismissing or other personnel actions;
(b) persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;
(c) an 'intra-corporate transferee' is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer must be to an establishment of that organization, effectively pursuing like economic activities in the territory of the other Party.
Article 33.
The Parties recognize the importance of granting each other national treatment with regard to the establishment and, where not so foreseen herein, operation of each other's companies in their territories and agree to consider the possibility of movement towards this end on a mutually satisfactory basis, and in the light of any recommendations by the Cooperation Council.
Article 34.
1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement.
2. By the end of the third year after signature of the Agreement at the latest, and thereafter at annual intervals the Parties shall examine within the Cooperation Council:
- Measures introduced by either Party since the signature of the Agreement which affect the establishment or operation of companies of one Party in the territory of the other Party, and which are the subject of commitments assumed in Article 28, and
- Whether it is possible for the Parties to assume:
- The obligation not to take any measures or actions which may render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing at the time of such examination, where not already foreseen herein, or
- Other obligations affecting their freedom of action
In areas agreed between the Parties in respect of the commitments assumed in Article 28.
If after such examination one Party is of the view that measures introduced by the other Party since the signature of the Agreement result in a situation which is significantly more restrictive in respect of establishment or operation of companies of the first Party in the territory of the other Party as compared with the situation existing at the date of signature of the Agreement, such Party may request the other Party to enter into consultations. In such case the provisions of Part A of Annex 8 shall apply.
3. In furtherance of the aims of this Article, measures shall be taken as indicated in Part B of
Annex 8.
4. The provisions of this Article are without prejudice to those of Article 51. The situations covered by such Article 51 shall be solely governed by its provisions to the exclusion of any other.
Article 35.
1. Article 28 shall not apply to air transport, inland waterways transport and maritime transport.
2. However, in respect of activities, as indicated below, undertaken by shipping agencies for the provision of services to international maritime transport, including intermodal transport operations involving a sea-leg, each Party shall permit the companies of the other Party to have a commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better, and this in conformity with the legislation and regulations applicable in each Party.
3. Such activities include:
(a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing;
(b) purchase and resale of any transport and related services, including transport services by any inland mode, necessary for the supply of an intermodal service;
(c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported;
(d) provision of business information by any means, including computerized information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications);
(e) setting up of any business arrangement with other shipping agencies;
(f) acting on behalf of the companies, inter alia in organizing the call of the vessel or taking over cargoes when required.
Chapter III. CROSS-BORDER SUPPLY OF SERVICES
Article 36.
For the sectors listed in Annex 5 to this Agreement, the Parties shall grant each other treatment no less favourable than that accorded to any third country with regard to the conditions affecting the cross-border supply of services, by Community or Russian companies into the territory of Russia or the Community respectively, pursuant to the legislation and regulations applicable in each Party.
Article 37.
Subject to the provisions of Article 48 of this Agreement, the Parties shall permit for the sectors list in Annex 5 to this Agreement the temporary movement of natural persons, who are representatives of a Community or a Russian company and are seeking temporary entry for the purpose of negotiating for the sales of cross-border services or entering into agreements to sell cross-border services for that company, where those representatives will not be engaged in making direct sales to the general public or in supplying services themselves.
Article 38.
1. For the sectors listed in Annex 5, each Party may regulate the conditions of cross-border supply of services into its territory. In so far as these regulations are of general application they shall be administered in a reasonable, objective and impartial manner.
2. Paragraph 1 is without prejudice to the provisions of Articles 36 and 50.
3. By the end of the third year after signature of the Agreement and the latest, the Parties shall examine within the Cooperation Council:
- Measures introduced by either Party since the signature of the Agreement which affect the cross-border supply of services covered by Article 36, and
- Whether it is possible for the Parties to assume:
- The obligation not to take any measures or actions which may render the conditions for the cross-border supply of services covered by Article 36 more restrictive than the situation existing at the time of such examination, or
- Other obligations affecting their freedom of action
In areas agreed between the Parties in respect of the commitments assumed in Article 36.
If after such examination one Party is of the view that measures introduced by the other Party since the signature of the Agreement result in a situation which is significantly more restrictive in respect of cross-border supply of services covered by Article 36 as compared with the situation existing at the date of signature of the Agreement, such first Party may request the other Party to enter into consultations. In such case the provisions of Part A of Annex 8 shall apply.
4. In furtherance of the aims of this Article, measures shall be taken as indicated in Part B of Annex 8.
5. The provisions of this Article are without prejudice to those of Article 51. The situations covered by such Article 51 shall be solely governed by its provisions to the exclusion of any other.
Article 39.
1. With regard to maritime transport, the Parties undertake to apply effectively the principle of unrestricted access to the international market and traffic on a commercial basis.
(a) The above provision does not prejudice the rights and obligations arising under the United Nations Convention on a code of conduct for liner conferences, as applicable to the Parties to this Agreement. Non-conference lines shall be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis.
(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 apply, in their mutual trade, as from entry into force of this Agreement, any cargo sharing provisions of bilateral agreements between any Member State and the former USSR;
(b) not introduce cargo sharing arrangements in future bilateral agreements with third countries concerning dry and liquid bulk and liner trade. However, this does not exclude the possibility of such arrangements concerning liner cargo 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;
(c) abolish, upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could constitute a disguised restriction or have discriminatory effects on the free supply of services in international maritime transport.
Each Party shall grant, inter alia, a treatment no less favourable than that accorded to a Party's own vessels, for vessels used for the transport of goods, passengers or both, and flying the flag of the other Party, with respect to access to ports open to foreign vessels, the use of infrastructure and auxiliary maritime services of those ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading.
3. The Parties agree that, following the entry into force of this Agreement and not later than 31 December 1996, they will conduct negotiations on the stage-by-stage opening of the inland waterways of each Party to the nationals and shipping companies of the other Party, in respect of the freedom to provide international sea-river services.
Article 40.
For the purpose of establishing favourable conditions for rail transport between the Parties, it is agreed that both Parties will, in the framework of this Agreement and through appropriate bilateral and multilateral mechanisms, promote:
- The facilitation of customs and other border clearance procedures for freight and for rolling stock,
- Cooperation in the creation of suitable rolling stock meeting the requirements of international traffic,
- The approximation of regulations and procedures which govern international transport,
- The safeguarding and development of international passenger traffic between the Member States and Russia.
Article 41.
Cooperation shall ensure fair, balanced and competitive conditions for the space launching and transportation market based on sound economic factors and, in particular, steps will be taken to promote the negotiation and implementation of multilateral rules regarding international trade in space launching and transportation services.
During the transnational period to the year 2000, conditions for the supply of space launch services shall be agreed upon.
Article 42.
The Parties shall endeavour to provide each other every assistance possible as regards measures promoting cross-border trade in mobile satellite communications on their respective territories, in conformity with their respective legislation, practices and conditions. In 1996, the Parties will meet to consider the possibilities of granting to each other most-favourednation treatment for mobile satellite services.
Article 43.
With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the Parties may, after the entry into force of this Agreement, conclude specific Agreements regarding the conditions of mutual market access and of provision of services in the transport sector, to the extent that these conditions are not already addressed by this Agreement. Such Agreements may apply to more than one or to a single mode of transport.
Chapter IV. General Provisions Article 44
For the purposes of Chapters II, III and of Title V, no account shall be taken of treatment accorded by the Community, its Member States or Russia pursuant to commitments entered into in economic integration agreements.
Article 45.
Companies which are controlled and exclusively owned by community companies and russian companies jointly shall also be beneficiaries of the provisions of chapters ii and iii of this Title and those of Title V.
Article 46.
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 47.
The Cooperation Council shall make recommendations for the further liberalization of trade in services, taking into account the development of the services sectors in the Parties and the other international commitments entered into by the Parties, in particular in the light of the final results of the negotiations of the General Agreement on Trade in Services, hereinafter referred to as 'GATS'.
Article 48.
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. The above provision does not prejudice the application of Article 46.
Article 49.
1. The most-favoured-nation treatment granted in accordance with the provisions of this Title or of Title V 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 or in Title V 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 or in Title V shall be construed to prevent Member States or Russia 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 50.
Without prejudice to Articles 32 and 37, no provision of Chapters II, III and IV hereof shall be interpreted as giving the right to:
- Nationals of the Member States or of Russia respectively to enter, or stay in, the territory of Russia or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employed thereof or supplier or recipient of services,
- Community subsidiaries or branches of Russian companies to employ or have employed in the territory of the Community nationals of Russia,
- Russian subsidiaries or branches of Community companies to employ or have employed in the territory of Russia nationals of the Member States,
- Russian companies or Community subsidiaries or branches of Russian companies to supply workers who are Russian nationals to act for and under the control of other persons by
Temporary employment contracts,
- Community companies or Russian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States to act for and under the control of other persons by temporary employment contracts.
Article 51.
1. Treatment granted by either Party to the other hereunder shall, has from the day one month prior to the date of entry into force of the relevant obligations of the GATS, in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of the GATS, and this, in respect of each service sector, sub-sector and mode of supply.
2. Without prejudice to the automatic nature of the provisions of paragraph 1, the Party which has assumed obligations under the GATS shall inform the other of the appropriate provisions and the adaptations resulting therefrom for this Agreement.
3. Within one month of receipt from the Party, which has assumed obligations under the GATS, of the information referred to in paragraph 2, the other Party may notify the first Party of its intention to make adjustments to its obligations under this Title, and make those adjustments as follows:
- Where a service sector, sub-sector or mode of supply of a service has been excluded from the Agreement, its scope reduced or made subject to the fulfilment of conditions pursuant to paragraph 1, the identical sector, sub-sector or mode of supply may be excluded or its scope reduced in the same way or made subject to the fulfilment of identical or similar conditions.
4. These adjustments made by the second Party should lead to the re-establishment of a balance of obligations between the Parties.
5. In the case that a Party considers that the adjustments made under paragraph 3 have not led to the re-establishment of the balance of obligations between the Parties, such Party may request the other Party, to enter into consultations within 30 days in order to find a satisfactory solution by means of any other appropriate adjustment of its obligations under this Title.
6. If within 30 days of the opening of such consultations no satisfactory solution has been found, the procedures of Article 101 will be applicable at the request of either Party.
Article 52.
1. The Parties undertake to authorize, in freely convertible currency, any current payments between residents of the Community and of Russia connected with the movement of goods, services or persons made in accordance with the provisions of the present Agreement.
2. The free movement of capital between residents of the Community and of Russia in the form of direct investment 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 transfer abroad of this investment, including any compensation payments arising from measures such as expropriation, nationalization or measures of equivalent effect, and of any profit stemming therefrom shall be ensured.
3. The provisions of Part 2 shall not prevent Russia from applying restrictions on outward direct investment by Russian residents. Five years after the entry into force of this Agreement the Parties agree to consult over the maintenance of these restrictions, taking into account all the relevant monetary, fiscal and financial considerations.