(c) Council Regulation (EEC) No. 616/78 on proof of origin for certain textile products falling within Chapter 51 or Chapters 53 to 62 of the Common Customs Tariff and imported into the Community, and on conditions for the acceptance of such proof.
3. The Customs Cooperation Committee shall lay down the appropriate measures to implement paragraphs 1 and 2.
Article 29.
Mutual assistance on customs matters between the administrative authorities of the Parties shall be governed by the provisions of Annex 7, which on the Community side, covers those matters falling under the Community competence.
Article 30.
The Customs Cooperation Committee shall elaborate the appropriate provisions on mutual assistance on the recovery of debts, before the entry into force of this Decision.
Chapter IV. APPROXIMATION OF LAWS
Section I. Protection of Intellectual, Industrial and Commercial Property
Article 31.
1. The Parties confirm the importance they attach to ensuring adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.
2. The Parties recognize that the Customs Union can function properly only if equivalent levels of effective protection of intellectual property rights are provided in both constituent parts of the customs Union. Accordingly, they undertake to meet the obligations set out in Annex8.
Section II. Competition
A. Competition rules of the Customs Union
Article 32.
1. The following shall be prohibited as incompatible with the proper functioning of the Customs Union, insofar as they may affect trade between the Community and Turkey: all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
2. Any agreements or decisions prohibited pursuant to this Article shall automatically be void.
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- any agreement or category of agreements between undertakings;
- any decision or category of decisions by associations of undertakings;
- any concerted practice or category of concerted practices which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
(a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
(b) afford such undertakings the possibility of eliminating competition in respect of substantial part of the products in question.
Article 33.
1. Any abuse by one or more undertakings of a dominant position in the territories of the Community and/or of Turkey as a whole or in a substantial part thereof shall be prohibited as incompatible with the proper functioning of the Customs Union, insofar as it may affect trade between the Community and Turkey.
2. Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Article 34.
1. Any aid granted by Member States of the Community or by Turkey through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between the Community and Turkey, be incompatible with the proper functioning of the Customs Union.
2. The following shall be compatible with the functioning of the Customs Union:
(a) aid having a social character, granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products concerned;
(b) aid to make good the damage caused by natural disasters or exceptional occurrences;
(c) aid granted to the economy of certain areas of the Federal Republic of Germany affected by the division of Germany, insofar as such aid is required in order to compensate for the economic disadvantages caused by that division.
(d) for a period of five years from the entry into force of this Decision, aid to promote economic development of Turkey's less developed regions, provided that such aid does not adversely affect trading conditions between the Community and Turkey to an extent contrary to the common interest.
3. The following may be considered to be compatible with the functioning of the Customs Union:
(a) in conformity with Article43(2) of the Additional Protocol, aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious underemployment;
(b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State of the Community or of Turkey;
(c) for a period of five years after the entry into force of this Decision, in conformity with Article 43(2) of the Additional Protocol, aids aiming at accomplishing structural adjustment necessitated by the establishment of the Customs Union. The Association Council shall review the application of that clause after the aforesaid period.
(d) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions between the Community and Turkey to an extent contrary to the common interest;
(e) aid to promote culture and heritage conservation where such aid does not adversely affect trading conditions between the Community and Turkey to an extent contrary to the common interest;
(f) such other categories of aid as may be specified by the Association Council.
Article 35.
Any practices contrary to Articles 32, 33 and 34 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 and its secondary legislation.
Article 36.
The Parties shall exchange information, taking into account the limitations imposed by the requirements of professional and business secrecy.
Article 37.
1. The Association Council shall, within two years following the entry into force of the Customs Union, adopt by decision the necessary rules for the implementation of Articles 32, 33 and 34 and related parts of Article 35. These rules shall be based upon those already existing in the Community and shall, inter alia, specify the role of each competition authority.
2. Until these rules are adopted,
(a) the authorities of the Community or Turkey shall rule on the admissibility of agreements, decisions and concerted practices and on abuse of a dominant position in accordance with Articles 32 and 33;
(b) the provisions of the GATT Subsidies Code shall be applied as the rules for the implementation of Article 34.
Article 38.
1. If the Community or Turkey considers that a particular practice is incompatible with the terms of Articles 32, 33 or 34, and
- is not adequately dealt with under the implementing rules referred to in Article37, or
- in the absence of such rules, and if such practices causes or threatens to cause serious prejudice to the interest of the other Party or material injury to its domestic industry, it may take appropriate measures after consultation with the Joint Customs Union Committee or after 45 working days following referral for such consultation. Priority shall be given to such measures that will least disturb the functioning of the Customs Union.
2. In the case of practices incompatible with Article 34, such appropriate measures may, where the General Agreement on Tariffs and Trade applies thereto, only be adopted in conformity 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.
B. Approximation of legislation
Article 39.
1. With a view to achieving the economic integration sought by the Customs Union, Turkey shall ensure that its legislation in the field of competition rules is made compatible with that of the European Community, and is applied effectively.
2. To comply with the obligations of paragraph1, Turkey shall
(a) before the entry into force of the Customs Union, adopt a law which shall prohibit behaviours of undertakings under the conditions laid down in Articles 85 and 86 of the EC Treaty. It shall also ensure that, within one year after the entry into force of the Customs Union, the principles contained in block exemption regulations in force in the Community, as well as in the case law developed by EC authorities, shall be applied in Turkey. The Community shall inform Turkey as soon as possible of any procedure related to the adoption, abolition, or modification of block exemption regulations by the EC after the entry into force of the Customs Union. After such information has been given, Turkey shall have one year to adapt its legislation, if necessary;
(b) before the entry into force of the Customs Union, establish a competition authority which shall apply these rules and principles effectively;
(c) before entry into force of this Decision, adapt all its aids granted to the textile and clothing sector to the rules laid down in the relevant Community frameworks and guidelines under Articles 92 and 93 of the EC Treaty. Turkey shall inform the Community of all its aid schemes to this sector as adapted in accordance with these frameworks and guidelines. The Community shall inform Turkey as soon as possible of any procedure related to the adoption, abolition or modification of such frameworks and guidelines by the Community after the entry into force of the Customs Union. After such information has been given, turkey shall have one year to adapt its legislation;
(d) within two years after the entry into force of this Decision, adapt all aid schemes other than those granted to the textile and clothing sector to the rules laid down in Community frameworks and guidelines under Articles 92 and 93 of the EC Treaty. The Community shall inform Turkey as soon as possible of any procedure related to the adoption, abolition or modification of such frameworks and guidelines by the Community. After such information has been given, Turkey shall have one year to adapt its legislation;
(e) within two years after the entry into force of the Customs Union, inform the Community of all aid schemes in force in Turkey as adapted in accordance with point (d). If a new scheme is to be adopted, Turkey shall inform the Community as soon as possible of the content of such scheme;
(f) notify the Community in advance of any individual aid to be granted to an enterprise or a group of enterprises that would be notifiable under Community frameworks or guidelines had it been granted by a Member State, or of individual aid awards outside of Community frameworks or guidelines above and amount of ECU12 million and which would have been notified under EC law had it been granted by a Member State.
Regarding individual aids granted by Member States and subject to the analysis by the Commission, on the basis of Article 93 EC, Turkey will be informed on the same basis as the Member States.
3. The Community and Turkey shall communicate to each other all amendments to their laws concerning restrictive practices by undertakings. They shall also inform each other of the cases when these laws have been applied.
4. In relation to information supplied under paragraph 2, points (c), (e) and (f), the Community shall have the right to raise objections against an aid granted by Turkey which it would have deemed unlawful under EC law had it been granted by a Member State. If Turkey does not agree with the Community's opinion, and if the case is not resolved within thirty days, the Community and Turkey shall each have the right to refer the case to arbitration.
5. Turkey shall have the right to raise objections and seize the Association Council against an aid granted by a Member State which it deems to be unlawful under EC law. If the case is not resolved by the Association within three months, the Association Council may decide to refer the case to the Court of Justice of the European Communities.
Article 40.
1. The Community shall inform Turkey as soon as possible of the adoption of any decision under Articles 85, 86 and 92 of the EC Treaty which might affect Turkey's interests.
2. Turkey shall be entitled to ask information about any specific case decided by the Community under Articles 85, 86 and 92 of the EC Treaty.
Article 41.
With regard to public undertakings to which special or exclusive rights have been granted, Turkey shall ensure that, by the end of the first year following the entry into force of the Customs Union, the principles of the Treaty establishing the European Economic Community, notably Article90, as well as the principles contained in the secondary legislation and the case- law developed on this basis, are upheld.
Article 42.
Turkey shall progressively adjust, in accordance with the conditions and the time-table laid down by the Association Council and State monopolies of a commercial character so as to ensure that, by the end of the second year following the entry into force of this decision, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of Turkey.
Article 43.
1. If the Community or Turkey believes that anti-competitive activities carried out on the territory of the other Party are adversely affecting its interests or the interests of its undertakings, the first Party may notify the other Party and may request that the other Party's competition authority initiate appropriate enforcement action. The notification shall be as specific as possible about the nature of the anti-competitive activities and their effects on the interests of the notifying Party, and shall include an offer for such further information and other cooperation as the notifying Party is able to provide.
2. Upon receipt of a notification under paragraph and after such other discussion between the Parties as may be appropriate and useful in the circumstances, the competition authority of the notified Party will consider whether or not to initiate enforcement action, with respect to the anti-competitive activities identified in the notification. The notified Party will advise the notifying Party of its decision. If enforcement action is initiated, the notified Party will advise the notifying Party of its outcome and, to the extent possible, of significant interim developments.
3. Nothing in this Article limits the discretion of the notified Party under its competition laws and enforcement policies as to whether or not to undertake enforcement action with respect to the notified anti-competitive activities, or precludes the notifying Party from undertaking enforcement action with respect to such anti-competitive activities.
Section III. Trade Defence Instruments
Article 44.
1. The Association Council shall review upon the request of either Party the principle of application of trade defence instruments other than safeguard by one Party in its relations with the other. During any such review, the Association Council may decide to suspend the application of these instruments provided that Turkey has implemented competition, state aids control and other relevant parts of the acquis communautaire which are related to the internal market and ensured their effective enforcement, so providing a guarantee against unfair competition comparable to that existing inside the internal market.
2. The modalities of implementation of anti-dumping measures set out in Article47 of the Additional Protocol remain in force.
Article 45.
By derogation from the provisions of Sectionll of Chapter V, the consultation and decision- making procedures referred to in that section shall not apply to trade defence measures taken by either Party.
In the framework of the application of trade policy measures towards third countries, the Parties shall endeavour, through exchange of information and consultation, to seek possibilities for co-ordinating their action when the circumstances and international obligations of both Parties allow.
Article 46.
By derogation from the principle of the free movement of goods laid down in Chapterl where one Party has taken or is taking anti-dumping measures or other measures pursuant to trade policy instruments as referred to in Article44 in its relations with the other Party or with third countries, that Party may make imports of the products concerned from the territory of the other Party subject to the application of those measures. In such cases it shall inform the Customs Union Joint Committee accordingly.
Article 47.
When completing the formalities involved in importing products of a type covered by trade policy measures, provided for in the preceding Articles, the authorities of the importing State shall ask the importer to indicate the origin of the products concerned on the customs declaration.
Additional supporting evidence may be requested where absolutely necessary because of serious and well-founded doubts in order to verify the true origin of the product in question.
Section IV. Government Procurement
Article 48.
As soon as possible after the date of entry into force of this Decision, the Association Council will set a date for the initiation of negotiations aiming at the mutual opening of the Parties ' respective government procurement markets.
The Association Council will review progress in this area annually.
Section V. Direct Taxation
Article 49.
No provision of this Decision shall have the effect:
- of extending the fiscal advantages granted by either Party in any international agreement or arrangement by which it is bound;
- of preventing the adoption or application by either Party of any measure aimed at preventing the avoidance or evasion of taxes;
- of opposing the right of either Party to apply the relevant provisions of its tax legislation to taxpayers whose position as regards place of residence is not identical.
Indirect taxation
Article 50.
1. Neither Party shall, directly or indirectly, impose on the products of the other Party any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.
Neither Party shall impose on the products of the other Party an internal taxation of such a nature as to afford indirect protection to other products.
2. Products exported to the territory of either of the parties shall not qualify for refunds of internal indirect taxation which exceed the indirect taxation directly or indirectly imposed on those products.
3. The Parties shall repeal any provisions existing at the date of the entry into force of this Decision which conflict with the above rules.
Article 51.
The Association Council may recommend the Parties to take measures to approximate laws, regulations or administrative provisions in respect of fields which are not covered by this Decision but have a direct bearing on the functioning of the Association, and of fields covered by this Decision but for which no specific procedure is laid down therein .
Chapter V. INSTITUTIONAL PROVISIONS
Section I. The EC-Turkey Customs Union Joint Committee
Article 52.
1. In accordance with Article24 of the Association Agreement, an EC-Turkey Customs Union Joint Committee is hereby established. The Committee shall carry out exchange of views and information, formulate recommendations to the Association Council and deliver opinions with a view to ensuring the proper functioning of the Customs Union.
2. The Parties shall consult with the Committee on any point relating to the implementation of this Decision which gives rise to a difficulty for either of them.
3. The Customs Union Joint Committee shall adopt its rules of procedure.
Article 53.
1. The Customs Union Joint Committee shall consist of representatives of the Parties.
2. The office of Chairman of the Customs Union Joint Committee shall be held alternatively, for a period of six months, by the representative of the Community, i.e. the European Commission, and the representative of Turkey.
3. In order to carry out its duties, the Customs Union Joint Committee shall meet, as a general rule, at least once a month. It shall also meet on the initiative of its Chairman or at the request of one of the Parties in accordance with its rules of procedure.
4. The Customs Union Joint Committee may decide to establish any subcommittee or working party to assist in it carrying out its duties. The Customs Union Joint Committee shall lay down the composition and rules of operation of such subcommittees or working parties in its rules of procedure. Their duties shall be determined by the Customs Union Joint Committee in each individual case.
Section II. Consultation and Decision Procedures
Article 54.
1. In areas of direct relevance to the operation of the Customs Union, and without prejudice to the other obligations deriving from Chapters! to IV Turkish legislation shall be harmonized as far as possible with Community legislation.
2. Areas of direct relevance to the operation of the Customs Union shall be commercial policy and agreements with third countries comprising a commercial dimension for industrial products, legislation on the abolition of technical barriers to trade in industrial products, competition and industrial and intellectual property law and customs legislation.
The Association Council may decide to extend the list of areas where harmonization is to be achieved in the light of the Association's progress.
3. The procedural rules provided for in Articles55 to 60 shall apply for the purposes of this Article.
Article 55.
1. Wherever new legislation is drawn up by the Commission of the European Communities in an area of direct relevance to the operation of the Customs Union and the Commission of the European Communities consults experts from Member States of the Community, it shall also informally consult Turkish experts.
2. When transmitting its proposal to the Council of the European Union, the Commission of the European Communities shall send copies thereof to Turkey.
3. During the phase preceding the decision of the Council of the European Union, the Parties shall, at the request of either of them, consult each other again within the Customs Union Joint Committee.
4. The Parties shall cooperate in good faith during the information and consultation phase with a view to facilitating, at the end of the process, the decision most appropriate for the proper functioning of the Customs Union.
Article 56.
1. Where it adopts legislation in an area of direct relevance to the functioning of the Customs Union as defined in Article 54(2), the Community shall immediately inform Turkey thereof within the Customs Union Joint Committee to allow Turkey to adopt corresponding legislation which will ensure the proper functioning of the Customs Union.
2. Where there is a problem for Turkey in adopting the corresponding legislation, the Customs Union Joint Committee shall make every effort to find a mutually acceptable solution maintaining the proper functioning of the Customs Union.
Article 57.
1. The principle of harmonization defined in Article 54 shall not affect Turkey's right, without prejudice to its obligations deriving from Chapters! to IV to amend legislation in areas of direct relevance to the functioning of the Customs Union provided the Customs Union Joint Committee has concluded that the amended legislation does not affect the proper functioning of the Customs Union or that the procedures referred to in the paragraphs2 to 4 of this Article have been accomplished.
2. Where Turkey is contemplating new legislation in an area of direct relevance to the functioning of the Customs Union, it shall informally seek the views of the Commission of the European Communities on the proposed legislation in question so that the Turkish legislator may take his decision in full knowledge of the consequences for the functioning of the Customs Union.
The Parties shall cooperate in good faith with a view to facilitating, at the end of the process, the decision most appropriate for the proper functioning of the Customs Union.
3. Once the proposed legislation has reached a sufficiently advanced stage of drafting, consultations shall be held within the Customs Union Joint Committee.
4. Where Turkey adopts legislation in an area of direct relevance to the functioning of the Customs Union, it shall forthwith inform the Community within the Customs Union Joint Committee.
If Turkey's adoption of such legislation is likely to disrupt the proper functioning of the Customs Union, the Customs Union Joint Committee shall endeavour to find a mutually acceptable solution.