2. The frequency of physical import checks applied by each Party are set out in Annex VIII, Part B to this Agreement. A Party may amend these frequencies within its competences and in accordance with its internal legislation, as a result of progress made in accordance with Articles 63 and 66 of this Agreement, or as a result of verifications, consultations or other measures provided for in this Agreement. The SPS Sub-Committee referred to in Article 71 of this Agreement shall, by decision, amend Annex VII, Part B of this Agreement accordingly.
3. Inspection fees may only cover the costs incurred by the competent authority for performing import checks. The fees shall be calculated on the same basis as fees charged for the inspection of similar domestic products.
4. The importing Party shall, at the request of the exporting Party, inform it of any amendments, including the reasons for these amendments, concerning the measures affecting import checks and inspection fees and of any significant changes in the administrative conduct of such checks.
5. From a date to be determined by the SPS Sub-Committee referred to in Article 71 of this Agreement, the Parties may agree on the conditions to approve each other's controls as laid down in Article 68(1)(b) with a view to adapting and reciprocally reducing, where applicable, the frequency of physical import checks for the commodities referred to in Article 66(2) of this Agreement.
From that date the Parties may reciprocally approve each other's controls for certain commodities and, consequently, reduce or replace the import checks for these commodities.
6. The conditions required for approval of the adaptation of import checks shall be included in Annex VIII to this Agreement by the procedure referred to in Article 71(6) of this Agreement.
Article 70. Safeguard Measures
1. Should the importing Party take, within its territory, measures to control any cause likely to constitute a serious hazard or risk to human, animal or plant health, the exporting Party, without prejudice to paragraph 2 of this Article, shall take equivalent measures to prevent the introduction of the hazard or risk into the territory of the importing Party.
2. On the basis of serious public, animal or plant health grounds, the importing Party may take provisional measures necessary for the protection of public, animal or plant health. For consignments in transport between the Parties, the importing Party shall consider the most suitable and proportionate solution in order to avoid unnecessary disruption to trade.
3. The Party adopting measures under paragraph 2 of this Article shall inform the other Party no later than one working day following the date of adoption of the measures. Upon request by either Party, and in accordance with Article 65(3) of this Agreement, the Parties shall hold consultations regarding the situation within 15 working days of the notification. The Parties shall take due account of any information provided through such consultations and shall endeavour to avoid unnecessary disruption to trade, taking into account, where applicable, the outcome of the consultations provided for in Article 65(3) of this Agreement.
Article 71. Sanitary and Phytosanitary Management (SPS) Sub-Committee
1. The Sanitary and Phytosanitary Management (SPS) Sub-Committee is hereby established. The SPS Sub-Committee shall meet within three months of the entry into force of this Agreement and, thereafter, upon request of either Party or at least once a year. If agreed by the Parties, a meeting of the SPS Sub-Committee may be held by video or audio conference. The SPS Sub Committee may also address issues out of session, by correspondence.
2. The SPS Sub-Committee shall have the following functions:
(a) to monitor the implementation of this Chapter and consider any matter relating to this Chapter, and examine all matters which may arise in relation to its implementation;
(b) to review the Annexes to this Chapter, in particular in the light of progress made under the consultations and procedures provided for under this Chapter;
(c) in the light of the review provided for in subparagraph (b) of this paragraph or as otherwise provided in this Chapter, to modify, by means of a decision, Annexes II to XI to this Agreement; and
(d) in the light of the review provided for in subparagraph (b) of this paragraph, to give opinions and make recommendations to other bodies as defined in the Institutional, General and Final Provisions of this Agreement.
3. The Parties agree to establish technical working groups, where appropriate, consisting of expert-level representatives of the Parties, which shall identify and address technical and scientific issues arising from the application of this Chapter. When additional expertise is required, the Parties may establish ad hoc groups, including scientific groups. Membership of such ad hoc groups need not be restricted to representatives of the Parties.
4. The SPS Sub-Committee shall regularly report to the Trade Committee established under Article 404(1) of this Agreement on its activities and decisions taken within its competence.
5. The SPS Sub-Committee shall adopt its working procedures at its first meeting.
6. Any decision, recommendation, report or other action by the SPS Sub- Committee or any group established by the SPS Sub-Committee, relating to the authorisation of imports, exchange of information, transparency, recognition of regionalisation, equivalence and alternative measures, and any other issue covered by paragraphs 2 and 3, shall be adopted by consensus between the Parties.
Chapter 5. CUSTOMS AND TRADE FACILITATION
Article 72. Objectives
The Parties acknowledge the importance of customs and trade facilitation matters in the evolving bilateral trade environment. The Parties agree to reinforce cooperation in this area with a view to ensuring that the relevant legislation and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objectives of effective control and support facilitation of legitimate trade as a matter of principle.
The Parties recognise that utmost importance shall be given to legitimate public policy objectives, including trade facilitation, security and prevention of fraud and a balanced approach to them.
Article 73. Legislation and Procedures
1. The Parties agree that their respective trade and customs legislation, as a matter of principle, shall be stable and comprehensive, and that provisions and procedures shall be proportionate, transparent, predictable, non-discriminatory, impartial and applied uniformly and effectively and shall inter alia:
(a) protect and facilitate legitimate trade through effective enforcement of, and compliance with, legislative requirements;
(b) avoid unnecessary or discriminatory burdens on economic operators, prevent fraud and provide further facilitation for economic operators having a high level of compliance;
(c) apply a single administrative document for the purposes of customs declarations;
(d) lead to greater efficiency, transparency and simplification of customs procedures and practices at the border;
(e) apply modern customs techniques, including risk assessment, post- clearance controls and company audit methods in order to simplify and facilitate the entry and release of goods;
(f) aim at reducing costs and increasing predictability for economic operators, including small and medium-sized companies;
(g) without prejudice to the application of objective risk-assessment criteria, ensure the non-discriminatory application of requirements and procedures applicable to imports, exports and goods in transit;
(h) apply the international instruments applicable in the field of customs and trade including those developed by the World Customs Organization (hereinafter referred to as the "WCO") (Framework of Standards to Secure and Facilitate Global Trade of 2005, Istanbul Convention on temporary admission of 1990, HS Convention) of 1983, the WTO (e.g. on Valuation), and the UN (TIR Convention of 1975, 1982 Convention on harmonization of frontier controls of goods);
(i) take the necessary measures to reflect and implement the provisions of the Revised Kyoto Convention on the Simplification and Harmonization of Customs Procedures of 1973;
(j) provide for advance binding rulings on tariff classification and rules of origin. The Parties ensure that a ruling may be revoked or annulled only after notification to the affected operator and without retroactive effect unless the rulings have been made on the basis of incorrect or incomplete information;
(k) introduce and apply simplified procedures for authorised traders according to objective and non-discriminatory criteria;
(l) set rules that ensure that any penalties imposed for the breach of customs regulations or procedural requirements are proportionate and non-discriminatory and, in their application, do not result in unwarranted and unjustified delays;
(m) apply transparent, non-discriminatory and proportionate rules in respect of the licensing of customs brokers.
2. In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability of operations, the Parties shall:
(a) take further steps towards the reduction, simplification and standardisation of data and documentation required by customs and other agencies;
(b) simplify requirements and formalities wherever possible, in respect of the prompt release and clearance of goods;
(c) provide effective, prompt and non-discriminatory procedures guaranteeing the right of appeal against customs' and other agencies' administrative actions, rulings and decisions affecting the goods submitted to customs. Such procedures for appeal shall be easily accessible, including to small or medium-sized enterprises and any costs shall be reasonable and commensurate with costs in providing for appeals. The Parties shall also take steps to ensure that where a disputed decision is the subject of an appeal, goods are normally released and duty payments may be left pending, subject to any safeguarding measures judged necessary. Where required, this should be subject to the provision of a guarantee, such as a surety or deposit;
(d) ensure that the highest standards of integrity be maintained, in particular at the border, through the application of measures reflecting the principles of the relevant international conventions and instruments in this field, in particular the WCO Revised Arusha Declaration (2003).
3. The Parties agree to eliminate:
(a) any requirements for the mandatory use of customs brokers;
(b) any requirements for the mandatory use of pre-shipment inspections or destination inspection.
4. Provisions on transit
(a) For the purposes of this Agreement, the transit rules and definitions as set out in the WTO provisions (Article V of GATT 1994, and related provisions, including any clarification or improvement resulting from the Doha Round negotiations on trade facilitation) shall apply. These provisions also apply when the transit of goods begins or ends in the territory of a Party (inland transit).
(b) The Parties shall pursue the progressive interconnectivity of their respective customs transit systems, with a view to Ukraine participating in the future in the common transit system set out in the Convention of 20 May 1987 on a common transit procedure.
(c) The Parties shall ensure cooperation and coordination between all relevant authorities and agencies in their territories in order to facilitate traffic in transit and promote cooperation across borders. Parties shall also promote cooperation between authorities and the private sector in relation to transit.
Article 74. Relations with the Business Community
The Parties agree:
(a) to ensure that their respective legislation and procedures are transparent and made publicly available, as far as possible through electronic means, together with the justification for them. There should be a consultation mechanism in place and a reasonable time period between the publication of new or amended provisions and their entry into force;
(b) on the need for timely and regular consultations with trade representatives on legislative proposals and procedures relating to customs and trade issues. To this end, mechanisms for appropriate and regular consultation between administrations and the business community shall be established by each Party;
(c) to make publicly available relevant notices of an administrative nature, including agency requirements and entry procedures, hours of operations and operating procedures for customs offices at ports and border crossing points, and points of contact for information enquiries;
(d) to foster cooperation between operators and relevant administrations via the use of non-arbitrary and publicly accessible procedures, such as Memoranda of Understanding based, in particular, on those promulgated by the WCO;
(e) to ensure that their respective customs and related requirements and procedures continue to meet the legitimate needs of the trading community, follow best practices, and remain the least trade-restrictive possible;
(f) to seek the implementation of the WTO Agreement on Trade Facilitation (TFA). Where the provisions of the TFA conflict with the provisions of this Agreement, the Trade Committee shall determine which of those provisions shall prevail.
Article 75. Fees and Charges
The Parties shall prohibit administrative fees having an equivalent effect to import or export duties and charges.
With regard to all fees and charges of whatever character imposed by the customs authorities of each Party, including fees and charges for tasks undertaken by another instance on behalf of the said authorities, on or in connection with import or export and without prejudice to the relevant Articles in Chapter 1 (National Treatment and Market Access for Goods) of Title IV of this Agreement, the Parties agree that:
(a) fees and charges may only be imposed for services provided outside of appointed hours and in places other than those referred to in customs regulations, at the request of the declarant in connection with the import or export in question or for any formality required for undertaking such import or export;
(b) fees and charges shall not exceed the cost of the service provided;
(c) fees and charges shall not be calculated on an ad valorem basis;
(d) information on fees and charges shall be published. This information shall include the reason for the fee or charge for the service provided, the authority responsible, the fees and charges that will be applied, and when and how payment is to be made.
The information on fees and charges shall be published via an officially designated medium, and where feasible and possible, on an official website;
(ec new or amended fees and charges shall not be imposed until information on them is published and made readily available.
Article 76. Customs Valuation
1. The Agreement on the Implementation of Article VI of GATT 1994 contained in Annex 1A to the WTO Agreement, including any subsequent amendments, shall govern the customs valuation of goods in trade between the Parties. Its provisions are hereby incorporated into, and made part of, this Agreement. Minimum customs values shall not be used.
2. The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.
Article 77. Customs Cooperation
The Parties shall strengthen cooperation to ensure implementation of the objectives of this Chapter, striking a reasonable balance between simplification and facilitation and effective control and security.
In order to ensure compliance with the provisions of this Chapter, the Parties shall inter alia:
(a) exchange information concerning customs legislation and procedures;
(b) develop joint initiatives relating to import, export and transit procedures, as well as work towards ensuring that an effective service is provided to the business community;
(c) cooperate on the automation of customs and other trade procedures;
(d) exchange, where appropriate, relevant information and data subject to respect of confidentiality of sensitive data and personal data protection;
(e) exchange information and/or enter into consultations with a view to establishing, where possible, common positions in international organisations in the field of customs, such as the WTO, the WCO, the UN, the United Nations Conference on Trade And Development and the United Nations Economic Commission for Europe;
(f) cooperate in the planning and delivery of technical assistance, in particular to facilitate customs and trade facilitation reforms in line with the relevant provisions of this Agreement;
(g) exchange best practices in customs operations focusing in particular on intellectual property rights enforcement, especially in relation to counterfeit products;
(h) promote coordination between all border agencies, both internally and across borders, to facilitate border-crossing processes and enhance control, taking into account joint border controls where feasible and appropriate;
(i) mutually recognise, where relevant and appropriate, authorised traders and customs controls. The scope of this cooperation, the implementation and the practical arrangements shall be decided by the Customs Sub-Committee provided for in Article 80 of this Agreement.
Article 78. Mutual Administrative Assistance In Customs Matters
Notwithstanding Article 77 of this Agreement, the administrations of the Parties shall provide mutual administrative assistance in customs matters in accordance with the provisions laid down in Protocol II to this Agreement and the Memorandum of Understanding between the Government of Ukraine and the Government of the United Kingdom of Great Britain and Northern Ireland Regarding Mutual Administrative Assistance between their Customs Authorities (1998). Where the provisions of the Memorandum of Understanding between the Government of Ukraine and the Government of the United Kingdom of Great Britain and Northern Ireland Regarding Mutual Administrative Assistance between their Customs Authorities (1998) conflict with the provisions of this Agreement, the Trade Committee shall determine which of those provisions shall prevail.
Article 79. Technical Assistance and Capacity-Building
The Parties may cooperate with a view to providing technical assistance and capacity-building for the implementation of trade facilitation and customs reforms.
Article 80. Customs Sub-Committee
The Customs Sub-Committee is hereby established. It shall report on its activities to the Trade Committee in accordance with Article 404(5) of this Agreement. The function of the Customs Sub-Committee shall include regular consultations and monitoring of implementation and administration of this Chapter, including the issues of customs cooperation, cross-border customs cooperation and management, technical assistance, rules of origin, and trade facilitation, as well as mutual administrative assistance in customs matters.
The Customs Sub-Committee shall inter alia:
(a) see to the proper functioning of this Chapter and of Protocols I and II to this Agreement;
(b) decide measures and practical arrangements for implementing this Chapter and Protocols I and II to this Agreement including on exchange of information and data, mutual recognition of customs controls and trade partnership programmes, and mutually agreed benefits;
(c) exchange views on any points of common interest, including future measures and the resources for them;
(d) make recommendations where appropriate; and
(e) adopt its internal rules of procedures.
Chapter 6. ESTABLISHMENT, TRADE IN SERVICES AND ELECTRONIC COMMERCE
Section 1. GENERAL PROVISIONS
Article 81. Objective, Scope and Coverage
1. The Parties, reaffirming their respective rights and obligations under the WTO Agreement, hereby lay down the necessary arrangements for the progressive reciprocal liberalisation of establishment and trade in services and for cooperation on electronic commerce.
2. Government procurement is dealt with by Chapter 8 (Public Procurement) of Title IV of this Agreement and nothing in this Chapter shall be construed in such a way as to impose any obligation with respect to government procurement.
3. Subsidies are dealt with in Chapter 10 (Competition) of Title IV of this Agreement and the provisions of this Chapter shall not apply to subsidies granted by the Parties.
4. Each Party shall retain the right to regulate and to introduce new regulations to meet legitimate policy objectives, provided they are compatible with this Chapter.
5. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.
Without prejudice to the provisions on movement of persons set out in Title II (Justice Freedom and Security) of this Agreement, nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of natural persons, and to ensure their orderly movement across its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Party under the terms of this Chapter (4).
Article 82. Definitions
For the purposes of this Chapter:
1. "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
2. "measures adopted or maintained by a Party" means measures taken by:
(a) central, regional or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
3. "natural person of a Party" means a national of the United Kingdom or a national of Ukraine according to the respective legislation;
4. "legal person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
5. "legal person of the United Kingdom" or "legal person of Ukraine" means:
a legal person set up in accordance with the laws of the United Kingdom or of Ukraine respectively, and having its registered office, central administration, or principal place of business in the territory of the United Kingdom or Ukraine, respectively, as defined in paragraphs 1 and 2 of Article 416;
should this legal person have only its registered office or central administration in either territory as defined in paragraphs 1 and 2 of Article 416, it shall not be considered as a legal person of the United Kingdom or a legal person of Ukraine, respectively, unless its operations possess a real and continuous link with the economy of the United Kingdom or of Ukraine, respectively;
6. Notwithstanding the preceding paragraph, shipping companies established outside the United Kingdom or Ukraine and controlled by nationals of the United Kingdom or of Ukraine, respectively, shall also be beneficiaries of the provisions of this Agreement, if their vessels are registered in accordance with their respective legislation, in the United Kingdom or in Ukraine and carry the flag of the United Kingdom or of Ukraine;
7. "subsidiary" of a legal person of a Party means a legal person which is effectively controlled by another legal person of that Party (5);
8. "branch" of a legal person means a place of business not having legal personality which:
(a) has the appearance of permanency such as the extension ofa parent body;
(b) has a management structure; and
(c) 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;
9. "establishment" means:
(a) as regards legal persons of the United Kingdom or of Ukraine, the right to take up and pursue economic activities by means of setting up, including the acquisition of, a legal person and/or create a branch or a representative office in Ukraine or in the United Kingdom respectively;
(b) as regards natural persons, the right of natural persons of the United Kingdom or of Ukraine to take up and pursue economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control.
10. "investor" means any natural or legal person of a Party that seeks to perform or performs an economic activity through setting up an establishment;
11. "economic activities" includes activities of an industrial, commercial and professional character and activities of craftsmen and do not include activities performed in the exercise of governmental authority;
12. "operations" means the pursuit of economic activities;
13. "services" includes any service in any sector except services supplied in the exercise of governmental authority;
14. "services and other activities performed in the exercise of governmental authority" are services or activities which are performed neither on a commercial basis nor in competition with one or more economic operators;
15. "cross-border supply of services" means the supply of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party to a service consumer of the other Party.
16. "service supplier" of a Party means any natural or legal person of a Party that seeks to supply or supplies a service, including through an establishment;
17. "key personnel" means natural persons employed within a legal person of one Party other than a non-profit organisation and who are responsible for the setting-up or the proper control, administration and operation of an establishment.
"Key personnel" comprise business visitors responsible for setting up an establishment and intra-corporate transfers.
(a) "Business visitors" means natural persons working in a senior position who are responsible for setting up an establishment. They do not engage in direct transactions with the general public and do not receive remuneration from a source located within the host Party,
(b) "Intra-corporate transferees" means natural persons who have been employed by a legal person of one Party or have been partners in it (other than as majority shareholders) for at least one year and who are temporarily transferred to an establishment in the territory of the other Party. The natural person concerned must belong to one of the following categories:
(i) Managers:
Persons working in a senior position within a legal person who primarily direct the management of the establishment, 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 sub- division thereof;
- supervising and controlling the work of other supervisory, professional or managerial employees;
- having the authority personally to recruit and dismiss personnel or recommend recruiting and dismissing personnel or take other related-actions.
(ii) Specialists:
Persons working within a legal person who possess uncommon knowledge essential to the establishment's production, research equipment, techniques or management. In assessing such knowledge, account will be taken not only of knowledge specific to the establishment, but also whether the person has a high level of qualification for a type of work or trade requiring specific technical knowledge, including membership of an accredited profession.
18. "graduate trainees" means natural persons of a Party who have been employed by a legal person of that Party for at least one year, possess a university degree and are temporarily transferred to an establishment in the territory of the other Party for career development purposes or to obtain training in business techniques or methods (6);
19. "business services sellers" means natural persons who are representatives of a service supplier of one Party seeking entry into and temporary stay in the territory of the other Party for the purpose of negotiating the sale of services or entering into agreements to sell services for that service supplier. They do not engage in making direct sales to the general public and do not receive remuneration from a source located within the host Party.
20. "contractual services suppliers" means natural persons employed by a legal person of one Party which has no establishment in the territory of the other Party and which has concluded a bona fide contract (7) to supply services with a final consumer in the latter Party requiring the presence on a temporary basis of its employees in that Party in order to fulfil the contract to provide services;
21. "independent professionals" means natural persons engaged in the supply of a service and established as self-employed in the territory of a Party who have no establishment in the territory of the other Party and who have concluded a bona fide contract (8) to supply services with a final consumer in the latter Party requiring their presence on a temporary basis in that Party in order to fulfil the contract to provide services.