(l) ‘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;
(m) ‘cross-border supply of services' means the supply of a service:
(i) from the territory of a Party into the territory of the other Party (Mode 1), or
(ii) in the territory of a Party to the service consumer of the other Party (Mode 2);
(n) ‘service supplier' of a Party means any natural or juridical person of a Party that seeks to supply or supplies a service;
(o) ‘entrepreneur' means any natural or juridical person of a Party that seeks to perform or performs an economic activity through setting up an establishment.
Section 2. Establishment
Article 78. Scope
This Section applies to measures adopted or maintained by the Parties affecting establishment in all economic activities with the exception of:
(a) mining, manufacturing and processing (1) of nuclear materials;
(b) production of or trade in arms, munitions and war matèriel; (c) audio-visual services;
(d) national maritime cabotage (2), and
(e) domestic and international air transport services (3), whether scheduled or non-scheduled, and services directly related to the exercise of traffic rights, other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system (CRS) services;
(iv) ground-handling services;
(v) airport operation services.
Article 79. National Treatment and Most Favoured Nation Treatment
1. Subject to the reservations listed in Annex XIV-E to this Agreement, Georgia shall grant, upon entry into force of this Agreement:
(a) as regards the establishment of subsidiaries, branches and representative offices of juridical persons of the Union: treatment no less favourable than that accorded to its own juridical persons, their branches and representative offices; or to subsidiaries, branches and representative offices of any third country's juridical persons, whichever is the better;
(b) as regards the operation of subsidiaries, branches and representative offices of juridical persons of the Union in Georgia, once established: treatment no less favourable than that accorded to its own juridical persons, their branches and representative offices; or to subsidiaries, branches and representative offices of any third country's juridical persons, whichever is the better (1).
2. Subject to reservations listed in Annex XIV-A to this Agreement, the Union shall grant, upon entry into force of this Agreement:
(a) as regards the establishment of subsidiaries, branches and representative offices of juridical persons of Georgia: treatment no less favourable than that accorded to its own juridical persons, their branches and representative offices; or to subsidiaries, branches and representative offices of any third country's juridical persons, whichever is the better;
(b) as regards the operation of subsidiaries, branches and representative offices of juridical persons of Georgia in the Union, once established: treatment no less favourable than that accorded to its own juridical persons, their branches and representative offices; or to subsidiaries, branches and representative offices of any third country's juridical persons, whichever is the better (2).
3. Subject to reservations listed in Annexes XIV-A and XIV-E to this Agreement, the Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of juridical persons of the Union or of Georgia on their territory or in respect of their operation, once established, by comparison with their own juridical persons.
Article 80. Review
1. With a view to progressively liberalising the establishment conditions, the Parties shall regularly review the provisions of this Section and the list of reservations referred to in Article 79 of this Agreement as well as the establishment environment, consistent with their commitments in international agreements.
2. In the context of the review referred to in paragraph 1, the Parties shall assess any obstacles to establishment that have been encountered. With a view to deepening the provisions of this Chapter, the Parties shall find, if need be, appropriate ways to address such obstacles, which could include further negotiations, including with respect to investment protection and to investor-to-state dispute settlement procedures.
Article 81. Other Agreements
This Chapter shall not affect the rights of entrepreneurs of the Parties arising from any existing or future international agreement relating to investment, to which a Member State of the EU and Georgia are parties.
Article 82. Standard of Treatment for Branches and Representative Offices
1. The provisions of Article 79 of this Agreement do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches and representative offices of juridical persons of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches and representative offices as compared to branches and representative offices of juridical persons incorporated in its territory or, as regards financial services, for prudential reasons.
2. The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences or, as regards financial services, for prudential reasons.
Section 3. Cross-border Supply of Services
Article 83. Scope
This Section applies to measures of the Parties affecting the cross border supply of all services sectors with the exception of:
(a) audio-visual services;
(b) national maritime cabotage (1), and (c) domestic and international air transport services (2), whether scheduled or non-scheduled, and services directly related to the exercise of traffic rights other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system (CRS) services;
(iv) ground-handling services;
(v) airport operation services.
Article 84. Market Access
1. With respect to market access through the cross-border supply of services, each Party shall accord services and service suppliers of the other Party a treatment not less favourable than that provided for in the specific commitments contained in Annexes XIV-B and XIV-F to this Agreement.
2. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in Annexes XIV-B and XIV-F to this Agreement are defined as:
(a) limitations on the number of services suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test, or
(c) limitations on the total number of service operations or on the total quantity of service output expressed in the terms of designated numerical units in the form of quotas or the requirement of an economic needs test.
Article 85. National Treatment
1. In the sectors where market access commitments are inscribed in Annexes XIV-B and XIV-F to this Agreement, and subject to any conditions and qualifications set out therein, each Party shall grant to services and service suppliers of the other Party, in respect of all measures affecting the cross-border supply of services, treatment no less favourable than that it accords to its own like services and services suppliers.
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of the other Party either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like services or service suppliers of the other Party.
4. Specific commitments entered into under this Article shall not be construed to require any Party to compensate for inherent competitive disadvantages which result from the foreign character of the relevant services or services suppliers.
Article 86. Lists of Commitments
The sectors liberalised by each Party pursuant to this Section and, by means of reservations, the market access and national treatment limitations applicable to services and services suppliers of the other Party in those sectors are set out in lists of commitments included in Annexes XIV-B and XIV-F to this Agreement.
Article 87. Review
With a view to the progressive liberalisation of the cross-border supply of services between the Parties, the Association Committee in Trade configuration, as set out in Article 408(4) of this Agreement, shall regularly review the list of commitments referred to in Article 86 of this Agreement. This review shall take into account the process of gradual approximation, referred to in Articles 103, 113, 122 and 126 of this Agreement, and its impact on the elimination of remaining obstacles to cross-border supply of services between the Parties.
Section 4. Temporary Presence of Natural Persons or Business Persons
Article 88. Scope and Definitions
1. This Section applies to measures of the Parties concerning the entry and temporary stay in their territories of key personnel, graduate trainees, business sellers, contractual service suppliers and independent professionals in accordance with Article 76(5) of this Agreement.
2. For the purposes of this Section:
(a) ‘key personnel' means natural persons employed within a juridical person of one Party other than a non-profit organisation (1) and who are responsible for the setting-up or the proper control, administration and operation of an establishment. ‘Key personnel' comprise ‘business visitors' for establishment purposes and ‘intra-corporate transferees':
(i) ‘business visitors' for establishment purposes means natural persons working in a senior position who are responsible for setting up an establishment. They do not offer or provide services or engage in any other economic activity than required for establishment purposes. They do not receive remuneration from a source located within the host Party;
(ii) ‘intra-corporate transferees' means natural persons who have been employed by a juridical person or have been partners in it for at least one year and who are temporarily transferred to an establishment that may be a subsidiary, branch or head company of the enterprise / juridical person in the territory of the other Party. The natural person concerned must belong to one of the following categories:
(1) managers: persons working in a senior position within a juridical person, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or from stockholders of the business or their equivalent, including at least:
— directing the establishment or a department or sub-division thereof;
— supervising and controlling the work of other supervisory, professional or managerial employees; and
— having the authority personally to recruit and dismiss or recommend recruiting, dismissing or other personnel actions;
(2) specialists: persons working within a juridical person who possess uncommon knowledge essential to the establishment's production, research equipment, techniques, processes, procedures or management. In assessing such knowledge, account will be taken not only of knowledge specific to the establishment, but also of whether the person has a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession.
(b) ‘graduate trainees' means natural persons who have been employed by a juridical person of one Party or its branch for at least one year, possess a university degree and are temporarily transferred to an establishment of the juridical person in the territory of the other Party, for career development purposes or to obtain training in business techniques or methods (1);
(c) ‘business sellers' (2) means natural persons who are representatives of a services or goods supplier of one Party seeking entry and temporary stay in the territory of the other Party for the purpose of negotiating the sale of services or goods, or entering into agreements to sell services or goods for that 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, nor are they commission agents;
(d) ‘contractual services suppliers' means natural persons employed by a juridical person of one Party which itself is not an agency for placement and supply services of personnel nor acting through such an agency, has no establishment in the territory of the other Party and has concluded a bona fide contract 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;
(e) ‘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 (other than through an agency for placement and supply services of personnel) 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;
(f) ‘qualifications' means diplomas, certificates and other evidence (of formal qualification) issued by an authority designated pursuant to legislative, regulatory or administrative provisions and certifying successful completion of professional training.
Article 89. Key Personnel and Graduate Trainees
1. For every sector committed in accordance with Section 2 (Establishment) of this Chapter and subject to any reservations listed in Annexes XIV-A and XIV-E to this Agreement, or in Annexes XIV-C and XIV-G to this Agreement, each Party shall allow entrepreneurs of the other Party to employ in their establishment natural persons of that other Party provided that such employees are key personnel or graduate trainees as defined in Article 88 to this Agreement. The temporary entry and temporary stay of key personnel and graduate trainees shall be for a period of no longer than three years for intra-corporate transferees, 90 days in any 12-month period for business visitors for establishment purposes, and one year for graduate trainees.
2. For every sector committed in accordance with Section 2 (Establishment) of this Chapter, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in Annexes XIV-C and XIV-G to this Agreement, are defined as limitations on the total number of natural persons that an entrepreneur may employ as key personnel and graduate trainees in a specific sector in the form of numerical quotas or a requirement of an economic needs test and as discriminatory limitations.
Article 90. Business Sellers
For every sector committed in accordance with Section 2 (Establishment) or Section 3 (Cross-border supply of services) of this Chapter and subject to any reservations listed in Annexes XIV-A, XIV-E, and XIV-B and XIV-F to this Agreement, each Party shall allow the entry and temporary stay of business sellers for a period of no longer than 90 days in any 12-month period.
Article 91. Contractual Service Suppliers
1. The Parties reaffirm their respective obligations arising from their commitments under the General Agreement on Trade in Services (GATS) as regards the entry and temporary stay of contractual services suppliers. In accordance with Annexes XIV-D and XIV-H to this Agreement, each Party shall allow the supply of services into their territory by contractual services suppliers of the other Party, subject to the conditions specified in paragraph 2 of this Article.
2. The commitments undertaken by the Parties are subject to the following conditions:
(a) the natural persons must be engaged in the supply of a service on a temporary basis as employees of a juridical person, which has obtained a service contract not exceeding 12 months;
(b) the natural persons entering the other Party should be offering such services as employees of the juridical person supplying the services for at least the year immediately preceding the date of submission of an application for entry into the other Party. In addition, the natural persons must possess, at the date of submission of an application for entry into the other Party, at least three years professional experience (1) in the sector of activity which is the subject of the contract;
(c) the natural persons entering the other Party must possess:
(i) a university degree or a qualification demonstrating knowledge of an equivalent level (2); and
(ii) professional qualifications where this is required to exercise an activity pursuant to the laws, regulations or legal requirements of the Party where the service is supplied;
(d) the natural person shall not receive remuneration for the provision of services in the territory of the other Party other than the remuneration paid by the juridical person employing the natural person;
(e) the entry and temporary stay of natural persons within the Party concerned shall be for a cumulative period of not more than six months or, in the case of Luxembourg, 25 weeks in any 12-month period or for the duration of the contract, whichever is less;
(f) access accorded under the provisions of this Article relates only to the service activity which is the subject of the contract and does not confer entitlement to exercise the professional title of the Party where the service is supplied;
(g) the number of persons covered by the service contract shall not be larger than necessary to fulfil the contract, as it may be requested by the laws, regulations or other legal requirements of the Party where the service is supplied.
Article 92. Independent Professionals
1. In accordance with Annexes XIV-D and XIV-H to this Agreement, the Parties shall allow the supply of services into their territory by independent professionals of the other Party, subject to the conditions specified in paragraph 2 of this Article.
2. The commitments undertaken by the Parties are subject to the following conditions:
(a) the natural persons must be engaged in the supply of a service on a temporary basis as self-employed persons established in the other Party and must have obtained a service contract for a period not exceeding 12 months;
(b) the natural persons entering the other Party must possess, at the date of submission of an application for entry into the other Party, at least six years professional experience in the sector of activity which is the subject of the contract;
(c) the natural persons entering the other Party must possess:
(i) a university degree or a qualification demonstrating knowledge of an equivalent level (1) and
(ii) professional qualifications where this is required to exercise an activity pursuant to the laws, regulations or other legal requirements of the Party where the service is supplied;
(d) the entry and temporary stay of natural persons within the Party concerned shall be for a cumulative period of not more than six months or, in the case of Luxembourg, 25 weeks in any 12-month period or for the duration of the contract, whichever is less;
(e) access accorded under the provisions of this Article relates only to the service activity which is the subject of the contract and does not confer entitlement to exercise the professional title of the Party where the service is provided.
Section 5. Regulatory Framework
Subsection 1. Domestic Regulation
Article 93. Scope and Definitions
1. The following disciplines apply to measures by the Parties relating to licencing requirements and procedures, qualification requirements and procedures that affect:
(a) cross-border supply of services;
(b) establishment in their territory of juridical and natural persons defined in Article 77(9) of this Agreement, and
(c) temporary stay in their territory of categories of natural persons as defined in points (a) to (e) of Article 88(2) of this Agreement.
2. In the case of cross-border supply of services, those disciplines shall only apply to sectors for which the Party has undertaken specific commitments and to the extent that these specific commitments apply in accordance with Annexes XIV-B and XIV-F to this Agreement. In the case of establishment, those disciplines shall not apply to sectors to the extent that a reservation is listed in accordance with Annexes XIV-A and XIV-E to this Agreement. In the case of temporary stay of natural persons, these disciplines shall not apply to sectors to the extent that a reservation is listed in accordance with Annexes XIV-C, XIV-D, XIV-G and XIV-H to this Agreement.
3. Those disciplines do not apply to measures to the extent that they constitute limitations under the relevant Annexes to this Agreement.
4. For the purposes of this Section:
(a) ‘licencing requirements' means substantive requirements, other than qualification requirements, with which a natural or a juridical person is required to comply in order to obtain, amend or renew authorisation to carry out the activities as defined in points (a) to (c) of paragraph 1;
(b) ‘licencing procedures' means administrative or procedural rules that a natural or a juridical person, seeking authorisation to carry out the activities as defined in points (a) to (c) of paragraph 1, including the amendment or renewal of a licence, must adhere to in order to demonstrate compliance with licencing requirements;
(c) ‘qualification requirements' means substantive requirements relating to the competence of a natural person to supply a service, and which are required to be demonstrated for the purpose of obtaining authorisation to supply a service;
(d) ‘qualification procedures' means administrative or procedural rules that a natural person must adhere to in order to demonstrate compliance with qualification requirements, for the purpose of obtaining authorisation to supply a service;
(e) ‘competent authority' means any central, regional or local government and authority or non-governmental body in the exercise of powers delegated by central or regional or local governments or authorities, which takes a decision concerning the authorisation to supply a service, including through establishment or concerning the authorisation to establish in an economic activity other than services.
Article 94. Conditions for Licencing and Qualification
1. Each Party shall ensure that measures relating to licencing requirements and procedures, qualification requirements and procedures are based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner.
2. The criteria referred to in paragraph 1 shall be:
(a) proportionate to a public policy objective;
(b) clear and unambiguous;
(c) objective;
(d) pre-established;
(e) made public in advance;
(f) transparent and accessible.
3. An authorisation or a licence shall be granted as soon as it is established, in the light of an appropriate examination, that the conditions for obtaining an authorisation or licence have been met.
4. Each Party shall maintain or institute judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected entrepreneur or service supplier, for a prompt review of, and where justified, appropriate remedies for, administrative decisions affecting establishment, cross-border supply of services or temporary presence of natural persons for business purposes. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, each Party shall ensure that the procedures in fact provide for an objective and impartial review.
5. Where the number of licences available for a given activity is limited because of the scarcity of available natural resources or technical capacity, each Party shall apply a selection procedure to potential candidates which provides full guarantees of impartiality and transparency, including, in particular, adequate publicity about the launch, conduct and completion of the procedure.
6. Subject to the provisions specified by this Article, in establishing the rules for the selection procedure, each Party may take into account public policy objectives, including considerations of health, safety, the protection of the environment and the preservation of cultural heritage.
Article 95. Licencing and Qualification Procedures
1. Licencing and qualification procedures and formalities shall be clear, made public in advance and be such as to provide the applicants with a guarantee that their application will be dealt with objectively and impartially.
2. Licencing and qualification procedures and formalities shall be as simple as possible and shall not unduly complicate or delay the provision of the service. Any licencing fees (1) which the applicants may incur from their application should be reasonable and proportionate to the cost of the authorisation procedures in question.
3. Each Party shall ensure that the procedures used by, and the decisions of, the competent authority in the licencing or authorisation process are impartial with respect to all applicants. The competent authority should reach its decision in an independent manner and not be accountable to any supplier of the services for which the licence or authorisation is required.