Article 24.
The provisions of this Title shall apply to trade in all products originating in both Parties except where otherwise provided herein or in Protocols 1 and 2.
Article 25.
1. In trade between the Community and Latvia from 1 January 1995:
- no new customs duties on imports or exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased,
- no new quantitative restrictions on imports or exports or measures having equivalent effect shall be introduced nor shall those existing be made more restrictive.
2. Without prejudice to the concessions granted pursuant to Article 20, the provisions of paragraph 1 of this Article shall not restrict in any way the pursuance of the respective agricultural and fisheries policies of Latvia and the Community or the taking of any measures under such policies.
Article 26.
1. The two Parties shall refrain from any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.
2. Products exported to the territory of one of the two Parties may not benefit from repayment of internal indirect taxation in excess of the amount of direct or indirect taxation imposed on them.
Article 27.
1. This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.
2. Consultations between the Parties shall take place within the Association Council concerning agreements establishing such customs unions or free trade areas and, where requested, on other major issues related to their respective trade policies with third countries. In particular in the event of a third country acceding to the Community, such consultations shall take place so as to ensure that account can be taken of the mutual interests of the Community and Latvia stated in this Agreement.
Article 28.
Exceptional measures of limited duration which derogate from the provisions of Article 11 and Article 25 (1), first indent, may be taken by Latvia in the form of increased customs duties.
These measures may only concern infant industries, or certain sectors undergoing restructuring or facing serious difficulties, particularly where these difficulties produce important social problems.
Customs duties on imports applicable in Latvia to products originating in the Community introduced by these measures may not exceed 25 % ad valorem and shall maintain an element of preference for products originating in the Community.
The total value of imports of the products which are subject to these measures may not exceed 15 % of total imports of industrial products from the Community as defined in Chapter I during the last year for which statistics are available.
These measures shall be applied for a period not exceeding three years unless a longer duration is authorized by the Association Council. They shall cease to apply at the latest by 31 December 1998.
No such measures can be introduced in respect of a product if more than three years have elapsed since the elimination of all duties and quantitative restrictions or charges or measures having an equivalent effect concerning that product.
Latvia shall inform the Association Council of any exceptional measures it intends to take and, at the request of the Community, consultations shall be held in the Association Council on such measures and the sectors to which they apply before they are applied. When taking such measures Latvia shall provide the Association Council with a schedule for the elimination of the customs duties introduced under this Article. This schedule shall provide for a phasing out of these duties starting at the latest two years after their introduction at equal annual rates. The Association Council may decide on a different schedule.
Article 29.
If one of the Parties finds that dumping is taking place in trade with the other Party within the meaning of Article VI of the GATT, it may take appropriate measures against this practice in accordance with the Agreement relating to the application of Article VI of the GATT, with related internal legislation and with the conditions and procedures laid down in Article 33.
Article 30.
Where any product is being imported in such increased quantities and under such conditions as to cause or threaten to cause:
- serious injury to domestic producers of like or directly competitive products in the territory of one of the Parties, or
- serious disturbances in any sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region,
the Community or Latvia, whichever is concerned, may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 33.
Article 31.
Where compliance with the provisions of Articles 14 and 25 leads to:
(i) re-export towards a third country against which the exporting Party maintains, for the product concerned, quantitative export restrictions, export duties or measures having equivalent effect; or
(ii) a serious shortage, or threat thereof, of a product essential to the exporting Party,
and where the situations referred to above give rise, or are likely to give rise, to major difficulties for the exporting Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in Article 33. The measures shall be non-discriminatory and be eliminated when conditions no longer justify their maintenance.
Article 32.
The Member States of the European Union (hereinafter referred to as 'the Member States`) and Latvia shall progressively adjust any State monopolies of a commercial character so as to ensure that, by the end of 1998, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States and of Latvia. The Association Council will be informed about the measures adopted to implement this objective.
Article 33.
1. In the event of the Community or Latvia subjecting imports of products liable to give rise to the difficulties referred to in Article 30 to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.
2. In the cases specified in Articles 29, 30 and 31, before taking the measures provided for therein or, in cases in which paragraph 3 (d) applies, as soon as possible, the Community or Latvia, as the case may be, shall supply the Association Council with all relevant information with a view to seeking a solution acceptable to the two Parties.
In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement.
The safeguard measures shall be notified immediately to the Association Council and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their abolition as soon as circumstances permit.
3. For the implementation of paragraph 2, the following provisions shall apply:
(a) as regards Article 30, the difficulties arising from the situation referred to in that Article shall be referred for examination to the Association Council, which may take any decision needed to put an end to such difficulties.
If the Association Council or the exporting Party has not taken a decision putting an end to the difficulties or no other satisfactory solution has been reached within 30 days of the matter being referred, the importing Party may adopt the appropriate measures to remedy the problem. These measures must not exceed the scope of what is necessary to remedy the difficulties which have arisen;
(b) as regards Article 29, the Association Council shall be informed of the dumping case as soon as the authorities of the importing Party have initiated an investigation. If no end has been put to the dumping or if no other satisfactory solution has been reached within 30 days of the matter being referred to the Association Council, the importing Party may adopt the appropriate measures;
(c) as regards Article 31, the difficulties arising from the situations referred to in that Article shall be referred for examination to the Association Council.
The Association Council may take any decision needed to put an end to the difficulties. If it has not taken such a decision within 30 days of the matter being referred to it, the exporting Party may apply appropriate measures on the exportation of the product concerned;
(d) where exceptional circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Latvia whichever is concerned may, in the situations specified in Articles 29, 30 and 31, apply forthwith the precautionary measures strictly necessary to deal with the situation.
Article 34.
Protocol 3 lays down rules of origin for the application of the tariff preferences provided for in this Agreement as well as the methods of administrative cooperation therewith.
Article 35.
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.
Article 36.
Protocol 4 lays down the specific provisions to apply to trade between Latvia of the one part and Spain and Portugal of the other part, and it will be valid until 31 December 1995.
Title IV. MOVEMENT OF WORKERS, ESTABLISHMENT, SUPPLY OF SERVICES
Chapter I. MOVEMENT OF WORKERS
Article 37.
1. Subject to the conditions and modalities applicable in each Member State:
- the treatment accorded to workers of Latvian nationality legally employed in the territory of a Member State shall be free from any discrimination based on nationality, as regards working conditions, remuneration or dismissal, as compared to its own nationals,
- the legally resident spouse and children of a worker legally employed in the territory of a Member State, with the exception of seasonal workers and of workers coming under bilateral agreements in the sense of Article 41, unless otherwise provided by such agreements, shall have access to the labour market of that Member State, during the period of that worker's authorized stay of employment.
2. Latvia shall, subject to the conditions and modalities applicable in that country, accord the treatment referred to in paragraph 1 to workers who are nationals of a Member State and are legally employed in its territory as well as their spouse and children who are legally resident in the said territory.
Article 38.
1. With a view to coordinating social security systems for workers of Latvian nationality, legally employed in the territory of a Member State and for the members of their family, legally resident there, and subject to the conditions and modalities applicable in each Member State,
- all periods of insurance, employment or residence completed by such workers in the various Member States shall be added together for the purpose of pensions and annuities in respect of old age, invalidity and death and for the purpose of medical care for such workers and such family members,
- any pensions or annuities in respect of old age, death, industrial accident or occupational disease, or of invalidity resulting therefrom, with the exception of non-contributory benefits, shall be freely transferable at the rate applied by virtue of the law of the debtor Member State or States,
- the workers in question shall receive family allowances for the members of their family as defined above.
2. Latvia shall accord to workers who are nationals of a Member State and legally employed in its territory, and to members of their families legally resident there, treatment similar to that specified in the second and third indents of paragraph 1.
Article 39.
1. The Association Council shall by decision adopt the appropriate provisions to implement the objective set out in Article 38.
2. The Association Council shall by decision adopt detailed rules for administrative cooperation providing the necessary management and control guarantees for the application of the provisions referred to in paragraph 1.
Article 40.
The provisions adopted by the Association Council in accordance with Article 39 shall not affect any rights or obligations arising from bilateral agreements linking Latvia and the Member States where those agreements provide for more favourable treatment of nationals of Latvia or of the Member States.
Article 41.
1. Taking into account the labour market situation in the Member State, subject to its legislation and to the respect of rules in force in that Member State in the area of mobility of workers,
- the existing facilities for access to employment for workers of Latvian nationality accorded by Member States under bilateral agreements ought to be preserved and if possible improved,
- the other Member States shall consider favourably the possibility of concluding similar agreements.
2. The Association Council shall examine granting other improvements including facilities of access for professional training, in conformity with rules and procedures in force in the Member States, and taking account of the labour market situation in the Member States and in the Community.
Article 42.
From the end of the transitional period or sooner if socio-economic conditions in Latvia have been largely aligned on those of the Member States and if the employment situation in the Community permits, the Association Council will consider ways of further improving the movement of workers. The Association Council shall make recommendations to such end.
Article 43.
In the interest of facilitating the restructuring of labour resources resulting from the economic restructuring in Latvia, the Community shall provide technical assistance for the establishment of a suitable social security system in Latvia as set out in Article 92 of this Agreement.
Chapter II. ESTABLISHMENT
Article 44.
1. The Community and its Member States shall grant, except for the sectors included in Annex XIV, from entry into force of this Agreement:
(i) treatment no less favourable than that accorded by Member States to their own companies or to any third country company, whichever is the better, with regard to the establishment of Latvian companies;
(ii) to subsidiaries and branches of Latvian companies, established in their territory, treatment no less favourable than that accorded by Member States to their own companies and branches or to subsidiaries and branches of any third country company established in their territory, whichever is the better, in respect of their operation.
2. Latvia shall facilitate the setting up of operations on its territory by Community companies and nationals. To that end, it shall:
(i) grant, from entry into force of the Agreement, for the establishment of Community companies, treatment no less favourable than that accorded to its own companies or to companies of any third country, whichever is the better, save for the sectors referred to in Annex XV, where national treatment shall be granted at the latest by the end of the transitional period referred to in Article 3;
(ii) grant, from entry into force of this Agreement, for the operation of branches and subsidiaries of Community companies, established in Latvia, treatment no less favourable than that accorded to its own companies or to subsidiaries and branches of any third country company established in its territory, whichever is the better.
3. Latvia shall, during the transitional period referred to in paragraph 2 (i) not adopt any measures or actions which introduce discrimination as regards the establishment and operations of Community companies and nationals in its territory in comparison to its own companies and nationals.
4. The Association Council shall during the transitional period referred to in paragraph 2 (i) examine regularly the possibility of accelerating the granting of national treatment in the sectors referred to in Annex XV. Amendments may be made to this Annex by decision of the Association Council.
Following the expiration of the transitional period referred to in Article 3, the Association Council may exceptionally, upon request of Latvia, and if the necessity arises, decide to prolong the duration of exclusion of certain areas or matters listed in Annex XV for a limited period of time.
5. The treatment described in paragraphs 1 and 2 shall be applicable for the establishment and operation of nationals as from the end of the transitional period referred to in Article 3.
Article 45.
1. The provisions of this Chapter shall not apply to air transport, inland waterways and maritime cabotage transport services.
2. The Association Council may make recommendations for improving establishment and operations in the areas covered by paragraph 1.
Article 46.
For the purposes of this Agreement:
(a) A 'Community company` or a 'Latvian company` respectively shall mean a company set up in accordance with the laws of a Member State or of Latvia respectively and having its registered office or central administration or principal place of business within the Community or in the territory of Latvia respectively.
However, should the company, set up in accordance with the laws of a Member State or Latvia respectively, have only its registered office within the Community or in the territory of Latvia respectively, the company shall be considered a Community or Latvian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Latvia respectively.
(b) 'Subsidiary` of a company shall mean a company which is effectively controlled by the first company.
(c) '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.
(d) 'Establishment` shall mean:
(i) as regards nationals, the right to take up economic activities as self-employed persons and to set up undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party. The provisions of this chapter do not apply to those who are not exclusively self-employed;
(ii) as regards Community or Latvian companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in Latvia or in the Community respectively.
(e) 'Operation` shall mean the pursuit of economic activities.
(f) 'Economic activities` shall in principle include activities of an industrial, commercial and professional character and activities of craftsmen.
(g) 'Community national` and 'Latvian national` shall mean respectively a natural person who is a national of one of the Member States or of Latvia.
(h) With regard to international maritime transport, including inter-modal operations involving a sea leg, nationals of the Member States or of Latvia established outside the Community or Latvia respectively, and shipping companies established outside the Community or Latvia and controlled by nationals of a Member State or Latvian nationals respectively, shall also be beneficiaries of the provisions of Chapter II and Chapter III, if their vessels are registered in that Member State or in Latvia respectively in accordance with their respective legislation.
Article 47.
1. Subject to the provisions of Article 43, with the exception of financial services described in Annex XVI, each Party may regulate the establishment and operation of companies and nationals on its territory, in so far as these regulations do not discriminate against companies and nationals of the other Party in comparison with its own companies and nationals.
2. In respect of financial services, 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, policyholders 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.
3. 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.
Article 48.
1. The provisions of Articles 44 and 47 do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches of companies of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches as compared with branches of companies 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.
Article 49.
1. A 'Community company` or a 'Latvian company` established in the territory of Latvia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Latvia and the Community respectively, employees who are nationals of Community Member States and Latvia 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 or branches.
The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the above-mentioned companies herein referred to as 'organizations` are 'intra-corporate transferees` as defined in (c) of this paragraph in the following categories, provided that the organization is a juridical 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, 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 of the establishment,
- supervising and controlling the work of other supervisory, professional or managerial employees,
- having the authority personally to recruit and dismiss or recommend recruiting, 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 be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party.
3. The entry into and the temporary presence within the territory of the Community or Latvia of Latvian and Community nationals respectively shall be permitted, when these representatives of companies are persons working in a senior position, as defined in paragraph 2 (a) above, within a company, and are responsible for the setting up of a Community subsidiary or branch of a Latvian company or of a Latvian subsidiary or branch of a Community company in a Community Member State or Latvia respectively, when:
- those representatives are not engaged in making direct sales or supplying services, and
- the company has its principal place of business outside the Community or Latvia, respectively, and has no other representative, office, branch or subsidiary in that Community Member State or Latvia respectively.
Article 50.
In order to make it easier for the Community nationals and Latvian nationals to take up and pursue regulated professional activities in Latvia and the Community respectively, the Association Council shall examine which steps are necessary to be taken to provide for the mutual recognition of qualifications. It may take all necessary measures to that end.
Article 51.
During the transitional period referred to in Article 3, Latvia may introduce measures which derogate from the provisions of this Chapter as regards the establishment of Community companies and nationals if certain industries:
- are undergoing restructuring, or
- are facing serious difficulties, particularly where these entail serious social problems in Latvia, or
- face the elimination or a drastic reduction of the total market share held by Latvian companies or nationals in a given sector or industry in Latvia, or
- are newly emerging industries in Latvia.
Such measures:
- shall cease to apply at the latest upon the expiration of the transitional period referred to in Article 3, and
- shall be reasonable and necessary in order to remedy the situation, and
- shall only relate to establishments in Latvia to be created after the entry into force of such measures and shall not introduce discrimination concerning the operations of Community companies or nationals already established in Latvia at the time of introduction of a given measure compared with Latvian companies or nationals.
While devising and applying such measures, Latvia shall grant whenever possible to Community companies and nationals a preferential treatment, and in no case a treatment less favourable than that accorded to companies or nationals from any third country.
Prior to the introduction of these measures, Latvia shall consult the Association Council and shall not put them into effect before a one-month period following the notification of the Association Council of the concrete measures to be introduced by Latvia, except where the threat of irreparable damage requires the taking of urgent measures in which case Latvia shall consult the Association Council immediately after their introduction.
Upon expiration of the transitional period referred to in Article 3, Latvia may introduce such measures only with the authorization of the Association Council and under conditions determined by the latter.
Chapter III. SUPPLY OF SERVICES
Article 52.
1. The Parties undertake in accordance with the following provisions to take the necessary steps to allow progressively the supply of services by Community or Latvian companies or nationals which are established in a Party other than that of the person for whom the services are intended.
2. In step with the liberalization process mentioned in paragraph 1, and subject to the provisions of Article 56, the Parties shall permit the temporary movement of natural persons providing the service or who are employed by the service provider as key personnel as defined in Article 49 (2), including natural persons who are representatives of a Community or Latvian company or national and are seeking temporary entry for the purpose of negotiating for the sale of services or entering into agreements to sell services for that service provider, where those representatives will not be engaged in making direct sales to the general public or in supplying services themselves.
3. At the latest eight years after the entry into force of this Agreement, the Association Council shall take the measures necessary to implement progressively the provisions of paragraph 1. Account shall be taken of the progress achieved by the Parties in the approximation of their laws.
Article 53.
1. The Parties shall not take any measures or actions which render the conditions for the supply of services by Community and Latvian nationals or companies which are established in a Party other than that of the person for whom the services are intended significantly more restrictive as compared with the situation existing on the day preceding the day of entry into force of the Agreement.