(b) Ukraine shall grant to subsidiaries and branches of Community companies, established in its territory, treatment no less favourable than that accorded to its own companies or branches respectively or to companies or branches of any third country respectively, whichever is the better, in respect of their operations, and this in conformity with its legislation and regulations.
3. The provisions of paragraphs 1 and 2 cannot be used so as to circumvent a Party's legislation and regulations applicable to access to specific sectors or activities by subsidiaries of companies of the other Party established in the territory of such first Party.
The treatment referred to in paragraph 1 and 2 shall benefit companies established in the Community and Ukraine respectively at the date of entry into force of this Agreement and companies established after that date once they are established.
Article 31.
1. The provisions of Article 30 shall not apply to air transport, inland waterways transport and maritime transport, without prejudice to the provisions of Article 104.
2. However, in respect of activities undertaken by shipping agencies for the provision of international maritime transport services, including intermodal activities involving a sea leg, each Party shall permit to the companies of the other Party their commercial presence in its territory in the form of subsidiaries or branches, under conditions of establishment and operation no less favourable than those accorded to its own companies or to subsidiaries or branches of companies of any third country, whichever are the better.
Such activities include, but are not limited to:
(a) marketing and sales of maritime transport and related services through direct contact with customers, from quotation to invoicing, whether these services are operated or offered by the service supplier itself or by service suppliers with which the service seller has established standing business arrangements;
(b) purchase and use, on their own account or on behalf of their customers (and the resale to rheir customers) of any transport and related services, including inward transport services by any mode, particularly inland waterways, road and rail, necessary for the supply of an integrated service;
(c) preparation of documentation concerning transport documents, customs documents, or other documents related to the origin and character of the goods transported;
(d) provision of business information of any means, including computerised information systems and electronic data interchange (subject to any non-discriminatory restrictions concerning telecommunications);
(e) setting up of any business arrangement, including participation in the company's stock and the appointment of personnel recruited locally (or, in the case of foreign personnel, subject to the relevant provisions of this Agreement), with any locally established shipping agency;
(f) acting on behalf of the companies, organizing the call of the ship or taking over cargoes when required.
Article 32.
For the purposes of this Agreement:
(a) A "Community company" or a "Ukrainian company" respectively shall mean a company set up in accordance with the laws of a Member State or of Ukraine respectively and having its registered office or central administration or principal place of business in the territory of the Community or Ukraine respectively. However, should the company, set up in accordance with the laws of a Member State or Ukraine respectively, have only its registered office in the territory of the Community or Ukraine respectively, the company shall be considered a Community or Ukrainian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or Ukraine 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 the right of Community or Ukrainian companies as referred to in point (a) to take up economic activities by means of the setting up of subsidiaries and branches in Ukraine or in the Community respectively.
(e) "Operation" shall mean the pursuit of economic activities.
(f) "Economic activities" shall mean activities of an industrial, commercial and professional character.
(g) With regard to international maritime transport, including intermodal operations involving a sea leg, nationals of the Member States or of Ukraine established outside the Community or Ukraine respectively, and shipping companies established outside the Community or Ukraine and controlled by nationals of a Member State or Ukrainian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Ukraine respectively in accordance with their respective legislations.
Article 33.
1. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the obligations of a Party under this Agreement.
2. Nothing in this 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 34.
The provisions of this Agreement shall not prejudice the application by each Party of any measure necessary to prevent the circumvention of its measures concerning third country access to its market, through the provisions of this Agreement.
Article 35.
1. Notwithstanding the provisions of Chapter I, a Community company or a Ukrainian company established in the territory of Ukraine 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 Ukraine and the Community respectively, employees who are nationals of Community Member States and Ukraine respectively, provided that such employees are key personnel as defined in paragraph 2, 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) in the following categories, provided that the organization is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least the year immediately preceding such movement:
(a) Persons working in a senior position with an organization, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent, including:
- Directing the establishment or a department or subdivision of the establishment;
- Supervizing and controlling the work of other supervisory, professional or managerial employees;
- Having the authority personally to engage and dismiss or recommend engaging, dismissing or other personnel actions.
(b) Persons working within an organization who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession.
(c) An "intra-corporate transferee" is defined as a natural person working within an organization in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organization concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organization, effectively pursuing like economic activities in the territory of the other Party.
Article 36.
1. The Parties shall use their best endeavours to avoid taking any measures or actions which render the conditions for the establishment and operation of each other's companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement.
2. The provisions of this Article are without prejudice to those of Article 44: the situations covered by such Article 44 shall be solely governed by its provisions to the exclusion of any other.
3. Acting in the spirit of partnership and co-operation and in light of provisions contained in Article 51 the Government of Ukraine shall inform the Community of its intentions to submit new legislation or adopt new regulations which may render the conditions for the establishment or operation in Ukraine of subsidiaries and branches of Community companies more restrictive than the situation existing on the day preceding the date of signature of the Agreement. The Community may request Ukraine to communicate the drafts of such legislation or regulations and to enter into consultations about those drafts.
4. Where new legislation or regulations introduced in Ukraine would result in rendering the conditions for establishment of Community companies into its territory and for the operation of subsidiaries and branches of Community companies established in Ukraine more restrictive than the situation existing on the day of signature of the Agreement, such respective legislation or regulations shall not apply during three years following the entry into force of the relevant act to those subsidiaries and branches already established in Ukraine at the time of entry into force of the relevant act.
Article 37.
1. The Parties undertake in accordance with the provisions of this Chapter to take the necessary steps to allow progressively the supply of services by Community or Ukrainian companies who are established in a Party other than that of the person for whom the services are intended, taking into account the development of the services sectors in the Parties.
2. The Co-operation Council shall make recommendations for the implementation of paragraph 1.
Article 38.
The Parties shall cooperate with the aim of developing a market-oriented service sector in Ukraine.
Article 39.
1. The Parties undertake to apply effectively the principle of unrestricted access to the international maritime market and traffic on a commercial basis.
(a) The above provision does not prejudice the rights and obligations arising from the United Nations Code of Conduct for Liner Conferences, as applicable to one or other Contracting Party to this Agreement. Non-conference lines will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis.
(b) The Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade.
2. In applying the principles of paragraph 1, the Parties shall:
(a) not apply, as from entry into force of this Agreement, any cargo sharing provisions of bilateral agreements between any Member State of the Community and the former Soviet Union;
(b) not introduce cargo sharing clauses in future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned;
(c) prohibit cargo sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade;
(d) abolish, upon entry into force of this Agreement, all unilateral measures, administrative, technical and other obstacles which could have restrictive or discriminatory effects on the free supply of services in international maritime transport.
Each Party shall grant, inter alia, no less favourable treatment, than that accorded to a Party's own ships for the ships flying the flag of the other Party with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading.
The same treatment shall also be accorded by each Party in respect of ships operated by the other Party's nationals and companies, which fly the flag of a third country, after a transitional period, but not later than 1 July 1997.
3. Nationals and companies of the Community providing international maritime transport services shall be free to provide international sea-river services in the inland waterways of Ukraine and vice versa.
Article 40.
With a view to assuring a coordinated development of transport between the Parties, adapted to their commercial needs, the conditions of mutual market access and provision of services in transport by road, rail and inland waterways and, if applicable, in air transport may be dealt with by specific agreements where appropriate negotiated between the Parties as defined in Article 99 after entry into force of this Agreement.
Article 41.
1. The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health.
2. They shall not apply to activities which in the territory of either Party are connected, even occasionally, with the exercise of official authority.
Article 42.
For the purpose of this Title, nothing in the Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, work, labour conditions and establishment of natural persons and supply of services, provided that - in so doing - they do not apply them in a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of the Agreement. This provision does not prejudice the application of Article 41.
Article 43.
Companies which are controlled and exclusively owned by Ukrainian companies and Community companies jointly shall also be beneficiaries of the provisions of Chapters II, III and IV.
Article 44.
Treatment granted by either Party to the other hereunder shall, as from the day one month prior to the date of entry into force of the relevant obligations of the General Agreement on Trade in Services (GATS), in respect of sectors or measures covered by the GATS, in no case be more favourable than that accorded by such first Party under the provisions of GATS and this in respect of each service sector, sub-sector and mode of supply.
Article 45.
For the purposes of Chapters II, III and IV, no account shall be taken of treatment accorded by the Community, its Member States or Ukraine pursuant to commitments entered into in economic integration agreements in accordance with the principles of Article V of the GATS.
Article 46.
1. The most-favoured-nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages which the Parties are providing or will provide in the future on the basis of agreements to avoid double taxation, or other tax arrangements.
2. Nothing in this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation and other tax arrangements, or domestic fiscal legislation.
3. Nothing in this Title shall be construed to prevent Member States or Ukraine from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in identical situations, in particular as regards their place of residence.
Article 47.
Without prejudice to Article 35, no provision of Chapters II, III and IV hereof shall be interpreted as giving the right to:
- Nationals of the Member States or of Ukraine respectively to enter, or stay in, the territory of Ukraine or the Community respectively in any capacity whatsoever, and in particular as a shareholder or partner in a company or manager or employed thereof or supplier or recipient of services;
- Community subsidiaries or branches of Ukrainian companies to employ or have employed in the territory of the Community nationals of Ukraine;
- Ukrainian subsidiaries or branches of Community companies to employ or have employed in the territory of Ukraine nationals of the Member States;
- Ukrainian companies or Community subsidiaries or branches of Ukrainian companies to supply Ukrainian persons to act for and under the control of other persons by temporary employment contracts;
- Community companies or Ukrainian subsidiaries or branches of Community companies to supply workers who are nationals of the Member States by temporary employment contracts.
Article 48.
1. The Parties undertake to authorize in freely convertible currency, any payments on the current account of balance of payments between residents of the Community and of Ukraine connected with the movement of goods, services or persons made in accordance with the provisions of this Agreement.
2. With regard to transactions on the capital account of balance of payments, from entry into force of this Agreement, the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II of Title IV, and the liquidation or repatriation of these investments and of any profit stemming therefrom shall be ensured.
3. Without prejudice to paragraph 2 or to paragraph 5, as from entry into force of this Agreement, no new foreign exchange restrictions on the movement of capital and current payments connected therewith between residents of the Community and Ukraine shall be introduced and the existing arrangements shall not become more restrictive.
4. The Parties shall consult each other with a view to facilitating the movement of forms of capital other than those referred to in paragraph 2 between the Community and Ukraine in order to promote the objectives of this Agreement.
5. With reference to the provisions of this Article, until a full convertibility of the Ukrainian currency within the meaning of Article VIII of the Articles of Agreement of the International Monetary Fund (IMF) is introduced, Ukraine may in exceptional circumstances apply exchange restrictions connected with the granting or taking up of short and medium-term financial credits to the extent that such restrictions are imposed on Ukraine for the granting of such credits and are permitted according to Ukraine's status under the IMF. Ukraine shall apply these restrictions in a non-discriminatory manner. They shall be applied in such a manner as to cause the least possible disruption to this Agreement. Ukraine shall inform the Co-operation Council promptly of the introduction of such measures and of any changes therein.
6. Without prejudice to paragraphs 1 and 2, where, in exceptional circumstances, movements of capital between the Community and the Ukraine cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Ukraine, the Community and Ukraine, respectively, may take safeguard measures with regard to movements of capital between the Community and Ukraine for a period not exceeding six months if such measures are strictly necessary.
Article 49.
1. The Parties agree to work to remedy or remove through the application of their competition laws or otherwise, restrictions on competition by enterprises or caused by State intervention insofar as they may affect trade between the Community and the Ukraine.
2. In order to attain the objectives mentioned in paragraph 1:
2.1 The Parties shall ensure that they have and enforce laws addressing restrictions on competition by enterprises within their jurisdiction.
2.2 The Parties shall refrain from granting State aids favouring certain undertakings or the production of goods other than primary products as defined in the GATT, or the provision of services, which distort or threaten to distort competition insofar as they affect trade between the Community and the Ukraine.
2.3 Upon request by one Party, the other Party shall provide information on its aid schemes or on particular individual cases of State aid. No information needs to be provided which is covered by legislative requirements of the Parties on professional or commercial secrets.
2.4 In the case of State monopolies of a commercial character, the Parties declare their readiness, as from the fourth year from the date of entry into force of this Agreement, to ensure that there is no discrimination between nationals of the Parties regarding the conditions under which goods are procured or marketed.
2.5 In the case of public undertakings or undertakings to which Member States or the Ukraine grant exclusive rights, the Parties declare their readiness, as from the fourth year from the date of entry into force of this Agreement, to ensure that there is neither enacted nor maintained any measure distorting trade between the Community and the Ukraine to an extent contrary to the Parties' respective interests. This provision shall not obstruct the performance, in law or fact, of the particular tasks assigned to such undertakings.
2.6 The period defined in paragraphs 2.4 and 2.5 may be extended by agreement of the Parties.
3. Consultations may take place within the Co-operation Committee at the request of the Community or Ukraine on the restrictions or distortions of competition referred to in paragraphs 1 and 2 and on the enforcement of their competition rules, subject to limitations imposed by laws regarding disclosure of information, confidentiality and business secrecy. Consultations may also comprise questions on the interpretation of paragraphs 1 and 2.
4. The Parties with experience in applying competition rules shall give full consideration to providing other Parties, upon request and within available resources, technical assistance for the development and implementation or competition rules.
5. The above provisions in no way affect the Parties' rights to apply adequate measures, notably those referred to in Article 19, in order to address distortions of trade in goods or services.
Article 50.
1. Pursuant to the provisions of this Article and of Annex III, Ukraine shall continue to improve the protection of intellectual, industrial and commercial property rights in order to provide, by the end of the fifth year after the entry into force of the Agreement for a level of protection similar to that existing in the Community, including effective means of enforcing such rights.
2. By the end of the fifth year after entry into force of the Agreement, Ukraine shall accede to the multilateral conventions on intellectual, industrial and commercial property rights referred to in Paragraph 1 of Annex III to which Member States are parties or which are de facto applied by Member States according to the relevant provisions contained in these conventions.
Article 51.
1. The Parties recognize that an important condition for strengthening the economic links between Ukraine and the Community is the approximation of Ukraine's existing and future legislation to that of the Community. Ukraine shall endeavour to ensure that its legislation will be gradually made compatible with that of the Community.
2. The approximation of laws shall extend to the following areas in particular: customs law, company law, banking law, company accounts and taxes, intellectual property, protection of workers at the workplace, financial services, rules on competition, public procurement, protection of health and life of humans, animals and plants, the environment, consumer protection, indirect taxation, technical rules and standards, nuclear laws and regulations, transport.
3. The Community shall provide Ukraine with technical assistance as appropriate for the implementation of these measures. which may include i.e. :
- The exchange of experts;
- The provision of early information especially on relevant legislation;
- Organization of seminars;
- Training activities;
- Aid for translation of Community legislation in the relevant sectors.
Article 52.
1. The Community and Ukraine shall establish economic co-operation aimed at contributing to the process of economic reform and recovery and sustainable development of Ukraine. Such co-operation shall strengthen and develop economic links, to the benefit of both parties.
2. Policies and other measures will be designed to bring about economic and social reforms and restructuring of the economic system in Ukraine and will be guided by the requirements of sustainability and harmonious social development; they will also fully incorporate environmental considerations.
3. To this end the co-operation will concentrate, on industrial co-operation, investment promotion and protection, public procurement, standards and conformity assessments, mining and raw materials, science and technology, education and training, agriculture and agro-industrial sector, energy, civil nuclear sector, environment, transport, space, telecommunications, financial services, money laundering, monetary policy, regional development, social co-operation, tourism, small and medium-sized enterprises, information and communication, consumer protection, customs, statistical co-operation, economics and drugs.
4. Special attention shall be devoted to measures capable of fostering co-operation between the Independent States and other neighbouring countries with a view to stimulating a harmonious development of the region.
5. Where appropriate, economic co-operation and other forms of co-operation provided for in this Agreement may be supported by technical assistance from the Community, taking into account the Community's relevant Council regulation applicable to technical assistance in the Independent States, the priorities agreed upon in the indicative programme related to Community technical assistance to Ukraine and its established coordination and implementation procedures.
6. The Co-operation Council shall make recommendations as to the development of co-operation in fields identified in paragraph 3.
Article 53. Industrial Co-operation
1. Co-operation shall aim at promoting the following in particular:
- The development of business links between economic operators of both sides, e.g. in view of the transfer of technologies and know-how;
- Community participation in Ukraine's efforts to restructure and technically upgrade its industry;
- The improvement of management;
- The development of appropriate commercial rules and practices, including product marketing;
- Environmental protection.
- Adaptation of the structure of industrial production to the standards of an advanced market economy;
- The conversion of the military-industrial complex.
2. The provisions of this Article shall not affect the enforcement of Community competition rules applicable to undertakings.
Article 54. Investment Promotion and Protection
1. Bearing in mind the respective powers and competences of the Community and the Member States, co-operation shall aim to establish a favourable climate for investment, both domestic and foreign, especially through better conditions for investment protection, the transfer of capital and the exchange of information on investment opportunities.
2. The aims of this co-operation shall be in particular:
- The conclusion, where appropriate, between the Member States and Ukraine, of agreements for the promotion and protection of investment;
- The conclusion, where appropriate, between the Member States and Ukraine, of agreements to avoid double taxation;
- The creation of favourable conditions for attracting foreign investments into the Ukrainian economy;
- To establish stable and adequate business law and conditions, and to exchange information on laws, regulations and administrative practices in the field of investment;
- To exchange information on investment opportunities in the form of inter alia trade fairs, exhibitions, trade weeks and other events.
Article 55. Public Procurement
The Parties shall cooperate to develop conditions for open and competitive award of contracts for goods and services in particular through calls for tenders.
Article 56. Co-operation In the Field of Standards and Conformity Assessment
1. Co-operation between the Parties shall promote alignment with internationally agreed criteria, principles and guidelines followed in the field of quality. The required actions will facilitate progress towards mutual recognition in the field of conformity assessment, as well as the improvement of Ukrainian product quality.
2. To this end they shall seek:
- To promote appropriate co-operation with organizations and institutions specialised in these fields;
- To promote the use of Community technical regulations and the application of European standards and conformity assessment procedures;
- To permit the sharing of experience and technical information in the field of quality management.
Article 57. Mining and Raw Materials
1. The Parties shall aim at increasing investment and trade in mining and raw materials.
2. The co-operation shall focus in particular on the following areas:
- Exchange of information on the developments in the mining and non-ferrous metals sectors;