EUROPEAN COMMISSION

Brussels, 25.9.2017

JOIN(2017) 36 final

2017/0236(NLE)

Joint Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

The attached proposal constitutes the legal instrument for the signing of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part (hereinafter referred to as ‘the Agreement’).

Relations between the European Union (EU) and the Republic of Armenia (Armenia) are currently based on the Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Armenia, of the other part, which entered into force on 1 July 1999 for an initial ten-year period and which has been automatically renewed.

On 29 September 2015, the Council adopted Decision authorising the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to negotiate a Framework Agreement between the EU and Armenia. Negotiation of the Agreement began on 7 December 2015. The text of the Agreement was initialled on 21 March 2017.

The Council has been kept informed at all stages of the negotiations. It has been consulted in the Working Party on Eastern Europe and Central Asia and in the Trade Policy Committee. The European Parliament has also been kept promptly and fully informed throughout the negotiations.

The Commission and the High Representative consider that the objectives set by the Council in its negotiating directives have been met and that the draft Agreement can be submitted for signature.

2.LEGAL ELEMENTS OF THE PROPOSAL

2.1 The aim and content of the agreement

The scope of the new Agreement is comprehensive, covering issues of EU competence and interests, which reflects the existing wide range of cooperation in economic, trade and political areas, as well as on sectoral policies. It develops these areas further, thus providing a long-term basis for further development of EU-Armenia relations. By strengthening political dialogue and improving cooperation in a broad range of areas, the Agreement provides the basis for a more effective bilateral engagement with Armenia.

The Agreement includes the EU’s standard political clauses on human rights, the international criminal courts, weapons of mass destruction, small arms and light weapons and counter-terrorism. It also contains provisions on cooperation in areas such as transport, energy, health, the environment, climate change, taxation, education and culture, employment and social affairs, banking and insurance, industrial policy, agriculture and rural development, tourism, research and innovation, and mining. In addition, it covers legal cooperation, the rule of law, combatting money laundering and terrorist financing, and fighting organised crime and corruption.

The Agreement contains a substantive trade title with important commitments in several trade policy areas. These will improve conditions for bilateral EU-Armenia trade, while taking full account of Armenia's obligations as a member of the Eurasian Economic Union. These will ensure a better regulatory environment for the economic operators in areas such as trade in goods and services, setting up and running companies, capital movements, government procurement, intellectual property rights, sustainable development, and competition.

2.2    The legal basis for the proposed decision

Article 218(5) TFEU provides for the adoption of a decision authorising the signing of an agreement. Moreover, the second subparagraph of Article 218(8) TFEU provides that the Council acts unanimously when the agreement covers a field for which unanimity is required for the adoption of a Union act.

With regard to a measure that simultaneously pursues a number of objectives, or that has several components, which are inseparably linked without one being incidental to the other, the Court has held that, where various provisions of the Treaty are therefore applicable, such a measure will have to be founded, exceptionally, on the various corresponding legal bases, unless the procedure laid down for each legal basis are incompatible with each other (Case C-490/10 Parliament v Council, ECLI: EU:C:2012:525, paragraph 46).

The Agreement pursues objectives and includes components from the Common Foreign and Security Policy, the Common Commercial Policy and development cooperation. These aspects of the Agreement are inseparably linked without one being incidental to the other.

The Common Foreign and Security Policy is a field for which unanimity is required for the adoption of an European Union act.

The legal basis of the proposed decision should therefore include Article 37 TEU, Article 207 TFEU and Article 209 TFEU read in conjunction with Article 218(5) TFEU and the second subparagraph of Article 218(8) TFEU. No additional provisions are required as legal basis (see Case C-377/12 Commission v Council, ECLI: EU: C: 2014:1903).

Having assessed the text of the Agreement the Commission and the High Representative take the view that the Agreement does not cover any areas that would fall into the exclusive competence of the Member States and would thus warrant, in legal terms, the use of a mixed agreement. However, as the negotiating directives were issued in view of a mixed agreement, the text of the Agreement was initialled as mixed agreement and in consequence proposed here as such for signature and conclusion, the parties being the European Union and European Atomic Energy Community and their Member States of the one part and the Republic of Armenia, of the other part.

2.3    The necessity of the proposed decision

Article 216 TFEU provides that the European Union may conclude an agreement with one or more third country where the Treaties so provide or where the conclusion of an agreement is necessary in order to achieve, within the context of EU policies, one of the objectives referred to in the Treaties, where it is provided for in a legally binding EU act or where it is likely to affect common rules or alter their scope.

The Treaties provide for the conclusion of agreements such as this one, namely in Articles 37 TEU, 207 TFEU and 209 TFEU. Moreover, the conclusion of the Agreement is necessary for the purpose of achieving, within the framework of the EU's policies, objectives referred to in the Treaties, including strengthening human rights, non-proliferation of weapons of mass destruction, counter-terrorism, the fight against corruption and organised crime, trade, migration, the environment, energy, climate change, transport, science and technology, employment and social affairs, education, agriculture.

The Agreement must be signed before it can be concluded on behalf of the European Union.

2017/0236 (NLE)

Joint Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on European Union, in particular Article 37 thereof,

Having regard to the Treaty on the Functioning of the European Union, in particular Articles 207 and 209, in conjunction with Article 218(5) and the second paragraph of Article 218(8), thereof,

Having regard to the proposal from the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy,

Whereas:

(1)On 29 September 2015, the Council authorised the Commission and the High Representative to open negotiations with the Republic of Armenia on a Framework Agreement.

(2)Those negotiations have been concluded and the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part, hereinafter referred to as the Agreement', was initialled on 21March 2017.

(3)Article 385 of the Agreement provides for its provisional application.

(4)The Agreement should be signed on behalf of the Union and applied on a provisional basis, subject to the fulfilment of the procedures required for its conclusion at a later date.

HAS ADOPTED THIS DECISION:

Article 1

1. The signing of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Armenia, of the other part is hereby authorised on behalf of the Union, subject to the conclusion of the said Agreement.

2. The text of the Agreement to be signed is attached to this Decision.

Article 2

The Council Secretariat General shall establish the instrument of full powers to sign the Agreement, subject to its conclusion, for the person(s) indicated by the negotiators of the Agreement

Article 3

1. In accordance with Article 385 of the Agreement and subject to the notifications provided for therein, the Agreement shall be applied provisionally in its entirety between the Union and the Republic of Armenia, pending its entry into force.

2. The date from which the Agreement is to be provisionally applied shall be published in the Official Journal of the European Union by the General Secretariat of the Council.

Article 4

1. For the purposes of Article 240 of the Agreement, any amendments to the Agreement through decisions taken by the Subcommittee on Geographical Indications shall be approved by the Commission on behalf of the Union. Where interested parties cannot reach agreement after objections have been raised concerning a geographical indication, the Commission shall adopt such a position on the basis of the procedure laid down in Article 57of Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21November 2012 on quality schemes for agricultural products and foodstuffs 1 .

2. For the purpose of Article 270(2), first sentence, of the Agreement the Commission is authorised to approve the Union position with regard to amendments to Annex XI to the Agreement.

For the purpose of Article 270(2), second sentence, of the Agreement the Commission is authorised to raise objections to a modification or rectification of Annex XI proposed by the Republic of Armenia.

Article 5

The Agreement shall not be construed as conferring rights or imposing obligations that can be directly invoked before Union or Member State courts and tribunals.

Article 6

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

(1) OJ L 343 14.12.2012, p.1

EUROPEAN COMMISSION

Brussels, 25.9.2017

JOIN(2017) 36 final

ANNEX

to the

Joint Proposal for a Council Decision

on the signing, on the behalf of the European Union, an provisional application of the Comprehensive and Enhanced Partnership Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part and the Republic of Armenia, of the other part.

COMPREHENSIVE AND ENHANCED PARTNERSHIP AGREEMENT

BETWEEN THE EUROPEAN UNION

AND THE EUROPEAN ATOMIC ENERGY COMMUNITY

AND THEIR MEMBER STATES, OF THE ONE PART,

AND THE REPUBLIC OF ARMENIA, OF THE OTHER PART

PREAMBLE

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE REPUBLIC OF CROATIA,

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

HUNGARY,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,

Contracting Parties to the Treaty on European Union, the Treaty on the Functioning of the European Union and the Treaty establishing the European Atomic Energy Community, hereinafter referred to as "the Member States",

THE EUROPEAN UNION, and

THE EUROPEAN ATOMIC ENERGY COMMUNITY, hereinafter referred to as "Euratom"

   of the one part, and

THE REPUBLIC OF ARMENIA

   of the other part,

hereafter jointly referred to as "the Parties",

TAKING ACCOUNT OF the strong links between the Parties and the values that they share, and their desire to strengthen links established in the past through the Partnership and Cooperation Agreement and to promote close and intensive cooperation based on equal partnership within the framework of the European Neighbourhood Policy (ENP) and the Eastern Partnership as well as within the this Agreement;

RECOGNISING the contribution of the joint EU-Armenia ENP Action Plan, including its introductory provisions, and the importance of the partnership priorities in strengthening relations between the European Union and the Republic of Armenia and in helping to move forward the reform and approximation, as referred to hereinafter, process in the Republic of Armenia, thus contributing to enhanced political and economic cooperation;

COMMITTED to further strengthening respect for fundamental freedoms, human rights, including the rights of persons belonging to minorities, democratic principles, the rule of law, and good governance;

ACKNOWLEDGING that internal reforms towards strengthening democracy and the market economy, on the one hand, and sustainable conflict settlement, on the other hand, are linked. Hence, sustainable democratic reform processes in the Republic of Armenia will help build confidence and stability throughout the region;

COMMITTED to further promoting the political, socio-economic and institutional development of the Republic of Armenia through, for example, the development of civil society, institution building, public-administration and civil-service reform, the fight against corruption, and enhanced trade and economic cooperation, including good governance in the area of tax, the reduction of poverty, and wide-ranging cooperation in a broad spectrum of areas of common interest, including in the field of justice, freedom and security;

COMMITTED to the full implementation of the purposes, principles and provisions of the United Nations Charter, the United Nations Universal Declaration of Human Rights of 1948, the European Convention for the Protection of Human Rights and Fundamental Freedoms of 1950 ("the European Convention on Human Rights") and the Helsinki Final Act of 1975 of the Conference on Security and Cooperation in Europe ("OSCE Helsinki Final Act");

RECALLING their will to promote international peace and security as well as engaging in effective multilateralism and the peaceful settlement of disputes within agreed formats, in particular by cooperating to that end within the framework of the United Nations (UN) and the Organization for Security and Co-operation in Europe (OSCE);

COMMITTED to international obligations to fight against the proliferation of weapons of mass destruction ("WMDs") and their means of delivery and to cooperate on disarmament and nonproliferation, as well as nuclear security and safety;

RECOGNISING the importance of the active participation of the Republic of Armenia in regional cooperation formats, including those supported by the European Union; recognising the importance the Republic of Armenia attaches to its participation in international organisations and cooperation formats and its existing obligations arising therefrom;

DESIROUS to further develop regular political dialogue on bilateral and international issues of mutual interest, including regional aspects, taking into account the common foreign and security policy, including the common security and defence policy, of the European Union and the relevant policies of the Republic of Armenia; recognising the importance the Republic of Armenia attaches to its participation in international organisations and cooperation formats and its existing obligations arising therefrom;

RECOGNISING the importance of the commitment of the Republic of Armenia to the peaceful and lasting settlement of the Nagorno-Karabakh conflict, and the need to achieve that settlement as early as possible, in the framework of the negotiations led by the OSCE Minsk Group co-chairs; also recognising the need to achieve that settlement on the basis of the purposes and principles enshrined in the UN Charter and the OSCE Helsinki Final Act, in particular those related to refraining from the threat or use of force, the territorial integrity of States, and the equal rights and self-determination of peoples and reflected in all declarations issued within the framework of the OSCE Minsk Group co-chairmanship since the 16th OSCE Ministerial Council of 2008; also noting the stated commitment of the European Union to support this settlement process;

COMMITTED to preventing and fighting corruption, combating organised crime and stepping up cooperation in the fight against terrorism;

COMMITTED to stepping up their dialogue and cooperation on migration, asylum and border management with a comprehensive approach paying attention to legal migration and to cooperation aimed at tackling illegal migration and trafficking in human beings as well as efficiently implementing the readmission agreement;

RECONFIRMING that enhanced mobility of the citizens of the Parties in a secure and wellmanaged environment remains a core objective and considering in due course the opening of a visa dialogue with the Republic of Armenia, provided that conditions for well-managed and secure mobility, including the effective implementation of visa facilitation and readmission agreements between the Parties, are in place;

COMMITTED to the principles of free-market economy and the readiness of the European Union to contribute to the economic reforms in the Republic of Armenia;

RECOGNISING the willingness of the Parties to deepen economic cooperation, including in traderelated areas, in compliance with the rights and obligations arising from the Parties' membership of the World Trade Organization (WTO) and through the transparent and non-discriminatory application of those rights and obligations;

CONVINCED that this Agreement will create a new climate for economic relations between the two Parties and, above all, for the development of trade and investment, and will stimulate competition, which are crucial to economic restructuring and modernisation;

COMMITTED to respecting the principles of sustainable development;

COMMITTED to ensuring environmental protection, including trans-boundary cooperation and the implementation of multilateral international agreements;

COMMITTED to enhancing the security and safety of the energy supply, facilitating the development of appropriate infrastructure, increasing market integration and gradual regulatory approximation with the key elements of the EU acquis referred to hereinafter, including, inter alia, by promoting energy efficiency and the use of renewable energy sources, taking into account commitments of the Republic of Armenia to the principles of equal treatment of energysupplier, transit, and -consumer countries;

COMMITTED to high levels of nuclear safety and nuclear security, as referred to hereinafter;

ACKNOWLEDGING the need for enhanced energy cooperation, and the commitment of the Parties to fully respect the provisions of the Energy Charter Treaty;

WILLING to improve the level of public health and safety and the protection of human health, respecting the principles of sustainable development, environmental needs and climate change;

COMMITTED to enhancing people-to-people contacts, including through cooperation and exchanges in the fields of science and technology, education and culture, youth and sport;

COMMITTED to promoting cross-border and inter-regional cooperation;

RECOGNISING the commitment of the Republic of Armenia to progressively approximate its legislation in the relevant sectors with that of the European Union, to implement it effectively as part of its wider reform efforts and to develop its administrative and institutional capacity to the extent necessary to enforce this Agreement, and recognising the sustained support of the European Union, in accordance with all available instruments of cooperation, including technical, financial and economic assistance in connection with that commitment, reflecting the pace of the reforms and economic needs of the Republic of Armenia;

NOTING that, in the event that the Parties decide, within the framework of this Agreement, to enter into specific agreements in the area of freedom, security and justice concluded by the European Union pursuant to Title V of Part Three of the Treaty on the Functioning of the European Union, the provisions of such future agreements would not bind the United Kingdom and/or Ireland unless the European Union, simultaneously with the United Kingdom and/or Ireland as regards their respective previous bilateral relations, notifies the Republic of Armenia that the United Kingdom and/or Ireland has/have become bound by such agreements as part of the European Union in accordance with Protocol No 21 on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice, annexed to the Treaty on European Union and the Treaty on the Functioning of the European Union. Likewise, any subsequent internal measures of the European Union adopted pursuant to the Title V of Part Three of the Treaty on the Functioning of the European Union to implement this Agreement would not bind the United Kingdom and/or Ireland unless they have notified their wish to take part or accept such measures in accordance with Protocol No 21; also noting, that such future agreements or such subsequent internal measures of the European Union would fall under Protocol No 22 on the position of Denmark, annexed to the said Treaties,

HAVE AGREED AS FOLLOWS:

TITLE I

OBJECTIVES AND GENERAL PRINCIPLES

ARTICLE 1

Objectives

The aims of this Agreement are:

(a)    to enhance the comprehensive political and economic partnership and cooperation between the Parties, based on common values and close links, including by increasing the participation of the Republic of Armenia in policies, programmes and agencies of the European Union;

(b)    to strengthen the framework for political dialogue on all areas of mutual interest, promoting the development of close political relations between the Parties;

(c)    to contribute to the strengthening of democracy and of political, economic and institutional stability in the Republic of Armenia;

(d)    to promote, preserve and strengthen peace and stability at both regional and international level, including through joining efforts to eliminate sources of tension, enhancing border security, and promoting cross-border cooperation and good neighbourly relations;

(e)    to enhance cooperation in the area of freedom, security and justice with the aim of reinforcing the rule of law and respect for human rights and fundamental freedoms;

(f)    to enhance mobility and people-to-people contacts;

(g)    to support the efforts of the Republic of Armenia to develop its economic potential via international cooperation, including through the approximation of its legislation to the EU acquis referred to hereinafter;

(h)    to establish enhanced trade cooperation allowing for sustained regulatory cooperation in relevant areas, in compliance with the rights and obligations arising from WTO membership; and

(i)    to establish conditions for increasingly close cooperation in other areas of mutual interest.

ARTICLE 2

General Principles

1.    Respect for the democratic principles, the rule of law, human rights and fundamental freedoms, as enshrined in particular in the UN Charter, the OSCE Helsinki Final Act and the Charter of Paris for a New Europe of 1990, as well as other relevant human rights instruments such as the UN Universal Declaration on Human Rights and the European Convention on Human Rights, shall form the basis of the domestic and external policies of the Parties and constitute an essential element of this Agreement.

2.    The Parties reiterate their commitment to the principles of a free-market economy, sustainable development, regional cooperation and effective multilateralism.

3.    The Parties reaffirm their respect for the principles of good governance, as well as for their international obligations, in particular under the UN, the Council of Europe and the OSCE.

4.    The Parties commit themselves to the fight against corruption, the fight against the different forms of transnational organised crime and terrorism, the promotion of sustainable development, effective multilateralism and the fight against the proliferation of WMDs and their delivery systems, including through the EU Chemical Biological Radiological and Nuclear Risk Mitigation Centre of Excellence Initiative. This commitment constitutes a key factor in the development of the relations and cooperation between the Parties and contributes to regional peace and stability.

TITLE II

POLITICAL DIALOGUE AND REFORM;
COOPERATION IN THE FIELD OF FOREIGN AND SECURITY POLICY

ARTICLE 3

Aims of political dialogue

1.    Political dialogue on all areas of mutual interest, including foreign policy and security matters as well as domestic reform, shall be further developed and strengthened between the Parties. Such dialogue will increase the effectiveness of political cooperation on foreign policy and security matters, recognising the importance the Republic of Armenia attaches to its participation in international organisations and cooperation formats and its existing obligations arising therefrom.

2.    The aims of political dialogue shall be:

(a)    to further develop and strengthen political dialogue on all areas of mutual interest;

(b)    to enhance the political partnership and increase the effectiveness of cooperation in the area of foreign and security policy;

(c)    to promote international peace, stability and security based on effective multilateralism;

(d)    to strengthen cooperation and dialogue between the Parties on international security and crisis management, in particular in order to address global and regional challenges and related threats;

(e)    to strengthen cooperation in the fight against the proliferation of WMDs and their delivery systems;

(f)    to foster result-oriented and practical cooperation between the Parties for achieving peace, security and stability on the European continent;

(g)    to strengthen respect for democratic principles, the rule of law, good governance, and human rights and fundamental freedoms, including media freedom and the rights of persons belonging to minorities, and to contribute to consolidating domestic political reforms;

(h)    to develop dialogue and to deepen cooperation between the Parties in the field of security and defence;

(i)    to promote the peaceful resolution of conflicts;

(j)    to promote the purposes and principles of the UN as enshrined in its Charter and the principles guiding relations between participating states as set out in the OSCE Helsinki Final Act; and

(k)    to promote regional cooperation, develop good neighbourly relations and enhance regional security, including by taking steps towards opening borders to promote regional trade and cross-border movement.

ARTICLE 4

Domestic reform

The Parties shall cooperate in the following areas:

(a)    developing, consolidating and increasing the stability and effectiveness of democratic institutions and the rule of law;

(b)    ensuring respect for human rights and fundamental freedoms;

(c)    making further progress on judicial and legal reform, so as to secure the independence, quality and efficiency of the judiciary, the prosecution and law enforcement;

(d)    strengthening the administrative capacity and guaranteeing the impartiality and effectiveness of law-enforcement bodies;

(e)    further pursuing public-administration reform and developing an accountable, efficient, transparent and professional civil service; and

(f)    ensuring effectiveness in the fight against corruption, in particular with a view to enhancing international cooperation in combating corruption, and ensuring effective implementation of relevant international legal instruments, such as the UN Convention Against Corruption of 2003.

ARTICLE 5

Foreign and security policy

1.    The Parties shall intensify their dialogue and cooperation in the area of foreign and security policy, including the common security and defence policy, recognising the importance that the Republic of Armenia attaches to its participation in international organisations and cooperation formats and its existing obligations arising therefrom, and shall address in particular issues of conflict prevention and crisis management, risk reduction, cybersecurity, security-sector reform, regional stability, disarmament, non-proliferation, arms control and export control. Cooperation shall be based on common values and mutual interests, and shall aim at increasing its effectiveness, making use of bilateral, international and regional fora, in particular the OSCE.

2.    The Parties reaffirm their commitment to the principles and norms of international law, including those enshrined in the UN Charter and the OSCE Helsinki Final Act, and their commitment to the promotion of those principles in their bilateral and multilateral relations.

ARTICLE 6

Serious crimes of international concern and the International Criminal Court

1.    The Parties reaffirm that the most serious crimes of concern to the international community as a whole must not go unpunished and that their effective prosecution must be ensured by taking measures at national and international level, including at the level of the International Criminal Court.

2.    The Parties consider that the establishment and effective functioning of the International Criminal Court constitutes an important development for international peace and justice. The Parties shall aim to enhance cooperation in promoting peace and international justice by ratifying and implementing the Rome Statute of the International Criminal Court and its related instruments, and taking into account their legal and constitutional frameworks.

3.    The Parties agree to closely cooperate to prevent genocide, crimes against humanity and war crimes by making use of appropriate bilateral and multilateral frameworks.

ARTICLE 7

Conflict prevention and crisis management

The Parties shall enhance practical cooperation in conflict prevention and crisis management, in particular with a view to the possible participation of the Republic of Armenia in EU-led civilian and military crisis-management operations as well as relevant exercises and training, on a case-by-case basis.

ARTICLE 8

Regional stability and peaceful resolution of conflicts

1.    The Parties shall intensify their joint efforts to improve conditions for further regional cooperation by promoting open borders with cross-border movement, good neighbourly relations and democratic development, thereby contributing to stability and security, and shall work towards the peaceful settlement of conflicts.

2.    The efforts referred to in paragraph 1 shall follow commonly shared principles of maintaining international peace and security as enshrined in the UN Charter, the OSCE Helsinki Final Act and other relevant multilateral documents to which the Parties have aligned themselves. The Parties underline the importance of existing agreed formats for the peaceful settlement of conflicts.

3.    The Parties underline that arms control and confidence- and security-building measures remain of great importance for security, predictability and stability in Europe.

ARTICLE 9

Weapons of mass destruction, non-proliferation and disarmament

1.    The Parties consider that the proliferation of WMDs and their means of delivery, both to State and non-State actors, such as terrorists and other criminal groups, represents one of the most serious threats to international peace and stability. The Parties therefore agree to cooperate in and contribute to countering the proliferation of WMDs and their means of delivery, in full compliance with, and national implementation of, their existing obligations under international disarmament and nonproliferation treaties and agreements as well as other relevant international obligations. The Parties agree that this provision constitutes an essential element of this Agreement.

2.    The Parties agree to cooperate in and contribute to countering the proliferation of WMDs and their means of delivery by:

(a)    taking steps to sign, ratify or accede to, as appropriate, and fully implement all other relevant international instruments; and

(b)    further developing an effective system of national export controls, including controls on the export and transit of WMD-related goods as well as WMD end-use controls on dual-use technologies.

3.    The Parties agree to establish a regular political dialogue that will accompany and consolidate the elements referred to in this Article.

ARTICLE 10

Small arms and light weapons and conventional arms exports control

1.    The Parties recognise that the illicit manufacture and trafficking of small arms and light weapons (SALWs), including their ammunition, and excessive accumulation, poor management, inadequately secured stockpiles and the uncontrolled spread thereof continue to pose a serious threat to international peace and security.

2.    The Parties agree to observe and fully implement their respective obligations to deal with the illicit trade in SALWs, including their ammunition, under existing international agreements to which they are parties and UN Security Council resolutions, as well as their commitments within the framework of other international instruments applicable in that area, such as the UN Programme of Action to prevent, combat and eradicate the illicit trade in SALWs in all its aspects.

3.    The Parties shall undertake to cooperate and to ensure coordination, complementarity and synergy in their efforts to deal with the illicit trade in SALWs, including their ammunition, and the destruction of excessive stockpiles, at global, regional, sub-regional and, as appropriate, national levels.

4.    Furthermore, the Parties agree to continue to cooperate in the area of conventional arms control, in the light of the Council Common Position 2008/944/CFSP of 8 December 2008 defining common rules governing on control of exports of military technology and equipment 1 and relevant national legislation of the Republic of Armenia.

5.    The Parties agree to establish a regular political dialogue that will accompany and consolidate the elements referred to in this Article.

ARTICLE 11

Combating terrorism

1.    The Parties reaffirm the importance of the fight against and the prevention of terrorism, and agree to work together at bilateral, regional and international level to prevent and combat terrorism in all its forms and manifestations.

2.    The Parties agree that it is essential that the fight against terrorism be conducted with full respect for the rule of law and in full conformity with international law, including international human rights law, international refugee law and international humanitarian law, the principles of the UN Charter, and all relevant international counter-terrorism-related instruments.

3.    The Parties stress the importance of the universal ratification and full implementation of all UN counter-terrorism-related conventions and protocols. The Parties agree to continue to promote dialogue on the draft Comprehensive Convention on International Terrorism and to cooperate in the implementation of the UN Global Counter-Terrorism Strategy, as well as all relevant UN Security Council resolutions and Council of Europe conventions. The Parties also agree to cooperate to promote international consensus on the prevention of and fight against terrorism.

TITLE III

JUSTICE, FREEDOM AND SECURITY

ARTICLE 12

Rule of law and respect for human rights and fundamental freedoms

1.    In their cooperation in the area of freedom, security and justice, the Parties shall attach particular importance to the consolidation of the rule of law, including the independence of the judiciary, access to justice, the right to a fair trial as provided for by the European Convention on Human Rights, and procedural safeguards in criminal matters and victims' rights.

2.    The Parties shall cooperate fully with regard to the effective functioning of institutions in the areas of law enforcement, the fight against corruption and the administration of justice.

3.    Respect for human rights, non-discrimination and fundamental freedoms shall guide all cooperation on freedom, security and justice.

ARTICLE 13

Protection of personal data

The Parties agree to cooperate in order to ensure a high level of protection of personal data in accordance with the European Union, Council of Europe and international legal instruments and standards.

ARTICLE 14

Cooperation on migration, asylum and border management

1.    The Parties reaffirm the importance of the joint management of migration flows between their territories and shall establish a comprehensive dialogue on all migration-related issues, including legal migration, international protection and the fight against illegal migration, smuggling and trafficking in human beings.

2.    Cooperation will be based on a specific needs-assessment conducted through mutual consultation between the Parties and will be implemented in accordance with their relevant legislation in force. It will, in particular, focus on:

(a)    addressing the root causes of migration;

(b)    the development and implementation of national legislation and practices as regards international protection, with a view to satisfying the provisions of the Geneva Convention relating to the status of refugees of 1951, the Protocol relating to the Status of Refugees of 1967 and other relevant international instruments, such as the European Convention on Human Rights, and to ensuring respect for the principle of "non-refoulement";

(c)    the admission rules and rights and status of persons admitted, fair treatment and integration of lawfully residing non-nationals, education and training and measures against racism and xenophobia;

(d)    the establishment of an effective and preventive policy against illegal migration, the smuggling of migrants and trafficking in human beings, including the issue of how to combat networks of smugglers and traffickers and how to protect the victims of such trafficking in the framework of relevant international instruments;

(e)    issues such as organisation, training, best practices and other operational measures in the areas of migration management, document security, visa policy, and border-management and migration-information systems;

3.    Cooperation may also facilitate circular migration for the benefit of development.

ARTICLE 15

Movement of persons and readmission

1.    The Parties that are bound by the following Agreements shall ensure the full implementation of:

(a)    the Agreement between the European Union and the Republic of Armenia on the readmission of persons residing without authorisation ("the Readmission Agreement"), which entered into force on 1 January 2014; and

(b)    the Agreement between the European Union and the Republic of Armenia on the facilitation of the issuance of visas ("the Visa-facilitation Agreement"), which entered into force on 1 January 2014.

2.    The Parties shall continue to promote the mobility of citizens through the Visa-facilitation Agreement and consider in due course the opening of a visa-liberalisation dialogue provided that conditions for well-managed and secure mobility are in place. They shall cooperate in fighting irregular migration, including through the implementation of the Readmission Agreement, as well as promoting border-management policy as well as legal and operational frameworks.

ARTICLE 16

Fight against organised crime and corruption

1.    The Parties shall cooperate in combating and preventing criminal and illegal activities, including transnational activities, organised or otherwise, such as:

(a)    smuggling of migrants and trafficking in human beings;

(b)    smuggling and trafficking in firearms including SALWs;

(c)    smuggling and trafficking illicit drugs;

(d)    smuggling and trafficking in goods;

(e)    illegal economic and financial activities such as counterfeiting, fiscal fraud and publicprocurement fraud;

(f)    embezzlement in projects funded by international donors;

(g)    active and passive corruption, in both the private and public sector;

(h)    forging documents and submitting false statements; and

(i)    cybercrime.

2.    The Parties shall enhance bilateral, regional and international cooperation among law-enforcement bodies, including the possible development of cooperation between European Union Agency for Law Enforcement Cooperation (Europol) and the relevant authorities of the Republic of Armenia. The Parties are committed to implementing effectively the relevant international standards, in particular those enshrined in the UN Convention against Transnational Organised Crime of 2000 and the three Protocols thereto. The Parties shall cooperate in preventing and fighting corruption in line with the UN Convention Against Corruption of 2003, the recommendations of the Group of States against corruption (GRECO) and the OECD, transparency with regard to asset declaration, the protection of whistle-blowers, and the disclosure of information on final beneficiaries of legal entities.

ARTICLE 17

Illicit drugs

1.    Within their respective powers and competencies, the Parties shall cooperate to ensure a balanced and integrated approach towards preventing and combating illicit drugs as well as new psychoactive substances. Drug policies and actions shall be aimed at reinforcing structures for preventing and combating illicit drugs, reducing the supply of, trafficking in and the demand for illicit drugs and coping with the health and social consequences of drug abuse with a view to reducing harm, as well as at more effective prevention of the diversion of chemical precursors used for the illicit manufacture of narcotic drugs and psychotropic or psychoactive substances.

2.    The Parties shall agree on the necessary methods of cooperation to attain the objectives referred to in paragraph 1. Actions shall be based on commonly agreed principles set out in the relevant international conventions, and shall aim at implementing the recommendations enshrined in the Outcome Document of the UN General Assembly Special Session on the world drug problem held in April 2016.

ARTICLE 18

Money laundering and terrorism financing

1.    The Parties shall cooperate in order to prevent the use of their financial and relevant non-financial systems for the laundering of the proceeds of criminal activities in general and drug offences in particular, as well as for the purpose of terrorism financing. That cooperation extends to the recovery of assets or funds derived from the proceeds of crime.

2.    Cooperation in this area shall allow for exchanges of relevant information within the framework of the Parties' respective legislation and relevant international instruments as well as the adoption of appropriate standards to prevent and combat money laundering and the financing of terrorism equivalent to those adopted by relevant international bodies active in this area, such as the Financial Action Task Force on Money Laundering.

ARTICLE 19

Cooperation in the fight against terrorism

1.    In accordance with the principles underlying the fight against terrorism as set out in Article 11, the Parties reaffirm the importance of a law-enforcement and judicial approach to the fight against terrorism, and agree to cooperate in the prevention and suppression of terrorism, in particular by:

(a)    exchanging information on terrorist groups and individuals and their support networks, in accordance with international and national law, in particular as regards data protection and the protection of privacy;

(b)    exchanging experience with regard to the prevention and suppression of terrorism, means and methods and their technical aspects, as well as training, in accordance with applicable law;

(c)    exchanging views on radicalisation and recruitment, and ways to counter radicalisation and promote rehabilitation;

(d)    exchanging views and experience concerning cross-border movement and travel of terrorist suspects as well as terrorist threats;

(e)    sharing best practices as regards the protection of human rights in the fight against terrorism, in particular in relation to criminal proceedings;

(f)    ensuring the criminalisation of terrorist offences; and

(g)    taking measures against the threat of chemical, biological, radiological and nuclear terrorism, and undertaking necessary measures to prevent the acquisition, transfer and use for terrorist purposes of chemical, biological, radiological and nuclear materials as well as to prevent illegal acts against high-risk chemical, biological, radiological and nuclear facilities.

2.    Cooperation shall be based on relevant available assessments and conducted through mutual consultation between the Parties.

ARTICLE 20

Legal cooperation

1.    The Parties agree to develop judicial cooperation in civil and commercial matters as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation and, in particular, the Conventions of the Hague Conference on Private International Law in the fields of international legal cooperation and litigation as well as the protection of children.

2.    As regards judicial cooperation in criminal matters, the Parties shall seek to enhance cooperation on mutual legal assistance on the basis of relevant multilateral agreements. Such cooperation shall include, where appropriate, accession to, and implementation of, the relevant international instruments of the UN and the Council of Europe and closer cooperation between Eurojust and the competent authorities of the Republic of Armenia.

ARTICLE 21

Consular protection

The Republic of Armenia agrees that the diplomatic and consular authorities of any represented Member State shall provide protection to any national of an Member State which does not have a permanent representation in the Republic of Armenia effectively in a position to provide consular protection in a given case, on the same conditions as to nationals of that Member State.

TITLE IV

ECONOMIC COOPERATION

CHAPTER 1

ECONOMIC DIALOGUE

ARTICLE 22

1.    The European Union and the Republic of Armenia shall facilitate the process of economic reform by improving shared understanding of the fundamentals of each economy and the formulation and implementation of economic policies.

2.    The Republic of Armenia shall take further steps to develop a well-functioning market economy and to gradually approximate its economic and financial regulations and policies to those of the European Union, as appropriate. The European Union will support the Republic of Armenia in ensuring sound macroeconomic policies, including central-bank independence and price stability, sound public finances, and a sustainable exchange-rate regime and balance of payments.

ARTICLE 23

To that end, the Parties agree to conduct a regular economic dialogue aimed at:

(a)    exchanging information on macroeconomic trends and policies, as well as on structural reforms, including strategies for economic development;

(b)    exchanging expertise and best practices in areas such as public-finance, monetary and exchange-rate policy frameworks, financial-sector policy and economic statistics;

(c)    exchanging information and experiences on regional economic integration, including the functioning of the European economic and monetary union;

(d)    reviewing the status of bilateral cooperation in the economic, financial and statistical fields.

ARTICLE 24

Public sector internal control and auditing arrangements

The Parties shall cooperate in the areas of public internal control and external audit with the following objectives:

(a)    further developing and implementing the public internal control system in accordance with the principle of decentralised managerial accountability, including an independent internal audit function for the entire public sector in the Republic of Armenia, by means of harmonisation with generally accepted international standards, frameworks and guidance and European Union good practice, on the basis of the public internal financial control reform programme approved by the Government of the Republic of Armenia;

(b)    developing an adequate financial inspection system in the Republic of Armenia to complement, but not duplicate, the internal audit function;

(c)    supporting the central harmonisation unit for public internal financial control in the Republic of Armenia and strengthening its ability to steer the reform process;

(d)    further strengthening the Chamber of Control as the supreme audit institution of the Republic of Armenia, in particular in terms of its financial, organisational and operational independence in accordance with internationally accepted external audit (INTOSAI) standards; and

(e)    providing for the exchange of information, experiences and good practice.

CHAPTER 2

TAXATION

ARTICLE 25

The Parties shall cooperate to enhance good governance in the area of tax, with a view to the further improvement of economic relations, trade, investment and fair cooperation.

ARTICLE 26

With reference to Article 25, the Parties recognise and commit themselves to implement the principles of good governance in the area of tax, i.e. the principles of transparency, exchange of information and fair tax competition, as subscribed to by Member States at European Union level. To that effect, without prejudice to European Union and Member State competences, the Parties shall improve international cooperation in the area of tax, facilitate the collection of tax revenues, and develop measures for the effective implementation of those principles of good governance.

ARTICLE 27

The Parties shall enhance and strengthen their cooperation aimed at the improvement and development of the Republic of Armenia's tax system and administration, including the enhancement of collection and control capacity, ensure effective tax collection and reinforce the fight against tax fraud and tax avoidance. The Parties shall not discriminate between imported products and like domestic products, in accordance with Articles I and III of the General Agreement on Tariffs and Trade 1994 ("GATT 1994"). The Parties shall strive to enhance cooperation and the sharing of experiences in combating tax fraud and tax avoidance, in particular carousel fraud, as well as with regard to transfer pricing and anti-offshore regulation issues.

ARTICLE 28

The parties shall develop their cooperation with a view to reaching shared policies for counteracting and fighting fraud and the smuggling of excisable products. The cooperation shall involve the exchange of information. To that end, the Parties shall look to strengthen their cooperation within the regional context and in line with the World Health Organization Framework Convention on Tobacco Control of 2003.

ARTICLE 29

A regular dialogue shall take place on the issues covered by this Chapter.

CHAPTER 3

STATISTICS

ARTICLE 30

The Parties shall develop and strengthen their cooperation on statistical issues, thereby contributing to the long-term objective of providing timely, internationally comparable and reliable statistical data. It is expected that a sustainable, efficient and professionally independent national statistical system shall produce information relevant for citizens, businesses and decision-makers in the European Union and in the Republic of Armenia, enabling them to take informed decisions on that basis. The national statistical system shall respect the UN Fundamental Principles of Official Statistics and take into account the EU acquis in the field of statistics, including the European Statistics Code of Practice, in order to align national statistical production with European norms and standards.

ARTICLE 31

Cooperation in the area of statistics shall aim at:

(a)    further strengthening the capacity of the national statistical system, including legal basis, the production of good-quality data and metadata, dissemination policy and user-friendliness, and taking into account users in the public and private sectors, the academic community and society at large;

(b)    the progressive alignment of the statistical system of the Republic of Armenia with norms and practice applied in the European Statistical System;

(c)    the fine-tuning of data provision to the European Union, taking into account the application of relevant international and European methodologies, including classifications;

(d)    enhancing the professional and management capacity of the national statistical staff to facilitate the application of statistical standards of the European Union and to contribute to the development of the statistical system of the Republic of Armenia;

(e)    exchanging experience with regard to the development of statistical know-how; and

(f)    promoting quality assurance and management in all statistical production processes and dissemination.

ARTICLE 32

The Parties shall cooperate within the framework of the European Statistical System in which Eurostat is the statistical office of the European Union. That cooperation shall ensure the professional independence of the statistical office and the application of the principles of the European statistics Code of practice as well as focus on the areas of:

(a)    demographic statistics, including censuses and social statistics;

(b)    agricultural statistics, including agricultural censuses;

(c)    business statistics, including business registers and the use of administrative sources for statistical purposes;

(d)    macroeconomic statistics, including national accounts, foreign trade statistics, balance-of-payments statistics and foreign direct-investment statistics;

(e)    energy statistics, including balances;

(f)    environment statistics;

(g)    regional statistics; and

(h)    horizontal activities, including quality assurance and management, statistical classifications, training, dissemination and the use of modern information technologies.

ARTICLE 33

The Parties shall, inter alia, exchange information and expertise and shall develop their cooperation, taking into account the experience accumulated in the reform of the statistical system launched within the framework of various assistance programmes. Efforts shall be directed towards further alignment with the EU acquis in statistics, on the basis of the national strategy for the development of the statistical system of the Republic of Armenia, and taking into account the development of the European Statistical System. Emphasis in the statistical data production shall be on the increased use of administrative records and streamlining statistical surveys, while taking into account the need to reduce response burden. The data produced shall be relevant for the design and monitoring of policies in key areas of social and economic life.

ARTICLE 34

A regular dialogue shall take place on the issues covered by this Chapter. To the extent possible, the activities undertaken within the European Statistical System, including training, shall be open for the participation of the Republic of Armenia.

ARTICLE 35

Gradual approximation of the legislation of the Republic of Armenia to the EU acquis in statistics shall be carried out in accordance with the annually updated Statistical Requirements Compendium as produced by Eurostat, which is considered by the Parties as annexed to this Agreement.

TITLE V

OTHER COOPERATION POLICIES

CHAPTER 1

TRANSPORT

ARTICLE 36

The Parties shall:

(a)    expand and strengthen their transport cooperation in order to contribute to the development of sustainable transport systems;

(b)    promote efficient, safe and secure transport operations as well as intermodality and interoperability of transport systems; and

(c)    endeavour to enhance the main transport links between their territories.

ARTICLE 37

Transport cooperation shall cover, the following areas:

(a)    the development of a sustainable national transport policy covering all modes of transport, in particular with a view to ensuring environmentally friendly, efficient, safe and secure transport systems and promoting the integration of transport-related considerations into other policy areas;

(b)    the development of sector-specific strategies in light of the national transport policy (including legal requirements for the upgrading of technical equipment and transport fleets to meet highest international standards) for road, rail, inland waterway, maritime, aviation and intermodality, including timetables and milestones for implementation, administrative responsibilities as well as financing plans;

(c)    the improvement of the infrastructure policy in order to better identify and evaluate infrastructure projects in the various modes of transport;

(d)     the development of funding strategies focusing on maintenance, capacity constraints and missing-link infrastructure as well as activating and promoting the participation of the private sector in transport projects;

(e)    accession to relevant international transport organisations and agreements, including procedures for ensuring strict implementation and effective enforcement of international transport agreements and conventions;

(f)    cooperation and the exchange of information for the development and improvement of technologies in transport, such as intelligent transport systems; and

(g)    the promotion of the use of intelligent transport systems and information technology in managing and operating all modes of transport as well as supporting intermodality and cooperation in the use of space systems and commercial applications facilitating transport.

ARTICLE 38

1.    Cooperation shall also aim at improving the movement of passengers and goods, increasing fluidity of transport flows between the Republic of Armenia, the European Union and third countries in the region, promoting open borders with cross border movement by removing administrative, technical and other obstacles, enhancing the operation of the existing transport networks and developing infrastructure in particular on the main networks connecting the Parties.

2.    Cooperation shall include actions to facilitate border crossings, taking into account the specificities of landlocked countries as referred to in the relevant international instruments.

3.    Cooperation shall include information exchange and joint activities:

(a)    at regional level, in particular taking into consideration progress achieved under regional transport cooperation arrangements such as the Transport Corridor Europe-Caucasus-Asia (TRACECA) and other transport initiatives at international level, including with regard to international transport organisations and international agreements and conventions ratified by the Parties; and

(b)    in the framework of the various transport agencies of the European Union, as well as within the Eastern Partnership.

ARTICLE 39

1.    With a view to ensuring the coordinated development and progressive liberalisation of air transport between the Parties adapted to their reciprocal commercial needs, the conditions of mutual market access in air transport should be addressed in accordance with the Common Aviation Area Agreement between the European Union and the Republic of Armenia.

2.    Prior to the conclusion of the Common Aviation Area Agreement, the Parties shall not take any measures or actions which are more restrictive or discriminatory as compared with the situation existing prior to the entry into force of this Agreement.

ARTICLE 40

A regular dialogue will take place on the issues covered by this Chapter.

ARTICLE 41

1.    The Republic of Armenia shall carry out approximation of its legislation to the acts of the European Union referred to in Annex I in accordance with the provisions of that Annex.

2.    Regulatory approximation may also take place through sectoral agreements.

CHAPTER 2

ENERGY COOPERATION, INCLUDING NUCLEAR SAFETY

ARTICLE 42

1.    The Parties shall cooperate on energy matters on the basis of the principles of partnership, mutual interest, transparency and predictability. Cooperation shall aim at regulatory harmonisation in the areas of the energy sector areas referred to hereinafter, taking into account the need to ensure access to secure, environmentally friendly and affordable energy.

2.    That cooperation shall cover, inter alia, the following areas:

(a)    energy strategies and policies, including for the promotion of energy security and diversity of energy supplies and power generation;

(b)    the enhancement of energy security, including by stimulating the diversification of energy sources and routes;

(c)    the development of competitive energy markets;

(d)    the promotion of the use of renewable energy sources, energy efficiency and energy savings;

(e)    the promotion of regional cooperation on energy and on integration into regional markets;

(f)    the promotion of common regulatory frameworks to facilitate trade in oil products, electricity and potentially in other energy commodities, as well as a level playing field in terms of nuclear safety, aiming at a high level of safety and security;

(g)    the civil nuclear sector, taking into account the specificities of the Republic of Armenia and focusing in particular on high levels of nuclear safety, on the basis of International Atomic Energy Agency (IAEA) standards and standards and practices of the European Union referred to hereinafter, and on high levels of nuclear security, on the basis of international guidance and practices. The cooperation in that area will include:

(i)    the exchange of technologies, best practices and training in the fields of safety, security and waste management in order to ensure the safe operation of nuclear power plants;

(ii)    the closure and safe decommissioning of Medzamor nuclear power plant and the early adoption of a road map or action plan to that effect, taking into consideration the need for its replacement with new capacity to ensure the energy security of the Republic of Armenia and conditions for sustainable development;

(h)    pricing policies, transit and transport, in particular a general cost-based system for the transmission of energy resources, if and when appropriate, and further precisions regarding access to hydrocarbons, as appropriate;

(i)    the promotion of regulatory aspects reflecting key principles of energy market regulation and non-discriminatory access to energy networks and infrastructures at competitive, transparent and cost-effective tariffs, and adequate and independent oversight;

(j)    scientific and technical cooperation, including the exchange of information for the development and improvement of technologies in energy production, transportation, supply and end use with particular attention to energy-efficient and environmentally friendly technologies.

ARTICLE 43

A regular dialogue will take place on the issues covered by this Chapter.

ARTICLE 44

The Republic of Armenia shall carry out approximation of its legislation to the instruments referred to in Annex II in accordance with the provisions of that Annex.

CHAPTER 3

ENVIRONMENT

ARTICLE 45

The Parties shall develop and strengthen their cooperation on environmental issues, thereby contributing to the long-term objective of sustainable development and greening the economy. It is expected that enhanced environmental protection will bring benefits to citizens and businesses in the European Union and in the Republic of Armenia, including through improved public health, preserved natural resources, and increased economic and environmental efficiency, as well as through the use of modern, cleaner technologies contributing to more sustainable production patterns. Cooperation shall be conducted while taking into account the interests of the Parties on the basis of equality and mutual benefit, the interdependence existing between the Parties in the field of environmental protection, and multilateral agreements in that field.

ARTICLE 46

1.    Cooperation shall aim at preserving, protecting, improving and rehabilitating the quality of the environment, protecting human health, utilising natural resources in a sustainable manner and promoting measures at international level to address regional or global environmental problems, including in the areas of:

(a)    environmental governance and horizontal issues, including strategic planning, environmental impact assessment and strategic environmental assessment, education and training, monitoring and environmental information systems, inspection and enforcement, environmental liability, combating environmental crime, transboundary cooperation, public access to environmental information, decision-making processes, and effective administrative and judicial review procedures;

(b)    air quality;

(c)    water quality and resource management, including flood-risk management, water scarcity and droughts;

(d)    waste management;

(e)    nature protection, including forestry and conservation of biological diversity;

(f)    industrial pollution and industrial hazards;

(g)    chemicals management.

2.    Cooperation shall also aim at integrating the environment into policy areas other than environmental policy.

ARTICLE 47

The Parties shall, inter alia:

(a)    exchange information and expertise;

(b)    cooperate at regional and international level, especially with regard to multilateral environmental agreements ratified by the Parties; and

(c)    cooperate in the framework of relevant agencies, as appropriate.

ARTICLE 48

The cooperation shall cover, inter alia, the following objectives:

(a)    the development of a general national environmental strategy for the Republic of Armenia, covering:

(i)    planned institutional reforms (with timetables) for ensuring implementation and enforcement of environmental legislation;

(ii)    the division of competence for environmental administration at national, regional and municipal levels;

(iii)    procedures for decision-making and the implementation of decisions;

(iv)    procedures for the promotion of the integration of the environment into other policy areas;

(v)    the promotion of green economy measures and eco-innovation, the identification of the necessary human and financial resources and a review mechanism; and

(b)    the development of sector-specific strategies for the Republic of Armenia (including clearly defined timetables and milestones for implementation, administrative responsibilities, as well as financing strategies for investments in infrastructure and technology) on:

(i) air quality;

(ii) water quality and resource management;

(iii) waste management;

(iv) biodiversity, nature conservation and forestry;

(v) industrial pollution and industrial hazards; and

(vi) chemicals.

ARTICLE 49

A regular dialogue will take place on the issues covered by this Chapter.

ARTICLE 50

The Republic of Armenia shall carry out approximation of its legislation to the acts of the European Union and international instruments referred to in Annex III in accordance with the provisions of that Annex.

CHAPTER 4

CLIMATE ACTION

ARTICLE 51

The Parties shall develop and strengthen their cooperation to combat climate change. Cooperation shall be conducted while taking into account the interests of the Parties on the basis of equality and mutual benefit, as well as the interdependence existing between bilateral and multilateral commitments in that field.

ARTICLE 52

Cooperation shall promote measures at domestic, regional and international level, including with regard to:

(a)    the mitigation of climate change;

(b)    adaptation to climate change;

(c)    market and non-market mechanisms for addressing climate change;

(d)    research into and the development, demonstration, deployment, transfer and diffusion of new, innovative, safe and sustainable low-carbon and adaptation technologies;

(e)    the mainstreaming of climate considerations into general and sector-specific policies; and

(f)    awareness raising, education and training.

ARTICLE 53

1.    The Parties shall, inter alia:

(a)    exchange information and expertise;

(b)    implement joint research activities and exchanges of information on cleaner and environmentally sound technologies;

(c)    implement joint activities at regional and international level, including with regard to multilateral environmental agreements ratified by the Parties, such as the United Nations Framework Convention on Climate Change of 1992 (UNFCCC) and the Paris Agreement of 2015, and joint activities in the framework of relevant agencies, as appropriate.

2.    The Parties shall pay special attention to transboundary issues and regional cooperation.

ARTICLE 54

The cooperation shall cover, inter alia, the following objectives:

(a)    measures to implement the Paris Agreement of 2015 in accordance with principles set out in this Agreement;

(b)    measures to enhance the capacity to take effective climate action;

(c)    the development of an overall climate strategy and action plan for the long-term mitigation of and adaptation to climate change;

(d)    the development of vulnerability and adaptation assessments;

(e)    the development of a low-carbon development plan;

(f)    the development and implementation of long-term measures to mitigate climate change by addressing emissions of greenhouse gases;

(g)    measures to prepare for carbon trading;    

(h)    measures to promote technology transfer;

(i)    measures to mainstream climate considerations into sector-specific policies; and

(j)    measures related to ozone-depleting substances and fluorinated gases.

ARTICLE 55

A regular dialogue will take place on the issues covered by this Chapter.

ARTICLE 56

The Republic of Armenia shall carry out approximation of its legislation to the acts of the European Union and international instruments referred to in Annex IV in accordance with the provisions of that Annex.

CHAPTER 5

INDUSTRIAL AND ENTERPRISE POLICY

ARTICLE 57

The Parties shall develop and strengthen their cooperation on industrial and enterprise policy, thereby improving the business environment for all economic operators, but with particular emphasis on small and medium-sized enterprises (SMEs). Enhanced cooperation should improve the administrative and regulatory framework for both businesses of the European Union and businesses of the Republic of Armenia operating in the European Union and in the Republic of Armenia, and should be based on the SME and industrial policies of the European Union, taking into account internationally recognised principles and practices in that field.

ARTICLE 58

The Parties shall cooperate in order to:

(a)    implement strategies for SME development, based on the principles of the Small Business Act for Europe, and monitoring of the implementation process through regular reporting and dialogue. That cooperation will also include a focus on micro- and craft enterprises, which are extremely important for the economies of both the European Union and the Republic of Armenia;

(b)    create better framework conditions, via the exchange of information and good practice, thereby contributing to improved competitiveness. That cooperation will include the management of structural changes (restructuring) and environmental and energy issues, such as energy efficiency and cleaner production;

(c)    simplify and rationalise regulations and regulatory practice, with a specific focus on the exchange of good practice on regulatory techniques, including the principles of the European Union;

(d)    encourage the development of innovation policy, via the exchange of information and good practice regarding the commercialisation of research and development (including support instruments for technology-based business start-ups), cluster development and access to finance;

(e)    encourage greater contacts between businesses of the European Union and businesses of the Republic of Armenia, and between those businesses and the authorities of the European Union and the Republic of Armenia;

(f)    support the establishment of export promotion activities in the Republic of Armenia;

(g)    promote a more business-friendly environment, with a view to enhancing growth potential and investment opportunities; and

(h)    facilitate the modernisation and restructuring of industry in the European Union and in the Republic of Armenia in certain sectors.

ARTICLE 59

A regular dialogue will take place on the issues covered by this Chapter. That dialogue will also involve representatives of European Union businesses and businesses from the Republic of Armenia.

CHAPTER 6

COMPANY LAW, ACCOUNTING AND AUDITING,
AND CORPORATE GOVERNENCE

ARTICLE 60

1.    The Parties recognise the importance of an effective set of rules and practices in the areas of company law and corporate governance, as well as in accounting and auditing, in a functioning market economy with a predictable and transparent business environment, and underline the importance of promoting regulatory convergence in those fields.

2.    The Parties shall cooperate on the following:

(a)    the exchange of best practices for ensuring the availability of and access to information regarding the organisation and representation of registered companies in a transparent and easily accessible way;

(b)    the further development of corporate governance policy in line with international and, in particular, OECD standards;

(c)    the implementation and consistent application of International Financial Reporting Standards (IFRS) for the consolidated accounts of listed companies;

(d)    the regulation and oversight of the audit and accountancy professions;

(e)    international auditing standards and the Code of Ethics of the International Federation of Accountants (IFAC), with the aim of improving the professional level of auditors by means of observance of standards and ethical norms by professional organisations, audit organisations and auditors.

CHAPTER 7

COOPERATION IN THE AREAS OF BANKING,
INSURANCE AND OTHER FINANCIAL SERVICES

ARTICLE 61

The Parties agree on the importance of effective legislation and practices and to cooperate in the area of financial services with the objectives of:

(a)    improving the regulation of financial services;

(b)    ensuring effective and adequate protection of investors and consumers of financial services;

(c)    contributing to the stability and integrity of the global financial system;

(d)    promoting cooperation between different actors of the financial system, including regulators and supervisors;

(e)    promoting independent and effective supervision.

CHAPTER 8

COOPERATION IN THE FIELD OF THE INFORMATION SOCIETY

ARTICLE 62

The Parties shall promote cooperation with regard to the development of the information society to benefit citizens and businesses through the widespread availability of information and communication technology (ICT) and through better quality of services at affordable prices. That cooperation should aim at facilitating access to electronic communications markets and encourage competition and investment in the sector.

ARTICLE 63

Cooperation shall cover, inter alia, the following subjects:

(a)    the exchange of information and best practice on the implementation of national information society strategies, including, inter alia, initiatives aimed at promoting broadband access, improving network security and developing public online services;

(b)    the exchange of information, best practices and experience to promote the development of a comprehensive regulatory framework for electronic communications and, in particular, to strengthen the administrative capacity of the national independent regulator, to foster a better use of spectrum resources and to promote interoperability of networks in the Republic of Armenia and with the European Union.

ARTICLE 64

The Parties shall promote cooperation between the regulators from the European Union and national regulator of the Republic of Armenia in the field of electronic communications.

ARTICLE 65

The Republic of Armenia shall carry out approximation of its legislation to the acts of the European Union and international instruments referred to in Annex V in accordance with the provisions of that Annex.

CHAPTER 9

TOURISM

ARTICLE 66

The Parties shall cooperate in the field of tourism, with the aim of strengthening the development of a competitive and sustainable tourism industry as a generator of economic growth, empowerment, employment and foreign exchange.

ARTICLE 67

Cooperation at bilateral, regional and European level shall be based on the following principles:

(a)    respect for the integrity and interests of local communities, in particular in rural areas;

(b)    the importance of cultural heritage; and

(c)    positive interaction between tourism and environmental preservation.

ARTICLE 68

The cooperation shall focus on the following topics:

(a)    the exchange of information, best practices, experience and know-how, including with regard to innovative technologies;

(b)    the establishment of a strategic partnership between public, private and community interests in order to ensure the sustainable development of tourism;

(c)    the promotion and development of tourism products and markets, infrastructure, human resources and institutional structures as well as the identification and elimination of barriers to travel services;

(d)    the development and implementation of efficient policies and strategies, including appropriate legal, administrative and financial aspects;

(e)    tourism training and capacity building in order to improve service standards; and

(f)    the development and promotion of community-based tourism.

ARTICLE 69

A regular dialogue will take place on the issues covered by this Chapter.

CHAPTER 10

AGRICULTURE AND RURAL DEVELOPMENT

ARTICLE 70

The Parties shall cooperate to promote agricultural and rural development, in particular through progressive convergence of policies and legislation.

ARTICLE 71

Cooperation between the Parties in the field of agriculture and rural development shall cover, inter alia, the following objectives:

(a)    facilitating the mutual understanding of agricultural and rural development policies;

(b)    enhancing the administrative capacities at central and local level in the planning, evaluation and implementation of policies in accordance with legislation of the European Union and best practices;

(c)    promoting the modernisation and the sustainability of agricultural production;

(d)    sharing knowledge and best practices with regard to rural development policies to promote economic well-being for rural communities;

(e)    improving the competitiveness of the agricultural sector and the efficiency and transparency of the markets;

(f)    promoting quality policies and their control mechanisms, in particular geographical indications and organic farming;

(g)    disseminating knowledge and promoting extension services to agricultural producers; and

(h)    enhancing the harmonisation of issues addressed within the framework of international organisations of which both Parties are members.

CHAPTER 11

FISHERIES AND MARITIME GOVERNANCE

ARTICLE 72

The Parties shall cooperate with regard to issues of mutual interest concerning fisheries and maritime governance, thereby developing closer bilateral, multilateral and international cooperation in the fisheries sector.

ARTICLE 73

The Parties shall take common action, exchange information and provide mutual support in order to promote:

(a)    responsible fishing and fisheries management consistent with the principles of sustainable development, so as to conserve fish stocks and ecosystems in a healthy state; and

(b)    cooperation through relevant multilateral and international organisations responsible for management and conservation of living aquatic resources, in particular by strengthening appropriate international monitoring and law-enforcement instruments.

ARTICLE 74

The Parties shall support initiatives, such as mutual exchange of experience and the provision of support, in order to ensure the implementation of a sustainable fisheries policy covering:

(a)    the management of fisheries and aquaculture resources;

(b)    inspection and control of fishing activities;

(c)    the collection of catch, landing, biological and economic data;

(d)    the improvement of the efficiency of the markets, in particular by promoting producer organisations and providing information to consumers, and through marketing standards and traceability;

(e)    the sustainable development of areas with lake shore or including ponds or a river estuary and with a significant level of employment in the fisheries sector; and

(f)    institutional exchange of experience on sustainable aquaculture legislation and its practical implementation in natural basins and artificial lakes.

ARTICLE 75

Taking into account their cooperation in the areas of fisheries, transport, environment and other sea-related policies, the Parties shall also cooperate and provide mutual support, when appropriate, with regard to maritime issues, in particular by actively supporting an integrated approach to maritime affairs and good governance in the relevant regional and international fora.

CHAPTER 12

MINING

ARTICLE 76

The Parties shall develop and strengthen their cooperation in the areas of mining and the production of raw materials, with the objectives of promoting mutual understanding, improving the business environment, exchanging information and cooperating on non-energy issues relating in particular to the mining of metallic ores and industrial minerals.

ARTICLE 77

The Parties shall cooperate in order to:

(a)    exchange information on the developments in their mining and raw-material sectors;

(b)    exchange information on matters related to trade in raw materials with the aim of promoting bilateral exchanges;

(c)    exchange information and best practices in relation to the sustainable development of the mining industries; and

(d)    exchange information and best practices in relation to training, skills and safety in the mining industries.

CHAPTER 13

COOPERATION IN RESEARCH AND INNOVATION

ARTICLE 78

The Parties shall promote cooperation in all areas of civil scientific research, technological development and innovation on the basis of mutual benefit and subject to appropriate and effective protection of intellectual property rights.

ARTICLE 79

Cooperation referred to in Article 78 shall cover:

(a)    policy dialogue and the exchange of scientific and technological information;

(b)    the facilitation of adequate access to the respective programmes of each Party;

(c)    initiatives to increase research capacity and the participation of research entities from the Republic of Armenia in the research framework programme of the European Union;

(d)    the promotion of joint projects for research in all areas of research and innovation;

(e)    training activities and mobility programmes for scientists, researchers and other research staff engaged in research and innovation activities on both sides;

(f)    the facilitation, within the framework of applicable legislation, of the free movement of research workers participating in the activities covered by this Agreement and the cross-border movement of goods intended for use in such activities; and

(g)    other forms of cooperation in research and innovation on the basis of mutual agreement.

ARTICLE 80

In carrying out such cooperation activities, synergies should be sought with activities funded by the International Science and Technology Centre (ISTC) and other activities carried out within the framework of financial cooperation between the European Union and the Republic of Armenia as stipulated in Chapter 1 of Title VII.

CHAPTER 14

CONSUMER PROTECTION

ARTICLE 81

The Parties shall cooperate in order to ensure a high level of consumer protection and to achieve compatibility between their systems of consumer protection.

ARTICLE 82

Where appropriate, cooperation may comprise:

(a)    aiming at approximation of the Republic of Armenia's consumer legislation to that of the European Union, while avoiding barriers to trade;

(b)    promoting the exchange of information on consumer protection systems, including consumer legislation and its enforcement, consumer product safety, information exchange systems, consumer education and empowerment, and consumer redress;

(c)    training activities for administration officials and other consumer interest representatives; and

(d)    encouraging the development of independent consumer associations and contacts between consumer representatives.

ARTICLE 83

The Republic of Armenia shall carry out approximation of its legislation to the European Union acts and international instruments referred to in Annex VI in accordance with the provisions of that Annex.

CHAPTER 15

EMPLOYMENT, SOCIAL POLICY AND EQUAL OPPORTUNITIES

ARTICLE 84

The Parties shall strengthen their dialogue and cooperation on promoting the International Labour Organisation (ILO) Decent Work Agenda, employment policy, health and safety at work, social dialogue, social protection, social inclusion, gender equality and anti-discrimination, and thereby contribute to the promotion of more and better jobs, poverty reduction, enhanced social cohesion, sustainable development and improved quality of life.

ARTICLE 85

Cooperation, based on exchange of information and best practices, may cover a selected number of issues to be identified among the following areas:

(a)    poverty reduction and the enhancement of social cohesion;

(b)    employment policy, aiming at more and better jobs with decent working conditions, including with a view to reducing the informal economy and informal employment;

(c)    promoting active labour market measures and efficient employment services to modernise the labour markets and to adapt to labour market needs;

(d)    fostering more inclusive labour markets and social safety systems that integrate disadvantaged people, including people with disabilities and people from minority groups;

(e)    equal opportunities and antidiscrimination, aiming at enhancing gender equality and ensuring equal opportunities between women and men, as well as combating discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation;

(f)    social policy, aiming at enhancing the level of social protection and modernising social protection systems, in terms of quality, accessibility and financial sustainability;

(g)    enhancing the participation of social partners and promoting social dialogue, including through strengthening the capacity of all relevant stakeholders;

(h)    promoting health and safety at work; and

(i)    promoting corporate social responsibility.

ARTICLE 86

The Parties shall encourage the involvement of all relevant stakeholders, including civil-society organisations and in particular social partners, in the policy development and reforms of the Republic of Armenia and in the cooperation between the Parties under this Agreement.

ARTICLE 87

The Parties shall aim to enhance cooperation on employment and social policy matters in all relevant regional, multilateral and international fora and organisations.

ARTICLE 88

The Parties shall promote corporate social responsibility and accountability and encourage responsible business practices, such as those promoted by the OECD Guidelines for Multinational Enterprises, the UN Global Compact, the ILO tripartite declaration of principles concerning multinational enterprises and social policy, and ISO 26000.

ARTICLE 89

A regular dialogue shall take place on the issues covered by this Chapter.

ARTICLE 90

Armenia shall carry out approximation of its legislation to the European Union acts and international instruments referred to in Annex VII in accordance with the provisions of that Annex.

CHAPTER 16

COOPERATION IN THE AREA OF HEALTH

ARTICLE 91

The Parties shall develop their cooperation in the field of public health with a view to raising the level of, in line with common health values and principles, and as a precondition for sustainable development and economic growth.

ARTICLE 92

Cooperation shall address the prevention and control of communicable and noncommunicable diseases, including through the exchange of health information, the promotion of a healthinall-policies approach, cooperation with international organisations, in particular the World Health Organization, and the promotion of the implementation of international health agreements such as the World Health Organization Framework Convention on Tobacco Control of 2003 and the International Health Regulations.

CHAPTER 17

EDUCATION, TRAINING AND YOUTH

ARTICLE 93

The Parties shall collaborate in the field of education and training to intensify cooperation and policy dialogue with a view to approximating the education and training systems in the Republic of Armenia with policies and practices of the European Union. The Parties shall cooperate to promote lifelong learning and encourage cooperation and transparency at all levels of education and training, with a special focus on vocational and higher education.

ARTICLE 94

Cooperation in the field of education and training shall focus, inter alia, on:

(a)    promoting lifelong learning, which is key to growth and jobs and can allow citizens to participate fully in society;

(b)    modernising education and training systems, including training systems for public/civil servants, and enhancing quality, relevance and access throughout the education ladder, from early childhood education and care to tertiary education;

(c)    promoting convergence and coordinated reforms in higher education in line with the European Union Agenda for Higher Education and the European Higher Education Area (Bologna Process);

(d)    reinforcing international academic cooperation, increasing participation in cooperation programmes of the European Union and improving student and teacher mobility;

(e)    encouraging the learning of foreign languages;

(f)    developing the national qualifications framework to improve the transparency and recognition of qualifications and competences within the European Network of Information Centres and National Academic Recognition Information Centres (ENIC-NARIC) community aligned with the European Qualifications Framework;

(g)    enhancing cooperation to further develop vocational education and training, while taking into consideration good practice in the European Union; and

(h)    reinforcing understanding and knowledge of the European integration process, the academic dialogue on EU-Eastern Partnership relations, and participation in relevant programmes of the European Union, including in the field of civil service.

ARTICLE 95

The Parties agree to collaborate in the field of youth to:

(a)    reinforce cooperation and exchanges in the fields of youth policy and non-formal education for young people and youth workers;

(b)    facilitate the active participation of all young people in society;

(c)    support mobility for young people and youth workers as a means of promoting intercultural dialogue and the acquisition of knowledge, skills and competences outside the formal educational systems, including through volunteering; and

(d)    promote cooperation between youth organisations to support civil society.

CHAPTER 18

COOPERATION IN THE CULTURAL FIELD

ARTICLE 96

The Parties will promote cultural cooperation in accordance with the principles enshrined in the United Nations Educational, Scientific and Cultural Organisation (UNESCO) Convention on the Protection and Promotion of the Diversity of Cultural Expressions of 2005. The Parties will seek a regular policy dialogue in areas of mutual interest, including the development of cultural industries in the European Union and the Republic of Armenia. Cooperation between the Parties will foster intercultural dialogue, including through the participation of the culture sector and civil society from the European Union and the Republic of Armenia.

ARTICLE 97

Cooperation shall focus on, inter alia:

(a)    cultural cooperation and cultural exchanges;

(b)    the mobility of art and artists and the strengthening of the capacity of the cultural sector;

(c)    intercultural dialogue;

(d)    cultural policy dialogue;

(e)    the Creative Europe Programme; and

(f)    cooperation in international fora such as UNESCO and the Council of Europe in order to support cultural diversity and preserve and valorise cultural and historical heritage.

CHAPTER 19

COOPERATION IN THE AUDIOVISUAL AND MEDIA FIELDS

ARTICLE 98

The Parties will promote cooperation in the audiovisual field. Cooperation shall strengthen the audiovisual industries in the European Union and the Republic of Armenia, in particular through training of professionals and the exchange of information.

ARTICLE 99

1.    The Parties shall develop a regular dialogue with regard to audiovisual and media policies and cooperate to reinforce independence and professionalism of the media as well as links with media in the European Union in compliance with European standards, including those of the Council of Europe and the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions of 2005.

2.    Cooperation could cover, inter alia, the issue of the training of journalists and other media professionals, as well as support to the media.

ARTICLE 100

Cooperation shall focus on, inter alia:

(a)    policy dialogue on audiovisual and media policies;

(b)    cooperation in international fora (such as UNESCO and the WTO); and

(c)    audiovisual and media cooperation, including cooperation in the field of cinema.

CHAPTER 20

COOPERATION IN THE FIELD OF SPORT AND PHYSICAL ACTIVITY

ARTICLE 101

The Parties shall promote cooperation in the field of sport and physical activity, in particular through the exchange of information and good practices in order to promote a healthy lifestyle, good governance as well as the social and educational values of sport and in order to fight against threats to sport such as doping, match-fixing, racism and violence within the European Union and the Republic of Armenia.

CHAPTER 21

CIVIL-SOCIETY COOPERATION

ARTICLE 102

The Parties shall establish a dialogue on civil-society cooperation, with the following objectives:

(a)    to strengthen contacts and the exchange of information and experience between all sectors of civil society in the European Union and in the Republic of Armenia;

(b)    to ensure a better knowledge and understanding of the Republic of Armenia, including its history and culture, in the European Union and in particular among civil-society organisations based in Member States, thus allowing for a better awareness of the opportunities and challenges for future relations; and

(c)    to ensure a better knowledge and understanding of the European Union in the Republic of Armenia and in particular among civil-society organisations in the Republic of Armenia, with a non-exclusive focus on the values on which the European Union is founded, its policies and its functioning.

ARTICLE 103

1.    The Parties shall promote dialogue and cooperation between civil-society stakeholders from both sides as an integral part of the relations between the European Union and the Republic of Armenia.

2.    The aims of such dialogue and cooperation are:

(a)    to ensure involvement of civil society in relations between the European Union and the Republic of Armenia;

(b)    to enhance civil-society participation in the public decision-making process, in particular by establishing an open, transparent and regular dialogue between, on the one hand, public institutions and, on the other, representative associations and civil society;

(c)    to facilitate the process of institution-building and the consolidation of civil-society organisations in various ways, including inter alia: advocacy support, informal and formal networking, mutual visits and workshops, in particular with a view to improving the legal framework for civil society; and

(d)    to enable civil-society representatives from each side to become acquainted with the processes of consultation and dialogue between civil and social partners on the other side, in particular with a view to further integrating civil society into the public policy-making process in the Republic of Armenia.

ARTICLE 104

A regular dialogue will take place between the Parties on the issues covered by this Chapter.

CHAPTER 22

REGIONAL DEVELOPMENT, CROSS-BORDER
AND REGIONAL LEVEL COOPERATION

ARTICLE 105

1.    The Parties shall promote mutual understanding and bilateral cooperation in the field of regional development policy, including methods of formulation and implementation of regional policies, multi-level governance and partnership, with special emphasis on the development of disadvantaged areas and territorial cooperation, with the objective of establishing channels of communication and enhancing the exchange of information and experience between national, regional and local authorities, socio-economic actors and civil society.

2.    In particular, the Parties shall cooperate with a view to aligning the practice of the Republic of Armenia with the following principles:

(a)    strengthening multi-level governance in so far as it affects the central, regional and local level, with special emphasis on ways to enhance the involvement of regional and local stakeholders;

(b)    consolidating the partnership between all stakeholders involved in regional development; and

(c)    co-financing through financial contribution by the Parties involved in the implementation of regional development programmes and projects.

ARTICLE 106

1.    The Parties shall support and strengthen the involvement of local- and regional-level authorities in regional-policy cooperation, including cross-border cooperation and the related management structures, enhance cooperation through the establishment of an enabling legislative framework, sustain and develop capacity-building measures and promote the strengthening of cross-border and regional economic and business networks.

2.    The Parties will cooperate to consolidate the institutional and operational capacities of institutions of the Republic of Armenia in the fields of regional development and land-use planning by, inter alia:

(a)    improving interinstitutional coordination, in particular the mechanism of vertical and horizontal interaction of central and local administration in the process of development and implementation of regional policies;

(b)    developing the capacity of regional and local authorities to promote cross-border cooperation, taking into account regulations and practice of the European Union; and

(c)    sharing knowledge, information and best practices on regional development policies to promote economic well-being for local communities and uniform development of the regions.

ARTICLE 107

1.    The Parties shall strengthen and encourage development of cross-border cooperation in other areas covered by this Agreement such as, inter alia, transport, energy, environment, communication networks, culture, education, tourism and health.

2.    The Parties shall intensify cooperation between their regions in the form of transnational and inter-regional programmes, encouraging the participation of regions of the Republic of Armenia in European regional structures and organisations and promoting their economic and institutional development by implementing projects of common interest.

3.    The activities referred to in paragraph 2 will take place in the context of:

(a)    continuing territorial cooperation with European regions (including through transnational and cross-border cooperation programmes);

(b)    cooperation within the framework of the Eastern Partnership and with bodies of the European Union including the Committee of the Regions, and participation in various European regional projects and initiatives; and

(c)    cooperation with, inter alia, the European Economic and Social Committee (EESC), and the European Spatial Planning Observation Network (ESPON).

ARTICLE 108

A regular dialogue will take place on the issues covered by this Chapter.

CHAPTER 23

CIVIL PROTECTION

ARTICLE 109

The Parties shall develop and strengthen their cooperation on natural and man-made disasters. Cooperation shall be conducted while taking into account the interests of the Parties on the basis of equality and mutual benefit, as well as the interdependence existing between the Parties and multilateral activities in the field.

ARTICLE 110

Cooperation shall aim at improving the prevention of, preparation for and response to natural and man-made disasters.

ARTICLE 111

The Parties shall, inter alia, exchange information and expertise and implement joint activities on a bilateral basis and/or within the framework of multilateral programmes. Cooperation may take place, inter alia, through the implementation of specific agreements and/or administrative arrangements concluded between the Parties in the field of civil protection. The Parties may jointly decide on specific guidelines and/or work plans for the activities contemplated or planned under this Agreement.

ARTICLE 112

The cooperation may cover the following objectives:

(a)    exchanging and regularly updating contact details in order to ensure continuity of dialogue and in order to be able to contact each other on a 24-hour basis;

(b)    facilitating mutual assistance in case of major emergencies, as appropriate and subject to the availability of sufficient resources;

(c)    exchanging on a 24-hour basis early warnings and updated information on large-scale emergencies affecting the European Union or the Republic of Armenia, including requests for and offers of assistance;

(d)    exchanging information on the provision of assistance by Parties to third countries for emergencies where the EU Civil Protection Mechanism is activated;

(e)    cooperating with regard to host-nation support when requesting or providing assistance;

(f)    exchanging best practices and guidelines in the field of disaster prevention, preparedness and response;

(g)    cooperating on disaster risk reduction by addressing, inter alia: institutional linkages and advocacy; information, education and communication; and best practices aimed at preventing or mitigating the impact of natural hazards;

(h)    cooperating with a view to improving the knowledge base on disasters and on hazard and risk assessment for disaster management;

(i)    cooperating with regard to the assessment of the environmental and public-health impact of disasters;

(j)    inviting experts to specific technical workshops and symposia on civil-protection issues;

(k)    inviting, on a case-by-case basis, observers to specific exercises and training sessions organised by the European Union and/or the Republic of Armenia; and

(l)    strengthening cooperation on the most effective use of available civil-protection capabilities.

TITLE VI

TRADE AND TRADE RELATED MATTERS

CHAPTER 1

TRADE IN GOODS

ARTICLE 113

Most-favoured-nation treatment

1.    Each Party shall accord most-favoured-nation treatment to goods of the other Party in accordance with Article I of the General Agreement on Tariffs and Trade 1994 ("GATT 1994") contained in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994 ("WTO Agreement"), including its interpretative notes, which are incorporated into and made part of this Agreement, mutatis mutandis.

2.    Paragraph 1 of this Article does not apply in respect of preferential treatment accorded by either Party to goods of another country in accordance with GATT 1994.

ARTICLE 114

National treatment

Each Party shall accord national treatment to goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes, which is incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 115

Import duties and charges

Each Party shall apply import duties and charges in accordance with its obligations established under the WTO Agreement.

ARTICLE 116

Export duties, taxes or other charges

Neither Party shall adopt or maintain any duties, taxes or other charges imposed on, or in connection with, the exportation of goods destined to the territory of the other Party that are in excess of those imposed on like goods destined for the domestic market.

ARTICLE 117

Import and export restrictions

1.    Neither Party may adopt or maintain any prohibition or restriction other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, in accordance with Article XI of GATT 1994 and its interpretative notes. To this end, Article XI of GATT 1994, including its interpretative notes, is incorporated into and made part of this Agreement, mutatis mutandis.

2.    The Parties shall exchange information and good practices with regard to export controls on dual use goods with a view to promoting the convergence of the export controls of the European Union and of the Republic of Armenia.

ARTICLE 118

Remanufactured goods

1.    The Parties shall accord to remanufactured goods the same treatment as that provided to new like goods. A Party may require specific labelling of remanufactured goods in order to prevent the deception of consumers.

2.    For greater certainty, Article 117 paragraph 1 applies to prohibitions and restrictions on remanufactured goods.

3.    In accordance with its obligations under this Agreement and the WTO Agreements, a Party may require that remanufactured goods:

(a)    be identified as such for distribution or sale in its territory; and

(b)    meet all applicable technical requirements that apply to equivalent goods in new condition.

4.    If a Party adopts or maintains prohibitions or restrictions on used goods, it shall not apply those measures to remanufactured goods.

5.    For the purposes of this Article, a remanufactured good means a good that:

(a)    is entirely or partially comprised of parts obtained from goods that have been used beforehand, and;

(b)    has similar performance and working conditions compared to the original new good and is given the same warranty as the new good.

ARTICLE 119

Temporary admission of goods

Each Party shall grant the other Party exemption from import charges and duties on goods admitted temporarily, in the instances and according to the procedures stipulated by international agreements on the temporary admission of goods binding upon it. This exemption shall be applied pursuant to the laws and regulations of each Party.

ARTICLE 120

Transit

The Parties agree that the principle of freedom of transit is an essential condition for attaining the objectives of this Agreement. In that connection, each Party shall provide for freedom of transit through its territory of goods consigned from or destined for the territory of the other Party in accordance with Article V of GATT 1994, including its interpretative notes, which is incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 121

Trade defence

1.    Nothing in this Agreement shall prejudice or affect the rights and obligations of each Party under:

(a)    Article XIX of GATT 1994 and the Agreement on Safeguards, contained in Annex 1A to the WTO Agreement;

(b)    Article 5 of the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement on special safeguard provisions; and

(c)    Article VI of GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement, and the Agreement on Subsidies and Countervailing Measures, contained in Annex 1A to the WTO Agreement.

2.    The existing rights and obligations referred to in paragraph 1, and measures resulting therefrom, shall not be subject to the dispute settlement provisions of this Agreement.

ARTICLE 122

Exceptions

1.    The Parties affirm that their existing rights and obligations under Article XX of GATT 1994 and its interpretative notes shall apply to trade in goods covered by this Agreement. To that end Articles XX of GATT 1994, including its interpretative notes, is incorporated into and made part of this Agreement, mutatis mutandis.

2.    The Parties understand that before taking any measures provided for in subparagraphs (i) and (j) of Article XX of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within 30 days of supplying such information, the Party may apply measures under this Article with regard to the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

CHAPTER 2

CUSTOMS

ARTICLE 123

Customs cooperation

1.    The Parties shall strengthen cooperation in the area of customs in order to facilitate trade, ensure a transparent trade environment, enhance supply chain security, promote safety of consumers, prevent flows of goods infringing intellectual property rights and fight smuggling and fraud.

2.    In order to implement the objectives referred to in paragraph 1 and within the limits of available resources, the Parties shall cooperate to, inter alia:

(a)    improve customs legislation, regulations, practices and related binding decisions and simplify customs procedures, in compliance with international conventions and standards applicable in the field of customs and trade facilitation, including those developed by the World Trade Organization, the World Customs Organisation, in particular the International Convention on the Simplification and Harmonization of Customs Procedures, as amended ("Revised Kyoto Convention"), and taking into account the instruments and best practices developed by the European Union, including customs blueprints;

(b)    establish modern customs systems, including modern customs clearance technologies, provisions for authorised economic operators, automated risk-based analysis and controls, simplified procedures for the release of goods, post-clearance controls, transparent customs valuation and provisions for customs-to-business partnerships;

(c)    encourage the highest standards of integrity in the area of customs, in particular at the border, through the application of measures reflecting the principles set out in the Declaration of the Customs Cooperation Council concerning Good Governance and Integrity in Customs as last revised in June 2003 (the World Customs Organisation’s Revised Arusha Declaration);

(d)    exchange best practices as well as provide training and technical support for planning and capacity building and for ensuring the highest standards of integrity;

(e)    exchange, where appropriate, relevant information and data subject to the legal requirements of each Party on the confidentiality of sensitive data and on the protection of personal data;

(f)    engage, where relevant and appropriate, in coordinated customs actions between the customs authorities of the Parties;

(g)    establish, where relevant and appropriate, mutual recognition of authorised economic operators programmes and customs controls, including equivalent trade facilitation measures;

(h)    pursue, where relevant and appropriate, possibilities for interconnectivity of the respective customs transit systems; and

(i)    improve the implementation of customs-related obligations in the trade relations between the European Union and the Republic of Armenia, including cooperation on the origin of goods.

ARTICLE 124

Mutual administrative assistance

Without prejudice to other forms of cooperation envisaged in this Agreement, in particular in its Article 123, the Parties shall provide each other with mutual administrative assistance in customs matters in accordance with the provisions of the Protocol on Mutual Administrative Assistance in Customs Matters to this Agreement.

ARTICLE 125

Customs valuation

1.    The Parties shall apply the provisions of the Agreement on the Implementation of Article VII of the GATT 1994, including any subsequent amendments, to the valuation of goods for customs purposes in trade between the Parties. Those provisions are hereby incorporated into this Agreement and made part thereof mutatis mutandis.

2.    The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.

ARTICLE 126

Sub-Committee on Customs

1.    The Sub-Committee on Customs is hereby established.

2.    The Sub-Committee on Customs shall hold regular meetings and monitor the implementation of this Chapter, including the matters of customs cooperation, facilitating trade, cross-border customs cooperation and management, customs related technical assistance, rules of origin, customs enforcement of intellectual property rights, as well as mutual administrative assistance in customs matters.

3.    The Sub-Committee on Customs shall inter alia:

(a)    see to the proper functioning of this Chapter and of the Protocol on Mutual Administrative Assistance on Customs Matters to this Agreement;

(b)    adopt practical arrangements and measures to implement this Chapter and the Protocol on Mutual Administrative Assistance on Customs Matters 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 needed for their implementation and application; and

(d)    make recommendations to the Partnership Committee, where appropriate.

CHAPTER 3

TECHNICAL BARRIERS TO TRADE

ARTICLE 127

Objective

The objective of this Chapter is to facilitate trade in goods between the Parties, by providing a framework to prevent, identify and eliminate unnecessary barriers to trade within the scope of the Agreement on Technical Barriers to Trade, contained in Annex 1A to the WTO Agreement ("TBT Agreement").

ARTICLE 128

Scope and definitions

1.    This Chapter applies to the preparation, adoption and application by each Party of standards, technical regulations and conformity assessment procedures, as defined in the TBT Agreement, that affect or may affect trade in goods between the Parties.

2.    Notwithstanding paragraph 1, this Chapter does not apply to sanitary and phytosanitary measures as defined in Annex A to the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement ("SPS Agreement"), nor to purchasing specifications prepared by public authorities for their own production or consumption requirements.

3.    For the purposes of this Chapter, the definitions set out in Annex 1 to the TBT Agreement apply.

ARTICLE 129

The TBT Agreement

The Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement, which is hereby incorporated into this Agreement and made part thereof.

ARTICLE 130

Cooperation in the field of technical barriers to trade

1.    The Parties shall strengthen their cooperation with regard to standards, technical regulations, metrology, market surveillance, accreditation and conformity assessment procedures with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets. To that end, the Parties shall seek to identify and develop regulatory cooperation mechanisms and initiatives appropriate for the particular issues or sectors, which may include, but are not limited to:

(a)    exchanging information and experiences on the preparation and application of their respective technical regulations and conformity assessment procedures;

(b)    working towards the possibility of converging or aligning technical regulations and conformity assessment procedures;

(c)    encouraging cooperation between their respective bodies responsible for metrology, standardisation, conformity assessment and accreditation; and

(d)    exchanging information on developments in relevant regional and multilateral fora related to standards, technical regulations, conformity assessment procedures and accreditation.

2.    In order to promote mutual trade, the Parties shall:

(a)    seek to reduce the differences which exist between them with regard to technical regulations, metrology, standardisation, market surveillance, accreditation and conformity assessment procedures, including by encouraging the use of relevant internationally agreed instruments;

(b)    promote, in accordance with international rules, the use of accreditation in support of the assessment of the technical competence of conformity assessment bodies and their activities; and

(c)    promote the participation and, where possible, the membership of the Republic of Armenia and its relevant national bodies in the European and international organisations the activity of which relates to standards, conformity assessment, accreditation, metrology and related functions.

3.    The Parties shall endeavour to establish and maintain a process through which gradual approximation of the technical regulations, standards and conformity assessment procedures of the Republic of Armenia to those of the European Union can be achieved.

4.    For areas in which alignment has been achieved, the Parties may consider negotiating agreements on conformity assessment procedures and acceptance of industrial products.

ARTICLE 131

Marking and labelling

1.    Without prejudice to Article 129 of this Agreement, and with respect to technical regulations relating to labelling or marking requirements, the Parties reaffirm the principles of Article 2.2 of the TBT Agreement that such requirements are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For that purpose, such labelling or marking requirements shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks that non-fulfilment would create. The Parties shall promote the use of internationally harmonised marking requirements. Where appropriate, the Parties shall endeavour to accept detachable or non-permanent labelling.

2.    In particular, with regard to mandatory labelling or marking requirements, the Parties shall:

(a)    endeavour to minimise their respective requirements for labelling or marking in mutual trade, except as required for the protection of health, safety, the environment other reasonable public policy purposes;

(b)    retain the right to require the information on the label or marking to be in a language specified by a Party.

ARTICLE 132

Transparency

1.    Without prejudice to Chapter 12, each Party shall ensure that its procedures for the development of technical regulations and conformity assessment procedures allow for public consultation of interested parties at an early appropriate stage, when comments resulting from the public consultation can still be introduced and taken into account, except where that is not possible because of an emergency or threat thereof related to safety, health, environmental protection or national security.

2.    In accordance with Article 2.9 of the TBT Agreement, each Party shall allow a period for comments at an early appropriate stage following the notification of proposed technical regulations or conformity assessment procedures. Where a consultation process on proposed technical regulations or conformity assessment procedures is open to the public, each Party shall permit the other Party, or natural or legal persons of the other Party, to participate in the public consultations on terms no less favourable than those accorded to its own natural or legal persons.

3.    Each Party shall ensure that its adopted technical regulations and conformity assessment procedures are publicly available.

CHAPTER 4

SANITARY AND PHYTOSANITARY MATTERS

ARTICLE 133

Objective

The objective of this Chapter is to set out the principles applicable to sanitary and phytosanitary ("SPS") measures in trade between the Parties, as well as cooperation in animal welfare. Those principles shall be applied by the Parties in a manner that facilitates trade while preserving each Party's level of protection with regard to the life or health of humans, animals and plants.

ARTICLE 134

Multilateral obligations

The Parties affirm their rights and obligations under the SPS Agreement.

ARTICLE 135

Principles

1.    The Parties shall ensure that SPS measures are developed and applied on the basis of the principles of proportionality, transparency, non-discrimination and scientific justification taking into account international standards such as set in the International Plant Protection Convention of 1951 ("IPPC"), the World Organisation of Animal Health ("OIE") and Codex Alimentarius Commission ("Codex").

2.    Each Party shall ensure that its SPS measures do not arbitrarily or unjustifiably discriminate between its own territory and the territory of the other Party to the extent that identical or similar conditions prevail. SPS measures shall not be applied in a manner which would constitute a disguised restriction on trade.

3.    Each Party shall ensure that SPS measures, procedures and controls are implemented.

4.    Each Party shall reply to request for information received from a competent authority of the other Party no later than two months from receiving the request and in a manner no less favourable to imported products than to like domestic products.

ARTICLE 136

Import Requirements

1.    The import requirements of the importing Party shall be applicable to the entire territory of the exporting Party, subject to Article 137.

2.    The import requirements set out in certificates shall be based on Codex, OIE and IPPC principles, unless the import requirements are supported by a science-based risk assessment conducted in accordance with the provisions of the SPS Agreement.

3.    The requirements set out in import permits shall not contain more stringent sanitary and veterinary conditions than those laid down in the certificates referred to in paragraph 2.

ARTICLE 137

Measures linked to animal and plant health

1.    The Parties shall recognise the concept of pest- or disease-free areas and areas of low pest or disease prevalence in accordance with the SPS Agreement and the relevant Codex, OIE and IPPC standards, guidelines and recommendations.

2.    When determining pest- or disease-free areas and areas of low pest or disease prevalence, the Parties shall consider factors such as geographical location, ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary controls in such areas.

ARTICLE 138

Inspections and audits

The importing Party may carry out on its own cost inspections and audits on the territory of the exporting Party to evaluate the latter's inspection and certification systems. Those inspections and audits shall be performed in accordance with the relevant international standards, guidelines and recommendations.

ARTICLE 139

Exchange of information and cooperation

1.    The Parties shall discuss and exchange information on existing SPS and animal-welfare measures and on their development and implementation. Such discussions and exchanges of information shall take into account the SPS Agreement and the relevant Codex, OIE and IPPC standards, guidelines and recommendations, as appropriate.

2.    The Parties shall cooperate on animal health, animal welfare and plant-health matters through the exchange of information, expertise and experience, with the objective of building up capacity in those fields.

3.    The Parties shall, upon the request of either Party, establish a timely dialogue on SPS matters to consider matters relating to SPS and any other urgent issues covered by this Chapter. The Partnership Committee may adopt rules of procedures for the conduct of such dialogues.

4.    The Parties shall designate and regularly update contact points for communication on matters covered by this Chapter.

ARTICLE 140

Transparency

Each Party shall:

(a)    pursue transparency as regards SPS measures applicable to trade and, in particular, to the SPS requirements applied to imports of the other Party;

(b)    communicate, upon the request of the other Party and within two months of the date of that request, the SPS requirements that apply for the import of specific products, including whether a risk assessment is needed; and

(c)    notify the other Party about any serious or significant public, animal or plant health risk, including any food emergency. This notification shall be done, in writing, within two working days from the date on which that risk is revealed.

CHAPTER 5

TRADE IN SERVICES, ESTABLISHMENT AND ELECTRONIC COMMERCE

SECTION A
GENERAL PROVISIONS

ARTICLE 141

Objective, scope and coverage

1.    The Parties, affirming their respective commitments 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.    Nothing in this Chapter shall be construed as imposing any obligation on the Parties with respect to government procurement subject to the provisions of Chapter 8.

3.    This Chapter does not apply to subsidies granted by a Party which are subject to Chapter 10.

4.    Consistent with this Chapter, each Party retains the right to adopt and maintain measures to pursue legitimate policy objectives.

5.    This Chapter does not apply to measures affecting natural person seeking access to the employment market of a Party, nor does it apply to measures regarding citizenship, residence or employment on a permanent basis.

6.    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, and to ensure the orderly movement of natural persons 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 a specific commitment in this Chapter and the Annexes to this Agreement.

ARTICLE 142

Definitions

For purposes of this Chapter:

(a)    "measure" means any measure taken by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or in any other form;

(b)    "measures adopted or maintained by a Party" means measures taken by:

(i)    central, regional or local governments and authorities of a Party; and

(ii)    non-governmental bodies of a Party in the exercise of powers delegated by central, regional or local governments or authorities of that Party;

(c)    "natural person of a Party" means a national of a Member State according to its legislation or a national of the Republic of Armenia according to its legislation;

(d)    "juridical person" means any legal entity duly constituted or otherwise organised under the applicable law, whether for profit or otherwise, and whether privately owned or state-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(e)    "juridical person of a Party" means a juridical person set up in accordance with the law of a Member State and of the European Union or of the Republic of Armenia, and having its registered office, central administration, or principal place of business in the territory to which the Treaty on the Functioning of the European Union applies or in the territory of the Republic of Armenia;

a juridical person that has only its registered office or central administration in the territory to which the Treaty on the Functioning of the European Union applies or in the territory of the Republic of Armenia, respectively, shall not be considered as a juridical person of the European Union or a juridical person of the Republic of Armenia unless its operations possess a real and continuous link with the economy of the European Union or of the Republic of Armenia, respectively;

(f)    notwithstanding the preceding paragraphs, shipping companies established outside the European Union or the Republic of Armenia and controlled by nationals of the Member States or of the Republic of Armenia, respectively, shall also be beneficiaries of the provisions of this Agreement, if their vessels are registered in accordance with their respective legislation, in a Member State or in the Republic of Armenia and fly the flag of that Member State or of the Republic of Armenia;

(g)    "subsidiary of a juridical person of a Party" means a legal person which is effectively controlled by another juridical person of that Party 2 ;

(h)    "branch" of a juridical person' means a place of business not having legal personality which has the appearance of permanency, such as an extension of a parent body, has a management structure 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;

(i)    "establishment" means:

(i)    as regards juridical persons of a Party, juridical persons taking-up and pursuing economic activities by means of setting up, including the acquisition of, a juridical person or creating a branch or a representative office in the European Union or in the Republic of Armenia respectively;

(ii)    as regards natural persons of a Party, natural persons taking-up and pursuing economic activities as self-employed persons, or setting up undertakings, in particular companies, which they effectively control;

(j)    "economic activities" includes activities of an industrial, commercial and professional character and activities of craftsmen and does not include activities performed in the exercise of governmental authority;

(k)    "operations" means the pursuit of economic activities;

(l)    "services" means any service in any sector except services supplied in the exercise of governmental authority;

(m)    "services and other activities performed in the exercise of governmental authority' means services or activities which are performed neither on a commercial basis nor in competition with one or more economic operators;

(n)    "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; or

(ii)    in the territory of a Party to the service consumer of the other Party;

(o)    "service supplier" of a Party' means any natural or juridical person of a Party that supplies or seeks to supply a service;

(p)    "entrepreneur" means any natural or juridical person of a Party that performs or seeks to perform an economic activity by setting up an establishment.

SECTION B

ESTABLISHMENT

ARTICLE 143

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 3 of nuclear materials;

(b)    production of and trade in arms, munitions and war material;

(c)    audiovisual services;

(d)    national maritime cabotage 4 , and

(e)    domestic and international air transport services 5 , 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)    groundhandling services; and

(v)    airport operation services.

ARTICLE 144

National treatment and most favourable nation treatment

1.    Subject to reservations listed in Annex VIII-E, the Republic of Armenia shall grant, upon entry into force of this Agreement:

(a)    as regards the establishment of subsidiaries, branches and representative offices by natural or juridical persons of the European Union, treatment no less favourable than that accorded to its own juridical persons, branches and representative offices or to any third-country juridical persons, branches and representative offices, whichever is the better; and

(b)    as regards the operation of subsidiaries, branches and representative offices by natural or juridical persons of the European Union in the Republic of Armenia, once established, treatment no less favourable than that accorded to its own juridical persons, branches and representative offices or to any juridical persons, branches and representative offices of any third-country juridical persons, whichever is the better. 6

2.    Subject to reservations listed in Annex VIII-A, the European Union shall grant, upon entry into force of this Agreement:

(a)    as regards the establishment of subsidiaries, branches and representative offices by natural or juridical persons of the Republic of Armenia, treatment no less favourable than that accorded by the European Union to its own juridical persons, branches and representative offices or to any third-country juridical persons, branches and representative offices, whichever is the better; and

(b)    as regards the operation of subsidiaries, branches and representative offices by natural or juridical persons of the Republic of Armenia in the European Union, once established, treatment no less favourable than that accorded to their own juridical persons, branches and representative offices; or to any juridical persons, branches and representative offices of any third-country juridical persons, whichever is the better. 7

3.    Subject to reservations listed in Annexes VIII-A and VIII-E, the Parties shall not adopt any new measures which introduce discrimination as regards the establishment on their territory of juridical persons of the other Party or in respect of the operation of such juridical persons, once established, by comparison with their own juridical persons.

ARTICLE 145

Review

With a view to progressively liberalising the establishment conditions, the Partnership Committee, when meeting in trade configuration, shall regularly review the legal framework 8 and the environment for establishment.

ARTICLE 146

Other agreements

Nothing in this Chapter shall be construed as to limiting the rights of investors of the Parties to benefit from more favourable treatment provided for in any existing or future international agreement relating to investment to which a Member State and the Republic of Armenia are parties.

ARTICLE 147

Standard of treatment for branches and representative offices

1.    The provisions of Article 144 do not preclude a Party from applying particular measures concerning the establishment and operation in its territory of branches and representative offices of juridical persons of the other Party not incorporated in the territory of the former Party if those measures 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 the territory of the former Party 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 C

CROSS-BORDER SUPPLY OF SERVICES

ARTICLE 148

Scope

This Section applies to measures of the Parties affecting the cross border supply of services for all services sectors with the exception of:

(a)    audiovisual services;

(b)    national maritime cabotage 9 ; and

(c)    domestic and international air transport services 10 , 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; and

(v)    airport operation services.

ARTICLE 149

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 treatment not less favourable than that provided for in the specific commitments contained in Annexes VIII-B and VIII-F.

2.    In sectors where market access commitments are undertaken, each Party shall not adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in Annexes VIII-B and VIII-F, the following measures:

(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 terms of designated numerical units in the form of quotas or the requirement of an economic needs test.

ARTICLE 150

National treatment

1.    In the sectors for which market access commitments are inscribed in Annexes VIII-B and VIII-F, 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 accorded to its own like services and service suppliers.

2.    A Party may meet the requirement of paragraph 1 by according to services and service suppliers of the other Party treatment that is either formally identical or formally different from that accorded 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 assumed under this Article shall not be construed as requiring any Party to compensate for inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

ARTICLE 151

Lists of commitments

1.    The sectors liberalised by each of the Parties pursuant to this Chapter and, by means of reservations, the market access and national treatment limitations applicable to services and service suppliers of the other Party in those sectors are set out in the lists of commitments included in Annexes VIII-B and VIII-F.

2.    Without prejudice to rights and obligations of the Parties as they exist or could arise under the European Convention on Transfrontier Television of 1989 and the European Convention on Cinematographic Co-Production of 1992, the lists of commitments in Annexes VIII-B and VIII-F do not include commitments on audiovisual services.

ARTICLE 152

Review

With a view to progressively liberalising the cross-border supply of services between the Parties, the Partnership Committee, meeting in trade configuration, shall regularly review the list of commitments referred to in Articles 149 to 151. That review shall take into account, inter alia, the process of gradual approximation, referred to in Articles 169, 180 and 192, and its impact on the elimination of remaining obstacles to the cross-border supply of services between the Parties.

SECTION D

TEMPORARY PRESENCE OF NATURAL PERSONS FOR BUSINESS PURPOSES

ARTICLE 153

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 without prejudice to Article 141 paragraph 5.

For the purposes of this Section:

(a)    "key personnel" means natural persons who are employed within a juridical person of a Party other than a non-profit organisation 11 , who are responsible for the setting-up or the proper control, administration and operation of an establishment and who are either "business visitors for establishment purposes" or "intra-corporate transferees";

(b)    "business visitors for establishment purposes" means natural persons working in a senior position who are responsible for setting up an establishment, who do not offer or provide services or engage in any economic activity not required for establishment purposes and who do not receive remuneration from a source located within the host Party;

(c)    "intra-corporate transferees" means natural persons who have been employed by a juridical person of a Party or have been partners in it for at least one year, who are temporarily transferred to an establishment that may be a subsidiary, branch or head company of the juridical person in the territory of the other Party and who are either "managers" or "specialists";

(d)    "managers" means natural persons who work 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 and whose role includes at least:

(i)    directing the establishment or a department or sub-division thereof;

(ii)    supervising and controlling the work of other supervisory, professional or managerial employees; and

(iii)    having the authority personally to recruit and dismiss or to recommend recruiting, dismissing or other personnel actions;

(e)    "specialists" means persons working within a juridical person of a Party 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, including adequate professional experience related to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;

(f)    "graduate trainees" means natural persons who have been employed by a juridical person of a 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 12 ;

(g)    "business sellers" 13 means natural persons who are representatives of a services or goods supplier of a Party seeking entry into 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, who do not engage in making direct sales to the general public, who do not receive remuneration from a source located within the host Party, and who are not commission agents;

(h)    "contractual service suppliers" means natural persons employed by a juridical person of a 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 other Party, requiring the presence on a temporary basis of its employees in that Party, in order to fulfil the contract to provide services 14 ;

(i)    "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 15 ;

(j)    "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 154

Key personnel and graduate trainees

1.    For every sector committed in accordance with Section B and subject to any reservations listed in Annex VIII-C 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 153. The entry and temporary stay of key personnel and graduate trainees shall be for a period of up to 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 B, the measures which a Party shall not adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in Annex VIII-C, 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 the requirement of an economic needs test and as discriminatory limitations.

ARTICLE 155

Business sellers

For every sector committed in accordance with Sections B or C and subject to any reservations listed in Annex VIII-C, each Party shall allow the entry and temporary stay of business sellers for a period of up to 90 days in any 12 month period.

ARTICLE 156

Contractual service suppliers

1.    The Parties affirm their respective obligations arising from their commitments under the WTO General Agreement on Trade in Services as regards the entry and temporary stay of contractual services suppliers.

2.    In accordance with Annexes VIII-D and VIII-G, each Party shall allow the supply of services into their territory by contractual services suppliers of the other Party, subject to the following conditions:

(a)    the natural persons are 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 offer that service 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, and, in addition, possess, at the date of submission of an application for entry into the other Party, at least three years of professional experience 16 in the sector of activity which is the subject of the contract;

(c)    the natural persons entering the other Party possess:

(i)    a university degree or a qualification demonstrating knowledge of an equivalent level 17 ; and

(ii)    the professional qualifications required to exercise an activity pursuant to the laws and regulations or other measures of the Party where the service is supplied;

(d)    the natural persons do 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 is 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 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; and

(g)    the number of persons covered by the service contract is not larger than necessary to fulfil the contract, in accordance with the laws and regulations or other measures of the Party where the service is supplied.

ARTICLE 157

Independent professionals

In accordance with Annex VIII-D and VIII-G, each Party shall allow the supply of services into its territory by independent professionals of the other Party, subject to the following conditions:

(a)    the natural persons are engaged in the supply of a service on a temporary basis as self-employed persons established in the other Party and have obtained a service contract for a period not exceeding 12 months;

(b)    the natural persons entering the other Party possess, at the date of submission of an application for entry into the other Party, at least six years of professional experience in the sector of activity which is the subject of the contract;

(c)    the natural persons entering the other Party possess:

(i)        a university degree or a qualification demonstrating knowledge of an equivalent level 18 ; and

(ii)        the professional qualifications required to exercise an activity pursuant to the laws and regulations or other measures of the Party where the service is supplied;

(d)    the entry and temporary stay of natural persons within the Party concerned is 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, whatever is less; and

(e)    access accorded under 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 E

REGULATORY FRAMEWORK

SUBSECTION I

DOMESTIC REGULATION

ARTICLE 158

Scope and definitions

1.    This Section applies to measures by the Parties relating to licensing requirements and procedures, qualification requirements and procedures that affect:

(a)    the cross-border supply of services;

(b)    the establishment in their territory of natural and juridical persons of a Party; and

(c)    the temporary stay in their territory of categories of natural persons referred to in Article 153.

2.    In the case of cross-border supply of services, this Section applies only to sectors for which a Party has undertaken specific commitments and to the extent that those specific commitments apply. In the case of establishment, this Section does not apply to sectors to the extent that a reservation is listed in Annexes VIII-A and VIII-E. In the case of temporary stay of natural persons, this Section does not apply to sectors to the extent that a reservation is listed in Annexes VIII-C, VIII-D and VIII-G.

3.    This Section does not apply to measures to the extent that they constitute limitations subject to scheduling.

4.    For the purpose of this Section:

(a)    "licensing 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 referred to in paragraph 1;

(b)    "licensing procedures" means administrative or procedural rules to which a natural or a juridical person seeking authorisation to carry out the activities referred to in paragraph 1, including the amendment or renewal of a licence, is required to adhere in order to demonstrate compliance with licensing requirements;

(c)    "qualification requirements" means substantive requirements relating to the competence of a natural person to supply a service which are required to be demonstrated for the purpose of obtaining authorisation to supply a service;

(d)    "qualification procedures" means administrative or procedural rules to which a natural person is required to adhere in order to demonstrate compliance with qualification requirements, for the purpose of obtaining authorisation to supply a service; and

(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 159

Conditions for licencing and qualification

1.    Each Party shall ensure that measures relating to licensing requirements and procedures, as well as 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; and

(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 actually 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 requirements specified in this Article, each Party may take into account legitimate public-policy objectives when establishing the rules for a selection procedure, including considerations of health, safety, the protection of the environment and the preservation of cultural heritage.

ARTICLE 160

Licencing and qualification procedures

1.    Licensing 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.    Licensing and qualification procedures and formalities shall be as simple as possible and shall not unduly complicate or delay the provision of the service. Any licensing fees 19 which the applicants may incur from their application shall 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 shall 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.

4.    Where specific time periods for applications exist, an applicant shall be allowed a reasonable period for the submission of an application. The competent authority shall initiate the processing of an application without undue delay. Where possible, applications shall be accepted in electronic format under the same conditions of authenticity as paper submissions.

5.    Each Party shall ensure that the processing of an application, including reaching a final decision, is completed within a reasonable timeframe from the submission of a complete application. Each Party shall endeavour to establish the normal timeframe for processing of an application.

6.    The competent authority shall inform the applicant within a reasonable period of time after receipt of an application which it considers incomplete, provide the opportunity to correct deficiencies and, to the extent feasible, identify the additional information required to complete the application.

7.    Authenticated copies shall be accepted, where possible, in place of original documents.

8.    The competent authority shall inform the applicant in writing and without undue delay if an application is rejected. In principle, the applicant shall, upon request, also be informed of the reasons for rejection of the application and of the timeframe for an appeal against the decision.

9.    Each Party shall ensure that a licence or an authorisation, once granted, enters into effect without undue delay in accordance with the terms and conditions specified therein.

SUBSECTION II

PROVISIONS OF GENERAL APPLICATION

ARTICLE 161

Mutual recognition

1.    Nothing in this Chapter shall prevent a Party from requiring that natural persons possess the necessary qualifications and professional experience specified in the territory where the service is supplied, for the sector of activity concerned.

2.    Each Party shall encourage the relevant professional bodies in its territory to provide recommendations on mutual recognition of qualifications and professional experience to the Partnership Committee, meeting in its trade configuration, for the purpose of the fulfilment, in whole or in part, by entrepreneurs and service suppliers of the criteria applied by each Party for the authorisation, licensing, operation and certification of entrepreneurs and service suppliers and, in particular, professional services.

3.    Upon receipt of a recommendation referred to in paragraph 2, the Partnership Committee, meeting in its trade configuration, shall, within a reasonable time, review that recommendation with a view to determining whether it is consistent with this Agreement and, on the basis of the information contained, assess in particular:

(a)    the extent to which the standards and criteria applied by each Party for the authorisation, licences, operation and certification of services providers and entrepreneurs are converging; and

(b)    the potential economic value of an agreement on mutual recognition of qualifications and professional experience.

4.    Where the requirements specified in paragraph 3 are satisfied, the Partnership Committee, meeting in its trade configuration, shall establish the necessary steps to negotiate an agreement on mutual recognition and thereafter recommend that the competent authorities of the Parties launch negotiations.

5.    Any such agreement shall be in conformity with the relevant provisions of the WTO Agreement and, in particular, Article VII of the General Agreement on Trade in Services contained in Annex 1B to the WTO Agreement (GATS).

ARTICLE 162

Transparency and disclosure of confidential information

1.    Each Party shall respond promptly to all requests by the other Party for specific information on any of its measures of general application or international agreements which pertain to or affect this Agreement. Each Party shall also establish one or more enquiry points to provide, upon request, specific information on those matters to entrepreneurs and services suppliers of the other Party. The Parties shall notify each other the enquiry points within three months after entry into force of this Agreement. Enquiry points are not required to be depositories for laws and regulations.

2.    Nothing in this Agreement shall require any Party to provide confidential information the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.

SUBSECTION III

COMPUTER SERVICES

ARTICLE 163

Understanding on computer services

1.    In liberalising trade in computer services in accordance with Sections B, C and D, the Parties shall comply with the paragraphs 2 to 4.

2.    The Central Product Classification (CPC 20 ) 84, which is the United Nations code used for describing computer and related services, covers the basic functions used to provide all computer and related services: computer programmes defined as the sets of instructions required to make computers work and communicate (including their development and implementation), data processing and storage, and related services, such as consultancy and training services for staff of clients. Technological developments have led to the increased offering of such services as a bundle or package of related services that can include some or all of those basic functions. For example, services such as web or domain hosting, data mining services and grid computing each consist of a combination of basic computer services functions.

3.    Computer and related services, regardless of whether they are delivered via a network, including the internet, include all services that provide:

(a)    consulting, strategy, analysis, planning, specification, design, development, installation, implementation, integration, testing, debugging, updating, support, technical assistance or management of or for computers or computer systems;

(b)    computer programmes defined as the sets of instructions required to make computers work and communicate (in and of themselves), plus consulting, strategy, analysis, planning, specification, design, development, installation, implementation, integration, testing, debugging, updating, adaptation, maintenance, support, technical assistance, management or use of or for computer programs;

(c)    data processing, data storage, data hosting or database services;

(d)    maintenance and repair services for office machinery and equipment, including computers; or,

(e)    training services for staff of clients, related to computer programmes, computers or computer systems, and not elsewhere classified.

4.    Computer and related services enable the provision of other services, such as banking, by both electronic and other means. In such cases it is important to distinguish between the enabling service, such as web-hosting or application hosting), and the content or core service, such as banking, that is being supplied electronically. In such cases, the content or core service is not covered by CPC 84.

SUBSECTION IV

POSTAL SERVICES 21

ARTICLE 164

Scope and definitions

1.    This Subsection sets out the principles of the regulatory framework for all postal service.

2.    For the purpose of this Subsection and Sections B, C and D:

(a)    "licence" means an authorisation, granted to an individual supplier by a regulatory authority, which is required before carrying out activity of supplying a given service; and

(b)    "universal service" means the permanent provision of a minimum set of postal services of specified quality at all points in the territory of a Party.

ARTICLE 165

Prevention of market distortive practices

Each Party shall ensure that a supplier of postal services subject to a universal service obligation or a postal monopoly does not engage in market-distortive practices such as:

(a)    using revenues derived from the supply of such service to cross-subsidise the supply of an express delivery service or any non-universal delivery service; and

(b)    unjustifiably differentiating among customers such as businesses, large-volume mailers or consolidators with respect to tariffs or other terms and conditions for the supply of a service subject to a universal service obligation or a postal monopoly.

ARTICLE 166

Universal service

1.    Each Party has the right to define the kind of universal service obligation it wishes to maintain. Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, non-discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the Party.

2.    Tariffs for the universal service shall be affordable to meet the needs of users.

ARTICLE 167

Licences

1.    Each Party should endeavour to replace any licences for services not covered by the scope of the universal service with a simple registration.

2.    Where a licence is required:

(a)    the terms and conditions of licences, which shall not be more burdensome than necessary to achieve their aim, shall be made publicly available;

(b)    the reasons for the denial of a licence shall be made known to the applicant upon request; and

(c)    each Party shall provide for an appeal procedure through an independent body that shall be transparent, non-discriminatory and based on objective criteria.

ARTICLE 168

Independence of the regulatory body

The regulatory body shall be legally separate from, and not accountable to, any supplier of postal and courier services. The decisions of and the procedures used by the regulatory body shall be impartial with respect to all market participants.

ARTICLE 169

Gradual approximation

The Parties recognise the importance of gradual approximation of the legislation of the Republic of Armenia on postal services to that of the European Union.

SUBSECTION V

ELECTRONIC COMMUNICATION NETWORK AND SERVICES

ARTICLE 170

Scope and definitions

1.    This Subsection sets out principles of the regulatory framework for the provision of electronic communications networks and services, liberalised pursuant to Sections B, C and D.

2.    For the purpose of this Subsection:

(a)    "electronic communications network" means transmission systems and, where applicable, switching or routing equipment and other resources, including network elements which are not active, which permit the conveyance of signals by wire, radio, optical, or other electromagnetic means;

(b)    "electronic communications service" means a service which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting; those services exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services;

(c)    "public electronic communications service" means any electronic communications service that a Party requires, explicitly or in effect, to be offered to the public generally;

(d)    "public electronic communications network" means an electronic communications network which is used wholly or mainly for the provision of electronic communications services available to the public and which supports the transfer of information between network termination points;

(e)    "public telecommunications service" means any telecommunications transport service required, explicitly or in effect, by a Party to be offered to the public generally such services may include, inter alia, telegraph, telephone, telex, and data transmission typically involving the real-time transmission of customer-supplied information between two or more points without any end-to-end change in the form or content of the customer's information;

(f)    "regulatory authority in the electronic communications sector' means the body or bodies charged by a Party with the regulation of electronic communications mentioned in this Subsection;

(g)    "essential facilities" mean facilities of a public electronic communications network and service that

(i)    are exclusively or predominantly provided by a single or limited number of suppliers; and

(ii)    cannot feasibly be economically or technically substituted in order to provide a service;

(h)    "associated facilities" means those associated services, physical infrastructures and other facilities or elements associated with an electronic communication network or service which enable or support the provision of services via that network or service or have the potential to do so, and include, inter alia, buildings or entries to buildings, building wiring, antennae, towers and other supporting constructions, ducts, conduits, masts, manholes and cabinets;

(i)    "major supplier 22 " in the electronic communications sector is a supplier which has the ability to materially affect the terms of participation, having regard to price and supply, in the relevant market for electronic communications services as a result of control over essential facilities or the use of its position in the market;

(j)    "access" means the making available of facilities or services to another supplier under defined conditions, for the purpose of providing electronic communication services and covers inter alia access to:

(i)    network elements and associated facilities, which may involve the connection of equipment, by fixed or non-fixed means, in particular this includes access to the local loop and to facilities and services necessary to provide services over the local loop;

(ii)    physical infrastructure including buildings, ducts and masts;

(iii)    relevant software systems including operational support systems;

(iv)    information systems or databases for pre-ordering, provisioning, ordering, maintaining and repair requests, and billing;

(v)    number translation or systems offering equivalent functionality;

(vi)    fixed and mobile networks, in particular for roaming; and

(vii)    virtual network services;

(k)    "interconnection" means the physical and logical linking of public electronic communications networks used by the same or different suppliers in order to allow the users of one supplier to communicate with users of the same or another supplier or to access services provided by another supplier, services that may be provided by the parties involved or other parties who have access to the network;

(l)    "universal service" means the minimum set of services of specified quality to be made available to all users in the territory of a Party regardless of their geographical location and at an affordable price; its scope and implementation are decided by each Party;

(m)    "number portability" means the ability of all subscribers of public electronic communications services who so request to retain, at the same location, the same telephone numbers without impairment of quality, reliability or convenience when switching between the same category of suppliers of public electronic communications services.

ARTICLE 171

Regulatory authority

1.    Each Party shall ensure that its regulatory authorities for electronic communications networks and services are legally distinct and functionally independent from any supplier of electronic communications networks, electronic communications services or electronic communications equipment.

2.    A Party that retains ownership or control of providers of electronic communication networks or services shall ensure effective structural separation of the regulatory function from activities associated with ownership or control. The regulatory authority shall act independently and shall not seek or accept instructions from any other body in relation to the exercise of these tasks assigned to it under domestic law.

3.    Each Party shall ensure that its regulatory authorities are sufficiently empowered to regulate the sector, and have adequate financial and human resources to carry out the task assigned to it. Only appeal bodies referred to in paragraph 7 shall have the power to suspend or overturn decisions by the regulatory authorities.

The tasks assigned to a regulatory authority shall be made public in an easily accessible and clear form, in particular where those tasks are assigned to more than one body. Each Party shall ensure that its regulatory authorities have a separate annual budgets. The budgets shall be made public.

4.    The decisions of and the procedures used by regulators shall be impartial with regard to all market participants.

5.    The powers of the regulatory authorities shall be exercised in a transparent and timely manner.

6.    Regulatory authorities shall have the power to ensure that suppliers of electronic communications networks and services provide them, promptly upon request, with all the information, including financial information, which is necessary to enable the regulatory authorities to carry out their tasks in accordance with this Subsection. Information requested shall be proportionate to the performance of the tasks of the regulatory authorities and treated in accordance with the requirements of confidentiality.

7.    Any user or supplier affected by the decision of a regulatory authority shall have a right to appeal against that decision to an appeal body which is independent of the parties involved. That body, which may be a court, shall have the appropriate expertise to carry out its functions effectively. The merits of the case shall be duly taken into account and the appeal mechanism shall be effective. With regard to bodies responsible for review procedures which are not judicial in character each Party shall ensure that written reasons for their decisions shall always be given and that those decisions shall also be subject to review by an impartial and independent judicial authority. Decisions taken by appeal bodies shall be effectively enforced. Pending the outcome of the appeal, the decision of the regulatory authority shall stand, unless interim measures are granted in accordance with domestic law.

8.    Each Party shall ensure that the head of a regulatory authority, or where applicable, members of the collegiate body fulfilling that function within a regulatory body or their replacements may be dismissed only if they no longer fulfil the conditions required for the performance of their duties which are laid down in advance in domestic law. Any such decision to dismiss shall be made public at the time of dismissal. The dismissed head of the regulatory authority, or where applicable, members of the collegiate body fulfilling that function shall receive a statement of reasons and shall have the right to request its publication, where this would not otherwise take place, in which case it shall be published.

ARTICLE 172

Authorisation to provide electronic communications networks and services

1.    Each Party shall authorise the provision of electronic communications networks or services, wherever possible, upon simple notification. Following the notification, the service supplier concerned shall not be required to obtain an explicit decision or any other administrative act by the regulatory authority before exercising the rights stemming from the authorisation. The rights and obligations resulting from such authorisation shall be made publicly available in an easily accessible form. Obligations should be proportionate to the service in question.

2.    Where necessary, a Party may require a licence for the right of use for radio frequencies and numbers in order to:

(a)    avoid harmful interference;

(b)    ensure technical quality of service;

(c)    safeguard efficient use of spectrum; or

(d)    fulfil other objectives of general interest.

3.    Where a Party requires a licence it shall:

(a)    make publicly available all the licensing criteria and a reasonable period of time normally required to reach a decision concerning an application for a licence;

(b)    make known to the applicant, upon request, the reasons for the denial of a licence in writing;

(c)    provide to the applicant the possibility to seek recourse before an appeal body in cases where a licence has been denied.

4.    Any administrative costs shall be imposed on suppliers in an objective, transparent, proportionate and cost-minimising manner. Any administrative costs imposed by a Party on suppliers providing a service or a network under an authorisation referred to in paragraph 1 or a license under paragraph 2 shall be limited to the actual administrative costs normally incurred in the management, control and enforcement of the applicable authorisation and licences. Such administrative costs may include costs for international cooperation, harmonisation and standardisation, market analysis, monitoring compliance and other market control, as well as regulatory work involving preparation and enforcement of legislation and administrative decisions, such as decisions on access and interconnection.

Administrative costs referred to in the first subparagraph do not include payments for auction, tendering or other non-discriminatory means of awarding concessions, or mandated contributions to universal service provision.

ARTICLE 173

Scarce resources

1.    The allocation and granting of rights for the use of scarce resources, including radio spectrum, numbers and rights of way, shall be carried out in an open, objective, timely, transparent, nondiscriminatory and proportionate manner. Each Party shall base its procedures on objective, transparent, non-discriminatory and proportionate criteria.

2.    The current state of allocated frequency bands shall be made publicly available, but detailed identification of radio spectrum allocated for specific government uses is not required.

3.    Each Party retains the right to establish and apply spectrum and frequency management measures that may have the effect of limiting the number of suppliers of electronic communications services, provided that it does so in a manner consistent with this Agreement. That right includes the ability to allocate frequency bands taking into account current and future needs and spectrum availability. Measures of a Party allocating and assigning spectrum and managing frequency are not considered as measures that are per se inconsistent with Articles 144, 149 and 150.

ARTICLE 174

Access and interconnection

1.    Access and interconnection shall, in principle, be agreed on the basis of commercial negotiation between the suppliers concerned.

2.    Each Party shall ensure that any suppliers of electronic communications services shall have a right, and when requested by another supplier an obligation, to negotiate interconnection with each other for the purpose of providing publicly available electronic communications networks and services. No Party shall maintain any legal or administrative measures which oblige suppliers granting access or interconnection to offer different terms and conditions to different suppliers for equivalent services or impose obligations that are not related to the services provided.

3.    Each Party shall ensure that suppliers acquiring information from another supplier in the process of negotiating access or interconnection arrangements may use that information solely for the purpose for which it was supplied and respect at all times the confidentiality of information transmitted or stored.

4.    Each Party shall ensure that a major supplier in its territory grants access to its essential facilities including, inter alia, network elements, associated facilities and ancillary services, to suppliers of electronic communications services on reasonable and non-discriminatory 23 terms and conditions.

5.    For public telecommunications services, interconnection with a major supplier shall be ensured at any technically feasible point in the network. Such interconnection shall be provided:

(a)    under non-discriminatory terms, conditions (including as regards technical standards, specifications, quality and maintenance) and rates, and of a quality no less favourable than that provided for own like services of such major supplier, or for like services of non-affiliated suppliers, or for its subsidiaries or other affiliates;

(b)    in a timely manner, on terms, conditions (including as regards technical standards, specifications, quality and maintenance) and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and

(c)    upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.

6.    Each Party shall ensure that the procedures applicable for interconnection to a major supplier are made publicly available and that major suppliers make publicly available either their interconnection agreements or, where appropriate, their reference interconnection offers.

ARTICLE 175

Competitive safeguards on major suppliers

Each Party shall adopt or maintain appropriate measures for the purpose of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anti-competitive practices. Those anti-competitive practices shall include in particular:

(a)    engaging in anti-competitive cross-subsidisation;

(b)    using information obtained from competitors with anti-competitive results; and

(c)    not making available to other service suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to provide services.

ARTICLE 176

Universal service

1.    Each Party has the right to define the kind of universal service obligations it wishes to maintain.

2.    Those universal service obligations shall not be regarded per se as anti-competitive, provided they are administered in a proportionate, transparent, objective and non-discriminatory way. The administration of such obligations shall also be neutral with respect to competition and be not more burdensome than necessary for the kind of universal service defined by the Party.

3.    All suppliers of electronic communications networks or services should be eligible to provide universal service. The designation of universal service suppliers shall be made through an efficient, transparent and non-discriminatory mechanism. Where necessary, each Party shall assess whether the provision of universal service represents an unfair burden on a supplier designated to provide universal service. Where justified on the basis of such calculation, and taking into account the market benefit which accrues to a supplier that offers universal service, regulatory authorities shall determine whether a mechanism is required to compensate the supplier concerned or to share the net cost of universal service obligations.

ARTICLE 177

Number portability

Each Party shall ensure that suppliers of public electronic communications services provide for number portability on reasonable terms and conditions.

ARTICLE 178

Confidentiality of information

Each Party shall ensure the confidentiality of electronic communications and related traffic data by means of a public electronic communications network and publicly available electronic communications services without restricting trade in services.

ARTICLE 179

Resolution of electronic communications disputes

1.    Each Party shall ensure that in the event of a dispute arising between suppliers of electronic communications networks or services in connection with rights and obligations that arise from this Subsection, the regulatory authority concerned shall, at the request of either party concerned, issue a binding decision to resolve the dispute in the shortest possible timeframe and in any case within four months, except in exceptional circumstances.

2.    Where such a dispute concerns the cross-border provision of services, the regulatory authorities concerned shall coordinate their efforts in order to bring about a resolution of the dispute.

3.    The decision of the regulatory authority shall be made available to the public, having regard to the requirements of business confidentiality. The parties concerned shall be given a full statement of the reasons on which it is based and shall have the right to appeal that decision, in accordance with Article 172 paragraph 7.

4.    The procedure referred to in this Article shall not preclude either party concerned from bringing an action before the courts.

ARTICLE 180

Gradual approximation

The Parties recognise the importance of gradual approximation of the legislation of the Republic of Armenia on electronic communication networks to that of the European Union.

SUBSECTION VI

FINANCIAL SERVICES

ARTICLE 181

Scope and definitions

1.    This Subsection applies to measures affecting the supply of financial services, where financial services are liberalised pursuant to Sections B, C and D.

2.    For the purposes of this Chapter "financial service" means any service of a financial nature offered by a financial service supplier of a Party. Financial services comprise insurance and insurance-related services as well as banking and other financial services.

3.    Insurance and insurance-related services as referred to in paragraph 2 comprise:

(a)    direct insurance (including co-insurance):

(i)    life; and

(ii)    non-life;

(b)    reinsurance and retrocession;

(c)    insurance inter-mediation, such as brokerage and agency; and

(d)    services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.

4.    Banking and other financial services (excluding insurance and insurance-related services) as referred to in paragraph 2 comprise:

(a)    acceptance of deposits and other repayable funds from the public;

(b)    lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;

(c)    financial leasing;

(d)    all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;

(e)    guarantees and commitments;

(f)    trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:

(i)    money-market instruments (including cheques, bills, certificates of deposits);

(ii)    foreign exchange;

(iii)    derivative products including, but not limited to, futures and options;

(iv)    exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;

(v)    transferable securities; and

(iv)    other negotiable instruments and financial assets, including bullion;

(g)    participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;

(h)    money broking;

(i)    asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;

(j)    settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;

(k)    provision and transfer of financial information, and financial data processing and related software; and

(l)    advisory, intermediation and other auxiliary financial services on all the activities listed in this paragraph, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy.

5.    For the purposes of this Subsection:

(a)    "financial service supplier" means any natural or juridical person of a Party that seeks to provide or provides financial services but does not include a public entity;

(b)    "public entity" means:

(i)    a government, a central bank or a monetary authority, of a Party, or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or

(ii)    a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions;

(c)    "new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, that is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party.

ARTICLE 182

Prudential carve-out

1.    Nothing in this Agreement shall prevent a Party from adopting or maintaining measures for prudential reasons, such as:

(a)    the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier;

(b)    ensuring the integrity and stability of its financial system.

2.    Those measures shall not be more burdensome than necessary to achieve their aim.

3.    Nothing in this Agreement shall be construed as requiring a Party to disclose information relating to the affairs and accounts of individual consumers or any confidential or proprietary information in the possession of public entities.

ARTICLE 183

Effective and transparent regulation

1.    Each Party shall make its best endeavours to provide in advance to all interested persons any measure of general application that the Party proposes to adopt in order to allow an opportunity for such persons to comment on the measure. Such proposed measure shall be provided:

(a)    by means of an official publication; or

(b)    in other written or electronic form.

2.    Each Party shall make available to interested persons its requirements for completing applications relating to the supply of financial services.

On the request of an applicant, the concerned Party shall inform the applicant of the status of its application. If the concerned Party requires additional information from the applicant, it shall notify the applicant without undue delay.

3.    Each Party shall make its best endeavours to ensure that internationally agreed standards for regulation and supervision in the financial services sector and for the fight against tax evasion and avoidance are implemented and applied in its territory. Such internationally agreed standards are, inter alia:

(a)    the "Core Principle for Effective Banking Supervision" of the Basel Committee;

(b)    the "Insurance Core Principles" of the International Association of Insurance Supervisors;

(c)    the "Objectives and Principles of Securities Regulation" of the International Organisation of Securities Commissions;

(d)    the OECD "Agreement on exchange of information on tax matters";

(e)    the G20 "Statement on Transparency and exchange of information for tax purposes"; and

(f)     "Forty Recommendations on Money Laundering" and "Nine Special Recommendations on Terrorist Financing" of the Financial Action Task Force.

4.    The Parties take note of the "Ten Key Principles for Information Exchange" promulgated by the Finance Ministers of the G7 Nations, and shall make their best endeavours to apply those principles between them.

ARTICLE 184

New financial services

Each Party shall permit a financial service supplier of the other Party to provide any new financial service of a type similar to those services that the Party would permit its own financial service suppliers to provide under its domestic law in like circumstances. A Party may determine the legal form through which the service may be provided and may require authorisation for the provision of the service. Where such authorisation is required, a decision shall be made within a reasonable time and the authorisation may only be refused for prudential reasons consistent with Article 182.

ARTICLE 185

Data processing

1.    Each Party shall permit a financial service supplier of the other Party to transfer information in electronic or other form, into and out of its territory, for data processing where such processing is required in the ordinary course of business of such financial service supplier.

2.    Nothing in paragraph 1 restricts the right of a Party to protect personal data and privacy, so long as such right is not used to circumvent this Agreement.

3.    Each Party shall adopt or maintain adequate safeguards for the protection of privacy and fundamental rights, and freedom of individuals, in particular with regard to the transfer of personal data.

ARTICLE 186

Specific exceptions

1.    Nothing in this Chapter shall be construed as preventing a Party, including its public entities, from exclusively conducting or providing in its territory activities or services forming part of a public retirement plan or statutory system of social security, except where those activities may be carried out, as provided by the Party's domestic regulation, by financial service suppliers in competition with public entities or private institutions.

2.    Nothing in this Agreement applies to activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies.

3.    Nothing in this Chapter shall be construed as preventing a Party, including its public entities, from exclusively conducting or providing in its territory activities or services for the account or with the guarantee or using the financial resources of the Party, or its public entities.

ARTICLE 187

Self-regulatory organisations

Where a Party requires membership or participation in, or access to, any self-regulatory body, securities or futures exchange or market, clearing agency, or any other organisation or association, in order for financial service suppliers of the other Party to supply financial services on an equal basis with financial service suppliers of the Party, or where the Party provides, directly or indirectly, such entities with privileges or advantages in supplying financial services, the Party shall ensure compliance with the obligations specified in Articles 144 and 150.

ARTICLE 188

Clearing and payment systems

Under the terms and conditions of national treatment specified in Articles 144 and 150, each Party shall grant to financial service suppliers of the other Party established in its territory access to payment and clearing systems operated by public entities, as well as to official funding and refinancing facilities available in the normal course of ordinary business. This paragraph is not intended to confer access to the lender-of-last-resort facilities of a Party.

ARTICLE 189

Financial stability and regulation of financial services in the Republic of Armenia

The Parties recognise the importance of the adequate regulation of financial services to ensure financial stability, fair and efficient markets and the protection of investors, depositors, policy-holders and persons to whom fiduciary duty is owed by financial services suppliers. For such regulation of financial services the international best-practice standards provide the overall benchmark, in particular in the way they are implemented in the European Union. In that context, the Republic of Armenia shall approximate its regulation of financial services, as appropriate, to the legislation of the European Union.

SUBSECTION VII

TRANSPORT SERVICES

ARTICLE 190

Scope and objectives

This Subsection sets out the principles regarding the liberalisation of international transport services pursuant to Sections B, C and D.

ARTICLE 191

Definitions

1.    For the purposes of this Subsection and Sections B, C and D:

(a)    "international maritime transport" includes door to door and multi-modal transport operations, which is the carriage of goods using more than one mode of transport, involving a sea-leg, under a single transport document, and includes to this effect the right to directly contract with providers of other modes of transport;

(b)    "maritime cargo handling services" means activities exercised by stevedore companies, including terminal operators, but not including the direct activities of dockers, when this workforce is organised independently of the stevedoring or terminal operator companies. The activities covered include the organisation and supervision of:

(i)    the loading or discharging of cargo to or from a ship;

(ii)    the lashing or unlashing of cargo;

(iii)    the reception or delivery and safekeeping of cargoes before shipment or after discharge;

(c)    "customs clearance services" or alternatively "customs house brokers" services' means activities consisting in carrying out on behalf of another party customs formalities concerning import, export or through transport of cargoes, whether this service is the main activity of the service provider or a usual complement of its main activity;

(d)    "container station and depot services" means activities consisting in storing containers, whether in port areas or inland, with a view to their stuffing or stripping, repairing and making them available for shipments;

(e)    "maritime agency services" means activities consisting in representing, within a given geographic area, as an agent the business interests of one or more shipping lines or shipping companies, for the following purposes:

(i)    marketing and sales of maritime transport and related services, from quotation to invoicing, and issuance of bills of lading on behalf of the companies, acquisition and resale of the necessary related services, preparation of documentation, and provision of business information; and

(ii)    acting on behalf of the companies organising the call of the ship or taking over cargoes when required;

(f)    "freight forwarding services" means the activity consisting of organising and monitoring shipment operations on behalf of shippers, through the acquisition of transport and related services, preparation of documentation and provision of business information; and

(g)    "feeder services" means the pre- and onward transportation of international cargoes by sea, notably containerised, between ports located in a Party.

2.    As regards international maritime transport, the Parties shall ensure effective application of the principle of unrestricted access to cargoes on a commercial basis, the freedom to provide international maritime transport services, as well as national treatment in the framework of the provision of such services.

3.    In view of the existing levels of liberalisation between the Parties in international maritime transport each Party shall:

(a)    apply effectively the principle of unrestricted access to the international maritime markets and trades on a commercial and non-discriminatory basis; and

(b)    grant to ships flying the flag of the other Party or operated by service suppliers of the other Party treatment no less favourable than that accorded to its own ships or those of any third-country, whichever are the better, with regard to, inter alia, access to ports, the use of infrastructure and services of ports, and the use of maritime auxiliary services, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading.

4.    In applying the principles referred to in paragraph 3, each Party shall:

(a)    not introduce cargo-sharing arrangements in future agreements with third countries concerning international maritime transport services, including dry and liquid bulk and liner trade, and terminate, within a reasonable period of time, any such cargo-sharing arrangements that exist in previous agreements; and

(b)    upon the entry into force of this Agreement, abolish and abstain from introducing any unilateral measures and administrative, technical and other obstacles which could constitute a disguised restriction or have discriminatory effects on the free supply of services in international maritime transport.

5.    Each Party shall permit international maritime transport service suppliers of the other Party to have an establishment in its territory under conditions of establishment and operation no less favourable than those accorded to its own service suppliers or those of any third-country, whichever are the better.

6.    Each Party shall make available to international maritime transport service suppliers of the other Party on reasonable and non-discriminatory terms and conditions the following services at the port: pilotage, towing and tug assistance, provisioning, fuelling and watering, garbage collecting and ballast waste disposal, port captain’s services, navigation aids, emergency repair facilities, anchorage, berth and berthing services as well as shore-based operational services essential to ship operations, including communications, water and electrical supplies.

7.    Each Party shall permit the movement of equipment such as empty containers, not being carried as cargo against payment, between ports of the Republic of Armenia or between ports of a Member State.

8.    Each Party, subject to the authorisation of the competent authority shall permit international maritime transport service suppliers of the other Party to provide feeder services between their national ports.

ARTICLE 192

Gradual approximation

The Parties recognise the importance of gradual approximation of the legislation of the Republic of Armenia on transport services to that of the European Union.

SECTION F

ELECTRONIC COMMERCE

SUBSECTION I

GENERAL PROVISIONS

ARTICLE 193

Objective and principles

1.    The Parties, recognising that electronic commerce increases trade opportunities in many sectors, aim to promote the development of electronic commerce between them, in particular by cooperating on the issues raised by electronic commerce with regard to the provisions of this Chapter.

2.    The Parties agree that the development of electronic commerce shall be fully compatible with the highest international standards of data protection, in order to ensure the confidence of users of electronic commerce.

3.    The Parties shall consider electronic transmissions as the provision of services, within the meaning of Section C, which cannot be subject to customs duties.

ARTICLE 194

Regulatory aspects of electronic commerce

1.    The Parties shall maintain a dialogue on regulatory issues raised by electronic commerce. That dialogue shall inter alia address the following matters:

(a)    the recognition of certificates of electronic signatures issued to the public and the facilitation of cross-border certification services;

(b)    the liability of intermediary service providers with respect to the transmission, or storage of information:

(i)    the treatment of unsolicited electronic commercial communications; and

(ii)    the protection of consumers in the ambit of electronic commerce; and

(c)    any other matter relevant for the development of electronic commerce.

2.    Such dialogue may be implemented by an exchange of information on the legislation of each Party with regard to the matters referred to in paragraph 1 as well as on the implementation of such legislation.

SUBSECTION II

LIABILITY OF INTERMEDIARY SERVICE PROVIDERS

ARTICLE 195

Use of intermediaries' services

The Parties recognise that the services of intermediaries can be used by third parties for activities infringing their respective domestic law. To take account of that possibility each Party shall adopt or maintain for intermediary service providers the lability measures referred to in this subsection.

ARTICLE 196

Liability of intermediary service providers: "mere conduit"

1.    Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, or the provision of access to a communication network, each Party shall ensure that the service provider is not liable for the information transmitted, on condition that the provider:

(a)    does not initiate the transmission;

(b)    does not select the receiver of the transmission; and

(c)    does not select or modify the information contained in the transmission.

2    The acts of transmission and of provision of access referred to in paragraph 1 include the automatic, intermediate and transient storage of the information transmitted in so far as this takes place for the sole purpose of carrying out the transmission in the communication network, and provided that the information is not stored for any period longer than is reasonably necessary for the transmission.

3    This Article shall not affect the possibility for a court or an administrative authority, in accordance with the legal system of each Party, to require the service provider to terminate or prevent an infringement.

ARTICLE 197

Liability of intermediary service providers: "caching"

1.    Where an information society service is provided that consists of the transmission in a communication network of information provided by a recipient of the service, each Party shall ensure that the service provider is not liable for the automatic, intermediate and temporary storage of that information, performed for the sole purpose of making more efficient the information's onward transmission to other recipients of the service upon their request, on condition that the provider:

(a)    does not modify the information;

(b)    complies with conditions on access to the information;

(c)    complies with rules regarding the updating of the information, specified in a manner widely recognised and used by industry;

(d)    does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information; and

(e)    acts expeditiously to remove or to disable access to the information the provider has stored upon obtaining actual knowledge of the fact that the information at the initial source of the transmission has been removed from the network, or access to it has been disabled, or that a court or an administrative authority has ordered such removal or disablement.

2.    This Article shall not affect the possibility for a court or an administrative authority to require the service provider to terminate or prevent an infringement in accordance with the legal system of each Party.

ARTICLE 198

Liability of intermediary service providers: "hosting"

1.    Where an information society service is provided that consists of the storage of information provided by a recipient of the service, the Parties shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that the provider:

(a)    does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or,

(b)    upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

2.    Paragraph 1 does not apply where the recipient of the service is acting under the authority or the control of the provider.

3.    This Article shall not affect the possibility for a court or an administrative authority, in accordance with the legal system of each Party, to require the service provider to terminate or prevent an infringement, or the possibility for a Party to establish procedures governing the removal or disabling of access to information.

ARTICLE 199

No general obligation to monitor

1.    The Parties shall not impose either a general obligation on providers, when providing the services covered by Articles 196, 197 and 198, to monitor the information which they transmit or store, or a general obligation to actively seek facts or circumstances indicating illegal activity.

2.    Each Party may establish obligations for information society service providers to promptly inform the competent public authorities of alleged illegal activities and information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.

SECTION G

EXCEPTIONS

ARTICLE 200

General exceptions

1.    Without prejudice to general exceptions provided for in this Agreement, this Chapter is subject to the exceptions specified in paragraphs 2 and 3.

2.    Subject to the requirement that such measures not be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on establishment or cross-border supply of services, nothing in this Chapter shall be construed as preventing the adoption or enforcement by a Party of measures:

(a)    necessary to protect public security or public morals or to maintain public order;

(b)    necessary to protect human, animal or plant life or health;

(c)    relating to the conservation of exhaustible natural resources if such measures are applied in conjunction with restrictions on domestic entrepreneurs or on the domestic supply or consumption of services;

(d)    necessary for the protection of national treasures of artistic, historic or archaeological value;

(e)    necessary to secure compliance with laws or regulations which are not inconsistent with this Chapter including those relating to:

(i)    the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;

(ii)    the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; or

(iii)    safety; or

(f)    inconsistent with Articles 144 and 150, provided that the difference in treatment is aimed at ensuring the effective or equitable imposition or collection of direct taxes in respect of economic activities, entrepreneurs or services suppliers of the other Party 24 .

3.    This Chapter and Annex VIII to this Agreement do not apply to the respective social security systems of the Parties or to activities in the territory of each Party, which are connected, even occasionally, with the exercise of official authority.

ARTICLE 201

Taxation measures

The most-favoured-nation treatment granted in accordance with this Chapter does not apply to the tax treatment that Parties are providing or will provide in future on the basis of agreements between the Parties designed to avoid double taxation.

Article 202

Security exceptions

Nothing in this Agreement shall be construed as:

(a)    requiring any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests;

(b)    preventing any Party from taking any action which it considers necessary for the protection of its essential security interests:

(i)    connected with the production of or trade in arms, munitions or war material;

(ii)    relating to economic activities carried out directly or indirectly for the purpose of provisioning a military establishment;

(iii)    relating to fissionable and fusionable materials or the materials from which they are derived; or

(iv)    taken in time of war or other emergency in international relations; or

(c)    preventing a Party from taking any action in pursuance of obligations it has accepted for the purpose of maintaining international peace and security.

SECTION H

INVESTMENT

ARTICLE 203

Review

In order to facilitate bilateral investment, the Parties shall jointly review the environment and the legal framework for investment, no later than three years after the entry into force of this Agreement and at regular intervals thereafter. On the basis of that review, they shall consider the opportunity for starting negotiations with a view to supplementing this Agreement with provisions on investment, including investment protection.

CHAPTER 6

Current Payments and Movement of Capital

ARTICLE 204

Current Payments

The Parties shall impose no restrictions and shall allow, in freely convertible currency and in accordance with the Articles of Agreement of the International Monetary Fund, any payments and transfers on the current account of the balance of payments between the European Union and the Republic of Armenia.

ARTICLE 205

Capital Movements

1.    With regard to transactions on the capital and financial account of the balance of payments, from the date of entry into force of this Agreement, the Parties shall ensure the free movement of capital relating to direct investments 25 made in accordance with the law of the host country and in accordance with the provisions of Chapter 5, and the liquidation or repatriation of such invested capital and of any profit stemming therefrom.

2.    With regard to transactions on the capital and financial account of the balance of payments not covered by paragraph 1, from the entry into force of this Agreement and without prejudice to other provisions of this Agreement, each Party shall ensure the free movement of capital with regard to:

(a)    credits relating to commercial transactions, including the provision of services, in which a resident of one of the Parties is participating;

(b)    financial loans and credits by investors of the other Party; and

(c)    capital participation in a juridical person, as defined in Article 142, with no intention of establishing or maintaining lasting economic links.

3.    Without prejudice to other provisions of this Agreement, the Parties shall not introduce any new restrictions on the movement of capital and current payments between residents of the European Union and the Republic of Armenia and shall not make the existing arrangements more restrictive.