2013/490/EU, Euratom: Council and Commission Decision of 22 July 2013 on the conclusion of the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Serbia, of the other part

The Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Serbia, of the other part, the Annexes and Protocols annexed thereto, as well as the joint declarations and the declaration by the Community attached to the Final Act, are hereby approved on behalf of the European Union and the European Atomic Energy Community. The text of the Agreement is attached to this Decision.

The President of the Council shall, on behalf of the Union, make the following notification: ‘As a consequence of the entry into force of the Treaty of Lisbon on 1 December 2009, the European Union has replaced and succeeded the European Community and from that date exercises all rights and assumes all obligations of the European Community. Therefore, references to ‘the European Community’ in the text of the Agreement are, where appropriate, to be read as ‘the European Unon’.’.

1 The position to be taken by the Union or by the European Atomic Energy Community within the Stabilisation and Association Council and within the Stabilisation and Association Committee when the latter is empowered to act by the Stabilisation and Association Council shall be determined by the Council, on a proposal from the Commission, or, where appropriate, by the Commission, each in accordance with the corresponding provisions of the Treaties.

2 The President of the Council shall, in accordance with Article 120 of the Agreement, preside over the Stabilisation and Association Council. A representative of the Commission shall preside over the Stabilisation and Association Committee, in accordance with the Rules of Procedure thereof.

3 The decision to publish the decisions of the Stabilisation and Association Council and the Stabilisation and Association Committee in the Official Journal of the European Union shall be taken on a case-by-case basis by the Council or the Commission, each in accordance with the corresponding provisions of the Treaties.

The President of the Council is hereby authorised to designate the person(s) empowered, on behalf of the European Union, to deposit the act of approval provided for in Article 138 of the Agreement. The President of the Commission shall deposit the said act of approval on behalf of the European Atomic Energy Community.

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

1 An Association is hereby established between the Community and its Member States, of the one part, and the Republic of Serbia of the other part.

2 The aims of this Association are: (a) to support the efforts of Serbia to strengthen democracy and the rule of law; (b) to contribute to political, economic and institutional stability in Serbia, as well as to the stabilisation of the region; (c) to provide an appropriate framework for political dialogue, allowing the development of close political relations between the Parties; (d) to support the efforts of Serbia to develop its economic and international cooperation, including through the approximation of its legislation to that of the Community; (e) to support the efforts of Serbia to complete the transition into a functioning market economy; (f) to promote harmonious economic relations and gradually develop a free trade area between the Community and Serbia; (g) to foster regional cooperation in all the fields covered by this Agreement.

Respect for democratic principles and human rights as proclaimed in the Universal Declaration of Human Rights and as defined in the Convention for the Protection of Human Rights and Fundamental Freedoms, in the Helsinki Final Act and the Charter of Paris for a New Europe, respect for principles of international law, including full cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY), and the rule of law as well as the principles of market economy as reflected in the Document of the CSCE Bonn Conference on Economic Cooperation, shall form the basis of the domestic and external policies of the Parties and constitute essential elements of this Agreement.

The Parties consider that the proliferation of weapons of mass destruction (hereinafter also referred to as ‘WMD’) and their means of delivery, both to state and non-state actors, represents one of the most serious threats to international stability and security. The Parties therefore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery through full compliance with and national implementation of their existing obligations under international disarmament and non-proliferation Treaties and Agreements and other relevant international obligations. The parties agree that this provision constitutes an essential element of this Agreement and will be part of the political dialogue that will accompany and consolidate these elements. The Parties furthermore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery by: taking steps to sign, ratify, or accede to, as appropriate, and fully implement all other relevant international instruments; the establishment of an effective system of national export controls, controlling the export as well as the transit of WMD-related goods, including a WMD end-use control on dual use technologies and containing effective sanctions for breaches of export controls. Political dialogue on this matter may take place on a regional basis.

The contracting parties reaffirm the importance they attach to the implementation of international obligations, notably the full cooperation with ICTY.

International and regional peace and stability, the development of good neighbourly relations, human rights and the respect and protection of minorities are central to the Stabilisation and Association process referred to in the conclusions of the Council of the European Union on 21 June 1999. The conclusion and the implementation of this Agreement come within the framework of the conclusions of the Council of the European Union of 29 April 1997 and are based on the individual merits of Serbia.

Serbia commits itself to continue to foster cooperation and good neighbourly relations with the other countries of the region including an appropriate level of mutual concessions concerning the movement of persons, goods, capital and services as well as the development of projects of common interest, notably those related to border management and combating organised crime, corruption, money laundering, illegal migration and trafficking, including in particular in human beings, small arms and light weapons, as well as illicit drugs. This commitment constitutes a key factor in the development of the relations and cooperation between the Parties and thus contributes to regional stability.

The Parties reaffirm the importance that they attach to the fight against terrorism and the implementation of international obligations in this area.

The association shall be progressively and fully realised over a transitional period of a maximum of six years. The Stabilisation and Association Council (hereinafter also referred to as ‘SAC’) established under Article 119 shall regularly review, as a rule on an annual basis, the implementation of this Agreement and the adoption and implementation by Serbia of legal, administrative, institutional and economic reforms. This review shall be carried out in the light of the preamble and in accordance with the general principles of this Agreement. It shall take duly into account priorities set in the European Partnership relevant to this Agreement and be in coherence with the mechanisms established under the Stabilisation and Association process, notably the progress report on the Stabilisation and Association process. On the basis of this review, the SAC will issue recommendations and may take decisions. Where the review identifies particular difficulties, they may be referred to the mechanisms of dispute settlement established under this Agreement. The full association shall be progressively realised. No later than the third year after the entry into force of this Agreement, the SAC shall make a thorough review of the application of this Agreement. On the basis of this review the SAC shall evaluate progress made by Serbia and may take decisions governing the following stages of association. The aforementioned review will not apply to the free movement of goods, for which a specific schedule is foreseen in Title IV.

This Agreement shall be fully compatible with and implemented in a manner consistent with the relevant WTO provisions, in particular Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994) and Article V of the General Agreement on Trade in Services (GATS).

1 Political dialogue between the Parties shall be further developed within the context of this Agreement. It shall accompany and consolidate the rapprochement between the European Union and Serbia and contribute to the establishment of close links of solidarity and new forms of cooperation between the Parties.

2 The political dialogue is intended to promote in particular: (a) full integration of Serbia into the community of democratic nations and gradual rapprochement with the European Union; (b) an increasing convergence of positions of the Parties on international issues, including CFSP issues, also through the exchange of information as appropriate, and, in particular, on those issues likely to have substantial effects on the Parties; (c) regional cooperation and the development of good neighbourly relations; (d) common views on security and stability in Europe, including cooperation in the areas covered by the CFSP of the European Union.

1 Political dialogue shall take place within the Stabilisation and Association Council, which shall have the general responsibility for any matter which the Parties might wish to put to it.

2 At the request of the Parties, political dialogue may also take place in the following forms: (a) meetings, where necessary, of senior officials representing Serbia, on the one hand, and the Presidency of the Council of the European Union, the Secretary-General/High Representative for the Common Foreign and Security Policy and the Commission of the European Communities (hereinafter referred to as ‘European Commission’), on the other; (b) taking full advantage of all diplomatic channels between the Parties, including appropriate contacts in third countries and within the United Nations, the OSCE, the Council of Europe and other international fora; (c) any other means which would make a useful contribution to consolidating, developing and stepping up this dialogue, including those identified in the Thessaloniki agenda, adopted in the Conclusions of the European Council in Thessaloniki on 19 and 20 June 2003.

A political dialogue at parliamentary level shall take place within the framework of the Stabilisation and Association Parliamentary Committee established under Article 125.

Political dialogue may take place within a multilateral framework, and as a regional dialogue including other countries of the region, including in the framework of the EU-Western Balkan forum.

In conformity with its commitment to international and regional peace and stability, and to the development of good neighbourly relations, Serbia shall actively promote regional cooperation. The Community assistance programmes may support projects having a regional or cross-border dimension through its technical assistance programmes. Whenever Serbia intends to enhance its cooperation with one of the countries mentioned in Articles 15, 16 and 17, it shall inform and consult the Community and its Member States according to the provisions laid down in Title X. Serbia shall implement fully the Central European Free Trade Agreement signed in Bucharest on 19 December 2006.

After the signature of this Agreement, Serbia shall start negotiations with the countries which have already signed a Stabilisation and Association Agreement with a view to concluding bilateral conventions on regional cooperation, the aim of which shall be to enhance the scope of cooperation between the countries concerned. The main elements of these conventions shall be: (a) political dialogue; (b) the establishment of free trade areas, consistent with relevant WTO provisions; (c) mutual concessions concerning the movement of workers, establishment, supply of services, current payments and movement of capital as well as other policies related to movement of persons at an equivalent level to that of this Agreement; (d) provisions on cooperation in other fields whether or not covered by this Agreement, and notably the field of Justice, Freedom and Security. These conventions shall contain provisions for the creation of the necessary institutional mechanisms, as appropriate. These conventions shall be concluded within two years after the entry into force of this Agreement. Readiness by Serbia to conclude such conventions will be a condition for the further development of the relations between Serbia and the European Union. Serbia shall initiate similar negotiations with the remaining countries of the region once these countries will have signed a Stabilisation and Association Agreement.

Serbia shall pursue regional cooperation with the other States concerned by the Stabilisation and Association process in some or all the fields of cooperation covered by this Agreement, and notably those of common interest. Such cooperation should always be compatible with the principles and objectives of this Agreement.

1 Serbia should foster its cooperation and conclude a convention on regional cooperation with any country candidate for EU accession in any of the fields of cooperation covered by this Agreement. Such conventions should aim to gradually align bilateral relations between Serbia and that country with the relevant part of the relations between the Community and its Member States and that country.

2 Serbia shall start negotiations with Turkey which has established a customs union with the Community, with a view to concluding, on a mutually advantageous basis, an Agreement establishing a free trade area in accordance with Article XXIV of the GATT 1994 as well as liberalising the establishment and supply of services between them at an equivalent level of this Agreement in accordance with Article V of the GATS. These negotiations should be opened as soon as possible, with a view to concluding the abovementioned Agreement before the end of the transitional period referred to in Article 18(1).

1 The Community and Serbia shall gradually establish a bilateral free trade area over a period lasting a maximum of six years starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with those of the GATT 1994 and the WTO. In so doing they shall take into account the specific requirements laid down hereinafter.

2 The Combined Nomenclature shall be applied to the classification of goods in trade between the Parties.

3 For the purpose of this Agreement customs duties and charges having equivalent effect to customs duties include any duty or charge of any kind imposed in connection with the importation or exportation of a good, including any form of surtax or surcharge in connection with such importation or exportation, but do not include any: (a) charges equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of the GATT 1994; (b) antidumping or countervailing measures; (c) fees or charges commensurate with the costs of services rendered.

4 For each product, the basic duty to which the successive tariff reductions set out in this Agreement are to be applied shall be: (a) the Community Common Customs Tariff, established pursuant to Council Regulation (EEC) No 2658/87 actually applied erga omnes on the day of the signature of this Agreement; (b) the Serbian applied tariff .

5 If, after the signature of this Agreement, any tariff reduction is applied on an erga omnes basis, in particular reductions resulting: (a) from the tariff negotiations in the WTO or, (b) in the event of the accession of Serbia to the WTO or, (c) from subsequent reductions after the accession of Serbia to the WTO, such reduced duties shall replace the basic duty referred to in paragraph 4 as from the date when such reductions are applied.

6 The Community and Serbia shall communicate to each other their respective basic duties and any changes thereof.

1 The provisions of this Chapter shall apply to products originating in the Community or in Serbia listed in Chapters 25 to 97 of the Combined Nomenclature, with the exception of the products listed in Annex I, paragraph I, (ii) of the WTO Agreement on Agriculture.

2 Trade between the Parties in products covered by the Treaty establishing the European Atomic Energy Community shall be conducted in accordance with the provisions of that Treaty.

1 Customs duties on imports into the Community and charges having equivalent effect shall be abolished upon the entry into force of this Agreement on industrial products originating in Serbia.

2 Quantitative restrictions on imports into the Community and measures having equivalent effect shall be abolished upon the entry into force of this Agreement on industrial products originating in Serbia.

1 Customs duties on imports into Serbia of industrial products originating in the Community other than those listed in Annex I shall be abolished upon the entry into force of this Agreement.

2 Charges having equivalent effect to customs duties on imports into Serbia shall be abolished upon the entry into force of this Agreement on industrial products originating in the Community.

3 Customs duties on imports into Serbia of industrial products originating in the Community which are listed in Annex I shall be progressively reduced and abolished in accordance with the timetable indicated in that Annex.

4 Quantitative restrictions on imports into Serbia of industrial products originating in the Community and measures having equivalent effect shall be abolished upon the date of entry into force of this Agreement.

1 The Community and Serbia shall abolish any customs duties on exports and charges having equivalent effect in trade between them upon the entry into force of this Agreement.

2 The Community and Serbia shall abolish between themselves any quantitative restrictions on exports and measures having equivalent effect upon the entry into force of this Agreement.

Serbia declares its readiness to reduce its customs duties in trade with the Community more rapidly than is provided for in Article 21 if its general economic situation and the situation of the economic sector concerned so permit. The Stabilisation and Association Council shall analyse the situation in this respect and make the relevant recommendations.

1 The provisions of this Chapter shall apply to trade in agricultural and fishery products originating in the Community or in Serbia.

2 The term ‘agricultural and fishery products’ refers to the products listed in Chapters 1 to 24 of the Combined Nomenclature and the products listed in Annex I, paragraph I, (ii) of the WTO Agreement on Agriculture.

3 This definition includes fish and fishery products covered by Chapter 3, headings 1604 and 1605, and sub-headings 051191, 230120 and ex190220 (‘stuffed pasta containing more than 20 % by weight of fish, crustaceans, molluscs or other aquatic invertebrates’).

Protocol 1 lays down the trade arrangements for processed agricultural products which are listed therein.

1 From the date of entry into force of this Agreement, the Community shall abolish all quantitative restrictions and measures having equivalent effect, on imports of agricultural products originating in Serbia.

2 From the date of entry into force of this Agreement, the Community shall abolish the customs duties and charges having equivalent effect, on imports of agricultural products originating in Serbia other than those of headings 0102, 0201, 0202, 1701, 1702 and 2204 of the Combined Nomenclature. For the products covered by Chapters 7 and 8 of the Combined Nomenclature, for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the elimination applies only to the ad valorem part of the duty.

3 From the date of entry into force of this Agreement, the Community shall fix the customs duties applicable to imports into the Community of ‘baby beef’ products defined in Annex II and originating in Serbia at 20 % of the ad valorem duty and 20 % of the specific duty as laid down in the Common Customs Tariff, within the limit of an annual tariff quota of 8700 tonnes expressed in carcass weight.

4 From the date of entry into force of this Agreement, the Community shall apply duty-free access on imports into the Community for products originating in Serbia of headings 1701 and 1702 of the Combined Nomenclature, within the limit of an annual tariff quota of 180000 tonnes (net weight).

1 From the date of entry into force of this Agreement, Serbia shall abolish all quantitative restrictions and measures having equivalent effect, on imports of agricultural products originating in the Community.

2 From the date of entry into force of this Agreement, Serbia shall: (a) abolish the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex III(a); (b) abolish progressively the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex III(b) in accordance with the timetable indicated for each product in that Annex; (c) reduce progressively the customs duties applicable on imports of certain agricultural products originating in the Community, listed in Annex III (c) and (d) in accordance with the timetable indicated for each product in those Annexes;

The arrangements applicable to the wine and spirit drinks products referred to in Protocol 2 are laid down in that Protocol.

1 From the date of entry into force of this Agreement, the Community shall abolish all quantitative restrictions and measures having equivalent effect on imports of fish and fishery products originating in Serbia.

2 From the entry into force of this Agreement the Community shall eliminate all customs duties and measures having equivalent effect on fish and fishery products originating in Serbia other than those listed in Annex IV. Products listed in Annex IV shall be subject to the provisions laid down therein.

1 From the date of entry into force of this Agreement, Serbia shall abolish all quantitative restrictions and measures having equivalent effect on imports of fish and fishery products originating in the Community.

2 From the entry into force of this Agreement, Serbia shall eliminate all customs duties and measures having equivalent effect on fish and fishery products originating in the Community other than those listed in Annex V. Products listed in Annex V shall be subject to the provisions laid down therein.

Taking account of the volume of trade in agricultural and fishery products between the Parties, of their particular sensitivities, of the rules of the Community common policies and of the policies for agriculture and fisheries in Serbia of the role of agriculture and fisheries in the economy of Serbia, of the consequences of the multilateral trade negotiations in the framework of the WTO as well as of the eventual accession of Serbia to the WTO, the Community and Serbia shall examine in the Stabilisation and Association Council, no later than three years after the entry into force of this Agreement, product by product and on an orderly and appropriate reciprocal basis, the opportunities for granting each other further concessions with a view to implementing greater liberalisation of the trade in agricultural and fishery products.

1 Notwithstanding other provisions of this Agreement, and in particular Article 41, given the particular sensitivity of the agricultural and fisheries markets, if imports of products originating in one Party, which are the subject of concessions granted pursuant to Articles 25, 26, 27, 28, 29 and 30, cause serious disturbance to the markets or to their domestic regulatory mechanisms, in the other Party, both Parties shall enter into consultations immediately to find an appropriate solution. Pending such solution, the Party concerned may take the appropriate measures it deems necessary.

2 In the event that imports originating in Serbia of products listed in Annex V of Protocol 3 cumulatively reach in volume 115 % of the average of the three previous calendar years, Serbia and the Community shall within five working days enter into consultations to analyse and evaluate the trade pattern of these products into the Community, and when necessary, find appropriate solutions to avoid trade distortion of the imports of these products into the Community. Without prejudice to paragraph 1, in the event that imports originating in Serbia of products listed in Annex V of Protocol 3 cumulatively increase by more than 30 percent in volume during a calendar year, compared to the average of the three previous calendar years, the Community may suspend the preferential treatment applicable to the products causing the increase. If a suspension of the preferential treatment is decided, the Community shall notify within five working days the measure to the Stabilisation and Association Committee and shall enter in consultations with Serbia to agree on measures designed to avoid trade distortion in trade of products listed in Annex V of Protocol 3. The Community shall restore the preferential treatment as soon as the trade distortion has been resolved by the effective implementation of the agreed measures or by the effect of any other appropriate measures adopted by the Parties The provisions of Article 41, paragraphs 3 to 6 shall apply mutatis mutandis to action under this paragraph.

3 The Parties shall review the functioning of the mechanism provided for in paragraph 2 no later than three years after the entry into force of this Agreement. The Stabilisation and Association Council may decide on appropriate adaptations to the mechanism provided for in paragraph 2.

1 Serbia shall provide protection for the geographical indications of the Community registered in the Community under Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs , in accordance with the terms of this Article. Geographical indications of Serbia shall be eligible for registration in the Community under the conditions set out in that Regulation.

2 Serbia shall prohibit any use in its territory of the names protected in the Community for comparable products not complying with the geographical indication’s specification. This shall apply even where the true geographical origin of the good is indicated, the geographical indication in question is used in translation, the name is accompanied by terms such as ‘kind’, ‘type’, ‘style’, ‘imitation’, ‘method’ or other expressions of the sort.

3 Serbia shall refuse the registration of a trademark the use of which corresponds to the situations referred to in paragraph 2.

4 Trademarks the use of which corresponds to the situations referred to in paragraph 2, which have been registered in Serbia or established by use, shall no longer be used five years after the entry into force of this Agreement. However, this shall not apply to trademarks registered in Serbia and trademarks established by use which are owned by nationals of third countries, provided they are not of such a nature as to deceive in any way the public as to the quality, the specification and the geographical origin of the goods.

5 Any use of the geographical indications protected in accordance with paragraph 1 as terms customary in common language as the common name for such goods in Serbia shall cease at the latest five years after the entry into force of this Agreement.

6 Serbia shall ensure that goods exported from its territory five years after the entry into force of this Agreement do not infringe the provisions of this Article.

7 Serbia shall ensure the protection referred to in paragraph 1 to 6 on its own initiative as well as at the request of an interested party.

The provisions of this Chapter shall apply to trade in all products between the Parties except where otherwise provided herein or in Protocol 1.

The provisions of this Title shall in no way affect the application, on a unilateral basis, of more favourable measures by any of the Parties.

1 From the date of entry into force of this Agreement, no new customs duties on imports or exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased, in trade between the Community and Serbia.

2 From the date of entry into force of this Agreement, no new quantitative restriction on imports or exports or measure having equivalent effect shall be introduced, nor shall those existing be made more restrictive, in trade between the Community and Serbia.

3 Without prejudice to the concessions granted under Articles 26, 27, 28, 29 and 30, the provisions of paragraphs 1 and 2 of this Article shall not restrict in any way the pursuit of the respective agricultural and fishery policies of Serbia and of the Community and the taking of any measures under those policies in so far as the import regime in Annexes II-V and Protocol 1 is not affected.

1 The Community and Serbia shall refrain from, and abolish where existing, any measure or practice of an internal fiscal nature establishing, whether directly or indirectly, discrimination between the products of one Party and like products originating in the territory of the other Party.

2 Products exported to the territory of one of the Parties may not benefit from repayment of internal indirect taxation in excess of the amount of indirect taxation imposed on them.

The provisions concerning the abolition of customs duties on imports shall also apply to customs duties of a fiscal nature.

1 This Agreement shall not preclude the maintenance or establishment of customs unions, free trade areas or arrangements for frontier trade except in so far as they alter the trade arrangements provided for in this Agreement.

2 During the transitional period specified in Article 18, this Agreement shall not affect the implementation of the specific preferential arrangements governing the movement of goods either laid down in frontier Agreements previously concluded between one or more Member States and Serbia or resulting from the bilateral Agreements specified in Title III concluded by Serbia in order to promote regional trade.

3 Consultations between the Parties shall take place within the Stabilisation and Association Council concerning the Agreements described in paragraphs 1 and 2 of this Article and, where requested, on other major issues related to their respective trade policies towards third countries. In particular in the event of a third country acceding to the Union, such consultations shall take place so as to ensure that account is taken of the mutual interests of the Community and Serbia stated in this Agreement.

1 None of the provisions in this Agreement shall prevent any of the Parties from taking trade defence action in accordance with paragraph 2 of this Article and Article 41.

2 If one of the Parties finds that dumping and/or countervailable subsidisation is taking place in trade with the other Party, that Party may take appropriate measures against this practice in accordance with the WTO Agreement on Implementation of Article VI of the GATT 1994 or the WTO Agreement on Subsidies and Countervailing Measures and the respective related internal legislation.

1 The provisions of Article XIX GATT 1994 and the WTO Agreement on Safeguards are applicable between the parties.

2 Notwithstanding paragraph 1 of this Article, where any product of one Party is being imported into the territory of the other Party in such increased quantities and under such conditions as to cause or threaten to cause: (a) serious injury to the domestic industry of like or directly competitive products in the territory of the importing Party or (b) serious disturbances in any sector of the economy or difficulties which could bring about serious deterioration in the economic situation of a region of the importing Party, the importing Party may take appropriate bilateral safeguard measures under the conditions and in accordance with the procedures laid down in this Article.

3 Bilateral safeguard measures directed at imports from the other Party shall not exceed what is necessary to remedy the problems, as defined in paragraph 2, which have arisen as a result of application of this Agreement. The safeguard measure adopted should consist of a suspension in the increase or in the reduction of the margins of preferences provided for under this Agreement for the product concerned up to a maximum limit corresponding to the basic duty referred to in Article 18 paragraph 4(a) and (b) and paragraph 5 for the same product. Such measures shall contain clear elements progressively leading to their elimination at the end of the set period, at the latest, and shall not be taken for a period exceeding two years. In very exceptional circumstances, measures may be extended for a further period of maximum two years. No bilateral safeguard measure shall be applied to the import of a product that has previously been subject to such a measure for a period of time equal to that during which such measure had been previously applied, provided that the period of non-application is at least two years since the expiry of the measure.

4 In the cases specified in this Article, before taking the measures provided for therein or, in the cases to which paragraph 5(b) of this Article applies, as soon as possible, the Community on the one part or Serbia on the other part, shall supply the Stabilisation and Association Council with all relevant information required for a thorough examination of the situation, with a view to seeking a solution acceptable to the Parties concerned.

5 For the implementation of the paragraphs 1, 2, 3 and 4 the following provisions shall apply: (a) the problems arising from the situation referred to in this Article shall be immediately referred for examination to the Stabilisation and Association Council, which may take any decisions needed to put an end to such problems. If the Stabilisation and Association Council or the exporting Party has not taken a decision putting an end to the problems, or no other satisfactory solution has been reached within 30 days of the matter being referred to the Stabilisation and Association Council, the importing Party may adopt the appropriate measures to remedy the problem in accordance with this Article. In the selection of safeguard measures, priority must be given to those which least disturb the functioning of the arrangements established in this Agreement. Safeguard measures applied in accordance with Article XIX GATT 1994 and the WTO Agreement on Safeguards shall preserve the level/margin of preference granted under this Agreement. (b) Where exceptional and critical circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Party concerned may, in the situations specified in this Article, apply forthwith provisional measures necessary to deal with the situation and shall inform the other Party immediately thereof. The safeguard measures shall be notified immediately to the Stabilisation and Association Council and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their abolition as soon as circumstances permit.

6 In the event of the Community of the one part or Serbia of the other part subjecting imports of products liable to give rise to the problems referred to in this Article to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows, it shall inform the other Party.

1 Where compliance with the provisions of this Title leads to: (a) a critical shortage, or threat thereof, of foodstuffs or other products essential to the exporting Party; or (b) re-export to a third country of a product against which the exporting Party maintains quantitative export restrictions, export duties or measures or charges having equivalent effect, and where the situations referred to above give rise, or are likely to give rise to major difficulties for the exporting Party that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in this Article.

2 In the selection of measures, priority must be given to those which least disturb the functioning of the arrangements in this Agreement. Such measures shall not be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination where the same conditions prevail, or a disguised restriction on trade and shall be eliminated when the conditions no longer justify their maintenance.

3 Before taking the measures provided for in paragraph 1 or, as soon as possible in cases to which paragraph 4 applies, the Community or Serbia, shall supply the Stabilisation and Association Council with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties within the Stabilisation and Association Council may agree on any means needed to put an end to the difficulties. If no agreement is reached within 30 days of the matter being referred to the Stabilisation and Association Council, the exporting Party may apply measures under this Article on the exportation of the product concerned.

4 Where exceptional and critical circumstances requiring immediate action make prior information or examination, as the case may be, impossible, the Community or Serbia may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

5 Any measures applied pursuant to this Article shall be immediately notified to the Stabilisation and Association Council and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for their elimination as soon as circumstances permit.

Serbia shall progressively adjust any state monopolies of a commercial character so as to ensure that, three years after the entry into force of this Agreement, no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of the Member States of the European Union and Serbia.

Except if otherwise stipulated in this Agreement, Protocol 3 lays down the rules of origin for the application of the provisions of this Agreement.

This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures of artistic, historic or archaeological value or the protection of intellectual, industrial and commercial property, or rules relating to gold and silver. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the Parties.

1 The Parties agree that administrative cooperation is essential for the implementation and the control of the preferential treatment granted under this Title and underline their commitment to combat irregularities and fraud in customs and related matters.

2 Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud under this Title, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.

3 For the purpose of this Article a failure to provide administrative cooperation shall mean, inter alia: (a) a repeated failure to respect the obligations to verify the originating status of the product(s) concerned; (b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin; (c) a repeated refusal or undue delay in obtaining authorisation to conduct administrative cooperation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question. For the purpose of this Article a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party, which is linked to objective information concerning irregularities or fraud.

4 The application of a temporary suspension shall be subject to the following conditions: (a) the Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud shall without undue delay notify the Stabilisation and Association Committee of its finding together with the objective information and enter into consultations within the Stabilisation and Association Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties. (b) Where the Parties have entered into consultations within the Stabilisation and Association Committee as above and have failed to agree on an acceptable solution within three months following the notification, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the Stabilisation and Association Committee without undue delay. (c) Temporary suspensions under this Article shall be limited to the minimum necessary to protect the financial interests of the Party concerned. They shall not exceed a period of six months, which may be renewed. Temporary suspensions shall be notified immediately after their adoption to the Stabilisation and Association Committee. They shall be subject to periodic consultations within the Stabilisation and Association Committee in particular with a view to their termination as soon as the conditions for their application no longer prevail.

5 At the same time as the notification to the Stabilisation and Association Committee under paragraph 4(a) of this Article, the Party concerned should publish a notice to importers in its Official Journal. The notice to importers should indicate for the product concerned that there is a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud.

In case of error by the competent authorities in the proper management of the preferential system at export, and in particular in the application of the provisions of Protocol 3 to the present Agreement where this error leads to consequences in terms of import duties, the Contracting Party facing such consequences may request the Stabilisation and Association Council to examine the possibilities of adopting all appropriate measures with a view to resolving the situation.

The application of this Agreement shall be without prejudice to the application of the provisions of Community law to the Canary Islands.

1 Subject to the conditions and modalities applicable in each Member State: (a) treatment accorded to workers who are nationals of Serbia and who are legally employed in the territory of a Member State shall be free of any discrimination based on nationality, as regards working conditions, remuneration or dismissal, compared to nationals of that Member State; (b) the legally resident spouse and children of a worker legally employed in the territory of a Member State, with the exception of seasonal workers and of workers concerned by bilateral Agreements within the meaning of Article 50, unless otherwise provided by such Agreements, shall have access to the labour market of that Member State, during the period of that worker’s authorised stay of employment.

2 Serbia shall, subject to the conditions and modalities applicable in that Republic, accord the treatment referred to in paragraph 1 to workers who are nationals of a Member State and are legally employed in its territory as well as to their spouse and children who are legally resident in Serbia.

1 Taking into account the situation in the labour market in the Member States, and subject to their legislation and to compliance with the rules in force in the Member States in the area of mobility of workers: (a) the existing facilities of access to employment for Serbian workers accorded by Member States under bilateral Agreements should be preserved and if possible improved; (b) the other Member States shall examine the possibility of concluding similar Agreements.

2 After three years, the Stabilisation and Association Council shall examine the granting of other improvements, including facilities for access to professional training, in accordance with the rules and procedures in force in the Member States, and taking into account the situation in the labour market in the Member States and in the Community.

1 Rules shall be laid down for the coordination of social security systems for workers with Serbian nationality, legally employed in the territory of a Member State, and for the members of their families legally resident there. To that effect, a decision of the Stabilisation and Association Council, which should not affect any rights or obligations arising from bilateral Agreements where the latter provide for more favourable treatment, shall put the following provisions in place: (a) all periods of insurance, employment or residence completed by such workers in the various Member States shall be added together for the purpose of pensions and annuities in respect of old age, invalidity and death and for the purpose of medical care for such workers and such family members; (b) any pensions or annuities in respect of old age, death, industrial accident or occupational disease, or of invalidity resulting therefrom, with the exception of non-contributory benefits, shall be freely transferable at the rate applied by virtue of the law of the debtor Member State or States; (c) the workers in question shall receive family allowances for the members of their families as defined above.

2 Serbia shall accord to workers who are nationals of a Member State and legally employed in its territory, and to members of their families legally resident there, treatment similar to that specified in points (b) and (c) of paragraph 1.

For the purposes of this Agreement: (a) ‘Community company’ or ‘Serbian company’ shall mean, respectively, a company set up in accordance with the laws of a Member State, or of Serbia and having its registered office or central administration or principal place of business in the territory of the Community or of Serbia. However, should the company, set up in accordance with the laws of a Member State or of Serbia, have only its registered office in the territory of the Community or of Serbia respectively, the company shall be considered a Community or a Serbian company if its operations possess a real and continuous link with the economy of one of the Member States or of Serbia; (b) ‘Subsidiary’ of a company shall mean a company which is effectively controlled by another company; (c) ‘Branch’ of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension; (d) ‘Establishment’ shall mean: (i) as regards nationals, the right to take up economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another Party. The provisions of this Chapter do not apply to persons who are not exclusively self-employed; (ii) as regards Community or Serbian companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in Serbia, or in the Community respectively; (e) ‘Operations’ shall mean the pursuit of economic activities; (f) ‘Economic activities’ shall in principle include activities of an industrial, commercial and professional character and activities of craftsmen; (g) ‘Community national’ and ‘national of Serbia’ shall mean respectively a natural person who is a national of a Member State or Serbia; With regard to international maritime transport, including inter-modal operations involving a sea leg, Community nationals or nationals of Serbia established outside the Community and Serbia, and shipping companies established outside the Community or Serbia and controlled by Community nationals or nationals of Serbia, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Serbia, in accordance with their respective legislation; (h) ‘Financial services’ shall mean those activities described in Annex VI. The Stabilisation and Association Council may extend or modify the scope of that Annex.

1 Serbia shall facilitate the setting-up of operations on its territory by Community companies and nationals. To that end, Serbia shall grant, upon entry into force of this Agreement: (a) as regards the establishment of Community companies on the territory of Serbia, treatment no less favourable than that accorded to its own companies or to any third country company, whichever is the better; (b) as regards the operation of subsidiaries and branches of Community companies on the territory of Serbia once established, treatment no less favourable than that accorded to its own companies and branches or to any subsidiary and branch of any third country company, whichever is the better.

2 The Community and its Member States shall grant, from the entry into force of this Agreement: (a) as regards the establishment of Serbian companies treatment no less favourable than that accorded by Member States to their own companies or to any company of any third country, whichever is the better; (b) as regards the operation of subsidiaries and branches of Serbian companies, established in its territory, treatment no less favourable than that accorded by Member States to their own companies and branches, or to any subsidiary and branch of any third country company, established in their territory, whichever is the better.

3 The Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of any other Party’s companies on their territory or in respect of their operation, once established, by comparison with their own companies.

4 Four years after the entry into force of this Agreement, the Stabilisation and Association Council shall establish the detailed arrangements to extend the above provisions to the establishment of Community nationals and nationals of Serbia to take up economic activities as self-employed persons.

5 Notwithstanding the provisions of this Article: (a) Subsidiaries and branches of Community companies shall have, from the entry into force of this Agreement, the right to use and rent real property in Serbia; (b) Subsidiaries of Community companies shall, from the entry into force of this Agreement, have the right to acquire and enjoy ownership rights over real property as Serbian companies and as regards public goods/goods of common interest, the same rights as enjoyed by Serbian companies respectively where these rights are necessary for the conduct of the economic activities for which they are established. (c) Four years after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the possibility of extending the rights mentioned under point (b) to branches of the Community companies.

1 Subject to the provisions of Article 56, with the exception of financial services described in Annex VI, the Parties may regulate the establishment and operation of companies and nationals on their territory, insofar as these regulations do not discriminate against companies and nationals of the other Parties in comparison with its own companies and nationals.

2 In respect of financial services, notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Such measures shall not be used as a means of avoiding the Party’s obligations under this Agreement.

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

1 Without prejudice to any provision to the contrary contained in the Multilateral Agreement on the Establishment of a European Common Aviation Area (hereinafter referred to as ‘ECAA’), the provisions of this Chapter shall not apply to air transport services, inland waterways transport services and maritime cabotage services.

2 The Stabilisation and Association Council may make recommendations for improving establishment and operations in the areas covered by paragraph 1.

1 The provisions of Articles 53 and 54 do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches of companies of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches as compared to branches of companies incorporated in its territory or, as regards financial services, for prudential reasons.

2 The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences or, as regards financial services, for prudential reasons.

In order to make it easier for Community nationals and nationals from Serbia to take up and pursue regulated professional activities in Serbia and in the Community respectively, the Stabilisation and Association Council shall examine which steps are necessary for the mutual recognition of qualifications. It may take all necessary measures to that end.

1 A Community company established in the territory of Serbia or a Serbian company established in the Community shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host territory of establishment, in the territory of the Republic of Serbia and the Community respectively, employees who are nationals of the Member States or nationals from Serbia respectively, provided that such employees are key personnel as defined in paragraph 2 and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall cover only the period of such employment.

2 Key personnel of the abovementioned companies herein referred to as ‘organisations’ are ‘intra-corporate transferees’ as defined in point (c) of this paragraph in the following categories, provided that the organisation is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least one year immediately preceding such movement: (a) Persons working in a senior position with an organisation, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent including: (i) directing the establishment of a department or sub-division of the establishment; (ii) supervising and controlling the work of other supervisory, professional or managerial employees; (iii) having the authority personally to recruit and dismiss or recommend recruiting, dismissing or other personnel actions; (b) Persons working within an organisation who possess uncommon knowledge essential to the establishment’s service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession; (c) An ‘intra-corporate transferee’ is defined as a natural person working within an organisation in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organisation concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organisation, effectively pursuing like economic activities in the territory of the other Party.

3 The entry into and the temporary presence within the territory of the Community or in Serbia of Serbian nationals and Community nationals respectively shall be permitted, when these representatives of companies are persons working in a senior position, as defined in paragraph 2(a) above, within a company, and are responsible for the setting up of a Community subsidiary or branch of a Serbian company or of a Serbian subsidiary or branch of a Community company in a Member State or in the Republic of Serbia respectively, when: (a) those representatives are not engaged in making direct sales or supplying services, and do not receive remuneration from a source located within the host territory of establishment, and; (b) the company has its principal place of business outside the Community or Serbia, respectively, and has no other representative, office, branch or subsidiary in that Member State or in Serbia respectively.

1 The Community and Serbia undertake, in accordance with the following provisions, to take the necessary steps to allow progressively the supply of services by Community companies, Serbian companies or by Community nationals or nationals of Serbia which are established in the territory of a Party other than that of the person for whom the services are intended.

2 In step with the liberalisation process mentioned in paragraph 1, the Parties shall permit the temporary movement of natural persons providing the service or who are employed by the service provider as key personnel as defined in Article 58, including natural persons who are representatives of a Community or Serbian company or national and are seeking temporary entry for the purpose of negotiating for the sale of services or entering into agreements to sell services for that service provider, where those representatives will not be engaged in making direct sales to the general public or in supplying services themselves.

3 After four years, the Stabilisation and Association Council shall take the measures necessary to progressively implement the provisions of paragraph 1. Account shall be taken of the progress achieved by the Parties in the approximation of their laws.

1 The Parties shall not take any measures or actions which render the conditions for the supply of services by Community and Serbia nationals or companies which are established in a Party other than that of the person for whom the services are intended significantly more restrictive as compared to the situation existing on the day preceding the day of entry into force of this Agreement.

2 If one Party is of the view that measures introduced by the other Party since the entry into force of this Agreement result in a situation which is significantly more restrictive in respect of supply of services as compared with the situation existing at the date of entry into force of this Agreement, such first Party may request the other Party to enter into consultations.

With regard to supply of transport services between the Community and Serbia, the following provisions shall apply: 1. With regard to land transport, Protocol 4 lays down the rules applicable to the relationship between the Parties in order to ensure, particularly, unrestricted road transit traffic across Serbia and the Community as a whole, the effective application of the principle of non discrimination and progressive harmonisation of the transport legislation of Serbia with that of the Community. 2. With regard to international maritime transport, the Parties undertake to apply effectively the principle of unrestricted access to the international maritime markets and trades on a commercial basis, and to respect international and European obligations in the field of safety, security and environmental standards. The Parties affirm their commitment to a freely competitive environment as an essential feature of international maritime transport. 3. In applying the principles of paragraph 2, the Parties shall: (a) not introduce cargo-sharing clauses in future bilateral Agreements with third countries; (b) abolish, upon the entry into force of this Agreement, all unilateral measures and administrative, technical and other obstacles that could have restrictive or discriminatory effects on the free supply of services in international maritime transport; (c) Each Party shall grant, inter alia, no less favourable treatment for the ships operated by nationals or companies of the other Party than that accorded to a Party’s own ships with regard to access to ports open to international trade, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and the assignment of berths and facilities for loading and unloading. 4. With a view to ensuring a coordinated development and progressive liberalisation of transport between the Parties adapted to their reciprocal commercial needs, the conditions of mutual market access in air transport shall be dealt with by the ECAA. 5. Prior to the conclusion of the ECAA, 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. 6. Serbia shall adapt its legislation, including administrative, technical and other rules, to that of the Community existing at any time in the field of air, maritime, inland waterway and land transport insofar as it serves liberalisation purposes and mutual access to markets of the Parties and facilitates the movement of passengers and of goods. 7. In step with the common progress in the achievement of the objectives of this Chapter, the Stabilisation and Association Council shall examine ways of creating the conditions necessary for improving freedom to provide air, land and inland waterway transport services.

The Parties undertake to authorise, in freely convertible currency, in accordance with the provisions of Article VIII of the Articles of the Agreement of the International Monetary Fund, any payments and transfers on the current account of balance of payments between the Community and Serbia.

1 With regard to transactions on the capital and financial account of balance of payments, from the entry into force of this Agreement, the Parties shall ensure the free movement of capital relating to direct investments made in companies formed in accordance with the laws of the host country and investments made in accordance with the provisions of Chapter II of Title V, and the liquidation or repatriation of these investments and of any profit stemming there from.

2 With regard to transactions on the capital and financial account of balance of payments, from the entry into force of this Agreement, the Parties shall ensure the free movement of capital relating to credits related to commercial transactions or to the provision of services in which a resident of one of the Parties is participating, and to financial loans and credits, with maturity longer than a year.

3 As from the entry into force of this Agreement, Serbia shall authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Serbia by nationals of Member States of the European Union. Within four years from the entry into force of this Agreement, Serbia shall progressively adjust its legislation concerning the acquisition of real estate in its territory by nationals of the Member States of the European Union to ensure the same treatment as compared to its own nationals.

4 The Community and Serbia shall also ensure, as from four years after the entry into force of this Agreement, free movement of capital relating to portfolio investment and financial loans and credits with maturity shorter than a year.

5 Without prejudice to paragraph 1, the Parties shall not introduce any new restrictions on the movement of capital and current payments between residents of the Community and Serbia and shall not make the existing arrangements more restrictive.

6 Without prejudice to the provisions of Article 62 and of this Article, where, in exceptional circumstances, movements of capital between the Community and Serbia cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Serbia, the Community and Serbia, respectively, may take safeguard measures with regard to movements of capital between the Community and Serbia for a period not exceeding six months if such measures are strictly necessary.

7 Nothing in the above provisions shall be taken to limit the rights of economic operators of the Parties from benefiting from any more favourable treatment that may be provided for in any existing bilateral or multilateral Agreement involving Parties to this Agreement.

8 The Parties shall consult each other with a view to facilitating the movement of capital between the Community and Serbia in order to promote the objectives of this Agreement.

1 During the first four years following the date of entry into force of this Agreement, the Community and Serbia shall take measures permitting the creation of the necessary conditions for the further gradual application of Community rules on the free movement of capital.

2 By the end of the fourth year following the date of entry into force of this Agreement, the Stabilisation and Association Council shall determine the detailed arrangements for full application of Community rules on the movement of capital in Serbia.

1 The provisions of this Title shall be applied subject to limitations justified on grounds of public policy, public security or public health.

2 They shall not apply to activities that in the territory of any of the Parties are connected, even occasionally, with the exercise of official authority.

For the purpose of this Title, nothing in this Agreement shall prevent the Parties from applying their laws and regulations regarding entry and stay, employment, working conditions, establishment of natural persons and supply of services, notably insofar as the granting, renewal or refusal of a residence permit is concerned, provided that, in so doing, they do not apply them in such a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific provision of this Agreement. This provision shall be without prejudice to the application of Article 65.

Companies which are controlled and exclusively owned jointly by Serbian companies, or nationals of Serbia and Community companies or nationals shall also be covered by the provisions of this Title.

1 The Most-Favoured-Nation treatment granted in accordance with the provisions of this Title shall not apply to the tax advantages that the Parties are providing or will provide in the future on the basis of Agreements designed to avoid double taxation or other tax arrangements.

2 None of the provisions of this Title shall be construed to prevent the adoption or enforcement by the Parties of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of Agreements to avoid double taxation and other tax arrangements or domestic fiscal legislation.

3 None of the provisions of this Title shall be construed to prevent Member States or Serbia from applying the relevant provisions of their fiscal legislation, from distinguishing between taxpayers who are not in identical situations, in particular as regards their place of residence.

1 The Parties shall endeavour wherever possible to avoid the imposition of restrictive measures, including measures relating to imports, for balance of payments purposes. A Party adopting such measures shall present as soon as possible to the other Party a timetable for their removal.

2 Where one or more Member States or Serbia is in serious balance of payments difficulties, or under imminent threat thereof, the Community and Serbia may, in accordance with the conditions established under the WTO Agreement, adopt restrictive measures, including measures relating to imports, which shall be of limited duration and may not go beyond what is strictly necessary to remedy the balance of payments situation. The Community and Serbia shall inform the other Party forthwith.

3 Any restrictive measures shall not apply to transfers related to investment and in particular to the repatriation of amounts invested or reinvested or any kind of revenues stemming therefrom.

The provisions of this Title shall be progressively adjusted, notably in the light of requirements arising from Article V of the GATS.

The provisions of this Agreement shall not prejudice the application by any Party of any measure necessary to prevent the circumvention of its measures concerning third-country access to its market through the provisions of this Agreement.

1 The Parties recognise the importance of the approximation of the existing legislation in Serbia to that of the Community and of its effective implementation. Serbia shall endeavour to ensure that its existing laws and future legislation will be gradually made compatible with the Community acquis. Serbia shall ensure that existing and future legislation will be properly implemented and enforced.

2 This approximation shall start on the date of signing of this Agreement, and shall gradually extend to all the elements of the Community acquis referred to in this Agreement by the end of the transitional period defined in Article 8 of this Agreement.

3 Approximation will, at an early stage, focus on fundamental elements of the Internal Market acquis, Justice, Freedom and Security as well as on other trade-related areas. At a further stage, Serbia shall focus on the remaining parts of the acquis. Approximation shall be carried out on the basis of a programme to be agreed between the European Commission and Serbia.

4 Serbia shall also define, in agreement with the European Commission, the detailed arrangements for the monitoring of the implementation of approximation of legislation and law enforcement actions to be taken.

1 The following are incompatible with the proper functioning of this Agreement, insofar as they may affect trade between the Community and Serbia: (i) all Agreements between undertakings, decisions by associations of undertakings and concerted practices between undertakings which have as their object or effect the prevention, restriction or distortion of competition; (ii) abuse by one or more undertakings of a dominant position in the territories of the Community or Serbia as a whole or in a substantial part thereof; (iii) any State aid which distorts or threatens to distort competition by favouring certain undertakings or certain products.

2 Any practices contrary to this Article shall be assessed on the basis of criteria arising from the application of the competition rules applicable in the Community, in particular from Articles 81, 82, 86 and 87 of the EC Treaty and interpretative instruments adopted by the Community institutions.

3 The Parties shall ensure that an operationally independent authority is entrusted with the powers necessary for the full application of paragraph 1(i) and (ii) of this Article, regarding private and public undertakings and undertakings to which special rights have been granted.

4 Serbia shall establish an operationally independent authority which is entrusted with the powers necessary for the full application of paragraph 1(iii) within one year from the date of entry into force of this Agreement. This authority shall have, inter alia, the powers to authorise State aid schemes and individual aid grants in conformity with paragraph 2, as well as the powers to order the recovery of State aid that has been unlawfully granted.

5 The Community on one side and Serbia on the other side shall ensure transparency in the area of State aid, inter alia, by providing to the other Parties a regular annual report, or equivalent, following the methodology and the presentation of the Community survey on State aid. Upon request by one Party, the other Party shall provide information on particular individual cases of public aid.

6 Serbia shall establish a comprehensive inventory of aid schemes instituted before the establishment of the authority referred to in paragraph 4 and shall align such aid schemes with the criteria referred to in paragraph 2 within a period of no more than 4 years from the entry into force of this Agreement.

7 (a) For the purposes of applying the provisions of paragraph 1(iii), the Parties recognise that during the first five years after the entry into force of this Agreement, any public aid granted by Serbia shall be assessed taking into account the fact that Serbia shall be regarded as an area identical to those areas of the Community described in Article 87(3)(a) of the EC Treaty. (b) Within four years from the entry into force of this Agreement, Serbia shall submit to the European Commission its GDP per capita figures harmonised at NUTS II level. The authority referred to in paragraph 4 and the European Commission shall then jointly evaluate the eligibility of the regions of Serbia as well as the maximum aid intensities in relation thereto in order to draw up the regional aid map on the basis of the relevant Community guidelines.

8 As appropriate, Protocol 5 establishes the rules on state aid in the steel industry. This Protocol establishes the rules applicable in the event restructuring aid is granted to the steel industry. It would stress the exceptional character of such aid and the fact that the aid would be limited in time and would be linked to capacity reductions within the framework of feasibility programmes.

9 With regard to products referred to in Chapter II of Title IV: (a) paragraph 1(iii) shall not apply; (b) any practices contrary to paragraph 1(i) shall be assessed according to the criteria established by the Community on the basis of Articles 36 and 37 of the EC Treaty and specific Community instruments adopted on this basis.

10 If one of the Parties considers that a particular practice is incompatible with the terms of paragraph 1, it may take appropriate measures after consultation within the Stabilisation and Association Council or after 30 working days following referral for such consultation. Nothing in this Article shall prejudice or affect in any way the taking, by the Community or Serbia, of countervailing measures in accordance with the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures and the respective related internal legislation.

By the end of the third year following the entry into force of this Agreement, Serbia shall apply to public undertakings and undertakings to which special and exclusive rights have been granted the principles set out in the EC Treaty, with particular reference to Article 86. Special rights of public undertakings during the transitional period shall not include the possibility to impose quantitative restrictions or measures having an equivalent effect on imports from the Community into Serbia.

1 Pursuant to the provisions of this Article and Annex VII, the Parties confirm the importance that they attach to ensuring adequate and effective protection and enforcement of intellectual, industrial and commercial property rights.

2 From the entry into force of this Agreement, the Parties shall grant to each others companies and nationals, in respect of the recognition and protection of intellectual, industrial and commercial property, treatment no less favourable than that granted by them to any third country under bilateral Agreements.

3 Serbia shall take the necessary measures in order to guarantee no later than five years after entry into force of this Agreement a level of protection of intellectual, industrial and commercial property rights similar to that existing in the Community, including effective means of enforcing such rights.

4 Serbia undertakes to accede, within the period referred to above, to the multilateral conventions on intellectual, industrial and commercial property rights referred to in Annex VII. The Stabilisation and Association Council may decide to oblige Serbia to accede to specific multilateral Conventions in this area.

5 If problems in the area of intellectual, industrial and commercial property affecting trading conditions occur, they shall be referred urgently to the Stabilisation and Association Council, at the request of either Party, with a view to reaching mutually satisfactory solutions.

1 The Community and Serbia consider the opening-up of the award of public contracts on the basis of non-discrimination and reciprocity, following in particular the WTO rules, to be a desirable objective.

2 Serbian companies, whether established in the Community or not, shall be granted access to contract award procedures in the Community pursuant to Community procurement rules under treatment no less favourable than that accorded to Community companies as from the entry into force of this Agreement. The above provisions shall also apply to contracts in the utilities sector once the government of Serbia has adopted the legislation introducing the Community rules in this area. The Community shall examine periodically whether Serbia has indeed introduced such legislation.

3 Community companies established in Serbia under the provisions of Chapter II of Title V shall, from the entry into force of this Agreement, be granted access to contract award procedures in Serbia under treatment no less favourable than that accorded to Serbian companies.

4 Community companies not established in Serbia shall be granted access to contract award procedures in Serbia pursuant to the Serbian Law on Public Procurement under treatment no less favourable than that accorded to Serbian companies at the latest five years after the entry into force of this Agreement. Upon the entry into force of this Agreement, Serbia shall convert any existing preference for domestic economic entities to a price preference and, within a period of five years, shall gradually reduce the latter in accordance with the following timetable: the preferences shall not exceed 15 % by the end of the second year following the entry into force of this Agreement; the preferences shall not exceed 10 % by the end of the third year following the entry into force of this Agreement; the preferences shall not exceed 5 % by the end of the fourth year following the entry into force of this Agreement; and the preferences will be completely abolished no later than the end of the fifth year following the entry into force of this Agreement.

5 The Stabilisation and Association Council shall periodically examine the possibility for Serbia to introduce access to contract award procedures in Serbia for all Community companies. Serbia shall report annually to the Stabilisation and Association Council on the measures they have taken to enhance transparency and to provide for effective judicial review of decisions taken in the area of public procurement.

6 As regards establishment, operations, supply of services between the Community and Serbia, and also employment and movement of labour linked to the fulfilment of public contracts, the provisions of Articles 49 to 64 are applicable.

1 Serbia shall take the necessary measures in order to gradually achieve conformity with Community technical regulations and European standardisation, metrology, accreditation and conformity assessment procedures.

2 To this end, the Parties shall seek to: (a) promote the use of Community technical regulations, European standards and conformity assessment procedures; (b) provide assistance to fostering the development of quality infrastructure: standardisation, metrology, accreditation and conformity assessment; (c) promote the participation of Serbia in the work of organisations related to standards, conformity assessment, metrology and similar functions (e.g. CEN, Cenelec, ETSI, EA, WELMEC, EUROMET) . (d) where appropriate, conclude an Agreement on Conformity Assessment and Acceptance of Industrial Products once the legislative framework and the procedures of Serbia is sufficiently aligned on that of the Community and appropriate expertise is available.

The Parties shall cooperate in order to align the standards of consumer protection in Serbia to those of the Community. Effective consumer protection is necessary in order to ensure the proper functioning of the market economy, and this protection will depend on the development of an administrative infrastructure in order to ensure market surveillance and law enforcement in this field. To that end, and in view of their common interests, the Parties shall ensure: (a) a policy of active consumer protection, in accordance with Community law, including the increase of information and development of independent organisations; (b) the harmonisation of legislation of consumer protection in Serbia on that in force in the Community; (c) effective legal protection for consumers in order to improve the quality of consumer goods and maintain appropriate safety standards; (d) monitoring of rules by competent authorities and providing access to justice in case of disputes; (e) exchange information on dangerous products.

Serbia shall progressively harmonise its legislation to that of the Community in the fields of working conditions, notably on health and safety at work, and equal opportunities.

In their cooperation on justice, freedom and security, the Parties shall attach particular importance to the consolidation of the rule of law, and the reinforcement of institutions at all levels in the areas of administration in general and law enforcement and the administration of justice in particular. Cooperation shall notably aim at strengthening the independence of the judiciary and improving its efficiency, improving the functioning of the police and other law enforcement bodies, providing adequate training and fighting corruption and organised crime.

Serbia shall harmonise its legislation concerning personal data protection with Community law and other European and international legislation on privacy upon the entry into force of this Agreement. Serbia shall establish one or more independent supervisory bodies with sufficient financial and human resources in order to efficiently monitor and guarantee the enforcement of national personal data protection legislation. The Parties shall cooperate to achieve this goal.

The Parties shall cooperate in the areas of visa, border control, asylum and migration and shall set up a framework for the cooperation, including at a regional level, in these fields, taking into account and making full use of other existing initiatives in this area as appropriate. Cooperation in the matters above shall be based on mutual consultations and close coordination between the Parties and should include technical and administrative assistance for: (a) the exchange of statistics and information on legislation and practices; (b) the drafting of legislation; (c) enhancing the capacity and efficiency of the institutions; (d) the training of staff; (e) the security of travel documents and detection of false documents; (f) border management. Cooperation shall focus in particular: (a) on the area of asylum on the implementation of national legislation to meet the standards of the Convention relating to the Status of Refugees done at Geneva on 28 July 1951 and the Protocol relating to the Status of Refugees done at New York on 31 January 1967 thereby to ensure that the principle of ‘non-refoulement’ is respected as well as other rights of asylum seekers and refugees; (b) on the field of legal migration, on admission rules and rights and status of the person admitted. In relation to migration, the Parties agree to the fair treatment of nationals of other countries who reside legally on their territories and to promote an integration policy aiming at making their rights and obligations comparable to those of their citizens.

1 The Parties shall cooperate in order to prevent and control illegal immigration. To this end, Serbia and the Member States shall readmit any of their nationals illegally present on their territories and agree to fully implement the Agreement on readmission between the Community and Serbia and bilateral Agreements between Member States and Serbia in so far as the provisions of these bilateral Agreements are compatible with those of the Agreement on readmission between the Community and Serbia, including an obligation for the readmission of nationals of other countries and stateless persons. The Member States and Serbia shall provide their nationals with appropriate identity documents and shall extend to them the administrative facilities necessary for such purposes. Specific procedures for the purpose of readmission of nationals, third country nationals and stateless persons are laid down in the Agreement on readmission between the Community and Serbia and bilateral Agreements between Member States and Serbia in so far as the provisions of these bilateral Agreements are compatible with those of the Agreement on readmission between the Community and Serbia.

2 Serbia agrees to conclude readmission Agreements with the Stabilisation and Association process countries and undertakes to take any necessary measures to ensure the flexible and rapid implementation of all readmission Agreements referred to in this Article.

3 The Stabilisation and Association Council shall establish other joint efforts that can be made to prevent and control illegal immigration, including trafficking and illegal migration networks.

1 The Parties shall cooperate in order to prevent the use of their financial systems and relevant non-financial sectors for laundering of proceeds from criminal activities in general and drug offences in particular, as well as for the purpose of financing terrorism.

2 Cooperation in this area may include administrative and technical assistance with the purpose of developing the implementation of regulations and efficient functioning of the suitable standards and mechanisms to combat money laundering and financing of terrorism equivalent to those adopted by the Community and international fora in this field, in particular the Financial Action Task Force (FATF).

1 Within their respective powers and competencies, the Parties shall cooperate to ensure a balanced and integrated approach towards drug issues. Drug policies and actions shall be aimed at reinforcing structures for combating illicit drugs, reducing the supply of, trafficking in and the demand for illicit drugs, coping with the health and social consequences of drug abuse as well as at a more effective control of precursors.

2 The Parties shall agree on the necessary methods of cooperation to attain these objectives. Actions shall be based on commonly agreed principles along the lines of the EU Drug Strategy.

The Parties shall cooperate on combating and preventing criminal and illegal activities, organised or otherwise, such as: (a) smuggling and trafficking in human beings; (b) illegal economic activities, and in particular counterfeiting of cash and non-cash means of payments, illegal transactions on products such as industrial waste, radioactive material and transactions involving illegal, counterfeit or pirated products; (c) corruption, both in the private and public sector, in particular linked to non-transparent administrative practices; (d) fiscal fraud; (e) identity theft; (f) illicit trafficking in drugs and psychotropic substances; (g) illicit arms trafficking; (h) forging documents; (i) smuggling and illicit trafficking of goods, including cars; (j) cyber crime. Regional cooperation and compliance with recognised international standards in combating organised crime shall be promoted.

In compliance with the international conventions to which they are Party and their respective laws and regulations, the Parties agree to cooperate in order to prevent and suppress acts of terrorism and their financing: (a) in the framework of full implementation of United Nations Security Council Resolution 1373 (2001) and other relevant UN resolutions, international conventions and instruments; (b) by exchanging information on terrorist groups and their support networks in accordance with international and national law; (c) by exchanging experiences with regard to means and methods of combating terrorism and in technical areas and training, and by exchanging experience in respect of the prevention of terrorism.

1 The Community and Serbia shall establish a close cooperation aimed at contributing to the development and growth potential of Serbia. Such cooperation shall strengthen existing economic links on the widest possible foundation, to the benefit of both Parties.

2 Policies and other measures shall be designed to bring about sustainable economic and social development of Serbia. These policies should ensure that environmental considerations are also fully incorporated from the outset and that they are linked to the requirements of harmonious social development.

3 Cooperation policies shall be integrated into a regional framework of cooperation. Special attention will have to be devoted to measures that can foster cooperation between Serbia and its neighbouring countries including Member States, thus contributing to regional stability. The Stabilisation and Association Council shall define priorities between and within the cooperation policies described hereinafter in line with the European Partnership.

The Community and Serbia shall facilitate the process of economic reform by cooperating to improve understanding of the fundamentals of their respective economies and the formulation and implementation of economic policy in market economies. To these ends, the Community and Serbia shall cooperate to: (a) exchange information on macroeconomic performance and prospects and on strategies for development; (b) analyse jointly economic issues of mutual interest, including the framing of economic policy and the instruments for implementing it; and (c) promote wider cooperation with the aim to speed up the inflow of know-how and access to new technologies. Serbia shall strive to establish a functioning market economy and to gradually approximate its policies to the stability-oriented policies of the European Economic and Monetary Union. At the request of the authorities of Serbia, the Community may provide assistance designed to support the efforts of Serbia in this respect. Cooperation shall also aim at strengthening the rule of law in the business area through a stable and non-discriminatory trade-related legal framework. Cooperation in this area shall include exchange of information concerning the principles and functioning of the European Economic and Monetary Union.

Cooperation between the Parties shall primarily focus on priority areas related to the Community acquis in the field of statistics. It shall notably be aimed at developing efficient and sustainable statistical systems capable of providing, reliable, objective and accurate data needed to plan and monitor the process of transition and reform in Serbia. It should also enable the Statistical Office in Serbia to better meet the needs of its customers in the country (both public administration and private sector). The statistical system should respect the fundamental principles of statistics issued by the UN, the European Statistical Code of Practice and the stipulations of the European Statistical law and develop towards the Community acquis. The Parties shall cooperate in particular to ensure the confidentiality of individual data, to progressively increase data collection and transmission to the European Statistical System and, to exchange of information on methods, transfer of know-how and training.

Cooperation between Serbia and the Community shall focus on priority areas related to the Community acquis in the fields of banking, insurance and financial services. The Parties shall cooperate with the aim of establishing and developing a suitable framework for the encouragement of the banking, insurance and financial services sectors in Serbia based on fair competition practices and ensuring the necessary level playing field.

Cooperation between the Parties shall focus on priority areas related to the Community acquis in the fields of public internal financial control (PIFC) and external audit. The Parties shall, in particular, cooperate — through elaborating and adopting relevant regulation — with the aim of developing transparent, efficient and economic PIFC (including financial management and control and functionally independent internal audit) and independent external audit systems in Serbia, in accordance with internationally accepted standards and methodologies and EU best practices. Cooperation shall also focus on capacity building of the Supreme Audit Institution in Serbia. In order to be able to fulfil the coordination and harmonisation responsibilities stemming from the requirements above, cooperation should also focus on the establishment and strengthening of central harmonisation units for financial management and control and for Internal Audit.

Cooperation between the Parties, within the scope of their respective competencies, in the field of investment promotion and protection shall aim to bring about a favourable climate for private investment, both domestic and foreign, which is essential to economic and industrial revitalisation in Serbia. The particular aims of cooperation shall be for Serbia to improve the legal frameworks which favours and protects investment.

Cooperation shall aim to promote the modernisation and restructuring of industry and individual sectors in Serbia. It shall also cover industrial cooperation between economic operators, with the objective of strengthening the private sector under conditions which ensure that the environment is protected. Industrial cooperation initiatives shall reflect the priorities determined by both Parties. They shall take into account the regional aspects of industrial development, promoting trans-national partnerships when relevant. The initiatives should seek in particular to establish a suitable framework for undertakings, to improve management, know-how and to promote markets, market transparency and the business environment. Special attention shall be devoted to the establishment of efficient export promotion activities in Serbia. Cooperation shall take due account of the Community acquis in the field of industrial policy.

Cooperation between the Parties shall be aimed at developing and strengthening private sector small- and medium-sized enterprises (SMEs), the establishment of new undertakings in areas offering potential for growth and cooperation between SMEs in the Community and in Serbia. Cooperation shall take due account of priority areas related to the Community acquis in the field of SMEs, as well as the ten guidelines enshrined in the European Charter for Small Enterprises.

Cooperation between the Parties in the field of tourism shall be mainly aimed at strengthening the flow of information on tourism (through international networks, databanks, etc.); encouraging the development of infrastructure conducive to investment in the tourism sector, participation of Serbia in important European tourism organisations. It shall also aim at studying the opportunities for joint operations and strengthening cooperation between tourism enterprises, experts and governments and their competent agencies in the field of tourism, as well as transferring know-how (through training, exchanges, seminars). Cooperation shall take due account of Community acquis related to this sector. Cooperation may be integrated into a regional framework of cooperation.

Cooperation between the Parties shall be developed in all priority areas related to the Community acquis in the field of agriculture, as well as veterinary and phytosanitary domains. Cooperation shall notably aim at modernising and restructuring the agriculture and agro-industrial sector, in particular to reach community sanitary requirements, to improve water management and rural development as well as to develop the forestry sector in Serbia and at supporting the gradual approximation of Serbian legislation and practices to the Community rules and standards.

The Parties shall explore the possibility of identifying mutually beneficial areas of common interest in the fisheries sector. Cooperation shall take due account of priority areas related to the Community acquis in the field of fisheries, including the respect of international obligations concerning International and Regional Fisheries Organisation rules of management and conservation of fishery resources.

The Parties shall establish cooperation in this area with a view to guarantee compliance with the provisions to be adopted in the area of trade and to achieve the approximation of the customs systems of Serbia to that of the Community, thereby helping to pave the way for the liberalisation measures planned under this Agreement and for the gradual approximation of the Serbian customs legislation to the acquis. Cooperation shall take due account of priority areas related to the Community acquis in the field of customs. The rules on mutual administrative assistance between the Parties in the customs field are laid down in Protocol 6.

The Parties shall establish cooperation in the field of taxation including measures aiming at the further reform of Serbia’s fiscal system and the restructuring of tax administration with a view to ensuring effectiveness of tax collection and the fight against fiscal fraud. Cooperation shall take due account of priority areas related to the Community acquis in the field of taxation and in the fight against harmful tax competition. Elimination of harmful tax competition should be carried out on the basis of the principles of the Code of Conduct for business taxation agreed by the Council on 1 December 1997. Cooperation shall also be geared to enhancing transparency and fighting corruption, and to include exchange of information with the Member States in an effort to facilitate the enforcement of measures preventing tax fraud, evasion and avoidance. Serbia shall also complete the network of bilateral Agreements with Member States, along the lines of the latest update of the OECD Model Tax Convention on Income and on Capital as well as on the basis of the OECD Model Agreement on Exchange of Information in Tax Matters, to the extent that the requesting Member State subscribes to these.

With regard to employment, cooperation between the Parties shall focus notably on upgrading job-finding and careers advice services, providing back-up measures and promoting local development to assist industrial and labour market restructuring. It shall also include measures such as studies, the secondment of experts and information and training operations. The Parties shall cooperate to facilitate the reform of the employment policy in Serbia, in the context of strengthened economic reform and integration. Cooperation shall also seek to support the adaptation of the Serbian social security system to the new economic and social requirements, and shall involve the adjustment of the legislation in Serbia concerning working conditions and equal opportunities for women and men, for people with disabilities and for people belonging to minority and other vulnerable groups as well as the improvement of the level of protection of the health and safety of workers, taking as a reference the level of protection existing in the Community. Cooperation shall take due account of priority areas related to the Community acquis in this field.

The Parties shall cooperate with the aim of raising the level of general education and vocational education and training in Serbia as well as youth policy and youth work, including non-formal education. A priority for higher education systems shall be the achievement of the objectives of the Bologna Declaration in the intergovernmental Bologna process. The Parties shall also cooperate with the aim of ensuring that access to all levels of education and training in Serbia is free of discrimination on the grounds of gender, colour, ethnic origin or religion. The relevant Community programmes and instruments shall contribute to the upgrading of educational and training structures and activities in Serbia. Cooperation shall take due account of priority areas related to the Community acquis in this field.

The Parties undertake to promote cultural cooperation. This cooperation serves, inter alia, to raise mutual understanding and esteem between individuals, communities and peoples. The Parties also undertake to cooperate to promote cultural diversity, notably within the framework of the Unesco Convention on the protection and the promotion of the diversity of cultural expressions.

The Parties shall cooperate to promote the audiovisual industry in Europe and encourage co-production in the fields of cinema and television. Cooperation could include, inter alia, programmes and facilities for the training of journalists and other media professionals, as well as technical assistance to the media, the public and private, so as to reinforce their independence, professionalism and links with European media. Serbia shall align its policies on the regulation of content aspects of cross-border broadcasting with those of the EC and shall harmonise its legislation with the EU acquis. Serbia shall pay particular attention to matters relating to the acquisition of intellectual property rights for programmes and broadcast by satellite, cable and terrestrial frequencies.

Cooperation shall be developed in all areas related to the Community acquis regarding the information society. It shall mainly support Serbia’s gradual alignment of policies and legislation in this sector with those of the Community. The Parties shall also cooperate with a view to further developing the Information Society in Serbia Global objectives will be preparing society as a whole for the digital age, attracting investments and ensuring the interoperability of networks and services.

Cooperation shall primarily focus on priority areas related to the Community acquis in this field. The Parties shall, in particular, strengthen cooperation in the area of electronic communications networks and electronic communications services, with the ultimate objective of the adoption by Serbia of the Community acquis in the sector three years after the entry into force of this Agreement.

The Community and Serbia shall take the measures necessary to stimulate the mutual exchange of information. Priority shall be given to programmes aimed at providing the general public with basic information about the Community and professional circles in Serbia with more specialised information.

Cooperation between the Parties shall focus on priority areas related to the Community acquis in the field of transport. Cooperation may notably aim at restructuring and modernising the Serbian transport modes, improving the free movement of passengers and goods, enhancing the access to the transport market and facilities, including ports and airports. Furthermore cooperation may support the development of multi-modal infrastructures in connection with the main Trans-European networks, notably to reinforce regional links in South East Europe in line with the Memorandum of Understanding on the development of the Core Regional Transport Network. The objective of the cooperation should be to achieve operating standards comparable to those in the Community as well as to develop a transport system in Serbia compatible and aligned with the Community system and improving protection of the environment in transport.

Cooperation shall focus on priority areas related to the Community acquis in the field of energy. It shall be based on the Treaty establishing the Energy Community, and it shall be developed with a view to the gradual integration of Serbia into Europe’s energy markets. Cooperation may include in particular: (a) the formulation and planning of energy policy, including modernisation of infrastructure, improvement and diversification of supply and improvement of access to the energy market, including facilitation of transit, transmission and distribution and restoration of energy interconnections of regional importance with neighbouring countries; (b) the promotion of energy saving, energy efficiency, renewable energy and studying the environmental impact of energy production and consumption; (c) the formulation of framework conditions for restructuring of energy companies and cooperation between undertakings in this sector.

The Parties shall cooperate in the field of nuclear safety and safeguards. Cooperation could cover the following topics: (a) upgrading the laws and regulations of the Parties on radiation protection, nuclear safety and nuclear materials accountancy and control as well as strengthening the supervisory authorities and their resources; (b) encouraging the promotion of Agreements between Member States, or European Atomic Energy Community and Serbia on early notification and exchange of information in cases of nuclear accidents and on emergency preparedness and on nuclear safety issues in general, if appropriate; (c) nuclear third party liability.

The Parties shall develop and strengthen their cooperation in the environmental field with the vital task of halting further degradation and start improving the environmental situation with the aim of sustainable development. The parties shall, in particular, establish cooperation with the aim of strengthening administrative structures and procedures to ensure strategic planning of environment issues and coordination between relevant actors and shall focus on the alignment of Serbia’s legislation to the Community acquis. Cooperation could also centre on the development of strategies to significantly reduce local, regional and trans-boundary air and water pollution, to establish a framework for efficient, clean, sustainable and renewable production and consumption of energy, and to execute environmental impact assessment and strategic environmental assessment. Special attention shall be paid to the implementation of the Kyoto Protocol.

The Parties shall encourage cooperation in civil scientific research and technological development (RTD) on the basis of mutual benefit and, taking into account the availability of resources, adequate access to their respective programmes, subject to appropriate levels of effective protection of intellectual, industrial and commercial property rights (IPR). Cooperation shall take due account of the priority areas related to the Community acquis in the field of research and technical development.

The Parties shall seek to strengthen regional and local development cooperation, with the objective of contributing to economic development and reducing regional imbalances. Specific attention shall be given to cross-border, trans-national and interregional cooperation. Cooperation shall take due account of the priority areas related to the Community acquis in the field of regional development.

Cooperation shall aim at ensuring the development of an efficient and accountable public administration in Serbia, notably to support rule of law implementation, the proper functioning of the state institutions for the benefit of the entire population of Serbia as a whole and the smooth development of the relations between the EU and Serbia. Cooperation in this area shall mainly focus on institution building, including the development and implementation of transparent and impartial recruitment procedures, human resources management, and career development for the public service, continued training and the promotion of ethics within the public administration. Cooperation shall cover all levels of public administration, including local administration.

In order to achieve the objectives of this Agreement and in accordance with Articles 5, 116 and 118, Serbia may receive financial assistance from the Community in the forms of grants and loans, including loans from the European Investment Bank. Community aid is conditional on further progress in satisfying the Copenhagen political criteria and in particular progress in meeting the specific priorities of the European Partnership. Account shall also be taken of the results of the annual reviews of the countries of the Stabilisation and Association process, in particular as regards the recipients’ undertaking to carry out democratic, economic and institutional reforms and of other Council conclusions, pertaining in particular to the respect of adjustment programmes. Aid granted to Serbia shall be geared to observed needs, agreed priorities, the capacity to absorb and repay, and the measures taken to reform and restructure the economy.

Financial assistance, in the form of grants, shall be covered by the operation measures provided for in the relevant Council Regulation within a multiannual indicative planning document with annual reviews, established by the Community following consultations with Serbia. Financial assistance may cover all sectors of cooperation, paying particular attention to Justice, Freedom and Security, approximation of legislation, sustainable development and poverty reduction and environmental protection.

At the request of Serbia and in case of special need, the Community could examine in coordination with international financial institutions, the possibility of granting on an exceptional basis macro-financial assistance subject to certain conditions and taking into account the availability of all financial resources. This assistance would be released subject to the fulfilment of conditions to be established in the context of a programme agreed between Serbia and the International Monetary Fund.

In order to permit optimum use of the resources available, the Parties shall ensure that Community contributions are made in close coordination with those from other sources such as the Member States, other countries and international financial institutions. To this effect, information on all sources of assistance shall be exchanged regularly between the Parties.

A Stabilisation and Association Council is hereby established which shall supervise the application and implementation of this Agreement. It shall meet at an appropriate level at regular intervals and when circumstances require. It shall examine any major issues arising within the framework of this Agreement and any other bilateral or international issues of mutual interest.

1 The Stabilisation and Association Council shall consist of the members of the Council of the European Union and members of the European Commission, on the one hand, and of members of the Government of Serbia on the other.

2 The Stabilisation and Association Council shall establish its rules of procedure.

3 The members of the Stabilisation and Association Council may arrange to be represented, in accordance with the conditions to be laid down in its rules of procedure.

4 The Stabilisation and Association Council shall be chaired in turn by a representative of the Community and a representative of Serbia, in accordance with the provisions to be laid down in its rules of procedure.

5 In matters that concern it, the European Investment Bank shall take part, as an observer, in the work of the Stabilisation and Association Council.

The Stabilisation and Association Council shall, for the purpose of attaining the objectives of this Agreement, have the power to take decisions within the scope of this Agreement in the cases provided for therein. The decisions taken shall be binding on the Parties, which shall take the measures necessary to implement the decisions taken. The Stabilisation and Association Council may also make appropriate recommendations. It shall draw up its decisions and recommendations by agreement between the Parties.

1 The Stabilisation and Association Council shall be assisted in the performance of its duties by a Stabilisation and Association Committee, composed of representatives of the Council of the European Union and of representatives of the European Commission, on the one hand, and of representatives of the Government of Serbia on the other.

2 In its rules of procedure the Stabilisation and Association Council shall determine the duties of the Stabilisation and Association Committee, which shall include the preparation of meetings of the Stabilisation and Association Council, and shall determine how the Committee shall function.

3 The Stabilisation and Association Council may delegate to the Stabilisation and Association Committee any of its powers. In this event the Stabilisation and Association Committee shall take its decisions in accordance with the conditions laid down in Article 121.

The Stabilisation and Association Committee may create subcommittees. Before the end of the first year after the date of entry into force of this Agreement, the Stabilisation and Association Committee shall set up the necessary subcommittees for the adequate implementation of this Agreement. A subcommittee that will address migration issues shall be created.

The Stabilisation and Association Council may decide to set up other special committees or bodies that can assist it in carrying out its duties. In its rules of procedure, the Stabilisation and Association Council shall determine the composition and duties of such committees or bodies and how they shall function.

A Stabilisation and Association Parliamentary Committee is hereby established. It shall be a forum for Members of the Parliament of Serbia and of the European Parliament to meet and exchange views. It shall meet at intervals that it shall itself determine. The Stabilisation and Association Parliamentary Committee shall consist of members of the European Parliament and of members of the Parliament of Serbia. The Stabilisation and Association Parliamentary Committee shall establish its rules of procedure. The Stabilisation and Association Parliamentary Committee shall be chaired in turn by a member of the European Parliament and by a member of the Parliament of Serbia, in accordance with the provisions to be laid down in its rules of procedure.

Within the scope of this Agreement, each Party undertakes to ensure that natural and legal persons of the other Party have access free of discrimination in relation to its own nationals to the competent courts and administrative organs of the Parties to defend their individual rights and their property rights.

Nothing in this Agreement shall prevent a Party from taking any measures: (a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests; (b) which relate to the production of, or trade in, arms, munitions or war materials or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products not intended for specifically military purposes; (c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.

1 In the fields covered by this Agreement and without prejudice to any special provisions contained therein: (a) the arrangements applied by Serbia in respect of the Community shall not give rise to any discrimination between the Member States, their nationals, companies or firms; (b) the arrangements applied by the Community in respect of Serbia shall not give rise to any discrimination between nationals of Serbia as well as between Serbian companies or firms.

2 The provisions of paragraph 1 shall be without prejudice to the right of the Parties to apply the relevant provisions of their fiscal legislation to taxpayers who are not in identical situations as regards their place of residence.

1 The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall ensure that the objectives set out in this Agreement are attained.

2 The Parties agree to consult promptly through appropriate channels at the request of either Party to discuss any matter concerning the interpretation or implementation of this Agreement and other relevant aspects of the relations between the Parties.

3 Each Party shall refer to the Stabilisation and Association Council any dispute relating to the application or interpretation of this Agreement. In that case, Article 130 and, as the case may be, Protocol 7 shall apply. The Stabilisation and Association Council may settle the dispute by means of a binding decision.

4 If either Party considers that the other Party has failed to fulfil an obligation under this Agreement, it may take appropriate measures. Before so doing, except in cases of special urgency, it shall supply the Stabilisation and Association Council with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. In the selection of measures, priority must be given to those which least disturb the functioning of this Agreement. These measures shall be notified immediately to the Stabilisation and Association Council and shall be the subject of consultations if the other Party so requests within the Stabilisation and Association Council, the Stabilisation and Association Committee or any other body set up on the basis of Articles 123 or 124.

5 The provisions of paragraphs 2, 3 and 4 shall in no way affect and are without prejudice to Articles 32, 40, 41, 42, 46 and Protocol 3 (Definition of the concept of originating products and methods of administrative cooperation).

1 When a dispute arises between the Parties concerning the interpretation or the implementation of this Agreement, any Party shall notify to the other Party and the Stabilisation and Association Council a formal request that the matter in dispute be resolved. Where a Party considers that a measure adopted by the other Party, or a failure of the other Party to act, constitutes a breach of its obligations under this Agreement, the formal request that the dispute be resolved shall give the reasons for this opinion and indicate, as the case may be, that the Party may adopt measures as provided for in Article 129, paragraph 4.

2 The Parties shall endeavour to resolve the dispute by entering into good faith consultations within the Stabilisation and Association Council and other bodies as provided in paragraph 3, with the aim of reaching as soon as possible a mutually acceptable solution.

3 The Parties shall provide the Stabilisation and Association Council with all relevant information required for a thorough examination of the situation. As long as the dispute is not resolved, it shall be discussed at every meeting of the Stabilisation and Association Council, unless the arbitration procedure as provided for in Protocol 7 has been initiated. A dispute shall be deemed to be resolved when the Stabilisation and Association Council has taken a binding decision to settle the matter as provided for in Article 129, paragraph 3, or when it has declared that there is no dispute anymore. Consultations on a dispute can also be held at any meeting of the Stabilisation and Association Committee or any other relevant committee or body set up on the basis of Articles 123 or 124, as agreed between the Parties or at the request of any of the Parties. Consultations may also be held in writing. All information disclosed during the consultations shall remain confidential.

4 For matters within the scope of application of Protocol 7, any Party may submit the matter in dispute for settlement through arbitration in accordance with that Protocol, when the Parties have failed to resolve the dispute within two months after the initiation of the dispute settlement procedure in accordance with paragraph 1.

This Agreement shall not, until equivalent rights for individuals and economic operators have been achieved under this Agreement, affect rights ensured to them through existing Agreements binding one or more Member States, on the one hand, and Serbia, on the other.

Annexes I to VII and Protocols 1, 2, 3, 4, 5, 6 and 7 shall form an integral part of this Agreement. The Framework Agreement between the European Community and Serbia and Montenegro on the general principles for the participation of Serbia and Montenegro in Community Programmes, signed on 21 November 2004, and the Annex thereto shall form an integral part of this Agreement. The review provided for in Article 8 of that Framework Agreement shall be carried out within the Stabilisation and Association Council, which shall have the power to amend, if necessary, the Framework Agreement.

This Agreement shall be concluded for an unlimited period. Either Party may denounce this Agreement by notifying the other Party. This Agreement shall terminate six months after the date of such notification. Either Party may suspend this Agreement, with immediate effect, in the event of the non-compliance by the other Party of one of the essential elements of this Agreement.

For the purposes of this Agreement, the term ‘Parties’ shall mean the Community, or its Member States, or the Community and its Member States, in accordance with their respective powers, of the one part, and the Republic of Serbia, of the other part.

This Agreement shall apply, on the one hand, to the territories in which the Treaties establishing the European Community and the European Atomic Energy Community are applied and under the conditions laid down in those Treaties, and to the territory of Serbia on the other. This Agreement shall not apply in Kosovo which is at present under international administration pursuant to United Nations Security Council Resolution 1244 of 10 June 1999. This is without prejudice to the current status of Kosovo or the determination of its final status under that Resolution.

The Secretary-General of the Council of the European Union shall be the depository of this Agreement.

This Agreement shall be drawn up in duplicate in the Bulgarian, Spanish, Czech, Danish, German, Estonian, Greek, English, French, Italian, Latvian, Lithuanian, Hungarian, Maltese, Dutch, Polish, Portuguese, Romanian, Slovak, Slovene, Finnish, Swedish and Serbian languages, each text being equally authentic.

The Parties shall approve this Agreement in accordance with their own procedures. This Agreement shall enter into force on the first day of the second month following the date on which the Parties notify each other that the procedures referred to in the first paragraph have been completed.

In the event that, pending the completion of the procedures necessary for the entry into force of this Agreement, the provisions of certain parts of this Agreement, in particular those relating to the free movement of goods as well as the relevant provisions on Transport, are put into effect by means of Interim Agreements between the Community and Serbia, the Parties agree that, in such circumstances for the purpose of the provisions of Title IV, Articles 73, 74 and 75 of this Agreement, Protocols 1, 2, 3, 5, 6 and 7, and relevant provisions of Protocol 4, hereto, the terms ‘date of entry into force of this Agreement’ mean the date of entry into force of the relevant Interim Agreement in relation to obligations contained in the abovementioned provisions.

1 The Community and Serbia apply to processed agricultural products the duties, listed in Annex I and Annex II respectively in accordance with the conditions mentioned therein, whether limited by quota or not.

2 The Stabilisation and Association Council shall decide on: (a) extensions of the list of processed agricultural products under this Protocol; (b) amendments to the duties referred to in Annexes I and II; (c) increases in or the abolition of tariff quotas.

3 The Stabilisation and Association Council may replace the duties established by this Protocol by a regime established on the basis of the respective market prices in the Community and Serbia of agricultural products actually used in the manufacture of processed agricultural products subject to this Protocol.

The duties applied pursuant to Article 1 of this Protocol may be reduced by decision of the Stabilisation and Association Council: (a) when in trade between the Community and Serbia the duties applied to the basic products are reduced; or (b) in response to reductions resulting from mutual concessions relating to processed agricultural products. The reductions provided for under point (a) shall be calculated on the part of the duty designated as the agricultural component which shall correspond to the agricultural products actually used in the manufacture of the processed agricultural products in question and deducted from the duties applied to these basic agricultural products.

The Community and Serbia shall inform each other of the administrative arrangements adopted for the products covered by this Protocol. These arrangements should ensure equal treatment for all interested parties and should be as simple and flexible as possible.

This Protocol includes: 1. an Agreement on reciprocal preferential trade concessions for certain wines (Annex I to this Protocol). 2. an Agreement on reciprocal recognition, protection and control of wine, spirits drinks and aromatised wine names (Annex II to this Protocol).

The Agreements referred to in Article 1 of this Protocol shall apply to: 1. wines falling under heading 22.04 of the Harmonised System of the International Convention on the Harmonised Commodity Description and Coding System, done at Brussels on 14 June 1983 which have been produced from fresh grapes, (a) originate in the Community and have been produced in accordance with the rules governing the oenological practices and processes referred to in Title V of Council Regulation (EC) No 1493/1999 of 17 May 1999 on the common organisation of the market in wine , as amended, and Commission Regulation (EC) No 1622/2000 of 24 July 2000 laying down detailed rules for implementing Regulation (EC) No 1493/1999 on the common market organisation in wine and establishing a Community code of oenological practices and processes , as amended; or (b) originate in Serbia and have been produced in accordance with the rules governing the oenological practices and processes in conformity with the law of Serbia. These rules governing the oenological practices and processes shall be in conformity with the Community legislation. 2. spirit drinks falling under heading 22.08 of the Convention referred to in paragraph 1 which: (a) originate in the Community and comply with Council Regulation (EEC) No 1576/89 of 29 May 1989 laying down general rules on the definition, description and presentation of spirit drinks , as amended and Commission Regulation (EEC) No 1014/90 of 24 April 1990 laying down detailed implementing rules on the definition, description and presentation of spirit drinks as amended; or (b) originate in Serbia, and have been produced in conformity with the law of Serbia which shall be in conformity with Community legislation. 3. aromatised wines falling under heading 22.05 of the Convention referred to in paragraph 1, which: (a) originate in the Community and comply with Council Regulation (EEC) No 1601/91 of 10 June 1991 laying down general rules on the definition, description and presentation of aromatised wines, aromatised wine-based drinks and aromatised wine-product cocktails , as amended; or (b) originate in Serbia, and have been produced in conformity with the law of Serbia which shall be in conformity with Community legislation.

1 The Parties shall, on the basis of non-discrimination and reciprocity, recognise, protect and control names of the products referred to in Article 2 of this Protocol in accordance with the conditions provided for in this Annex.

2 The Parties shall take all general and specific measures necessary to ensure that the obligations laid down by this Annex are fulfilled and that the objectives set out in this Annex are attained.

For the purposes of the Agreement in this Annex and except where otherwise expressly provided herein: (a) ‘originating’, when used in relation to the name of a Party, shall mean that: a wine is produced entirely within the Party concerned solely from grapes which have been wholly harvested in that Party, a spirit drink or aromatised wine is produced within that Party; (b) ‘geographical indication’ as listed in Appendix 1 means an indication as defined in Article 22(1) of the Agreement on Trade Related Aspects of Intellectual Property Rights (hereinafter referred to as ‘the TRIPS Agreement’); (c) ‘traditional expression’ means a traditionally used name, as specified in Appendix 2, referring in particular to the method of production or to the quality, colour, type or place, or a particular event linked to the history of the wine concerned and recognised by the laws and regulations of a Party for the purpose of describing and presenting of such a wine originating in the territory of that Party; (d) ‘homonymous’ means the same geographical indication or same traditional expression, or such a term so similar as to be likely to cause confusion, to denote different places, procedures or things; (e) ‘description’ means the words used to describe a wine, spirit drink or aromatised wine on a label or documents accompanying the transport of wine, spirit drink or aromatised wine, on commercial documents particularly invoices and delivery notes, and advertising material; (f) ‘labelling’ means all descriptions and other references, signs, designs, geographical indications or trademarks which distinguish wines, spirit drinks or aromatised wines and which appear on the same container, including its sealing device or the tag attached to the container and the sheathing covering the neck of bottles; (g) ‘presentation’ means the entirety of terms, allusions and the like referring to a wine, spirit drink or aromatised wine used on the labelling, on the packaging; on the containers, the closure, in advertising and/or sales promotion of any kind; (h) ‘packaging’ means the protective wrappings, such as papers, straw envelopes of any kind, cartons and cases, used in transport of one or more containers or for sale to the ultimate consumer; (i) ‘produced’ means the entire process of wine-making, spirit drink-making and aromatised wine-making; (j) ‘wine’ means solely the beverage resulting from full or partial alcoholic fermentation of fresh grapes of the vine varieties, referred to in the Agreement in this Annex whether or not pressed, or of its must; (k) ‘vine varieties’ means varieties of plants of Vitis Vinifera without prejudice to any legislation which a Party may have in respect of the use of different vine varieties in wine produced in that Party; (l) ‘WTO Agreement’ means the Marrakesh Agreement establishing the World Trade Organisation done on 15 April 1994.

Unless otherwise provided for in the Agreement in this Annex, importation and marketing of the products referred to in Article 2 of this Protocol shall be conducted in compliance with the laws and regulations applying in the territory of the Party.

Without prejudice to Articles 5, 6 and 7 of thisAnnex, the following shall be protected: (a) as regards the products referred to in Article 2 of this Protocol: references to the name of the Member State in which the wine, spirit drink and aromatised wine originates or other names to indicate the Member State, the geographical indications, listed in Appendix 1, Part A, points (a) for wines (b) for spirit drinks and (c) for aromatised wines, the traditional expressions listed in Appendix 2, Part A. (b) as regards wines, spirit drinks or aromatised wines originating in Serbia: references to the name ‘Serbia’ or any other name designating that country, the geographical indications, listed in Appendix 1, Part B, points (a) for wines (b) for spirit drinks and (c) for aromatised wines, the traditional expressions listed in Appendix 2, Part B.

1 In Serbia, references to the Member States of the Community, and other names used to indicate a Member State, for the purpose of identifying origin of the wine, spirit drink and aromatised wine: (a) shall be reserved for wines, spirit drinks and aromatised wines originating in the Member State concerned, and (b) shall not be used by the Community otherwise than under the conditions provided for by the laws and regulations of the Community.

2 In the Community, references to Serbia, and other names used to indicate Serbia (whether or not followed by the name of a vine variety), for the purpose of identifying origin of the wine, spirit drink and aromatised wine: (a) shall be reserved for wines, spirit drinks and aromatised wines originating in Serbia, and (b) shall not be used by Serbia otherwise than under the conditions provided for by the laws and regulations of Serbia.

1 In Serbia, the geographical indications for the Community which are listed in Appendix 1, Part A: (a) shall be protected for wines, spirit drinks and aromatised wines originating in the Community, and (b) shall not be used otherwise than under the conditions provided for by the laws and regulations of the Community.

2 In the Community, the geographical indications for Serbia which are listed in Appendix 1, Part B: (a) shall be protected for wines, spirit drinks and aromatised wines originating in Serbia, and (b) shall not be used otherwise than under the conditions provided for by the laws and regulations of Serbia. Notwithstanding Article 2(2)(b) of Protocol 2 inasmuch as it refers to EU legislation on spirit drinks, sales denominations for spirit drinks originating in Serbia and marketed in the EU shall not be supplemented or replaced by a geographical indication.

3 The Parties shall take all measures necessary, in accordance with the Agreement in this Annex, for the reciprocal protection of the names referred to in Article 4(a) and (b), second indents which are used for the description and presentation of wines, spirit drinks and aromatised wines originating in the territory of the Parties. To that end, each Party shall make use of the appropriate legal means referred to in Article 23 of the TRIPS Agreement to ensure an effective protection and prevent geographical indications from being used to identify wines, spirit drinks and aromatised wines not covered by the indications or the descriptions concerned.

4 The geographical indications referred to in Article 4 shall be reserved exclusively for the products originating in the territory of the Party to which they apply and may be used only under the conditions laid down in the laws and regulations of that Party.

5 The protection provided for in the Agreement in this Annex shall prohibit in particular any use of protected names for wines, spirit drinks and aromatised wines which do not originate in the geographical area indicated, and shall apply even when: the true origin of the wine, spirit drink or aromatised wine is indicated, the geographical indication in question is used in translation, the name is accompanied by terms such as ‘kind’, ‘type’, ‘style’, ‘imitation’, ‘method’ or other expressions of the sort, the protected name is used in any way for products falling under heading 20.09 of the Harmonised System of the International Convention on the Harmonised Commodity Description and Coding System, done at Brussels on 14 June 1983.

6 If geographical indications listed in Appendix 1 are homonymous, protection shall be granted to each indication provided that it has been used in good faith. The Parties shall mutually decide the practical conditions of use under which the homonymous geographical indications will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

7 If a geographical indication listed in Appendix 1 is homonymous with a geographical indication for a third country, Article 23(3) of the TRIPS Agreement applies.

8 The provisions of the Agreement in this Annex shall in no way prejudice the right of any person to use, in the course of trade, that person’s name or the name of that person’s predecessor in business, except where such name is used in such a manner as to mislead consumers.

9 Nothing in the Agreement in this Annex shall oblige a Party to protect a geographical indication of the other Party listed in Appendix 1 which is not or ceases to be protected in its country of origin or which has fallen into disuse in that country.

10 On the entry into force of this Agreement, the Parties shall no longer deem that the protected geographical names listed in Appendix 1 are customary in the common language of the Parties as a common name for wines, spirit drinks and aromatised wines as foreseen in Article 24(6) of the TRIPS Agreement.

1 In Serbia, the traditional expressions for the Community listed in Appendix 2: (a) shall not be used for the description or presentation of wine originating in Serbia; and (b) may not be used for the description or presentation of wine originating in the Community otherwise than in relation to the wines of the origin and the category and in the language as listed in Appendix 2 and under the conditions provided for by the laws and regulations of the Community.

2 In the Community, the traditional expressions for Serbia listed in Appendix 2 shall not be used for the description or presentation of wine originating in the Community; and may not be used for the description or presentation of wine originating in Serbia otherwise than in relation to the wines of the origin and the category and in Serbian language, as listed in Appendix 2 and under the conditions provided for by the laws and regulations of Serbia.

3 The Parties shall take the measures necessary, in accordance with this Title, for the reciprocal protection of the traditional expressions referred to in Article 4 and used for the description and presentation of wines originating in the territory of the Parties. To that end, the Parties shall provide appropriate legal means to ensure an effective protection and prevent traditional expressions from being used to describe wine not entitled to use those traditional expressions, even where the traditional expressions used are accompanied by expressions such as ‘kind’, ‘type’, ‘style’, ‘imitation’, ‘method’ or the like.

4 If traditional expressions listed in Appendix 2 are homonymous, protection shall be granted to each expression provided it has been used in good faith and does not mislead consumers as to the actual origin of the wine. The Parties shall mutually decide the practical conditions of use under which the homonymous traditional expressions will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not mislead.

5 The protection of a traditional expression shall apply only: to the language or languages and alphabets in which it appears in Appendix 2 and not in translation; and for a category of product in relation to which it is protected for the Parties as set out in Appendix 2.

1 The responsible offices of the Parties shall refuse the registration of a trademark for a wine, spirit drink or aromatised wine which is identical with, or similar to, or contains or consists of a reference to a geographical indication protected under Article 4 with respect to such wine, spirit drink or aromatised wine not having this origin and not complying with the relevant rules governing its use.

2 The responsible offices of the Parties shall refuse the registration of a trademark for a wine which contains or consists of a traditional expression protected under the Agreement in this Annex if the wine in question is not one to which the traditional expression is reserved as indicated in Appendix 2.

The Parties shall take all steps necessary to ensure that, where wines, spirit drinks and aromatised wines originating in a Party are exported to a third country, the protected geographical indications referred to in Article 4(a) and 4(b) second indents and in the case of wines, the traditional expressions of that Party referred to in Article 4(a) and 4(b) third indent are not used to describe and present products originating in the respectively other Party.

1 A Working Group functioning under the auspices of the Subcommittee on Agriculture to be created in accordance with Article 123 of the Stabilisation and Association Agreement shall be established.

2 The Working Group shall see to the proper functioning of the Agreement in this Annex and shall examine all questions which may arise in implementing it.

3 The Working Group may make recommendations, discuss and put forward suggestions on any matter of mutual interest in the wine, spirit drink and aromatised wine sector which would contribute to the attainment of the objectives of the Agreement in this Annex. It shall meet at the request of either of the Parties, alternatively in the Community and in Serbia, at time and a place and in a manner mutually determined by the Parties.

1 The Parties shall either directly or through the Working Group referred to in Article 10 maintain contact on all matters relating to the implementation and functioning of this Agreement.

2 Serbia designates the Ministry of Agriculture, Forestry and Water Management as its representative body. The Community designates the Directorate-General Agriculture and Rural Development of the European Commission, as its representative body. A Party shall notify the other Party if it changes its representative body.

3 The representative body shall ensure the coordination of the activities of all the bodies responsible for ensuring the enforcement of the Agreement in this Annex.

4 The Parties shall: (a) mutually amend the lists referred to in Article 4 by decision of the Stabilisation and Association Committee to take account of any amendments to the laws and regulations of the Parties; (b) mutually decide, by decision of the Stabilisation and Association Committee, that the Appendices to the Agreement in this Annex should be modified. The Appendices shall be deemed to be modified from the date recorded in an Exchange of Letters between the Parties, or the date of the Working Group decision, as the case requires; (c) mutually decide the practical conditions referred to in Article 6(6); (d) inform each other of the intention to decide new regulations or amendments of existing regulations of public policy concern, such as health or consumer protection, with implications for the wine, spirit and aromatised wine sector; (e) notify each other of any legislative, administrative and judicial decisions concerning the implementation of the Agreement in this Annex and inform each other of measures adopted on the basis of such decisions.

The Parties designate the contact points set out in Appendix 3 to be responsible for the application and operation of the Agreement in this Annex.

1 If the description or presentation of a wine, spirit drink or aromatised wine in particular on the labelling, in official or commercial documents or in advertising, is in breach of the Agreement in this Annex, the Parties shall apply the necessary administrative measures and/or shall initiate legal proceedings with a view to combating unfair competition or preventing the wrongful use of the protected name in any other way.

2 The measures and proceedings referred to in paragraph 1 shall be taken in particular: (a) where descriptions or translation of description, names, inscriptions or illustrations relating to wine, spirit or aromatised wine drinks whose names are protected under the Agreement in this Annex are used, directly or indirectly, which give false or misleading information as to the origin, nature or quality of the wine, spirit drink or aromatised wine. (b) where, for packaging, containers are used which are misleading as to the origin of the wine.

3 If one of the Parties has reason to suspect that: (a) a wine, spirit drink or aromatised wine as defined in Article 2, being or having been traded in Serbia and the Community, does not comply with rules governing the wine, spirit drink or aromatised wine sector in the Community or in Serbia or with this Agreement; and (b) this non-compliance is of particular interest to the other Party and could result in administrative measures and/or legal proceedings being taken, it shall immediately inform the representative body of the other Party.

4 The information to be provided in accordance with paragraph 3 shall include details of the non-compliance with the rules governing the wine, spirit drink and aromatised wine sector of the Party and/or the Agreement in this Annex and shall be accompanied by official, commercial or other appropriate documents, with details of any administrative measures or legal proceedings that may, if necessary, be taken.

1 The Parties shall enter into consultations if one of them considers that the other has failed to fulfil an obligation under the Agreement in this Annex.

2 The Party which requests the consultations shall provide the other Party with all the information necessary for a detailed examination of the case in question.

3 In cases where any delay could endanger human health or impair the effectiveness of measures to control fraud, appropriate interim protective measures may be taken, without prior consultation, provided that consultations are held immediately after the taking of these measures.

4 If, following the consultations provided for in paragraphs 1 and 3, the Parties have not reached agreement, the Party which requested the consultations or which took the measures referred to in paragraph 3 may take appropriate measures in accordance with Article 129 of the Stabilisation and Association Agreement so as to permit the proper application of the Agreement in this Annex.

I. The Agreement in this Annex shall not apply to wines, spirit drinks and aromatised wines, which: (a) pass in transit through the territory of one of the Parties, or (b) originate in the territory of one of the Parties and which are consigned in small quantities between those Parties under the conditions and according to the procedures provided for in paragraph II: II. The following products referred to wines, spirit drinks and aromatised wines shall be considered to be small quantities: 1. quantities in labelled containers of not more than 5 litres fitted with a non-reusable closing device where the total quantity transported, whether or not made up of separate consignments, does not exceed 50 litres; 2. (a) quantities which are contained in the personal luggage of travellers in quantities not exceeding 30 litres; (b) quantities which are sent in consignments from one private individual to another in quantities not exceeding 30 litres; (c) quantities which are part of the belongings of private individuals who are moving house; (d) quantities which are imported for the purpose of scientific or technical experiments, subject to a maximum of 1 hectolitre; (e) quantities which are imported for diplomatic, consular or similar establishments as part of their duty-free allowance; (f) quantities which are held on board international means of transport as victualling supplies. The case of exemption referred to in point 1 may not be combined with one or more of the cases of exemption referred to in point 2.

1 Wines, spirit drinks or aromatised wines which, at the time of the entry into force of this Agreement, have been produced, prepared, described and presented in compliance with the internal laws and regulations of the Parties but are prohibited by the Agreement in this Annex may be sold until stocks run out.

2 Except where provisions to the contrary are adopted by the Parties, wines, spirit drinks or aromatised wines which have been produced, prepared, described and presented in compliance with the Agreement in this Annex but whose production, preparation, description and presentation cease to comply therewith as a result of an amendment thereto may continue to be marketed until stocks run out.

For the purposes of this Protocol: (a) ‘manufacture’ means any kind of working or processing including assembly or specific operations; (b) ‘material’ means any ingredient, raw material, component or part, etc., used in the manufacture of the product; (c) ‘product’ means the product being manufactured, even if it is intended for later use in another manufacturing operation; (d) ‘goods’ means both materials and products; (e) ‘customs value’ means the value as determined in accordance with the 1994 Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on customs valuation); (f) ‘ex-works price’ means the price paid for the product ex works to the manufacturer in the Community or in Serbia in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the product obtained is exported; (g) ‘value of materials’ means the customs value at the time of importation of the non-originating materials used, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the Community or in Serbia; (h) ‘value of originating materials’ means the value of such materials as defined in (g) applied mutatis mutandis; (i) ‘value added’ shall be taken to be the ex-works price minus the customs value of each of the materials incorporated which originate in the other countries referred to in Articles 3 and 4 or, where the customs value is not known or cannot be ascertained, the first ascertainable price paid for the materials in the Community or in Serbia; (j) ‘chapters’ and ‘headings’ mean the chapters and the headings (four-digit codes) used in the nomenclature which makes up the Harmonised Commodity Description and Coding System, referred to in this Protocol as ‘the Harmonised System’ or ‘HS’; (k) ‘classified’ refers to the classification of a product or material under a particular heading; (l) ‘consignment’ means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice; (m) ‘territories’ includes territorial waters.

1 For the purpose of implementing this Agreement, the following products shall be considered as originating in the Community: (a) products wholly obtained in the Community within the meaning of Article 5; (b) products obtained in the Community incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the Community within the meaning of Article 6.

2 For the purpose of implementing this Agreement, the following products shall be considered as originating in Serbia: (a) products wholly obtained in Serbia within the meaning of Article 5; (b) products obtained in Serbia incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in Serbia within the meaning of Article 6.

1 Without prejudice to the provisions of Article 2(1), products shall be considered as originating in the Community if such products are obtained there, incorporating materials originating in Serbia, in the Community or in any country or territory participating in the European Union’s Stabilisation and Association process , or incorporating the materials originating in Turkey to which the Decision 1/95/EC of the EC-Turkey Association Council of 22 December 1995 applies, provided that the working or processing carried out in the Community goes beyond the operations referred to in Article 7. It shall not be necessary that such materials have undergone sufficient working or processing.

2 Where the working or processing carried out in the Community does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in the Community only where the value added there is greater than the value of the materials used originating in any one of the other countries or territories referred to in paragraph 1. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in the Community.

3 Products, originating in one of the countries or territories referred to in paragraph 1, which do not undergo any working or processing in the Community, retain their origin if exported into one of these countries or territories.

4 The cumulation provided for in this Article may be applied only provided that: (a) a preferential trade Agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the countries or territories involved in the acquisition of the originating status and the country of destination; (b) materials and products have acquired originating status by the application of rules of origin identical to those given in this Protocol; and (c) notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in Serbia according to its own procedures. The cumulation provided for in this Article shall apply from the date indicated in the notice published in the Official Journal of the European Union (C series). The Community shall provide Serbia, through the European Commission with details of the Agreements and their corresponding rules of origin, which are applied with the other countries or territories referred to in paragraph 1. The products in Annex V shall be excluded from the cumulation provided for in this Article.

1 Without prejudice to the provisions of Article 2(2), products shall be considered as originating in Serbia if such products are obtained there, incorporating materials originating in the Community, Serbia or in any country or territory participating in the European Union’s Stabilisation and Association Process or incorporating the materials originating in Turkey to which the Decision 1/95/EC of the EC-Turkey Association Council of 22 December 1995 applies, provided that the working or processing carried out in Serbia goes beyond the operations referred to in Article 7. It shall not be necessary that such materials have undergone sufficient working or processing.

2 Where the working or processing carried out in Serbia does not go beyond the operations referred to in Article 7, the product obtained shall be considered as originating in Serbia only where the value added there is greater than the value of the materials used originating in any one of the other countries or territories referred to in paragraph 1. If this is not so, the product obtained shall be considered as originating in the country which accounts for the highest value of originating materials used in the manufacture in Serbia.

3 Products, originating in one of the countries or territories referred to in paragraph 1, which do not undergo any working or processing in Serbia, retain their origin if exported into one of these countries or territories.

4 The cumulation provided for in this Article may be applied only provided that: (a) a preferential trade Agreement in accordance with Article XXIV of the General Agreement on Tariffs and Trade (GATT) is applicable between the countries or territories involved in the acquisition of the originating status and the country of destination; (b) materials and products have acquired originating status by the application of rules of origin identical to those given in this Protocol; and (c) notices indicating the fulfilment of the necessary requirements to apply cumulation have been published in the Official Journal of the European Union (C series) and in Serbia according to its own procedures. The cumulation provided for in this Article shall apply from the date indicated in the notice published in the Official Journal of the European Union (C series). Serbia shall provide the Community, through the European Commission, with details of the Agreements, including their dates of entry into force, and their corresponding rules of origin, which are applied with the other countries or territories referred to in paragraph 1. The products in Annex V shall be excluded from the cumulation provided for in this Article.

1 The following shall be considered as wholly obtained in the Community or in Serbia: (a) mineral products extracted from their soil or from their seabed; (b) vegetable products harvested there; (c) live animals born and raised there; (d) products from live animals raised there; (e) products obtained by hunting or fishing conducted there; (f) products of sea fishing and other products taken from the sea outside the territorial waters of the Community or of Serbia by their vessels; (g) products made aboard their factory ships exclusively from products referred to in (f); (h) used articles collected there fit only for the recovery of raw materials, including used tyres fit only for retreading or for use as waste; (i) waste and scrap resulting from manufacturing operations conducted there; (j) products extracted from marine soil or subsoil outside their territorial waters provided that they have sole rights to work that soil or subsoil; (k) goods produced there exclusively from the products specified in points (a) to (j).

2 The terms ‘their vessels’ and ‘their factory ships’ in paragraph 1(f) and (g) shall apply only to vessels and factory ships: (a) which are registered or recorded in a Member State of the Community or in Serbia; (b) which sail under the flag of a Member State of the Community or of Serbia; (c) which are owned to an extent of at least 50 % by nationals of a Member State of the Community or of Serbia, or by a company with its head office in one of these States, of which the manager or managers, Chairman of the Board of Directors or the Supervisory Board, and the majority of the members of such boards are nationals of a Member State of the Community or of Serbia and of which, in addition, in the case of partnerships or limited companies, at least half the capital belongs to those States or to public bodies or nationals of the said States; (d) of which the master and officers are nationals of a Member State of the Community or of Serbia; and (e) of which at least 75 % of the crew are nationals of a Member State of the Community or of Serbia.

1 For the purposes of Article 2, products which are not wholly obtained are considered to be sufficiently worked or processed when the conditions set out in the list in Annex II are fulfilled. The conditions referred to above indicate, for all products covered by this Agreement, the working or processing which must be carried out on non-originating materials used in manufacturing and apply only in relation to such materials. It follows that if a product which has acquired originating status by fulfilling the conditions set out in the list is used in the manufacture of another product, the conditions applicable to the product in which it is incorporated do not apply to it, and no account shall be taken of the non-originating materials which may have been used in its manufacture.

2 Notwithstanding paragraph 1, non-originating materials which, according to the conditions set out in the list, should not be used in the manufacture of a product may nevertheless be used, provided that: (a) their total value does not exceed 10 % of the ex-works price of the product; (b) any of the percentages given in the list for the maximum value of non-originating materials are not exceeded through the application of this paragraph. This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonised System.

3 Paragraphs 1 and 2 shall apply subject to the provisions of Article 7.

1 Without prejudice to paragraph 2 of this Article, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 6 are satisfied: (a) preserving operations to ensure that the products remain in good condition during transport and storage; (b) breaking-up and assembly of packages; (c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings; (d) ironing or pressing of textiles; (e) simple painting and polishing operations; (f) husking, partial or total bleaching, polishing, and glazing of cereals and rice; (g) operations to colour sugar or form sugar lumps; (h) peeling, stoning and shelling, of fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting; (j) sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles); (k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations; (l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging; (m) simple mixing of products, whether or not of different kinds; mixing of sugar with any other material; (n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts; (o) a combination of two or more operations specified in points (a) to (n); (p) slaughter of animals.

2 All operations carried out either in the Community or in Serbia on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.

1 The unit of qualification for the application of the provisions of this Protocol shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonised System. It follows that: (a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonised System in a single heading, the whole constitutes the unit of qualification; (b) when a consignment consists of a number of identical products classified under the same heading of the Harmonised System, each product must be taken individually when applying the provisions of this Protocol.

2 Where, under General Rule 5 of the Harmonised System, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.

Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

Sets, as defined in General Rule 3 of the Harmonised System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 per cent of the ex-works price of the set.

In order to determine whether a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture: (a) energy and fuel; (b) plant and equipment; (c) machines and tools; (d) goods which do not enter and which are not intended to enter into the final composition of the product.

1 Except as provided for in Articles 3 and 4 and paragraph 3 of this Article, the conditions for acquiring originating status set out in Title II must be fulfilled without interruption in the Community or in Serbia.

2 Except as provided for in Articles 3 and 4, where originating goods exported from the Community or from Serbia to another country return, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that: (a) the returning goods are the same as those exported; and (b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported.

3 The acquisition of originating status in accordance with the conditions set out in Title II shall not be affected by working or processing done outside the Community or Serbia on materials exported from the Community or from Serbia and subsequently re-imported there, provided: (a) the said materials are wholly obtained in the Community or in Serbia or have undergone working or processing beyond the operations referred to in Article 7 prior to being exported; and (b) it can be demonstrated to the satisfaction of the customs authorities that: (i) the re-imported goods have been obtained by working or processing the exported materials; and (ii) the total added value acquired outside the Community or Serbia by applying the provisions of this Article does not exceed 10 % of the ex-works price of the end product for which originating status is claimed.

4 For the purposes of paragraph 3, the conditions for acquiring originating status set out in Title II shall not apply to working or processing done outside the Community or Serbia, but where, in the list in Annex II, a rule setting a maximum value for all the non-originating materials incorporated is applied in determining the originating status of the end product, the total value of the non-originating materials incorporated in the territory of the party concerned, taken together with the total added value acquired outside the Community or Serbia by applying the provisions of this Article, shall not exceed the stated percentage.

5 For the purposes of applying the provisions of paragraphs 3 and 4, ‘total added value’ shall be taken to mean all costs arising outside the Community or Serbia, including the value of the materials incorporated there.

6 The provisions of paragraphs 3 and 4 shall not apply to products which do not fulfil the conditions set out in the list in Annex II or which can be considered sufficiently worked or processed only if the general tolerance fixed in Article 6(2) is applied.

7 The provisions of paragraphs 3 and 4 shall not apply to products of Chapters 50 to63 of the Harmonised System.

8 Any working or processing of the kind covered by the provisions of this Article and done outside the Community or Serbia shall be done under the outward processing arrangements, or similar arrangements.

1 The preferential treatment provided for under this Agreement applies only to products, satisfying the requirements of this Protocol, which are transported directly between the Community and Serbia or through the territories of the other countries or territories referred to in Articles 3 and 4. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition. Originating products may be transported by pipeline across territory other than that of the Community or Serbia.

2 Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing country by the production of: (a) a single transport document covering the passage from the exporting country through the country of transit; or (b) a certificate issued by the customs authorities of the country of transit: (i) giving an exact description of the products; (ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and (iii) certifying the conditions under which the products remained in the transit country; or (c) failing these, any substantiating documents.

1 Originating products, sent for exhibition in a country or territory other than those referred to in Articles 3 and 4 and sold after the exhibition for importation in the Community or in Serbia shall benefit on importation from the provisions of this Agreement provided it is shown to the satisfaction of the customs authorities that: (a) an exporter has consigned these products from the Community or from Serbia to the country in which the exhibition is held and has exhibited them there; (b) the products have been sold or otherwise disposed of by that exporter to a person in the Community or in Serbia; (c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and (d) the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.

2 A proof of origin must be issued or made out in accordance with the provisions of Title V and submitted to the customs authorities of the importing country in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required.

3 Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

1 Non-originating materials used in the manufacture of products originating in the Community, in Serbia or in one of the other countries or territories referred to in Articles 3 and 4 for which a proof of origin is issued or made out in accordance with the provisions of Title V shall not be subject in the Community or in Serbia to drawback of, or exemption from, customs duties of whatever kind.

2 The prohibition in paragraph 1 shall apply to any arrangement for refund, remission or non-payment, partial or complete, of customs duties or charges having an equivalent effect, applicable in the Community or in Serbia to materials used in the manufacture, where such refund, remission or non-payment applies, expressly or in effect, when products obtained from the said materials are exported and not when they are retained for home use there.

3 The exporter of products covered by a proof of origin shall be prepared to submit at any time, upon request from the customs authorities, all appropriate documents proving that no drawback has been obtained in respect of the non-originating materials used in the manufacture of the products concerned and that all customs duties or charges having equivalent effect applicable to such materials have actually been paid.

4 The provisions of paragraphs 1 to 3 shall also apply in respect of packaging within the meaning of Article 8(2), accessories, spare parts and tools within the meaning of Article 9 and products in a set within the meaning of Article 10 when such items are non-originating.

5 The provisions of paragraphs 1, 2, 3 and 4 shall apply only in respect of materials which are of the kind to which this Agreement applies. Furthermore, they shall not preclude the application of an export refund system for agricultural products, applicable upon export in accordance with the provisions of this Agreement.

1 Products originating in the Community shall, on importation into Serbia and products originating in Serbia shall, on importation into the Community benefit from this Agreement upon submission of either: (a) a movement certificate EUR.1, a specimen of which appears in Annex III; or (b) in the cases specified in Article 22(1), a declaration, subsequently referred to as the ‘invoice declaration’, given by the exporter on an invoice, a delivery note or any other commercial document which describes the products concerned in sufficient detail to enable them to be identified; the text of the invoice declaration appears in Annex IV.

2 Notwithstanding paragraph 1 of this Article, originating products within the meaning of this Protocol shall, in the cases specified in Article 27, benefit from this Agreement without it being necessary to submit any of the documents referred to above.

1 A movement certificate EUR.1 shall be issued by the customs authorities of the exporting country on application having been made in writing by the exporter or, under the exporter’s responsibility, by his authorised representative.

2 For this purpose, the exporter or his authorised representative shall fill out both the movement certificate EUR.1 and the application form, specimens of which appear in Annex III. These forms shall be completed in one of the languages in which this Agreement is drawn up and in accordance with the provisions of the domestic law of the exporting country. If they are hand-written, they shall be completed in ink in printed characters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the empty space being crossed through.

3 The exporter applying for the issue of a movement certificate EUR.1 shall be prepared to submit at any time, at the request of the customs authorities of the exporting country where the movement certificate EUR.1 is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

4 A movement certificate EUR.1 shall be issued by the customs authorities of a Member State of the Community or of Serbia if the products concerned can be considered as products originating in the Community, Serbia or in one of the other countries or territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol.

5 The customs authorities issuing movement certificates EUR.1 shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Protocol. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate. They shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions.

6 The date of issue of the movement certificate EUR.1 shall be indicated in Box 11 of the certificate.

7 A movement certificate EUR.1 shall be issued by the customs authorities and made available to the exporter as soon as actual exportation has been effected or ensured.

1 Notwithstanding Article 17(7), a movement certificate EUR.1 may exceptionally be issued after exportation of the products to which it relates if: (a) it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances; or (b) it is demonstrated to the satisfaction of the customs authorities that a movement certificate EUR.1 was issued but was not accepted at importation for technical reasons.

2 For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the movement certificate EUR.1 relates, and state the reasons for his request.

3 The customs authorities may issue a movement certificate EUR.1 retrospectively only after verifying that the information supplied in the exporter’s application agrees with that in the corresponding file.

4 Movement certificates EUR.1 issued retrospectively must be endorsed with the following phrase in English: ‘ISSUED RETROSPECTIVELY’.

5 The endorsement referred to in paragraph 4 shall be inserted in the ‘Remarks’ box of the movement certificate EUR.1.

1 In the event of theft, loss or destruction of a movement certificate EUR.1, the exporter may apply to the customs authorities which issued it for a duplicate made out on the basis of the export documents in their possession.

2 The duplicate issued in this way must be endorsed with the following word in English: ‘DUPLICATE’.

3 The endorsement referred to in paragraph 2 shall be inserted in the ‘Remarks’ box of the duplicate movement certificate EUR.1.

4 The duplicate, which must bear the date of issue of the original movement certificate EUR.1, shall take effect as from that date.

When originating products are placed under the control of a customs office in the Community or in Serbia, it shall be possible to replace the original proof of origin by one or more movement certificates EUR.1 for the purpose of sending all or some of these products elsewhere within the Community or Serbia. The replacement movement certificate(s) EUR.1 shall be issued by the customs office under whose control the products are placed.

1 Where considerable cost or material difficulties arise in keeping separate stocks of originating and non-originating materials which are identical and interchangeable, the customs authorities may, at the written request of those concerned, authorise the so-called ‘accounting segregation’ method to be used for managing such stocks.

2 This method must be able to ensure that, for a specific reference-period, the number of products obtained which could be considered as ‘originating’ is the same as that which would have been obtained if there had been physical segregation of the stocks.

3 The customs authorities may grant such authorisation, subject to any conditions deemed appropriate.

4 This method is recorded and applied on the basis of the general accounting principles applicable in the country where the product was manufactured.

5 The beneficiary of this facilitation may issue or apply for proofs of origin, as the case may be, for the quantity of products which may be considered as originating. At the request of the customs authorities, the beneficiary shall provide a statement of how the quantities have been managed.

6 The customs authorities shall monitor the use made of the authorisation and may withdraw it at any time whenever the beneficiary makes improper use of the authorisation in any manner whatsoever or fails to fulfil any of the other conditions laid down in this Protocol.

1 An invoice declaration as referred to in Article 16(1)(b) may be made out: (a) by an approved exporter within the meaning of Article 23, or (b) by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed EUR 6000.

2 An invoice declaration may be made out if the products concerned can be considered as products originating in the Community, in Serbia or in one of the other countries or territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol.

3 The exporter making out an invoice declaration shall be prepared to submit at any time, at the request of the customs authorities of the exporting country, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Protocol.

4 An invoice declaration shall be made out by the exporter by typing, stamping or printing on the invoice, the delivery note or another commercial document, the declaration, the text of which appears in Annex IV, using one of the linguistic versions set out in that Annex and in accordance with the provisions of the domestic law of the exporting country. If the declaration is hand-written, it shall be written in ink in printed characters.

5 Invoice declarations shall bear the original signature of the exporter in manuscript. However, an approved exporter within the meaning of Article 23 shall not be required to sign such declarations provided that he gives the customs authorities of the exporting country a written undertaking that he accepts full responsibility for any invoice declaration which identifies him as if it had been signed in manuscript by him.

6 An invoice declaration may be made out by the exporter when the products to which it relates are exported, or after exportation on condition that it is presented in the importing country no longer than two years after the importation of the products to which it relates.

1 The customs authorities of the exporting country may authorise any exporter, hereinafter referred to as ‘approved exporter’, who makes frequent shipments of products under this Agreement to make out invoice declarations irrespective of the value of the products concerned. An exporter seeking such authorisation must offer to the satisfaction of the customs authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Protocol.

2 The customs authorities may grant the status of approved exporter subject to any conditions which they consider appropriate.

3 The customs authorities shall grant to the approved exporter a customs authorisation number which shall appear on the invoice declaration.

4 The customs authorities shall monitor the use of the authorisation by the approved exporter.

5 The customs authorities may withdraw the authorisation at any time. They shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, no longer fulfils the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorisation.

1 A proof of origin shall be valid for four months from the date of issue in the exporting country, and must be submitted within the said period to the customs authorities of the importing country.

2 Proofs of origin which are submitted to the customs authorities of the importing country after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to exceptional circumstances.

3 In other cases of belated presentation, the customs authorities of the importing country may accept the proofs of origin where the products have been submitted before the said final date.

Proofs of origin shall be submitted to the customs authorities of the importing country in accordance with the procedures applicable in that country. The said authorities may require a translation of a proof of origin and may also require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of this Agreement.

Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing country, dismantled or non-assembled products within the meaning of General Rule 2(a) of the Harmonised System falling within Sections XVI and XVII or headings 7308 and 9406 of the Harmonised System are imported by instalments, a single proof of origin for such products shall be submitted to the customs authorities upon importation of the first instalment.

1 Products sent as small packages from private persons to private persons or forming part of travellers’ personal luggage shall be admitted as originating products without requiring the submission of a proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Protocol and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration can be made on the customs declaration CN22/CN23 or on a sheet of paper annexed to that document.

2 Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if it is evident from the nature and quantity of the products that no commercial purpose is in view.

3 Furthermore, the total value of these products shall not exceed EUR 500 in the case of small packages or EUR 1200 in the case of products forming part of travellers’ personal luggage.

The documents referred to in Articles 17(3) and 22(3) used for the purpose of proving that products covered by a movement certificate EUR.1 or an invoice declaration can be considered as products originating in the Community, in Serbia or in one of the other countries or territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol may consist, inter alia, of the following: (a) direct evidence of the processes carried out by the exporter or supplier to obtain the goods concerned, contained for example in his accounts or internal book-keeping; (b) documents proving the originating status of materials used, issued or made out in the Community or in Serbia where these documents are used in accordance with domestic law; (c) documents proving the working or processing of materials in the Community or in Serbia, issued or made out in the Community or in Serbia, where these documents are used in accordance with domestic law; (d) movement certificates EUR.1 or invoice declarations proving the originating status of materials used, issued or made out in the Community or in Serbia in accordance with this Protocol, or in one of the other countries or territories referred to in Articles 3 and 4, in accordance with rules of origin which are identical to the rules in this Protocol; (e) appropriate evidence concerning working or processing undergone outside the Community or Serbia by application of Article 12, proving that the requirements of that Article have been satisfied.

1 The exporter applying for the issue of a movement certificate EUR.1 shall keep for at least three years the documents referred to in Article 17(3).

2 The exporter making out an invoice declaration shall keep for at least three years a copy of this invoice declaration as well as the documents referred to in Article 22(3).

3 The customs authorities of the exporting country issuing a movement certificate EUR.1 shall keep for at least three years the application form referred to in Article 17(2).

4 The customs authorities of the importing country shall keep for at least three years the movement certificates EUR.1 and the invoice declarations submitted to them.

1 The discovery of slight discrepancies between the statements made in the proof of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the proof of origin null and void if it is duly established that this document does correspond to the products submitted.

2 Obvious formal errors such as typing errors on a proof of origin should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in the document.

1 For the application of the provisions of Article 22(1)(b) and Article 27(3) in cases where products are invoiced in a currency other than euro, amounts in the national currencies of the Member States of the Community, of Serbia and of the other countries or territories referred to in Articles 3 and 4 equivalent to the amounts expressed in euro shall be fixed annually by each of the countries concerned.

2 A consignment shall benefit from the provisions of Article 22(1)(b) or Article 27(3) by reference to the currency in which the invoice is drawn up, according to the amount fixed by the country concerned.

3 The amounts to be used in any given national currency shall be the equivalent in that currency of the amounts expressed in euro as at the first working day of October. The amounts shall be communicated to the European Commission by 15 October and shall apply from 1 January the following year. The European Commission shall notify all countries concerned of the relevant amounts.

4 A country may round up or down the amount resulting from the conversion into its national currency of an amount expressed in euro. The rounded-off amount may not differ from the amount resulting from the conversion by more than 5 %. A country may retain unchanged its national currency equivalent of an amount expressed in euro if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding-off, results in an increase of less than 15 % in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion would result in a decrease in that equivalent value.

5 The amounts expressed in euro shall be reviewed by the Stabilisation and Association Committee at the request of the Community or of Serbia. When carrying out this review, the Stabilisation and Association Committee shall consider the desirability of preserving the effects of the limits concerned in real terms. For this purpose, it may decide to modify the amounts expressed in euro.

1 The customs authorities of the Member States of the Community and of Serbia shall provide each other, through the European Commission, with specimen impressions of stamps used in their customs offices for the issue of movement certificates EUR.1 and with the addresses of the customs authorities responsible for verifying those certificates and invoice declarations.

2 In order to ensure the proper application of this Protocol, the Community and Serbia shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1 or the invoice declarations and the correctness of the information given in these documents.

1 Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing country have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Protocol.

2 For the purposes of implementing the provisions of paragraph 1, the customs authorities of the importing country shall return the movement certificate EUR.1 and the invoice, if it has been submitted, the invoice declaration, or a copy of these documents, to the customs authorities of the exporting country giving, where appropriate, the reasons for the enquiry. Any documents and information obtained suggesting that the information given on the proof of origin is incorrect shall be forwarded in support of the request for verification.

3 The verification shall be carried out by the customs authorities of the exporting country. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate.

4 If the customs authorities of the importing country decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary.

5 The customs authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in the Community, in Serbia or in one of the other countries or territories referred to in Articles 3 and 4 and fulfil the other requirements of this Protocol.

6 If in cases of reasonable doubt there is no reply within 10 months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences.

Where disputes arise in relation to the verification procedures of Article 33 which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification or where they raise a question as to the interpretation of this Protocol, they shall be submitted to the Stabilisation and Association Committee. In all cases the settlement of disputes between the importer and the customs authorities of the importing country shall be under the legislation of the said country.

Penalties shall be imposed on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining a preferential treatment for products.

1 The Community and Serbia shall take all necessary steps to ensure that products traded under cover of a proof of origin which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.

2 By means of an exemption to the provisions contained in paragraph 1, when products originating in the Community or in Serbia are imported into a free zone under cover of a proof of origin and undergo treatment or processing, the authorities concerned shall issue a new movement certificate EUR.1 at the exporter’s request, if the treatment or processing undergone is in conformity with the provisions of this Protocol.

1 The term ‘Community’ used in Article 2 does not cover Ceuta or Melilla.

2 Products originating in Serbia, when imported into Ceuta and Melilla, shall enjoy in all respects the same customs regime as that which is applied to products originating in the customs territory of the Community under Protocol 2 of the Act of Accession of the Kingdom of Spain and the Portuguese Republic to the European Communities. Serbia shall grant to imports of products covered by this Agreement and originating in Ceuta and Melilla the same customs regime as that which is granted to products imported from and originating in the Community.

3 For the purpose of the application of paragraph 2 concerning products originating in Ceuta and Melilla, this Protocol shall apply mutatis mutandis subject to the special conditions set out in Article 38.

1 Providing they have been transported directly in accordance with the provisions of Article 13, the following shall be considered as: 1.1. products originating in Ceuta and Melilla: (a) products wholly obtained in Ceuta and Melilla; (b) products obtained in Ceuta and Melilla in the manufacture of which products other than those referred to in point (a) are used, provided that: (i) the said products have undergone sufficient working or processing within the meaning of Article 6; or that (ii) those products are originating in Serbia or in the Community, provided that they have been submitted to working or processing which goes beyond the operations referred to in Article 7; 1.2. products originating in Serbia: (a) products wholly obtained in Serbia; (b) products obtained in Serbia, in the manufacture of which products other than those referred to in point (a) are used, provided that: (i) the said products have undergone sufficient working or processing within the meaning of Article 6; or that (ii) those products are originating in Ceuta and Melilla or in the Community, provided that they have been submitted to working or processing which goes beyond the operations referred to in Article 7.

2 Ceuta and Melilla shall be considered as a single territory.

3 The exporter or his authorised representative shall enter ‘Serbia’ and ‘Ceuta and Melilla’ in Box 2 of movement certificates EUR. 1 or on invoice declarations. n addition, in the case of products originating in Ceuta and Melilla, this shall be indicated in Box 4 of movement certificates EUR.1 or on invoice declarations.

4 The Spanish customs authorities shall be responsible for the application of this Protocol in Ceuta and Melilla.

The Stabilisation and Association Council may decide to amend the provisions of this Protocol.

The aim of this Protocol is to promote cooperation between the Parties on land transport, and in particular transit traffic, and to ensure for this purpose that transport between and through the territories of the Parties is developed in a coordinated manner by means of the complete and interdependent application of all the provisions of this Protocol.

1 Cooperation shall cover land transport, and in particular road, rail and combined transport, and shall include the relevant infrastructure.

2 In this connection, the scope of this Protocol shall cover in particular: transport infrastructure in the territory of one or other Party to the extent necessary to achieve the objective of this Protocol, market access, on a reciprocal basis, in the field of road transport, essential legal and administrative supporting measures including commercial, taxation, social and technical measures, cooperation in developing a transport system which meets environmental needs, a regular exchange of information on the development of the transport policies of the Parties, with particular regard to transport infrastructure.

For the purposes of this Protocol, the following definitions shall apply: (a)Community transit trafficthe carriage, by a carrier established in the Community, of goods in transit through the territory of Serbia ‘en route’ to or from a Member State of the Community;(b)Serbian transit trafficthe carriage, by a carrier established in Serbia, of goods in transit from Serbia through Community territory and destined for a third country or of goods from a third country destined for Serbia;(c)combined transport the transport of goods where the lorry, trailer, semi-trailer, with or without tractor unit, swap body or container of 20 feet or more, uses the road on the initial or final leg of the journey and on the other leg, rail or inland waterway or maritime services where this section exceeds 100 kilometres as the crow flies and make the initial or final road transport leg of the journey; between the point where the goods are loaded and the nearest suitable rail loading station for the initial leg, and between the nearest suitable rail unloading station and the point where the goods are unloaded for the final leg, or within a radius not exceeding 150 km as the crow flies from the inland waterway port or seaport of loading or unloading.

The Parties hereby agree to adopt mutually coordinated measures to develop a multimodal transport infrastructure network as a vital means of solving the problems affecting the carriage of goods through Serbia in particular on the Pan-European Corridors VII and X and the rail connection from Belgrade to Vrbnica (border with Montenegro) which form part of the Core Regional Transport Network.

The development of a multimodal regional transport network on the territory of Serbia which serves the needs of Serbia and the South-Eastern European region covering the main road and rail routes, inland waterways, inland ports, ports, airports and other relevant modes of the network is of particular interest to the Community and Serbia. This network was defined in the Memorandum of Understanding for developing a Core Transport Infrastructure Network for South East Europe which was signed by ministers from the region, and the European Commission, in June 2004. The development of the network and the selection of priorities is being carried out by a Steering Committee comprised of representatives of each of the signatories.

1 The Community may contribute financially, under Article 116 of this Agreement, to the necessary infrastructure work referred to in Article 5. This financial contribution may take the form of credit from the European Investment Bank and any other form of financing which can provide further additional resources.

2 In order to speed up the work the European Commission will endeavour, as far as possible, to encourage the use of additional resources such as investment by certain Member States on a bilateral basis or from public or private funds.

The Parties shall adopt the mutually coordinated measures necessary for the development and promotion of rail and combined transport as a mean of ensuring that in the future a major proportion of their bilateral and transit transport through Serbia is performed under more environmentally-friendly conditions.

As part of the modernisation of the railways of Serbia, the necessary steps shall be taken to adapt the system for combined transport, with particular regard to the development or building of terminals, tunnel gauges and capacity, which require substantial investment.

The Parties shall take all the steps necessary to encourage the development of combined transport. The purpose of such measures shall be: to encourage the use of combined transport by users and consignors, to make combined transport competitive with road transport, in particular through the financial support of the Community or Serbia in the context of their respective legislation, to encourage the use of combined transport over long distances and to promote, in particular the use of swap bodies, containers and unaccompanied transport in general, to improve the speed and reliability of combined transport and in particular: to increase the frequency of convoys in accordance with the needs of consignors and users, to reduce the waiting time at terminals and increase their productivity, to remove in an appropriate manner, all obstacles from the approach routes so as to improve access to combined transport, to harmonise, where necessary, the weights, dimensions and technical characteristics of specialised equipment, in particular so as to ensure the necessary compatibility of gauges, and to take coordinated action to order and to put into service such equipment as is required by the level of traffic, and, in general, to take any other appropriate action.

In connection with the respective powers of the States and the railways, the Parties shall, in respect of both passenger and goods transport, recommend that their railways: step up cooperation, whether bilateral, multilateral or within international railway organisations, in all fields, with particular regard to the improvement of the quality and the safety of transport services, try to establish in common a system of organising the railways so as to encourage consignors to send freight by rail rather than road, in particular for transit purposes, on a basis of fair competition and while leaving the user freedom of choice in this matter, prepare the participation of Serbia in the implementation and future evolution of the Community acquis on the development of the railways.

1 With regard to mutual access to transport markets, the Parties agree, initially and without prejudice to paragraph 2, to maintain the regime resulting from bilateral Agreements or other existing international bilateral instruments concluded between each Member State of the Community and Serbia or, where there are no such Agreements or instruments, arising from the de facto situation in 1991. However, whilst awaiting the conclusion of Agreements between the Community and Serbia on access to the road transport market, as provided for in Article 12, and on road taxation, as provided for in Article 13(2), Serbia shall cooperate with the Member States of the Community to amend these bilateral Agreements to adapt them to this Protocol.

2 The Parties hereby agree to grant unrestricted access to Community transit traffic through Serbia and to Serbian transit traffic through the Community with effect from the date of entry into force of this Agreement.

3 If, as a result of the rights granted under paragraph 2, transit traffic by Community hauliers increases to such a degree as to cause or threaten to cause serious harm to road infrastructure and/or traffic fluidity on the axes mentioned in Article 5, and under the same circumstances problems arise on Community territory close to the borders of Serbia, the matter shall be submitted to the Stabilisation and Association Council in accordance with Article 121 of this Agreement. The Parties may propose exceptional temporary, non-discriminatory measures as are necessary to limit or mitigate such harm.

4 If the Community establishes rules aiming to reduce pollution caused by heavy goods vehicles registered in the European Union and to improve traffic safety, a similar regime shall apply to heavy goods vehicles registered in Serbia that wish to circulate through the Community territory. The Stabilisation and Association Council shall decide on the necessary modalities.

5 The Parties shall refrain from taking any unilateral action that might lead to discrimination between Community carriers or vehicles and carriers or vehicles from Serbia. Each Contracting Party shall take all steps necessary to facilitate road transport to or through the territory of the other Contracting Party.

The Parties shall, as a matter of priority, undertake to work together to seek, each of them subject to their internal rules: courses of action likely to favour the development of a transport system which meets the needs of the Parties, and which is compatible, on the one hand, with the completion of the internal Community market and the implementation of the common transport policy and, on the other hand, with economic and transport policies of Serbia, a definitive system for regulating future road transport market access between Parties on the basis of reciprocity.

1 The Parties accept that the taxation of road vehicles, tolls and other charges on either side must be non-discriminatory.

2 The Parties shall enter into negotiations with a view to reaching an agreement on road taxation, as soon as possible, on the basis of the rules adopted by the Community on this matter. The purpose of this Agreement shall be, in particular, to ensure the free flow of trans-frontier traffic, to progressively eliminate differences between the road taxation systems applied by the Parties and to eliminate distortions of competition arising from such differences.

3 Pending the conclusion of the negotiations mentioned in paragraph 2 of this Article, the Parties will eliminate discrimination between hauliers of the Community and Serbia when levying taxes and charges on the circulation and/or possession of heavy goods vehicles as well as taxes or charges levied on transport operations in the territory of the Parties. Serbia undertakes to notify the European Commission, if so requested, the amount of taxes, tolls and charges which they apply, as well as the methods of calculating them.

4 Until the conclusion of the Agreement mentioned in paragraph 2 and in Article 12 any change proposed after the entry into force of this Agreement to fiscal charges, tolls or other charges, including the systems for their collection which may be applied to Community traffic in transit through Serbia will be subject to a prior consultation procedure.

1 Serbia accepts that road vehicles complying with Community standards on weights and dimensions may circulate freely and without hindrance in this respect on the routes covered by Article 5. During six months after the entry into force of this Agreement, road vehicles which do not comply with existing standards of Serbia may be subject to a special non-discriminatory charge which reflects the damage caused by additional axle weight.

2 Serbia will endeavour to harmonise their existing regulations and standards for road construction with the legislation prevailing in the Community by the end of the fifth year after the entry into force of this Agreement and will make major efforts for improvement of the existing routes covered by Article 5 to those new regulations and standards within the proposed time, in accordance with their financial possibilities.

1 In order to protect the environment, the Parties shall endeavour to introduce standards on gaseous and particulate emissions and noise levels for heavy goods vehicles, which ensure a high level of protection.

2 In order to provide the industry with clear information and to encourage coordinated research, programming and production, exceptional national standards in this field shall be avoided.

3 Vehicles which comply with standards laid down by international Agreements also relating to environment may operate without further restrictions in the territory of the Parties.

4 For the purpose of introducing new standards, the Parties shall work together to achieve the abovementioned objectives.

1 Serbia shall harmonise their legislations on the training of road haulage personnel, particularly with respect to the carriage of dangerous goods, to the Community standards.

2 Serbia as a contracting party to the European Agreement concerning the work of crews of vehicles engaged in international road transport (ERTA), and the Community will coordinate to the maximum extent possible their policies concerning driving time, interruptions and rest periods for drivers and crew composition, in respect of the future development of the social legislation in this area.

3 The Parties shall cooperate with regard to implementation and enforcement of the social legislation in the field of road transport.

4 The Parties shall ensure the equivalence of their respective laws on the admission to the occupation of road haulage operator, with a view to their mutual recognition.

1 The Parties shall pool their experience and endeavour to harmonise their legislation so as to improve the flow of traffic during peak periods (weekends, public holidays, the tourist season).

2 In general, the Parties shall encourage the introduction, development and coordination of a road traffic information system.

3 They shall endeavour to harmonise their legislation on the carriage of perishable goods, live animals and dangerous substances.

4 The Parties shall also endeavour to harmonise the technical assistance to be provided to drivers, the dissemination of essential information on traffic and other matters of concern to tourists, and emergency services including ambulance services.

1 Serbia shall harmonise their legislation on road safety, particularly with regard to the transport of dangerous goods, to that of the Community by the end of the third year after the entry into force of this Agreement.

2 Serbia as a contracting Party of the European Agreement concerning the International Carriage of Dangerous Goods by Road (ADR) and the Community will coordinate to the maximum extent possible their policies concerning the carriage of dangerous goods.

3 The Parties shall cooperate with regard to implementation and enforcement of road safety legislation, particularly on driving licences and measures to reduce road accidents.

1 The Parties agree to simplify the flow of goods by rail and road, whether bilateral or in transit.

2 The Parties agree to begin negotiations with a view to concluding an Agreement on the facilitation of controls and formalities relating to the carriage of goods.

3 The Parties agree, to the extent necessary, to take joint action on, and to encourage, the adoption of further simplification measures.

If one of the Parties concludes, on the basis of experience in the application of this Protocol, that other measures which do not fall within the scope of this Protocol are in the interest of a coordinated European transport policy and, in particular, may help to solve the problem of transit traffic, it shall make suggestions in this respect to the other Party.

1 Cooperation between the Parties shall be carried out within the framework of a special Subcommittee to be created in accordance with Article 123 of this Agreement.

2 This Subcommittee in particular: (a) shall draw up plans for cooperation on rail and combined transport, transport research and the environment; (b) shall analyse the application of the decisions contained in the present Protocol and shall recommend to the Stabilisation and Association Committee appropriate solutions for any possible problems which might arise; (c) shall, two years after the entry into force of this Agreement, undertake an assessment of the situation as regards infrastructure improvement and the implications of free transit; (d) shall coordinate the monitoring, forecasting and other statistical work relating to international transport and in particular transit traffic.

For the purposes of this Protocol: (a) ‘customs legislation’ shall mean any legal or regulatory provisions applicable in the territories of the Parties, governing the import, export and transit of goods and their placing under any other customs regime or procedure, including measures of prohibition, restriction and control; (b) ‘applicant authority’ shall mean a competent administrative authority which has been designated by a Contracting Party for this purpose and which makes a request for assistance on the basis of this Protocol; (c) ‘requested authority’ shall mean a competent administrative authority which has been designated by a Contracting Party for this purpose and which receives a request for assistance on the basis of this Protocol; (d) ‘personal data’ shall mean all information relating to an identified or identifiable individual; (e) ‘operation in breach of customs legislation’ shall mean any violation or attempted violation of customs legislation.

1 The Parties shall assist each other, in the areas within their competence, in the manner and under the conditions laid down in this Protocol, to ensure the correct application of the customs legislation, in particular by preventing, investigating and combating operations in breach of that legislation.

2 Assistance in customs matters, as provided for in this Protocol, shall apply to any administrative authority of the Parties which is competent for the application of this Protocol. It shall not prejudice the rules governing mutual assistance in criminal matters. Nor shall it cover information obtained under powers exercised at the request of a judicial authority, except where communication of such information is authorised by that authority.

3 Assistance to recover duties, taxes or fines is not covered by this Protocol.

1 At the request of the applicant authority, the requested authority shall provide it with all relevant information which may enable it to ensure that customs legislation is correctly applied, including information regarding activities noted or planned which are or could be operations in breach of customs legislation.

2 At the request of the applicant authority, the requested authority shall inform it: (a) whether goods exported from the territory of one of the Parties have been properly imported into the territory of the other Contracting Party, specifying, where appropriate, the customs procedure applied to the goods; (b) whether goods imported into the territory of one of the Parties have been properly exported from the territory of the other Party, specifying, where appropriate, the customs procedure applied to the goods.

3 At the request of the applicant authority, the requested authority shall, within the framework of its legal or regulatory provisions, take the necessary steps to ensure special surveillance of: (a) natural or legal persons in respect of whom there are reasonable grounds for believing that they are or have been involved in operations in breach of customs legislation; (b) places where stocks of goods have been or may be assembled in such a way that there are reasonable grounds for believing that these goods are intended to be used in operations in breach of customs legislation; (c) goods that are or may be transported in such a way that there are reasonable grounds for believing that they are intended to be used in operations in breach of customs legislation; (d) means of transport that are or may be used in such a way that there are reasonable grounds for believing that they are intended to be used in operations in breach of customs legislation.

The Parties shall assist each other, at their own initiative and in accordance with their legal or regulatory provisions, if they consider that to be necessary for the correct application of customs legislation, particularly by providing information obtained pertaining to: (a) activities which are or appear to be operations in breach of customs legislation and which may be of interest to the other Party; (b) new means or methods employed in carrying out operations in breach of customs legislation; (c) goods known to be subject to operations in breach of customs legislation; (d) natural or legal persons in respect of whom there are reasonable grounds for believing that they are or have been involved in operations in breach of customs legislation; (e) means of transport in respect of which there are reasonable grounds for believing that they have been, are, or may be used in operations in breach of customs legislation.

At the request of the applicant authority, the requested authority shall, in accordance with legal or regulatory provisions applicable to the latter, take all necessary measures in order: (a) to deliver any documents; or (b) to notify any decisions, emanating from the applicant authority and falling within the scope of this Protocol, to an addressee residing or established in the territory of the requested authority. Requests for delivery of documents or notification of decisions shall be made in writing in an official language of the requested authority or in a language acceptable to that authority.

1 Requests pursuant to this Protocol shall be made in writing. They shall be accompanied by the documents necessary to enable compliance with the request. When required because of the urgency of the situation, oral requests may be accepted, but must be confirmed in writing immediately.

2 Requests pursuant to paragraph 1 shall include the following information: (a) the applicant authority; (b) the measure requested; (c) the object of and the reason for the request; (d) the legal or regulatory provisions and other legal elements involved; (e) indications as exact and comprehensive as possible on the natural or legal persons who are the target of the investigations; (f) a summary of the relevant facts and of the enquiries already carried out.

3 Requests shall be submitted in an official language of the requested authority or in a language acceptable to that authority. This requirement shall not apply to any documents that accompany the request under paragraph 1.

4 If a request does not meet the formal requirements set out above, its correction or completion may be requested; in the meantime precautionary measures may be ordered.

1 In order to comply with a request for assistance, the requested authority shall proceed, within the limits of its competence and available resources, as though it were acting on its own account or at the request of other authorities of that same Party, by supplying information already possessed, by carrying out appropriate enquiries or by arranging for them to be carried out. This provision shall also apply to any other authority to which the request has been addressed by the requested authority when the latter cannot act on its own.

2 Requests for assistance shall be executed in accordance with the legal or regulatory provisions of the requested Party.

3 Duly authorised officials of a Party may, with the agreement of the other Contracting Party involved and subject to the conditions laid down by the latter, be present to obtain in the offices of the requested authority or any other concerned authority in accordance with paragraph 1, information relating to activities that are or may be operations in breach of customs legislation which the applicant authority needs for the purposes of this Protocol.

4 Duly authorised officials of a Party involved may, with the agreement of the other Party involved and subject to the conditions laid down by the latter, be present at enquiries carried out in the latter’s territory.

1 The requested authority shall communicate results of enquiries to the applicant authority in writing together with relevant documents, certified copies or other items.

2 This information may be in computerised form.

3 Original documents shall be transmitted only upon request in cases where certified copies would be insufficient. These originals shall be returned at the earliest opportunity.

1 Assistance may be refused or may be subject to the satisfaction of certain conditions or requirements, in cases where a Party is of the opinion that assistance under this Protocol would: (a) be likely to prejudice the sovereignty of Serbia or that of a Member State which has been requested to provide assistance under this Protocol; or (b) be likely to prejudice public policy, security or other essential interests, in particular in the cases referred to under Article 10(2); or (c) violate an industrial, commercial or professional secret.

2 Assistance may be postponed by the requested authority on the ground that it will interfere with an ongoing investigation, prosecution or proceeding. In such a case, the requested authority shall consult with the applicant authority to determine if assistance can be given subject to such terms or conditions as the requested authority may require.

3 Where the applicant authority seeks assistance which it would itself be unable to provide if so requested, it shall draw attention to that fact in its request. It shall then be for the requested authority to decide how to respond to such a request.

4 For the cases referred to in paragraphs 1 and 2, the decision of the requested authority and the reasons therefor must be communicated to the applicant authority without delay.

1 Any information communicated in whatsoever form pursuant to this Protocol shall be of a confidential or restricted nature, depending on the rules applicable in each of the Parties. It shall be covered by the obligation of official secrecy and shall enjoy the protection extended to similar information under the relevant laws of the Party that received it and the corresponding provisions applying to the Community authorities.

2 Personal data may be exchanged only where the Party which may receive them undertakes to protect such data in at least an equivalent way to the one applicable to that particular case in the Party that may supply them. To that end, the Parties shall communicate to each other information on their applicable rules, including, where appropriate, legal provisions in force in the Member States of the Community.

3 The use, in judicial or administrative proceedings instituted in respect of operations in breach of customs legislation, of information obtained under this Protocol, is considered to be for the purposes of this Protocol. Therefore, the Parties may, in their records of evidence, reports and testimonies and in proceedings and charges brought before the courts, use as evidence information obtained and documents consulted in accordance with the provisions of this Protocol. The competent authority which supplied that information or gave access to those documents shall be notified of such use.

4 Information obtained shall be used solely for the purposes of this Protocol. Where one of the Parties wishes to use such information for other purposes, it shall obtain the prior written consent of the authority which provided the information. Such use shall then be subject to any restrictions laid down by that authority.

An official of a requested authority may be authorised to appear, within the limitations of the authorisation granted, as an expert or witness in judicial or administrative proceedings regarding the matters covered by this Protocol, and produce such objects, documents or certified copies thereof, as may be needed for the proceedings. The request for appearance must indicate specifically before which judicial or administrative authority the official will have to appear, on what matters and by virtue of what title or qualification the official will be questioned.

The Parties shall waive all claims on each other for the reimbursement of expenses incurred pursuant to this Protocol, except, as appropriate, for expenses to experts and witnesses, and those to interpreters and translators who are not public service employees.

1 The implementation of this Protocol shall be entrusted on the one hand to the customs authorities of Serbia and on the other hand to the competent services of the European Commission and the customs authorities of the Member States as appropriate. They shall decide on all practical measures and arrangements necessary for its application, taking into consideration the rules in force in particular in the field of data protection. They may recommend to the competent bodies amendments which they consider should be made to this Protocol.

2 The Parties shall consult each other and subsequently keep each other informed of the detailed rules of implementation which are adopted in accordance with the provisions of this Protocol.

1 Taking into account the respective competencies of the Community and the Member States, the provisions of this Protocol shall: (a) not affect the obligations of the Parties under any other international Agreement or Convention; (b) be deemed complementary to Agreements on mutual assistance which have been or may be concluded between individual Member States and Serbia; and shall (c) not affect the Community provisions governing the communication between the competent services of the European Commission and the customs authorities of the Member States of any information obtained under this Protocol which could be of interest to the Community.

2 Notwithstanding the provisions of paragraph 1, the provisions of this Protocol shall take precedence over the provisions of any bilateral Agreement on mutual assistance which has been or may be concluded between individual Member States and Serbia insofar as the provisions of the latter are incompatible with those of this Protocol.

3 In respect of questions relating to the applicability of this Protocol, the Parties shall consult each other to resolve the matter in the framework of the Stabilisation and Association Committee set up under Article 119 of this Agreement.

The objective of this Protocol is to avoid and settle disputes between the Parties with a view to arriving at mutually acceptable solutions.

The provisions of this Protocol shall only apply with respect to any differences concerning the interpretation and application of the following provisions, including where a Party considers that a measure adopted by the other Party, or a failure of the other Party to act, is in breach of its obligations under these provisions: (a) Title IV (Free movement of goods), except Articles 33, 40, 41, paragraphs 1, 4 and 5 (insofar as these concern measures adopted under paragraph 1 of Article 41) and Article 47; (b) Title V (Movement of workers, establishment, supply of services, capital): Chapter II Establishment (Articles 52 to 56 and 58), Chapter III Supply of services (Articles 59, 60 and 61, paragraphs 2 and 3), Chapter IV Current payments and movement of capital (Article 62 and Article 63 except paragraph 3, second sentence), Chapter V General provisions (Articles 65 to 71); (c) Title VI (Approximation of laws, law enforcement and competition rules): Articles 75, paragraph 2 (intellectual, industrial and commercial property) and 76, paragraph 1, the first subparagraph of paragraph 2 and 3 to 6 (public procurement).

1 Where the Parties have failed to resolve the dispute, the complaining Party may under the conditions of Article 130 of this Agreement, submit a request in writing for the establishment of an arbitration panel to the Party complained against as well as to the Stabilisation and Association Committee.

2 The complaining Party shall state in its request the subject-matter of the dispute and, as the case may be, the measure adopted by the other Party, or the failure to act, which it considers to be in breach of the provisions referred to in Article 2.

1 An arbitration panel shall be composed of three arbitrators.

2 Within 10 days of the date of the submission of the request for the establishment of an arbitration panel to the Stabilisation and Association Committee, the Parties shall consult in order to reach an agreement on the composition of the arbitration panel.

3 In the event that the Parties are unable to agree on its composition within the time frame laid down in paragraph 2, either Party may request the chairperson of the Stabilisation and Association Committee, or her or his delegate, to select all three members by lot from the list established under Article 15, one among the individuals proposed by the complaining Party, one among the individuals proposed by the Party complained against and one among the arbitrators selected by the Parties to act as chairperson. In case the Parties agree on one or more of the members of the arbitration panel, any remaining members shall be appointed in accordance with the same procedure.

4 The selection of the arbitrators by the chairperson of the Stabilisation and Association Committee, or her or his delegate, shall be done in the presence of a representative of each Party.

5 The date of establishment of the arbitration panel shall be the date on which the chairperson of the panel is informed of the appointment in common agreement between the Parties of the three arbitrators or, as the case may be, the date of their selection in accordance with paragraph 3.

6 Where a Party considers that an arbitrator does not comply with the requirements of the Code of Conduct referred to in Article 18, the Parties shall consult and, if they so agree, replace the arbitrator and select a replacement pursuant to paragraph 7. If the Parties fail to agree on the need to replace an arbitrator, the matter shall be referred to the chairperson of the arbitration panel, whose decision will be final. Where a Party considers that the chairperson of the arbitration panel does not comply with the Code of Conduct referred to in Article 18, the matter shall be referred to one of the remaining members of the pool of arbitrators selected to act as chairperson, her or his name being drawn by lot by the chairperson of the Stabilisation and Association Committee, or her or his delegate, in the presence of a representative of each Party, unless otherwise agreed between the Parties.

7 If an arbitrator is unable to participate in the proceeding, withdraws or is replaced pursuant to paragraph 6, a replacement shall be selected within five days in accordance with the selection procedures followed to select the original arbitrator. The panel proceedings will be suspended for the period taken to carry out this procedure.

1 The arbitration panel shall notify its ruling to the Parties and to the Stabilisation and Association Committee within 90 days from the date of the establishment of the arbitration panel. Where it considers that this deadline cannot be met, the chairperson of the panel must notify the Parties and the Stabilisation and Association Committee in writing, stating the reasons for the delay. Under no circumstances should the ruling be issued later than 120 days from the date of the establishment of the panel.

2 In cases of urgency, including those involving perishable goods, the arbitration panel shall make every effort to issue its ruling within 45 days from the date of the establishment of the panel. Under no circumstance should it take longer than 100 days from the date of the establishment of the panel. The arbitration panel may give a preliminary ruling within 10 days of its establishment on whether it deems the case to be urgent.

3 The ruling shall set out the findings of fact, the applicability of the relevant provisions of this Agreement and the basic rationale behind any findings and conclusions that it makes. The ruling may contain recommendations on the measures to be adopted for compliance with it.

4 The complaining Party may withdraw its complaint by written notification to the chairperson of the arbitration panel, the Party complained against and the Stabilisation and Association Committee, at any time before the ruling is notified to the Parties and the Stabilisation and Association Committee. Such withdrawal is without prejudice to the complaining Party’s right to introduce a new complaint regarding the same measure at a later point in time.

5 The arbitration panel shall, at the request of both Parties, suspend its work at any time for a period not exceeding 12 months. Once the period of 12 months has been exceeded, the authority for the establishment of the panel will lapse, without prejudice to the right of the complaining Party to request at a later stage the establishment of a panel on the same measure.

Each Party shall take any measure necessary to comply with the arbitration panel ruling, and the Parties will endeavour to agree on the reasonable period of time to comply with the ruling.

1 No later than 30 days after the notification of the arbitration panel ruling to the Parties, the Party complained against shall notify the complaining Party of the time it will require for compliance (hereinafter referred to as ‘reasonable period of time’). Both parties shall endeavour to agree on the reasonable period of time.

2 If there is disagreement between the Parties on the reasonable period of time to comply with the arbitration panel ruling, the complaining Party may request the Stabilisation and Association Committee, within 20 days of the notification made under paragraph 1, to reconvene the original arbitration panel to determine the length of the reasonable period of time. The arbitration panel shall notify its ruling within 20 days from the date of the submission of the request.

3 In the event of the original panel, or some of its members, being unable to reconvene, the procedures set out in Article 4 shall apply. The time limit for notifying the ruling remains 20 days from the date of the panel’s establishment.

1 The Party complained against shall notify the other Party and the Stabilisation and Association Committee before the end of the reasonable period of time of any measure that it has taken to comply with the arbitration panel ruling.

2 In the event that there is disagreement between the Parties concerning the compatibility of any measure notified under paragraph 1 of this Article, with the provisions referred to in Article 2, the complaining Party may request the original arbitration panel to rule on the matter. Such request shall explain why the measure is not in conformity with this Agreement. Once re-convened, the arbitration panel will issue its ruling within 45 days of the date of its re-establishment.

3 In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures laid down in Article 4 shall apply. The time limit for notifying the ruling remains 45 days from the date of the panel’s establishment.

1 If the Party complained against fails to notify any measure taken to comply with the arbitration panel ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that the measure notified under Article 8 paragraph 1 is not in conformity with that Party’s obligations under this Agreement, the Party complained against shall, if so requested by the complaining Party, present an offer for temporary compensation.

2 If no agreement on compensation is reached within 30 days of the end of the reasonable period of time, or of the arbitration panel ruling under Article 8 that a measure taken to comply is not in conformity with this Agreement, the complaining Party shall be entitled, upon notification to the other Party and to the Stabilisation and Association Committee, to suspend the application of benefits granted under the provisions referred to in Article 2 of this Protocol at a level equivalent to the adverse economic impact caused by the violation. The complaining Party may implement the suspension 10 days after the date of the notification, unless the Party complained against has requested arbitration under paragraph 3.

3 If the Party complained against considers that the level of suspension is not equivalent to the adverse economic impact caused by the violation, it may request in writing to the chairperson of the original arbitration panel before the expiry of the ten day period referred to in paragraph 2 for the reconvening of the original arbitration panel. The arbitration panel shall notify its ruling on the level of the suspension of benefits to the Parties and to the Stabilisation and Association Committee within 30 days of the date of the submission of the request. Benefits shall not be suspended until the arbitration panel has issued its ruling, and any suspension shall be consistent with the ruling of the arbitration panel.

4 The suspension of benefits shall be temporary and shall be applied only until any measure found to violate this Agreement has been withdrawn or amended so as to bring it into conformity with this Agreement, or until the Parties have agreed to settle the dispute.

1 The Party complained against shall notify the other Party and the Stabilisation and Association Committee of any measure it has taken to comply with the ruling of the arbitration panel and of its request for an end to the suspension of benefits applied by the complaining Party.

2 If the Parties do not reach an agreement on the compatibility of the notified measure with this Agreement within 30 days of the date of the submission of the notification, the complaining Party may request in writing to the chairperson of the original arbitration panel to rule on the matter. Such request shall be notified simultaneously to the other Party and to the Stabilisation and Association Committee. The arbitration panel ruling shall be notified within 45 days of the date of the submission of the request. If the arbitration panel rules that any measure taken to comply is not in conformity with this Agreement, the arbitration panel will determine whether the complaining party can continue the suspension of benefits at the original or at a different level. If the arbitration panel rules that any measure taken to comply is in conformity with this Agreement, the suspension of benefits shall be terminated.

3 In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures laid down in Article 4 shall apply. The period for notifying the ruling remains 45 days from the date of the panel’s establishment.

The meetings of the arbitration panel shall be open to the public under the conditions laid down in the Rules of Procedure referred to in Article 18, unless the arbitration panel decides otherwise on its own motion or at the request of the Parties.

At the request of a Party, or upon its own initiative, the panel may seek information from any source it deems appropriate for the panel proceeding. The panel will also have the right to seek the opinion of experts as it deems appropriate. Any information obtained in this manner must be disclosed to both Parties and shall be open for comments. Interested parties shall be authorised to submit amicus curiae briefs to the arbitration panel under the conditions laid down in the Rules of Procedure referred to in Article 18.

Arbitration panels shall apply and interpret the provisions of this Agreement in accordance with customary rules of interpretation of public international law, including the Vienna Convention on the Law of Treaties. They shall not give an interpretation of the acquis communautaire. The fact that a provision is identical in substance to a provision of the Treaty establishing the European Communities shall not be decisive in the interpretation of that provision.

1 All decisions of the arbitration panel, including the adoption of the ruling, shall be taken by majority vote.

2 All rulings of the arbitration panel shall be binding on the Parties. They shall be notified to the Parties and to the Stabilisation and Association Committee, which shall make them publicly available unless it decides by consensus not to do so.

1 The Stabilisation and Association Committee shall, no later than six months after the entry into force of this Protocol, establish a list of fifteen individuals who are willing and able to serve as arbitrators. Each of the Parties shall select five individuals to serve as arbitrators. The Parties shall also agree on five individuals which shall act as chairperson to arbitration panels. The Stabilisation and Association Committee will ensure that the list is always maintained at this level.

2 Arbitrators should have specialised knowledge and experience of law, international law, Community law and/or international trade. They shall be independent, serve in their individual capacities and not be affiliated with, or take instructions from any organisation or government, and shall comply with the Code of Conduct referred to in Article 18.

Upon the eventual accession of Serbia to the World Trade Organisation (WTO), the following shall apply: (a) Arbitration panels set up under this Protocol shall not adjudicate disputes on each Party’s rights and obligations under the Agreement establishing the World Trade Organisation; (b) The right of any of the Parties to have recourse to the dispute settlement provisions of this Protocol shall be without prejudice to any action in the WTO framework, including dispute settlement action. However, where a Party has, with regard to a particular measure, instituted a dispute settlement proceeding, either under Article 3(1) of this Protocol or under the WTO Agreement, it may not institute a dispute settlement proceeding regarding the same measure in the other forum until the first proceeding has ended. For purposes of this paragraph, dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party’s request for the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO; (c) Nothing in this Protocol shall preclude a Party from implementing the suspension of obligations authorised by a WTO Dispute Settlement Body.

1 All time limits laid down in this Protocol shall be counted in calendar days from the day following the act or fact to which they refer.

2 Any time limit referred to in this Protocol may be extended by mutual agreement of the Parties.

3 Any deadline referred to in this Protocol may also be extended by the chairperson of the arbitration panel, on a reasoned request of either of the Parties or upon his or her own initiative.

1 The Stabilisation and Association Council shall, no later than six months after the entry into force of this Protocol, establish Rules of Procedure for the conduct of the arbitration panel proceedings.

2 The Stabilisation and Association Council shall, no later than six months after the entry into force of this Protocol, complement the Rules of Procedure with a Code of Conduct guaranteeing the independence and impartiality of arbitrators.

3 The Stabilisation and Association Council may decide to modify this Protocol, except Article 2.