Council and Commission Decision of 23 September 1997 on the conclusion, by the European Communities, of the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspectsThe Decision on the conclusion of the Energy Charter Treaty on behalf of the European Community was adopted by the Council on 27 May 1997. (98/181/EC, ECSC, Euratom)

The final Plenary Session of the European Energy Charter Conference was held at Lisbon on 16 to 17 December 1994. Representatives of the Republic of Albania, the Republic of Armenia, Australia, the Republic of Austria, the Azerbaijani Republic, the Kingdom of Belgium, the Republic of Belarus, the Republic of Bulgaria, Canada, the Republic of Croatia, the Republic of Cyprus, the Czech Republic, the Kingdom of Denmark, the Republic of Estonia, the European Communities, the Republic of Finland, the French Republic, the Republic of Georgia, the Federal Republic of Germany, the Hellenic Republic, the Republic of Hungary, the Republic of Iceland, Ireland, the Italian Republic, Japan, the Republic of Kazakhstan, the Republic of Kyrgyzstan, the Republic of Latvia, the Principality of Liechtenstein, the Republic of Lithuania, the Grand Duchy of Luxembourg, the Republic of Malta, the Republic of Moldova, the Kingdom of the Netherlands, the Kingdom of Norway, the Republic of Poland, the Portuguese Republic, Romania, the Russian Federation, the Slovak Republic, the Republic of Slovenia, the Kingdom of Spain, the Kingdom of Sweden, the Swiss Confederation, the Republic of Tajikistan, the Republic of Turkey, Turkmenistan, Ukraine, the United Kingdom of Great Britain and Northern Ireland, the United States of America and the Republic of Uzbekistan (hereinafter referred to as ‘the representatives’) participated in the Conference, as did invited observers from certain countries and international organizations.

Following discussion of the Commission's proposal in the Council of the European Communities, the European Communities invited the other countries of western and eastern Europe, of the Union of Soviet Socialist Republics and the non-European members of the Organization for Economic Cooperation and Development to attend a conference in Brussels in July 1991 to launch negotiations on the European Energy Charter. A number of other countries and international organizations were invited to attend the European Energy Charter Conference as observers.

Negotiations on the European Energy Charter were completed in 1991 and the Charter was adopted by signature of a Concluding Document at a conference held at The Hague on 16 to 17 December 1991. Signatories of the Charter, then or subsequently, include all those listed in Section I, other than observers.

The signatories of the European Energy Charter undertook:

• to pursue the objectives and principles of the Charter and implement and broaden their cooperation as soon as possible by negotiating in good faith a Basic Agreement and Protocols.

The European Energy Charter Conference accordingly began negotiations on a Basic Agreement — later called the Energy Charter Treaty — designed to promote east-west industrial cooperation by providing legal safeguards in areas such as investment, transit and trade. It also began negotiations on Protocols in the fields of energy efficiency, nuclear safety and hydrocarbons, although in the last case negotiations were later suspended until completion of the Energy Charter Treaty.

Negotiations on the Energy Charter Treaty and the Energy Charter Protocol on energy efficiency and related environmental aspects were successfully completed in 1994.

Preamble

THE CONTRACTING PARTIES TO THIS TREATY,

Having regard to the Charter of Paris for a New Europe signed on 21 November 1990,

Having regard to the European Energy Charter adopted in the Concluding Document of the Hague Conference on the European Energy Charter signed at The Hague on 17 December 1991,

Recalling that all signatories to the Concluding Document of the Hague Conference undertook to pursue the objectives and principles of the European Energy Charter and implement and broaden their cooperation as soon as possible by negotiating in good faith an Energy Charter Treaty and Protocols, and desiring to place the commitments contained in that Charter on a secure and binding international legal basis;

Desiring also to establish the structural framework required to implement the principles enunciated in the European Energy Charter;

Wishing to implement the basic concept of the European Energy Charter initiative which is to catalyse economic growth by means of measures to liberalize investment and trade in energy;

Affirming that Contracting Parties attach the utmost importance to the effective implementation of full national treatment and most favoured nation treatment, and that these commitments will be applied to the making of investments pursuant to a supplementary treaty,

Having regard to the objective of progressive liberalization of international trade and to the principle of avoidance of discrimination in international trade as enunciated in the General Agreement on Tariffs and Trade and its Related Instruments and as otherwise provided for in this Treaty;

Determined progressively to remove technical, administrative and other barriers to trade in energy materials and products and related equipment, technologies and services;

Looking to the eventual membership in the General Agreement on Tariffs and Trade of those Contracting Parties which are not currently parties thereto and concerned to provide interim trade arrangements which will assist those Contracting Parties and not impede their preparation for such membership;

Mindful of the rights and obligations of certain Contracting Parties which are also parties to the General Agreement on Tariffs and Trade and its Related Instruments;

Having regard to competition rules concerning mergers, monopolies, anti-competitive practices and abuse of dominant position,

Having regard also to the Treaty on the Non-Proliferation of Nuclear Weapons, the Nuclear Suppliers Guidelines and other international nuclear non-proliferation obligations or understandings,

Recognizing the necessity for the most efficient exploration, production, conversion, storage, transport, distribution and use of energy;

Recalling the United Nations Framework Convention on Climate Change, the Convention on Long-Range Transboundary Air Pollution and its protocols, and other international environmental agreements with energy-related aspects; and

Recognizing the increasingly urgent need for measures to protect the environment, including the decommissioning of energy installations and waste disposal, and for internationally-agreed objectives and criteria for these purposes,

HAVE AGREED AS FOLLOWS:

1. (a)

   90 days after the entry into force of this Treaty if the Contracting Party is a party to the GATT; or

2. (b)

   12 months after the entry into force of this Treaty if the Contracting Party is not a party to the GATT.

Such trade-related investment measures of general or specific application shall be notified along with their principal features.

In the case of trade-related investment measures applied under discretionary authority, each specific application shall be notified. Information that would prejudice the legitimate commercial interests of particular enterprises need not be disclosed.

1. (a)

   two years from the date of entry into force of this Treaty if the Contracting Party is a party to the GATT; or

2. (b)

   three years from the date of entry into force of this Treaty if the Contracting Party is not a party to the GATT.

During the applicable period referred to in paragraph 3 a Contracting Party shall not modify the terms of any trade-related investment measure which it notifies pursuant to paragraph 1 from those prevailing at the date of entry into force of this Treaty so as to increase the degree of inconsistency with the provisions of Article 5 of this Treaty.

1. (a)

   the products of such investment are like products to those of the established enterprises; and

2. (b)

   such application is necessary to avoid distorting the conditions of competition between the new investment and the established enterprises.

Any trade-related investment measure so applied to a new investment shall be notified to the Secretariat. The terms of such a trade-related investment measure shall be equivalent in their competitive effect to those applicable to the established enterprises, and it shall be terminated at the same time.

1. (a)

   the notification referred to in paragraphs 1 and 2 shall be made by the later of the applicable date in paragraph 1 or the date of deposit of the instrument of accession; and

2. (b)

   the end of the phase-out period shall be the later of the applicable date in paragraph 3 or the date on which the Treaty enters into force for that State or Regional Economic Integration Organization.

Canada and United States of America

Australia

Azerbaijan

Bulgaria

Canada

Croatia

Cyprus

The Czech Republic

European Communities

Finland

Greece

Hungary

Ireland

Italy

Japan

Kazakhstan

Norway

Poland

Portugal

Romania

The Russian Federation

Slovenia

Spain

Sweden

United States of America

Australia

Canada

Hungary

Norway

Canada

Australia

Where, in making an award, the tribunal finds that a measure of a regional or local government or authority of a Contracting Party (hereinafter referred to as the ‘Responsible Party’) is not in conformity with a provision of this Treaty, the Responsible Party shall take such reasonable measures as may be available to it to ensure observance of the Treaty in respect of the measure.

The Responsible Party shall, within 30 days from the date the award is made, provide to the Secretariat written notice of its intentions as to ensuring observance of the Treaty in respect of the measure. The Secretariat shall present the notification to the Charter Conference at the earliest practicable opportunity, and no later than the meeting of the Charter Conference following receipt of the notice. If it is impracticable to ensure observance immediately, the Responsible Party shall have a reasonable period of time in which to do so. The reasonable period of time shall be agreed by both parties to the dispute. In the event that such agreement is not reached, the Responsible Party shall propose a reasonable period for approval by the Charter Conference.

Where the Responsible Party fails, within the reasonable period of time, to ensure observance in respect of the measure, it shall at the request of the other Contracting Party party to the dispute (hereinafter referred to as the ‘Injured Party’) endeavour to agree with the Injured Party on appropriate compensation as a mutually satisfactory resolution of the dispute.

If no satisfactory compensation has been agreed within 20 days of the request of the Injured Party, the Injured Party may with the authorization of the Charter Conference suspend such of its obligations to the Responsible Party under the Treaty as it considers equivalent to those denied by the measure in question, until such time as the Contracting Parties have reached agreement on a resolution of their dispute or the non-conforming measure has been brought into conformity with the Treaty.

1. (a)

   The Injured Party should first seek to suspend obligations with respect to the same part of the Treaty as that in which the tribunal has found a violation.

2. (b)

   f the Injured Party considers that it is not practicable or effective to suspend obligations with respect to the same part of the Treaty, it may seek to suspend obligations in other parts of the Treaty. If the Injured Party decides to request authorization to suspend obligations under this subparagraph, it shall state the reasons therefor in its request to the Charter Conference for authorization.

On written request of the Responsible Party, delivered to the Injured Party and to the President of the tribunal that rendered the award, the tribunal shall determine whether the level of obligations suspended by the Injured Party is excessive, and if so, to what extent. If the tribunal cannot be reconstituted, such determination shall be made by one or more arbitrators appointed by the Secretary-General. Determinations pursuant to this paragraph shall be completed within 60 days of the request to the tribunal or the appointment by the Secretary-General. Obligations shall not be suspended pending the determination, which shall be final and binding.

In suspending any obligations to a Responsible Party, an Injured Party shall make every effort not to affect adversely the rights under the Treaty of any other Contracting Party.

1. (a)

   General Agreement on Tariffs and Trade

   II	Schedules of concessions (and the Schedules to the General Agreement on Tariffs and Trade)
   IV	Special provisions relating to cinematographic films
   XV	Exchange arrangements
   XVIII	Governmental assistance to economic development
   XXII	Consultation
   XXIII	Nullification or impairment
   XXV	Joint action by the Contracting Parties
   XXVI	Acceptance. Entry into force and registration
   XXVII	Withholding or withdrawal of concessions
   XXVIII	Modification of Schedules
   XXVIIIa	Tariff negotiations
   XXIX	The relation of this Agreement to the Havana Charter
   XXX	Amendments
   XXXI	Withdrawal
   XXXII	Contracting Parties
   XXXIII	Accession
   XXXV	Non-application of the Agreement between particular Contracting Parties
   XXXVI	Principles and objectives
   XXXVII	Commitments
   XXXVIII	Joint action
   Annex H	Relating to Article XXVI
   Annex I	Notes and supplementary provisions (related to above GATT Articles)

   Safeguard action for development purposes

   Understanding regarding notification, consultation, dispute settlement and surveillance.

2. (b)

   Related Instruments

   1. (i)

      Agreement on Technical Barriers to Trade (Standards Code)

      Preamble (paragraphs 1, 8, 9)

      1.3.	General provisions
      2.6.4.	Preparation, adoption and application of technical regulations and standards by central government bodies
      10.6.	Information about technical regulations, standards and certification systems
      11.	Technical assistance to other Parties
      12.	Special and differential treatment of developing countries
      13.	The Committee on Technical Barriers to Trade
      14.	Consultation and dispute settlement
      15.	Final provisions (other than 15.5 and 15.13)
      Annex 2	Technical Expert Groups
      Annex 3	Panels

   2. (ii)

      Agreement on Government Procurement

   3. (iii)

      Agreement on Interpretation and Application of Articles VI, XVI and XXIII (Subsidies and Countervailing Measures)

      10.	Export subsidies on certain primary products
      12.	Consultations
      13.	Conciliation, dispute settlement and authorized counter measures
      14.	Developing countries
      16.	Committee on Subsidies and Countervailing Measures
      17.	Conciliation
      18.	Dispute settlement
      19.2.	Acceptance and accession
      19.4.	Entry into force
      19.5. (a)	National legislation
      19.6.	Review
      19.7.	Amendments
      19.8.	Withdrawal
      19.9.	Non-application of this Agreement between particular signatories
      19.11.	Secretariat
      19.12.	Deposit
      19.13.	Registration

   4. (iv)

      Agreement on Implementation of Article VII (Customs Valuation)

      1.2. (b) (iv)	Transaction value
      11.1.	Determination of customs value
      14.	Application of Annexes (second sentence)
      18.	Institutions (Committee on Customs Valuation)
      19.	Consultation
      20.	Dispute settlement
      21.	Special and differential treatment of developing countries
      22.	Acceptance and accession
      24.	Entry into force
      25.1.	National legislation
      26.	Review
      27.	Amendments
      28.	Withdrawal
      29.	Secretariat
      30.	Deposit
      31.	Registration
      Annex II	Technical Committee on Customs Valuation
      Annex III	Ad hoc panels

      Protocol to the Agreement on Implementation of Article VII (except I.7 and I.8; with necessary conforming introductory language)

   5. (v)

      Agreement on Import Licensing Procedures

      1.4.	General provisions (last sentence)
      2.2.	Automatic import licensing (footnote 2)
      4.	Institutions, consultation and dispute settlement
      5.	Final provisions (except paragraph 2)

   6. (vi)

      Agreement on Implementation of Article VI (Antidumping Code)

      13.	Developing countries
      14.	Committee on Anti-Dumping Practices
      15.	Consultation, conciliation and dispute settlement
      16.	Final provisions (except paragraphs 1 and 3)

   7. (vii)

      Arrangement regarding bovine meat

   8. (viii)

      International dairy arrangement

   9. (ix)

      Agreement on Trade in Civil Aircraft

   10. (x)

       Declaration on trade measures taken for balance-of-payments purposes.

3. (c)

   All other provisions in the GATT or Related Instruments which relate to:

   1. (i)

      governmental assistance to economic development and the treatment of developing countries, except for paragraphs 1 to 4 of the Decision of 28 November 1979 (L/4903) on differential and more favourable treatment, reciprocity and fuller participation of developing countries;

   2. (ii)

      the establishment or operation of specialist committees and other subsidiary institutions;

   3. (iii)

      signature, accession, entry into force, withdrawal, deposit and registration.

4. (d)

   All agreements, arrangements, decisions, understandings or other joint action pursuant to the provisions listed in subparagraphs (a) to (c).

Contracting Parties shall apply the provisions of the ‘Declaration on trade measures taken for balance-of-payments purposes’ to measures taken by those Contracting Parties which are not parties to the GATT, to the extent practicable in the context of the other provisions of this Treaty.

1. (a)

   Contracting Parties which are not parties to the GATT or a Related Instrument shall make their notifications to the Secretariat. The Secretariat shall circulate copies of the notifications to all Contracting Parties. Notifications to the Secretariat shall be in one of the authentic languages of this Treaty. The accompanying documents may be solely in the language of the Contracting Party;

2. (b)

   such requirements shall not apply to Contracting Parties to this Treaty which are also parties to the GATT and Related Instruments, which contain their own notification requirements.

Trade in nuclear materials may be governed by agreements referred to in the declarations related to this paragraph contained in the Final Act of the European Energy Charter Conference.

1. (a)

   in respect of an agreement in force as of a date three months after the date on which the first of such parties signs or deposits its instrument of accession to the Treaty, no later than six months after such date of signature or deposit; and

2. (b)

   in respect of an agreement which enters into force on a date subsequent to the date referred to in subparagraph (a), sufficiently in advance of its entry into force for other States or Regional Economic Integration Organizations which have signed or acceded to the Treaty (hereinafter referred to as the ‘Interested Parties’) to have a reasonable opportunity to review the agreement and make representations concerning it to the parties thereto and to the Charter Conference prior to such entry into force.

1. (a)

   copies of the original texts of the agreement in all languages in which it has been signed;

2. (b)

   a description, by reference to the items included in Annex EM, of the specific energy materials and products to which it applies;

3. (c)

   an explanation, separately for each relevant provision of the GATT and Related Instruments made applicable by Article 29 (2) (a), of the circumstances which make it impossible or impracticable for the parties to the agreement to conform fully with that provision;

4. (d)

   the specific measures to be adopted by each party to the agreement to address the circumstances referred to in subparagraph (c); and

5. (e)

   a description of the parties' programmes for achieving a progressive reduction and ultimate elimination of the agreement's non-conforming provisions.

Parties to an agreement notified in accordance with paragraph 1 shall afford to the Interested Parties a reasonable opportunity to consult with them with respect to such agreement, and shall accord consideration to their representations. Upon the request of any of the Interested Parties, the agreement shall be considered by the Charter Conference, which may adopt recommendations with respect thereto.

The Charter Conference shall periodically review the implementation of agreements notified pursuant to paragraph 1 and the progress having been made towards the elimination of provisions thereof that do not conform with provisions of the GAIT and Related Instruments made applicable by Article 29 (2) (a). Upon the request of any of the Interested Parties, the Charter Conference may adopt recommendations with respect to such an agreement.

An agreement described in Article 29 (2) (b) may in case of exceptional urgency be allowed to enter into force without the notification and consultation provided for in subparagraph 1 (b), paragraphs 2 and 3, provided that such notification takes place and the opportunity for such consultation is afforded promptly. In such a case the parties to the agreement shall nevertheless notify its text in accordance with subparagraph 2 (a) promptly upon its entry into force.

Contracting Parties which are or become parties to an agreement described in Article 29 (2) (b) undertake to limit the non-conformities thereof with the provisions of the GATT and Related Instruments made applicable by Article 29 (2) (a) to those necessary to address the particular circumstances and to implement such an agreement so as least to deviate from those provisions. They shall make every effort to take remedial action in light of representations from the Interested Parties and of any recommendations of the Charter Conference.

1. (a)

   In their relations with one another, Contracting Parties shall make every effort through cooperation and consultations to arrive at a mutually satisfactory resolution of any dispute about existing measures that might materially affect compliance with the provisions applicable to trade pursuant to Article 5 or 29.

2. (b)

   A Contracting Party may make a written request to any other Contracting Party for consultations regarding any existing measure of the other Contracting Party that it considers might affect materially compliance with provisions applicable to trade pursuant to Article 5 or 29. A Contracting Party which requests consultations shall to the fullest extent possible indicate the measure complained of and specify the provisions of Article 5 or 29 and of the GATT and Related Instruments that it considers relevant. Requests to consult pursuant to this paragraph shall be notified to the Secretariat, which shall periodically inform the Contracting Parties of pending consultations that have been notified.

3. (c)

   A Contracting Party shall treat any confidential or proprietary information identified as such and contained in or received in response to a written request, or received in the course of consultations, in the same manner in which it is treated by the Contracting Party providing the information.

4. (d)

   In seeking to resolve matters considered by a Contracting Party to affect compliance with provisions applicable to trade pursuant to Article 5 or 29 as between itself and another Contracting Party, the Contracting Parties participating in consultations or other dispute settlement shall make every effort to avoid a resolution that adversely affects the trade of any other Contracting Party.

1. (a)

   If, within 60 days from the receipt of the request for consultation referred to in subparagraph 1 (b), the Contracting Parties have not resolved their dispute or agreed to resolve it by conciliation, mediation, arbitration or other method, either Contracting Party may deliver to the Secretariat a written request for the establishment of a panel in accordance with subparagraphs (b) to (f). In its request the requesting Contracting Party shall state the substance of the dispute and indicate which provisions of Article 5 or 29 and of the GATT and Related Instruments are considered relevant. The Secretariat shall promptly deliver copies of the request to all Contracting Parties.

2. (b)

   The interests of other Contracting Parties shall be taken into account during the resolution of a dispute. Any other Contracting Party having a substantial interest in a matter shall have the right to be heard by the panel and to make written submissions to it, provided that both the disputing Contracting Parties and the Secretariat have received written notice of its interest no later than the date of establishment of the panel, as determined in accordance with subparagraph (c).

3. (c)

   A panel shall be deemed to be established 45 days after the receipt of the written request of a Contracting Party by the Secretariat pursuant to subparagraph (a).

4. (d)

   A panel shall be composed of three members who shall be chosen by the Secretary-General from the roster described in paragraph 7. Except where the disputing Contracting Parties agree otherwise, the members of a panel shall not be citizens of Contracting Parties which either are party to the dispute or have notified their interest in accordance with subparagraph (b), or citizens of States members of a Regional Economic Integration Organization which either is party to the dispute or has notified its interest in accordance with subparagraph (b).

5. (e)

   The disputing Contracting Parties shall respond within 10 working days to the nominations of panel members and shall not oppose nominations except for compelling reasons.

6. (f)

   Panel members shall serve in their individual capacities and shall neither seek nor take instruction from any government or other body. Each Contracting Party undertakes to respect these principles and not to seek to influence panel members in the performance of their tasks. Panel members shall be selected with a view to ensuring their independence, and that a sufficient diversity of backgrounds and breadth of experience are reflected in a panel.

7. (g)

   The Secretariat shall promptly notify all Contracting Parties that a panel has been constituted.

1. (a)

   The Charter Conference shall adopt rules of procedure for panel proceedings consistent with this Annex. Rules of procedure shall be as close as possible to those of the GATT and Related Instruments. A panel shall also have the right to adopt additional rules of procedure not inconsistent with the rules of procedure adopted by the Charter Conference or with this Annex. In a proceeding before a panel each disputing Contracting Party and any other Contracting Party which has notified its interest in accordance with subparagraph 2 (b), shall have the right to at least one hearing before the panel and to provide a written submission. Disputing Contracting Parties shall also have the right to provide a written rebuttal. A panel may grant a request by any other Contracting Party which has notified its interest in accordance with subparagraph 2 (b) for access to any written submission made to the panel, with the consent of the Contracting Party which has made it.

   The proceedings of a panel shall be confidential. A panel shall make an objective assessment of the matters before it, including the facts of the dispute and the compliance of measures with the provisions applicable to trade pursuant to Article 5 or 29. In exercising its functions, a panel shall consult with the disputing Contracting Parties and give them adequate opportunity to arrive at a mutually satisfactory solution. Unless otherwise agreed by the disputing Contracting Parties, a panel shall base its decision on the arguments and submissions of the disputing Contracting Parties. Panels shall be guided by the interpretations given to the GATT and Related Instruments within the framework of the GATT, and shall not question the compatibility with Article 5 or 29 of practices applied by any Contracting Party which is a party to the GATT to other parties to the GATT to which it applies the GATT and which have not been taken by those other parties to dispute resolution under the GATT.

   Unless otherwise agreed by the disputing Contracting Parties, all procedures involving a panel, including the issuance of its final report, should be completed within 180 days of the date of establishment of the panel; however, a failure to complete all procedures within this period shall not affect the validity of a final report.

2. (b)

   A panel shall determine its jurisdiction; such determination shall be final and binding. Any objection by a disputing Contracting Party that a dispute is not within the jurisdiction of the panel shall be considered by the panel, which shall decide whether to deal with the objection as a preliminary question or to join it to the merits of the dispute.

3. (c)

   In the event of two or more requests for establishment of a panel in relation to disputes that are substantively similar, the Secretary-General may with the consent of all the disputing Contracting Parties appoint a single panel.

1. (a)

   After having considered rebuttal arguments, a panel shall submit to the disputing Contracting Parties the descriptive sections of its draft written report, including a statement of the facts and a summary of the arguments made by the disputing Contracting Parties. The disputing Contracting Parties shall be afforded an opportunity to submit written comments on the descriptive sections within a period set by the panel.

   Following the date set for receipt of comments from the Contracting Parties, the panel shall issue to the disputing Contracting Parties an interim written report, including both the descriptive sections and the panel's proposed findings and conclusions. Within a period set by the panel a disputing Contracting Party may submit to the panel a written request that the panel review specific aspects of the interim report before issuing a final report. Before issuing a final report the panel may, in its discretion, meet with the disputing Contracting Parties to consider the issues raised in such a request.

   The final report shall include descriptive sections (including a statement of the facts and a summary of the arguments made by the disputing Contracting Parties), the panel's findings and conclusions, and a discussion of arguments made on specific aspects of the interim report at the stage of its review. The final report shall deal with every substantial issue raised before the panel and necessary to the resolution of the dispute and shall state the reasons for the panel's conclusions.

   A panel shall issue its final report by providing it promptly to the Secretariat and to the disputing Contracting Parties. The Secretariat shall at the earliest practicable opportunity distribute the final report, together with any written views that a disputing Contracting Party desires to have appended, to all Contracting Parties.

2. (b)

   Where a panel concludes that a measure introduced or maintained by a Contracting Party does not comply with a provision of Article 5 or 29 or with a provision of the GATT or a Related Instrument that applies pursuant to Article 29, the panel may recommend in its final report that the Contracting Party alter or abandon the measure or conduct so as to be in compliance with that provision.

3. (c)

   Panel reports shall be adopted by the Charter Conference. In order to provide sufficient time for the Charter Conference to consider panel reports, a report shall not be adopted by the Charter Conference until at least 30 days after it has been provided to all Contracting Parties by the Secretariat. Contracting Parties having objections to a panel report shall give written reasons for their objections to the Secretariat at least 10 days prior to the date on which the report is to be considered for adoption by the Charter Conference, and the Secretariat shall promptly provide them to all Contracting Parties. The disputing Contracting Parties and Contracting Parties which notified their interest in accordance with subparagraph 2 (b) shall have the right to participate fully in the consideration of the panel report on that dispute by the Charter Conference, and their views shall be fully recorded.

4. (d)

   In order to ensure effective resolution of disputes to the benefit of all Contracting Parties, prompt compliance with rulings and recommendations of a final panel report that has been adopted by the Charter Conference is essential. A Contracting Party which is subject to a ruling or recommendation of a final panel report that has been adopted by the Charter Conference shall inform the Charter Conference of its intentions regarding compliance with such ruling or recommendation. In the event that immediate compliance is impracticable, the Contracting Party concerned shall explain its reasons for non-compliance to the Charter Conference and, in light of this explanation, shall have a reasonable period of time to effect compliance. The aim of dispute resolution is the modification or removal of inconsistent measures.

1. (a)

   Where a Contracting Party has failed within a reasonable period of time to comply with a ruling or recommendation of a final panel report that has been adopted by the Charter Conference, a Contracting Party to the dispute injured by such non-compliance may deliver to the non-complying Contracting Party a written request that the non-complying Contracting Party enter into negotiations with a view to agreeing upon mutually acceptable compensation. If so requested the non-complying Contracting Party shall promptly enter into such negotiations.

2. (b)

   If the non-complying Contracting Party refuses to negotiate, or if the Contracting Parties have not reached agreement within 30 days after delivery of the request for negotiations, the injured Contracting Party may make a written request for authorization of the Charter Conference to suspend obligations owed by it to the non-complying Contracting Party pursuant to Article 5 or 29.

3. (c)

   The Charter Conference may authorize the injured Contracting Party to suspend such of its obligations to the non-complying Contracting Party, under provisions of Article 5 or 29 or under provisions of the GATT or Related Instruments that apply pursuant to Article 29, as the injured Contracting Party considers equivalent in the circumstances.

4. (d)

   The suspension of obligations shall be temporary and shall be applied only until such time as the measure found to be inconsistent with Article 5 or 29 has been removed, or until a mutually satisfactory solution is reached.

1. (a)

   Before suspending such obligations the injured Contracting Party shall inform the non-complying Contracting Party of the nature and level of its proposed suspension. If the non-complying Contracting Party delivers to the Secretary-General a written objection to the level of suspension of obligations proposed by the injured Contracting Party, the objection shall be referred to arbitration as provided below. The proposed suspension of obligations shall be stayed until the arbitration has been completed and the determination of the arbitral panel has become final and binding in accordance with subparagraph (e).

2. (b)

   The Secretary-General shall establish an arbitral panel in accordance with subparagraphs 2 (d) to (f), which if practicable shall be the same panel which made the ruling or recommendation referred to in subparagraph 4 (d), to examine the level of obligations that the injured Contracting Party proposes to suspend. Unless the Charter Conference decides otherwise the rules of procedure for panel proceedings shall be adopted in accordance with subparagraph 3 (a).

3. (c)

   The arbitral panel shall determine whether the level of obligations proposed to be suspended by the injured Contracting Party is excessive in relation to the injury it experienced, and if so, to what extent. It shall not review the nature of the obligations suspended, except in so far as this is inseparable from the determination of the level of suspended obligations.

4. (d)

   The arbitral panel shall deliver its written determination to the injured and the non-complying Contracting Parties and to the Secretariat within 60 days of the establishment of the panel or within such other period as may be agreed by the injured and the non-complying Contracting Parties. The Secretariat shall present the determination to the Charter Conference at the earliest practicable opportunity, and no later than the meeting of the Charter Conference following receipt of the determination.

5. (e)

   The determination of the arbitral panel shall become final and binding 30 days after the date of its presentation to the Charter Conference, and any level of suspension of benefits allowed thereby may thereupon be put into effect by the injured Contracting Party in such manner as that Contracting Party considers equivalent in the circumstances, unless prior to the expiration of the 30 days period the Charter Conference decides otherwise.

6. (f)

   In suspending any obligations to a non-complying Contracting Party, an injured Contracting Party shall make every effort not to affect adversely the trade of any other Contracting Party.

Each Contracting Party may designate two individuals who shall, in the case of Contracting Parties which are also party to the GATT, if they are willing and able to serve as panellists pursuant to this Annex, be panellists currently nominated for the purpose of GATT dispute panels. The Secretary-General may also designate, with the approval of the Charter Conference, not more than 10 individuals, who are willing and able to serve as panellists for purposes of dispute resolution in accordance with paragraphs 2 to 4. The Charter Conference may in addition decide to designate for the same purposes up to 20 individuals, who serve on dispute settlement rosters of other international bodies, who are willing and able to serve as panellists. The names of all of the individuals so designated shall constitute the dispute settlement roster. Individuals shall be designated strictly on the basis of objectivity, reliability and sound judgement and, to the greatest extent possible, shall have expertise in international trade and energy matters, in particular as relates to provisions applicable pursuant to Article 29. In fulfilling any function pursuant to this Annex, designees shall not be affiliated with or take instructions from any Contracting Party. Designees shall serve for renewable terms of five years and until their successors have been designated. A designee whose term expires shall continue to fulfil any function for which that individual has been chosen pursuant to this Annex. In the case of death, resignation or incapacity of a designee, the Contracting Party or the Secretary-General, whichever designated said designee, shall have the right to designate another individual to serve for the remainder of that designee's term, the designation by the Secretary-General being subject to approval of the Charter Conference.

Notwithstanding the provisions contained in this Annex, Contracting Parties are encouraged to consult throughout the dispute resolution proceeding with a view to settling their dispute.

The Charter Conference may appoint or designate other bodies or fora to perform any of the functions delegated in this Annex to the Secretariat and the Secretary-General.

Contributions payable by Contracting Parties shall be determined by the Secretariat annually on the basis of their percentage contributions required under the latest available United Nations Regular Budget Scale of Assessment (supplemented by information on theoretical contributions for any Contracting Parties which are not UN members).

The contributions shall be adjusted as necessary to ensure that the total of all Contracting Parties' contributions is 100 %.

The Czech Republic

Germany

Hungary

Lithuania

Poland

The Slovak Republic

Albania

Armenia

Azerbaijan

Belarus

Bulgaria

Croatia

The Czech Republic

Estonia

Georgia

Hungary

Kazakhstan

Kyrgyzstan

Latvia

Lithuania

Moldova

Poland

Romania

The Russian Federation

Slovakia

Slovenia

Tajikistan

Turkmenistan

Ukraine

Uzbekistan

‘Each Contracting Party shall ensure that within its jurisdiction it has and enforces such laws as are necessary and appropriate to address unilateral and concerted anti-competitive conduct in economic activity in the energy sector.’

Sector

All energy sectors.

Level of government

National.

Description

There is no law on protection of competition in Albania. The law No 7746 of 28 July 1993 on hydrocarbons and the law No 7796 of 17 February 1994 on minerals do not include such provisions. There is no law on electricity which is in the stage of preparation. This law is planned to be submitted to the Parliament by the end of 1996. In these laws Albania intends to include provisions on anti-competitive conduct.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

At present a State monopoly exists in Armenia in most energy sectors. There is no law on protection of competition, thus the rules of competition are not yet being implemented. There are no laws on energy. The draft laws on energy are planned to be submitted to the Parliament in 1994. The laws are envisaged to include provisions on anti-competitive behaviour, which would be harmonized with the EC legislation on competition.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

The anti-monopoly legislation is at the stage of elaboration.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Anti-monopoly legislation is at the stage of elaboration.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Laws on demonopolization are at present at the stage of elaboration in Georgia and that is why the State has so far the monopoly for practically all energy sources and energy resources, which restricts the possibility of competition in the energy and fuel complex.

Phase-out

1 January 1999.

Sector

All energy sectors.

Level of government

National.

Description

The law on development of competition and restriction of monopolistic activities (No 656 of 11 June 1991) has been adopted, but is of a general nature. It is necessary to develop the legislation further, in particular by means of adopting relevant amendments or adopting a new law.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

The law on anti-monopoly policies has already been adopted. The transitional period is needed to adapt provisions of this law to the energy sector which is now strictly regulated by the State.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

The law on restriction of monopolistic activities and development of competition of 29 January 1992 provides an organizational and legal basis for the development of competition, and of measures to prevent, limit and restrict monopolistic activities; it is oriented towards implementing market economy conditions. This law, however, does not provide for concrete measures of anti-competitive conduct in the energy sector, nor does it cover completely the requirements of Article 6.

In 1995 drafts of a law on competition and a State programme of demonopolization of the economy will be submitted to the Parliament. The draft law on energy which will also be submitted to the Parliament in 1995 will cover issues on demonopolization and development of competition in the energy sector.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

The rules of competition are not yet implemented in Romania. The draft law on protection of competition has been submitted to the Parliament and is scheduled to be adopted during 1994.

The draft contains provisions with respect to anti-competitive behaviour, harmonized with the EC's law on competition.

Phase-out

31 December 1996.

Sector

All energy sectors.

Level of government

The Federation.

Description

A comprehensive framework of anti-monopoly legislation has been created in the Russian Federation but other legal and organizational measures to prevent, limit or suppress monopolistic activities and unfair competition will have to be adopted and in particular in the energy sector.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

Law on protection of competition adopted in 1993 and published in Official Journal No 18/93 treats anti-competitive conduct generally. The existing law also provides for conditions for the establishment of competition authorities. At present the main competition authority is the Office of Protection of Competition in the Ministry of Economic Relations and Development. With regard to importance of energy sector a separate law in this respect is foreseen and thus more time for full compliance is needed.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

In 1993 Tajikistan passed the law on demonopolization and competition. However, due to the difficult economic situation in Tajikistan, the jurisdiction of the law has been temporarily suspended.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

Under the Ruling of the President of Turkmenistan No 1532 of 21 October 1993 the Committee on Restricting Monopolistic Activities has been etablished and is acting now, the function of which is to protect enterprises and other entities from monopoly conduct and practices and to promote the formation of market principles on the basis of the development of competition and entrepreneurship.

Further development of legislation and regulations is needed which would regulate anti-monopoly conduct of enterprises in the economic activity in the energy sector.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

The law on restricting monopoly activities has been adopted in Uzbekistan and has been in force since July 1992. However, the law (as is specified in Article 1 (3) does not extend to the activities of enterprises in the energy sector.

Phase-out

1 July 2001.

‘If a Contracting Party considers that any specified anti-competitive conduct carried out within the area of another Contracting Party is adversely affecting an important interest relevant to the purposes identified in this Article, the Contracting Party may notify the other Contracting Party and may request that its competition authorities initiate appropriate enforcement action. The notifying Contracting Party shall include in such notification sufficient information to permit the notified Contracting Party to identify the anti-competitive conduct that is the subject of the notification and shall include an offer of such further information and cooperation as that Contracting Party is able to provide. The notified Contracting Party or, as the case may be, the relevant competition authorities may consult with the competition authorities of the notifying Contracting Party and shall accord full consideration to the request of the notifying Contracting Party in deciding whether or not to initiate enforcement action with respect to the alleged anti-competitive conduct identified in the notification. The notified Contracting Party shall inform the notifying Contracting Party of its decision or the decision of the relevant competition authorities and may if it wishes inform the notifying Contracting Party of the grounds for the decision. If enforcement action is initiated, the notified Contracting Party shall advise the notifying Contracting Party of its outcome and, to the extent possible, of any significant interim development.’

Sector

All energy sectors.

Level of government

National.

Description

In Albania there are no established institutions to enforce the competition rules. Such institutions will be provided for in the law on the protection of competition which is planned to be finalized in 1996.

Phase-out

1 January 1999.

Sector

All energy sectors.

Level of government

National.

Description

Institutions to enforce the provisions of this paragraph have not been established in Armenia.

The laws on energy and protection of competition are planned to include provisions to establish such institutions.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

Anti-monopoly authorities shall be established after the adoption of anti-monopoly legislation.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Anti-monopoly authorities shall be established after the adoption of anti-monopoly legislation.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Laws on demonopolization are at present at the stage of elaboration in Georgia and that is why there are no competition authorities established yet.

Phase-out

1 January 1999.

Sector

All energy sectors.

Level of government

National.

Description

An Anti-monopoly Committee has been established in Kazakhstan, but its activity needs improvement, both from legislative and organizational points of view, in order to elaborate an effective mechanism handling the complaints on anti-competitive conduct.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

There is no mechanism in Kyrgyzstan to control the anticompetitive conduct and the relevant legislation. It is necessary to establish relevant anti-monopoly authorities.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

The Ministry of Economy is responsible for the control of competitive conduct in Moldova. Relevant amendments have been made to the law on breach of administrative rules, which envisage some penalties for violating rules of competition by monopoly enterprises.

The draft law on competition which is now at the stage of elaboration will have provisions on the enforcement of competition rules.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

Institutions to enforce the provisions of this paragraph have not been established in Romania.

The institutions charged with the enforcement of competition rules are provided for in the draft law on protection of competition which is scheduled to be adopted during 1994.

The draft also provides a period of nine months for enforcement, starting with the date of its publication.

According to the Europe Agreement establishing an association between Romania and the European Communities, Romania was granted a period of five years to implement competition rules.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

Tajikistan has adopted laws on demonopolization and competition, but institutions to enforce competition rules are in the stage of development.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

The law on restricting monopoly activities has been adopted in Uzbekistan and has been in force since July 1992. However, the law (as is specified in Article 1 (3) does not extend to the activities of the enterprises in the energy sector.

Phase-out

1 July 2001.

‘In the event that transit of energy materials and products cannot be achieved on commercial terms by means of energy transport facilities the Contracting Parties shall not place obstacles in the way of new capacity being established, except as may be otherwise provided in applicable legislation which is consistent with paragraph 1.’

Sector

All energy sectors.

Level of government

National.

Description

It is necessary to adopt a set of laws on energy, including licensing procedures regulating transit. During a transition period it is envisaged to build and modernize power transmission lines, as well as generating capacities with the aim of bringing their technical level to the world requirements and adjusting to conditions of a market economy.

Phase-out

31 December 1999.

Sector

All energy sectors.

Level of government

National.

Description

Laws on energy, land and other subjects are being worked out at present, and until their final adoption, uncertainty remains as to the conditions for establishing new transport capacities for energy carriers in the territory of Belarus.

Phase-out

31 December 1998.

Sector

All energy sectors.

Level of government

National.

Description

Bulgaria has no laws regulating transit of energy materials and products. An overall restructuring is ongoing in the energy sector, including development of institutional framework, legislation and regulation.

Phase-out

The transitional period of seven years is necessary to bring the legislation concerning the transit of energy materials and products in full compliance with this provision.

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

It is necessary to prepare a set of laws on the matter. At present there are substantially different conditions for the transport and transit of various energy sources in Georgia (electric power, natural gas, oil products, coal).

Phase-out

1 January 1999.

Sector

Electricity industry.

Level of government

National.

Description

According to the current legislation establishment and operation of high-voltage transmission lines is a State monopoly.

The creation of the new legal and regulatory framework for establishment, operation and ownership of high-voltage transmission lines is under preparation.

The Ministry of Industry and Trade has already taken the initiative to put forward a new Act on Electricity Power, that will have its impact also on the Civil Code and on the Act on Concession. Compliance can be achieved after entering in force of the new law on electricity and related regulatory decrees.

Phase-out

31 December 1996.

Sector

All energy sectors.

Level of government

National.

Description

Polish law on energy, being in the final stage of coordination, stipulates for creating new legal regulations similar to those applied by free market countries (licenses to generate, transmit, distribute and trade in energy carriers). Until it is adopted by the Parliament a temporary suspension of obligations under this paragraph is required.

Phase-out

31 December 1995.

‘The Contracting Parties acknowledge the importance of open capital markets in encouraging the flow of capital to finance trade in energy materials and products and for the making of and assisting with regard to investments in economic activity in the energy sector in the areas of other Contracting Parties, particularly those with economies in transition. Each Contracting Party shall accordingly endeavour to promote conditions for access to its capital market by companies and nationals of other Contracting Parties, for the purpose of financing trade in energy materials and products and for the purpose of investment in economic activity in the energy sector in the areas of those other Contracting Parties, on a basis no less favourable than that which it accords in like circumstances to its own companies and nationals or companies and nationals of any other Contracting Party or any third State, whichever is the most favourable.’

Sector

All energy sectors.

Level of government

National.

Description

Relevant legislation is at the stage of elaboration.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Relevant legislation is at the stage of elaboration.

Phase-out

1 January 2000.

Sector

All energy sectors.

Level of government

National.

Description

Relevant legislation is at the stage of preparation.

Phase-out

1 January 1997.

Sector

All energy sectors.

Level of government

National.

Description

The bill on foreign investments is at the stage of authorization approval with the aim to adopt it by the Parliament in autumn 1994.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

Relevant legislation is currently under preparation.

Phase-out

1 July 2001

‘Each Contracting Party shall accord to investments in its area of investors of another Contracting Party, and their related activities including management, maintenance, use, enjoyment or disposal, treatment no less favourable than that which it accords to investments of its own investors or of the investors of any other Contracting Party or any third State and their related activities including management, maintenance, use, enjoyment or disposal, whichever is the most favourable.’

Sector

All energy sectors.

Level of government

National.

Description

Foreign persons may not acquire property rights over land. A company with more than 50 % of foreign person's share may not acquire property right over agricultural land.

Foreigners and foreign legal persons may not aquire property rights over land except by way of inheritance according to the law. In this case they have to make it over.

A foreign person may aquire property rights over buildings, but without property rights over the land.

Foreign persons or companies with foreign controlling participation must obtain a permit before performing the following activities:

• exploration, development and extraction of natural resources from the territorial sea, continental shelf or exclusive economic zone,

• acquisition of real estate in geographic regions designated by the Council of Ministers,

• the permits are issued by the Council of Ministers or by a body authorized by the Council of Ministers.

Phase-out

1 July 2001.

‘Each Contracting Party shall with respect to investments in its area of investors of any other Contracting Party guarantee the freedom of transfer into and out of its area, including the transfer of:

unspent earnings and other remuneration of personnel engaged from abroad in connection with that investment;’

Sector

All energy sectors.

Level of government

National.

Description

Foreign nationals employed by companies with more than 50 % of foreign participation, or by a foreign person registered as sole trader or a branch or a representative office of a foreign company in Bulgaria, receiving their salary in Bulgarian leva, may purchase foreign currency not exeeding 70 % of their salary, including social security payments.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

According to the Act on Investments of Foreigners in Hungary, Article 33, foreign top managers, executive managers, members of the Supervisory Board and foreign employees may transfer their income up to 50 % of their aftertax earnings derived from the company of their employment through the bank of their company.

Phase-out

The phase out of this particular restriction depends on the progress Hungary is able to make in the implementation of the foreign exchange liberalization programme whose final target is the full convertibility of the Forint. This restriction does not create barriers to foreign investors. Phase-out is based on stipulations of Article 32.

1 July 2001.

‘Each Contracting Party shall designate one or more enquiry points to which requests for information about the abovementioned laws, regulations, judicial decisions and administrative rulings may be addressed and shall communicate promptly such designation to the Secretariat which shall make it available on request.’

Sector

All energy sectors.

Level of government

National.

Description

In Armenia there are no official enquiry points yet to which requests for information about the relevant laws and other regulations could be addressed. There is no information centre either. There is a plan to establish such a centre in 1994 to 1995. Technical assistance is required.

Phase-out

31 December 1996.

Sector

All energy sectors.

Level of government

National.

Description

There are no official enquiry points so far in Azerbaijan to which requests for information about relevant laws and regulations could be addressed. At present such information is concentrated in various organizations.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

Official enquiry offices which could give information on laws, regulations, judicial decisions and administrative rulings do not exist yet in Belarus. As far as the judicial decisions and administrative rulings are concerned there is no practice of their publishing.

Phase-out

31 December 1998.

Sector

All energy sectors.

Level of government

National.

Description

The process of establishing enquiry points has begun. As far as the judicial decisions and administrative rulings are concerned they are not published in Kazakhstan (except for some decisions made by the Supreme Court), because they are not considered to be sources of law. To change the existing practice will require a long transitional period.

Phase-out

1 July 2001.

Sector

All energy sectors.

Level of government

National.

Description

It is necessary to establish enquiry points.

Phase-out

31 December 1995.

Sector

All energy sectors.

Level of government

The Federation and the Republics constituting Federation.

Description

No official enquiry points exist in the Russian Federation as of now to which requests for information about relevant laws and other regulation acts could be addressed. As far as the judicial decisions and administrative rulings are concerned they are not considered to be sources of law.

Phase-out

31 December 2000.

Sector

All energy sectors.

Level of government

National.

Description

In Slovenia there are no official enquiry points yet to which requests for information about relevant laws and other regulatory acts could be addressed. At present such information is available in various ministries. The law on foreign investments which is under preparation foresees establishment of such an enquiry point.

Phase-out

1 January 1998.

Sector

All energy sectors.

Level of government

National.

Description

There are no enquiry points yet in Tajikistan to which requests for information about relevant laws and other regulations could be addressed. It is only a question of having available funding.

Phase-out

31 December 1997.

Sector

All energy sectors.

Level of government

National.

Description

Improvement of the present transparency of laws up to the level of international practice is required. Ukraine will have to establish enquiry points providing information about laws, regulations, judicial decisions and administrative rulings and standards of general application.

Phase-out

1 January 1998.

‘Each Contracting Party shall ensure that if it establishes or maintains a State entity and entrusts the entity with regulatory, administrative or other governmental authority, such entity shall exercise that authority in a manner consistent with the Contracting Party's obligations under this Treaty.’

Sector

Uranium and nuclear industries.

Level of government

National.

Description

In order to deplete uranium ore reserves that are stocked by Administration of State Material Reserves, no imports of uranium ore and concentrates, including uranium fuel bundles containing uranium of non-Czech origin, will be licensed.

Phase-out

1 July 2001.

The European Energy Charter Conference has adopted the following Decisions:

In the event of a conflict between the treaty concerning Spitsbergen of 9 February 1920 (the Svalbard Treaty) and the Energy Charter Treaty, the treaty concerning Spitsbergen shall prevail to the extent of the conflict, without prejudice to the positions of the Contracting Parties in respect of the Svalbard Treaty. In the event of such conflict or a dispute as to whether there is such conflict or as to its extent, Article 16 and Part V of the Energy Charter Treaty shall not apply.

The Russian Federation may require that companies with foreign participation obtain legislative approval for the leasing of federally-owned property, provided that the Russian Federation shall ensure without exception that this process is not applied in a manner which discriminates among investments of investors of other Contracting Parties.

1. 1..

   The term ‘freedom of transfer’ in Article 14 (1) does not preclude a Contracting Party (hereinafter referred to as the ‘Limiting Party’) from applying restrictions on movement of capital by its own investors, provided that:

   1. (a)

      such restrictions shall not impair the rights granted pursuant to Article 14 (1) to investors of other Contracting Parties with respect to their investments;

   2. (b)

      such restrictions do not affect current transactions; and

   3. (c)

      the Contracting Party ensures that investments in its area of the investors of all other Contracting Parties are accorded, with respect to transfers, treatment no less favourable than that which it accords to investments of investors of any other Contracting Party or of any third State, whichever is the most favourable.

2. 2..

   This Decision shall be subject to examination by the Charter Conference five years after entry into force of the Treaty, but not later than the date envisaged in Article 32 (3).

3. 3..

   No Contracting Party shall be eligible to apply such restrictions unless it is a Contracting Party which is a State that was a constituent part of the former Union of Soviet Socialist Republics, which has notified the provisional Secretariat in writing no later than 1 July 1995 that it elects to be eligible to apply restrictions in accordance with this Decision.

4. 4..

   For the avoidance of doubt, nothing in this Decision shall derogate, as concerns Article 16, from the rights hereunder of a Contracting Party, its investors or their investments, or from the obligations of a Contracting Party.

5. 5..

   For the purposes of this Decision:

   ‘current transactions’ are current payments connected with the movement of goods, services or persons that are made in accordance with normal international practice, and do not include arrangements which materially constitute a combination of a current payment and a capital transaction, such as deferrals of payments and advances which is meant to circumvent respective legislation of the Limiting Party in the field.

Without prejudice to the requirements of Article 14 and its other international obligations, Romania shall endeavour during the transition to full convertibility of its national currency to take appropriate steps to improve the efficiency of its procedures for the transfers of investment returns and shall in any case guarantee such transfers in a freely convertible currency without restriction or a delay exceeding six months. Romania shall ensure that investments in its area of the investors of all other Contracting Parties are accorded, with respect to transfers, treatment no less favourable than that which it accords to investments of investors of any other Contracting Party or of any third State, whichever is the most favourable.

An investment of an investor referred to in Article 1 (7) (a) (ii), of a Contracting Party which is not party to an EIA or a member of a free-trade area or a customs union, shall be entitled to treatment accorded under such EIA, free-trade area or customs union, provided that the investment:

1. (a)

   has its registered office, central administration or principal place of business in the area of a party to that EIA or member of that free-trade area or customs union; or

2. (b)

   in case it only has its registered office in that area, has an effective and continuous link with the economy of one of the parties to that EIA or member of that free-trade area or customs union.

PREAMBLE

THE CONTRACTING PARTIES to this Protocol,

Having regard to the European Energy Charter adopted in the Concluding Document of the Hague Conference on the European Energy Charter, signed at The Hague on 17 December 1991; and in particular to the declarations therein that cooperation is necessary in the field of energy efficiency and related environmental protection,

Having regard also to the Energy Charter Treaty, opened for signature from 17 December 1994 to 16 June 1995,

Mindful of the work undertaken by international organizations and fora in the field of energy efficiency and environmental aspects of the energy cycle;

Aware of the improvements in supply security, and of the significant economic and environmental gains, which result from the implementation of cost-effective energy efficiency measures; and aware of their importance for restructuring economies and improving living standards;

Recognizing that improvements in energy efficiency reduce negative environmental consequences of the energy cycle including global warming and acidification;

Convinced that energy prices should reflect as far as possible a competitive market, ensuring market-oriented price formation, including fuller reflection of environmental costs and benefits, and recognizing that such price formation is vital to progress in energy efficiency and associated environmental protection;

Appreciating the vital role of the private sector including small and medium-sized enterprises in promoting and implementing energy efficiency measures, and intent on ensuring a favourable institutional framework for economically viable investment in energy efficiency;

Recognizing that commercial forms of cooperation may need to be complemented by intergovernmental cooperation, particularly in the area of energy policy formulation and analysis as well as in other areas which are essential to the enhancement of energy efficiency but not suitable for private funding; and

Desiring to undertake cooperative and coordinated action in the field of energy efficiency and related environmental protection and to adopt a Protocol providing a framework for using energy as economically and efficiently as possible,

HAVE AGREED AS FOLLOWS:

Development of energy efficiency programmes, including identifying energy efficiency barriers and potentials, and the development of energy labelling and efficiency standards.

Assessment of the environmental impacts of the Energy Cycle.

Development of economic, legislative and regulatory measures.

Technology transfer, technical assistance and industrial joint ventures subject to international property rights regimes and other applicable international agreements.

Research and development.

Education, training, information and statistics.

Identification and assessment of measures such as fiscal or other market-based instruments, including tradable permits to take account of external, notably environmental, costs and benefits.

Energy analysis and policy formulation:.

• assessment of energy efficiency potentials,

• energy demand analysis and statistics,

• development of legislative and regulatory measures,

• integrated resource planning and demand side management,

• environmental impact assessment, including major energy projects.

Evaluation of economic instruments for improving energy efficiency and environmental objectives.

Energy efficiency analysis in refining, conversion, transport and distribution of hydro-carbons.

Improving energy efficiency in power generation and transmission:

• cogeneration,

• plant component (boilers, turbines, generators, etc.),

• network integration.

Improving energy efficiency in the building sector:

• thermal insulation standards, passive solar and ventilation,

• space heating and air conditioning systems,

• high efficiency low NO_X burners,

• metering technologies and individual metering,

• domestic appliances and lighting.

Municipalities and local community services:

• district heating systems,

• efficient gas distribution systems,

• energy planning technologies,

• twinning of towns or of other relevant territorial entities,

• energy management in cities and in public buildings,

• waste management and energy recovery of waste.

Improving energy efficiency in the industrial sector:

• joint ventures,

• energy cascading, cogeneration and waste heat recovery,

• energy audits.

Improving energy efficiency in the transport sector:

• motor vehicle performance standards,

• development of efficient transport infrastructures.

Information:

• awareness creation,

• databases: access, technical specifications, information systems,

• dissemination, collection and collation of technical information,

• behavioural studies.

Training and education:

• exchanges of energy managers, officials, engineers and students,

• organization of international training courses.

Financing:

• development of legal framework,

• Third Party Financing,

• joint ventures,

• co-financing.

The European Communities, as Contracting Parties to the Energy Charter Treaty, make the following statement concerning their policies, practices and conditions with regard to disputes between an investor and a Contracting Parties and their submission to international arbitration or conciliation:

The European Communities are a regional economic integration organisation within the meaning of the Energy Charter Treaty. The Communities exercise the competences conferred on them by their Member States through autonomous decision-making and judicial institutions.

The European Communities and their Member States have both concluded the Energy Charter Treaty and are thus internationally responsible for the fulfilment of the obligations contained therein, in accordance with their respective competences.

The Communities and the Member States will, if necessary, determine among them who is the respondent party to arbitration proceedings initiated by an Investor of another Contracting Party. In such case, upon the request of the Investor, the Communities and the Member States concerned will make such determination within a period of 30 days^f1.

The Court of Justice of the European Communities, as the judicial institution of the Communities, is competent to examine any question relating to the application and interpretation of the constituent treaties and acts adopted thereunder, including international agreements concluded by the Communities, which under certain conditions may be invoked before the Court of Justice.

Any case brought before the Court of Justice of the European Communities by an investor of another Contracting Party in application of the forms of action provided by the constituent treaties of the Communities falls under Article 26(2)(a) of the Energy Charter Treaty^f2. Given that the Communities' legal system provides for means of such action, the European Communities have not given their unconditional consent to the submission of a dispute to international arbitration or conciliation.

As far as international arbitration is concerned, it should be stated that the provisions of the ICSID Convention do not allow the European Communities to become parties to it. The provisions of the ICSID Additional Facility also do not allow the Communities to make use of them. Any arbitral award against the European Communities will be implemented by the Communities' institutions, in accordance with their obligation under Article 26(8) of the Energy Charter Treaty.