CHAPTER I — MOVEMENT OF WORKERS
1. Subject to the conditions and modalities applicable in each Member State:
—
treatment accorded to workers who are Croatian nationals 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 its own nationals;
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the legally resident spouse and children of a worker legally employed in the territory of a Member State, with the exception of seasonal workers and of workers coming under bilateral agreements within the meaning of Article 46, 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. Croatia shall, subject to the conditions and modalities in that country, accord the treatment referred to in paragraph 1 to workers who are nationals of a Member State and are legally employed in its territory as well as to their spouse and children who are legally resident in the said country.
1. Taking into account the labour market situation in the Member States, subject to their legislation and to compliance with the rules in force in the Member States in the area of mobility of workers:
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the existing facilities of access to employment for Croatian workers accorded by Member States under bilateral agreements should be preserved and if possible improved;
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the other Member States shall examine the possibility of concluding similar agreements.
2. 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 labour market situation in the Member States and in the Community.
1. Rules shall be laid down for the coordination of social security systems for workers with Croatian 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:
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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;
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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;
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the workers in question shall receive family allowances for the members of their families as defined above.
2. Croatia shall accord to workers who are nationals of a Member State and legally employed in its territory, and to members of their families legally resident there, treatment similar to that specified in the second and third indents of paragraph 1.
CHAPTER II — ESTABLISHMENT
For the purposes of this Agreement:
(a)
‘Community company’ or a ‘Croatian company’ respectively shall mean a company set up in accordance with the laws of a Member State or of Croatia respectively and having its registered office or central administration or principal place of business in the territory of the Community or Croatia respectively.
However, should the company, set up in accordance with the laws of a Member State or of Croatia respectively, have only its registered office in the territory of the Community or of Croatia respectively, the company shall be considered a Community or a Croatian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or of Croatia respectively;
(b)
‘Subsidiary’ of a company shall mean a company which is effectively controlled by the first company;
(c)
‘Branch’ of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third Parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;
(d)
‘Establishment’ shall mean:
(i)
as regards nationals, the right to take up economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another party. The provisions of this Chapter do not apply to those who are not exclusively self-employed;
(ii)
as regards Community or Croatian companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in Croatia 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 ‘Croatian national’ shall mean respectively a natural person who is a national of one of the Member States or of Croatia ;
(h)
with regard to international maritime transport, including intermodal operations involving a sea leg, nationals of the Member States or of Croatia established outside the Community or Croatia respectively, and shipping companies established outside the Community or Croatia and controlled by nationals of a Member State or Croatian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Croatia respectively, in accordance with their respective legislation.
(i)
‘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. Croatia shall facilitate the setting-up of operations on its territory by Community companies and nationals. To that end, it shall grant, upon entry into force of this Agreement:
(i)
as regards the establishment of Community companies treatment no less favourable than that accorded to its own companies or to any third country company, whichever is the better, and;
(ii)
as regards the operation of subsidiaries and branches of Community companies in Croatia, 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 Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of Community or Croatian companies on their territory or in respect of their operation, once established, by comparison with their own companies.
3. The Community and its Member States shall grant, from the entry into force of this Agreement:
(i)
as regards the establishment of Croatian 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;
(ii)
as regards the operation of subsidiaries and branches of Croatian companies, established in their 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.
4. Four years after the entry into force of this Agreement, the Stabilisation and Association Council will establish the modalities to extend the above provisions to the establishment of nationals of both Parties to the Agreement 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 Croatia;
(b)
Subsidiaries of Community companies shall also have the right to acquire and enjoy ownership rights over real property as Croatian companies and as regards public goods/goods of common interest, the same rights as enjoyed by Croatian companies, where these rights are necessary for the conduct of the economic activities for which they are established excluding natural resources, agricultural land, forests and forestry land. Four years after the entry into force of this Agreement the Stabilisation and Association Council shall establish the modalities for extending rights under this paragraph to the excluded sectors.
(c)
Four years after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the possibility of extending the rights under (b), including rights in the excluded sectors, to branches of Community companies.
1. Subject to the provisions of Article 49, with the exception of financial services described in Annex VI, each Party may regulate the establishment and operation of companies and nationals on its territory, in so far as these regulations do not discriminate against companies and nationals of the other Party in comparison with its own companies and nationals.
2. In respect of financial services, notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owned by a financial service supplier, or to ensure the integrity and stability of the financial system. Such measures shall not be used as a means of avoiding the Party's obligations under the Agreement.
3. Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
1. 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 49 and 50 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 Croatian nationals to take up and pursue regulated professional activities in Croatia and 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 or a Croatian company established in the territory of Croatia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Croatia and the Community respectively, employees who are nationals of the Member States and of Croatia respectively, provided that such employees are key personnel as defined in paragraph 2 and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the above mentioned companies, herein referred to as ‘organisations’, are ‘intra-corporate transferees’ as defined in (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 the 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:
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directing the establishment of a department or sub-division of the establishment;
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supervising and controlling the work of other supervisory, professional or managerial employees;
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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 Croatia of Croatian 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 Croatian company or of a Croatian subsidiary or branch of a Community company in a Member State or in Croatia respectively, when:
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those representatives are not engaged in making direct sales or supplying services, and
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the company has its principal place of business outside the Community or Croatia, respectively, and has no other representative, office, branch or subsidiary in that Member State or in Croatia respectively.
During the first three years following the date of entry into force of this Agreement, Croatia may, on a transitional basis, introduce measures which derogate from the provisions of this Chapter as regards the establishment of Community companies and nationals of certain industries which:
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are undergoing restructuring, or are facing serious difficulties, particularly where these entail serious social problems in Croatia, or
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face the elimination or a drastic reduction of the total market share held by Croatian companies or nationals in a given sector or industry in Croatia, or
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are newly emerging industries in Croatia.
Such measures:
(i)
shall cease to apply at the latest five years after the entry into force of this Agreement.
(ii)
shall be reasonable and necessary in order to remedy the situation, and
(iii)
shall not introduce discrimination concerning the activities of Community companies or nationals already established in Croatia at the time of introduction of a given measure, by comparison with Croatian companies or nationals.
While devising and applying such measures, Croatia shall grant preferential treatment wherever possible to Community companies and nationals, and in no case treatment less favourable than that accorded to companies or nationals from any third country. Prior to the adoption of these measures, Croatia shall consult the Stabilisation and Association Council and shall not put them into effect before a one month period has elapsed following the notification to the Stabilisation and Association Council of the concrete measures to be introduced by Croatia, except where the threat of irreparable damage requires the taking of urgent measures, in which case Croatia shall consult the Stabilisation and Association Council immediately after their adoption.
Upon the expiry of the third year following the entry into force of this Agreement Croatia may introduce or maintain such measures only with the authorisation of the Stabilisation and Association Council and under conditions determined by the latter.
CHAPTER III — SUPPLY OF SERVICES
1. The Parties undertake in accordance with the following provisions to take the necessary steps to allow progressively the supply of services by Community or Croatian companies or nationals which are established in a Party other than that of the person for whom the services are intended.
2. In step with the 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 54, including natural persons who are representatives of a Community or Croatian 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. As from four years after the entry into force of this Agreement, the Stabilisation and Association Council shall take the measures necessary to implement progressively the provisions of paragraph 1. Account shall be taken of the progress achieved by the Parties in the approximation of their laws.
1. The Parties shall not take any measures or actions which render the conditions for the supply of services by Community and Croatian 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 the Agreement.
2. If one Party is of the view that measures introduced by the other Party since the entry into force of the 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 the Agreement, such first Party may request the other Party to enter into consultations.
With regard to supply of transport services between the Community and Croatia, the following provisions shall apply:
1.
With regard to inland transport, Protocol 6 lays down the rules applicable to the relationship between the Parties in order to ensure, in particular, unrestricted road transit traffic across Croatia and the Community as a whole, the effective application of the principle of non discrimination and progressive harmonisation of the Croatian transport legislation 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 market and traffic on a commercial basis.
(a)
The above provision does not prejudice the rights and obligations under the United Nations Code of Conduct for Liner Conferences, as applied by one or the other Party to this Agreement. Non-conference liners will be free to operate in competition with a conference as long as they adhere to the principle of fair competition on a commercial basis;
(b)
The Parties affirm their commitment to a freely competitive environment as being an essential feature of the dry and liquid bulk trade.
3.
In applying the principles of paragraph 2, the Parties shall:
(a)
not introduce cargo-sharing clauses in future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from one or other Party to this Agreement would not otherwise have an effective opportunity to ply for trade to and from the third country concerned;
(b)
prohibit cargo-sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade;
(c)
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.
(d)
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 special agreements to be negotiated between the Parties after the entry into force of this Agreement.
5.
Prior to the conclusion of the agreement referred to in paragraph 4, 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.
Croatia shall adapt its legislation, including administrative, technical and other rules, to that of the Community existing at any time in the field of air and inland 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 and inland transport services.
CHAPTER IV — CURRENT PAYMENTS AND MOVEMENT OF CAPITAL
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 Croatia.
1. With regard to transactions on the capital and financial account of balance of payments, from the entry into force of the 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 therefrom.
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.
As from the entry into force of this Agreement, Croatia shall authorise, by making full and expedient use of its existing procedures, the acquisition of real estate in Croatia by nationals of Member States of the European Union, except for areas and matters listed in Annex VII. Within four years from the entry into force of this Agreement, Croatia shall progressively adjust its legislation concerning the acquisition of real estate in Croatia by nationals of the Member States of the European Union to ensure the same treatment as compared to Croatian nationals. At the end of the fourth year after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the modalities for extending these rights to the areas and matters listed in Annex VII.
The Parties shall also ensure, from the fourth year 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.
3. 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 Croatia and shall not make the existing arrangements more restrictive.
4. Without prejudice to the provisions of Article 59 and of this Article, where, in exceptional circumstances, movements of capital between the Community and Croatia cause, or threaten to cause, serious difficulties for the operation of exchange rate policy or monetary policy in the Community or Croatia, the Community and Croatia, respectively, may take safeguard measures with regard to movements of capital between the Community and Croatia for a period not exceeding six months if such measures are strictly necessary.
5. 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.
6. The Parties shall consult each other with a view to facilitating the movement of capital between the Community and Croatia 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 Parties 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 modalities for full application of Community rules on the movement of capital.
CHAPTER V — GENERAL PROVISIONS
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 either Party 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, 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 62.
Companies which are controlled and exclusively owned jointly by Croatian companies or nationals 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 Croatia in 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 Croatia is in serious balance of payments difficulties, or under imminent threat thereof, the Community or Croatia, as the case may be, 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 or Croatia, as the case may be, 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 General Agreement on Trade in Services (GATS).
The provisions of this Agreement shall not prejudice the application by either 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.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
