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II SÉRIE-A — NÚMERO 35

possible by negotiating in good faith a Basic Agreement and Protocols.

The European Energy Charter Conferente 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 sucessfully completed in 1994.

The Energy Charter Treaty

HI — As a result of its deliberations the European Energy Charter Conferente has adopted the text of the Energy Charter Treaty (hereinafter referred to as the «Treaty») which is set out in annex 1 and decisions with respect thereto which are set out in annex 2, and agreed that the Treaty would be open for signature at Lisbon from 17 December 1994 to 16 June 1995.

Understandings

IV — By signing the Final Act, the representatives agreed to adopt the following understandings with respect to the Treaty:

1 — With respect to the Treaty as a whole:

a) The representatives underline that the provisions of the Treaty have been agreed upon bearing in mind the specific nature of the Treaty aiming at a legal framework to promote long-term cooperation in a particular sector and as a result cannot be construed to constitute a precedent in the context of other international negotiations;

b) The provisions of the Treaty do not:

0 Oblige any Contracting Party to introduce

mandatory third party access; or if) Prevent the use of pricing systems which, within a particular category of consumers, apply identical prices to customers in different locations;

c) Derogations from most favoured nation treatment are not intended to cover measures which are specific to an investor or group of investors, rather than applying generally.

2 — With respect to article 1, 5):

a) It is understood that the Treaty confers no rights to engage in economic activities other than economic activities in the energy sector;

b) The following activities are illustrative of economic activity in the energy sector:

i) Prospecting and exploration for, and extraction of, e. g., oil, gas, coal and uranium;

ii) Construction and operation of power generation facilities, including those powered by wind and other renewable energy sources;

Hi) Land transportation, distribution, storage and supply of energy materials and products, e. g., by way of transmission and distribution grids and pipelines or dedicated rail lines, and construction of facilities for such, including the laying of oil, gas, and coal-slurry pipelines;

iv) Removal and disposal of wastes from energy related facilities such as power stations, including radioactive wastes from nuclear power stations;

v) Decommissioning of energy related facilities, including oil rigs, oil refineries and power generating plants;

vi) Marketing and sale of, and trade in energy materials and products, e. g., retail sales of gasoline; and

vii) Research, consulting, planning, management and design activities related to the activities mentioned above, including those aimed at improving energy efficiency.

3 — With respect to article 1, 6). — For greater clarity as to whether an investment made in the area of one Contracting Party is controlled, direcdy or indirectly, by an investor of any other Contracting Party, control of an investment means control in fact, determined after an examination of the actual circumstances in each situation. In any such examination, all relevant factors should be considered, including the investor's:

a) Financial interest, including equity interest, in the investment;

b) Ability to exercise substantial influence over the management and operation of the investment; and

c) Ability to exercise substantial influence over the selection of members of the board of directors or any other managing body.

Where there is doubt as to whether an investor controls, direcdy or indirectiy, an investment, an investor claiming such control has the burden of proof that such control exists.

4 — With respect to article I, 8). — Consistent with Australia's foreign investment policy, the establishment of a new mining or raw materials processing project in Australia with total investment of $A 10 million or more by a foreign interest, even where that foreign interest is already operating a similar business in Australia, is considered as the making of a new investment.

5 — With respect to article 1, 12). — The representatives recognize the necessity for adequate and effective protection of intellectual property rights according to the highest internationally-accepted standards.

6 — With respect to article 5, 1). — The representatives' agreement to article 5 is not meant to imply any position on whether or to what extent the provisions of the Agreement on Trade-Related Investment Measures

annexed to the Final Act of the Uruguay Round of Mul-