1 DE AGOSTO DE1997

1340-(213)

¿1) Provide earlier prospective financial benefits to the Authority, taking into account when commercial production is scheduled to begining;

c) Have already invest the most resources and effort in prospecting or exploration.

4 — Applicants which are not selected in any period shall have priority in subsequent periods until they receive a production authorization.

5 — Selection shall be made taking into account the need to enhance opportunities for all States Parties, irrespective of their social and economic systems or geographical locations so as to avoid discrimination against any State or system,- to participate in activities in the Area and to prevent monopolization of those activities.

6 — Whenever fewer reserved areas than non-reserved areas are under exploitation, applications for production authorizations with respect to reserved areas shall have priority. .

7 — The decision referred to in this article shall be taken as soon as possible after the close of each period.

Article 8 Reservation of areas

Each application, other than those submitted by the Enterprise or by any other entities for reserved areas, shall cover a total area, which need not be a single continuous area, sufficiently large and of sufficient estimated commercial value to allow two mining operations. The applicant shall indicate the co-ordinates dividing the area into two parts of equal estimated commercial value and submit all the data obtained by him with respect to both parts. Without prejudice to the powers of the Authority pursuant to article 17 of this annex, the data to be submitted concerning polymetallic nodules shall relate to mappping, sampling, the abundance of nodules, and their metal content. Whithin 45 days of receiving such data, the Authority shall designate which part is to be reserved solely for the conduct for activities by the Authority through the Enterprise or in association with developing States. This designation may be deferred for a further period of 45 days if the Authority requests an independent expert to assess whether all data required by this article has been submitted. The area designated shall become a reserved area as soon as the plan of work for the non-reserved area is approved and the contract is signed.

Article 9

Activities in reserved areas

1 — The Enterprise shall be given an opportunity to decide whether it intends to carry out activities in each reserved area. This decision may be taken at any time, unless a notification pursuant to paragraph 4 is received by the Authority, in which event the Enterprise shall take its decision within a reasonable time. The Enterprise may decide to exploit such areas in joint ventures with the interested State or entity.

2 — The Enterprise may conclude contracts for the execution of part of its activities in accordance with annex iv, article 12. It may also enter into joint ventures for the conduct of such activities with any entities which are eligible to carry out activities in the Area pursuant to article 153, paragraph 2, b). When considering such joint ventures, the Enterprise shall offer to States Parties which are developing States and their nationals the opportunity of effective participation.

3 — The Authority may prescribe, in its rules, regulations and procedures, substantive and procedural requirements and conditions with respect to such contracts and joint ventures.

4 — Any State Party which is a developing State or any natural or juridical person sponsored by it and effectively controlled by it or by other developing State which is a qualified applicant, or any group of the foregoing, may notify the Authority that it wishes to submit a plan of work pursuant to article 6 of this annex with respect to a reserved area. The plan of work shall be considered if the Enterprise decides, pursuant to paragraph 1, that it does not intend to carry out activities in that area.

Article 10

Preference and priority among applicants

An operator who has an approved plan of work for exploration only, as provided in article 3, paragraph 4, c), of this annex shall have a preference and a priority among applicants for a plan of work convering exploitation of the same area and resources. However, such preference or priority may be withdrawn if the operator's performance has not been satisfactory.

Article 11 Joint arrangements

1 — Contracts may provide for joint arrangements between the contractor and the Authority through the Enterprise, in the form of joint ventures or production sharing, as well as any other form of joint arrangement, which shall have the same protection against revision, suspension or termination as contracts with Authority.

2 — Contractors entering into such joint arrangements with the Enterprise may receive financial incentives as provided for in article 13 of this annex.

3 — Partners in joint ventures with the Enterprise shall be liable for the payments required by article 13 of this annex to the extent of their share in the joint ventures, subject to financial incentives as provided for in that article.

Article 12 Activities carried out by the Enterprise

1 — Activities in the Area carried out by the Enterprise pursuant to article 153, paragraph 2, a), shall be governed by part xi, the rules, regulations and procedures of the Authority and its relevant decisions.

2 — Any plan of work submitted by the Enterprise shall be accompanied by evidence supporting its financial and technical capabilities.

Article 13 Financial terms of contracts

1 — In adopting rules, regulations and procedures concerning the financial terms of a contract between the Authority and the entities referred to in article 153, paragraph 2, b), and in negotiating those financial terms in accordance with part xi and those rules, regulations and procedures, the Authority shall be guided by the following objectives:

a) To ensure optimum revenues for the Authority from the proceeds of commercial production;