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Umbrella Agreement On The Institutional Framework For The Establishment Of Interstate Oil And Gas Transportation Systems
The States party to the present Agreement (hereinafter referred to as "Parties"),
Recognizing that secure oil and gas access routes to world markets will be important to the future prosperity and energy security of the Parties;
Aware that account must be taken of all the legal, technical, commercial, environmental and financial factors in reaching decisions on transportation, including transit, of oil or natural gas and/or their processed products, in co-operation with other interested States, as well as with local and foreign companies investing in exploitation of hydrocarbon resources;
Respecting market economy rules in the oil and gas sector, such as the rules and regulations applicable in the EU countries, and wishing to contribute to the development of international rules and practices governing transit activities in the oil and gas sector;
Conscious that states have an important role to play in reducing investment and transit risks;
Considering that the protection, promotion and treatment of foreign investments and investors according to internationally acceptable standards and complying with the rules of international economic law constitute appropriate measures to develop the oil and gas transportation sector;
Determined to establish common rules and mechanisms, safeguarding the effective Operation of Interstate Oil and Gas Transportation Systems, in accordance with the rules and practices in force in the international oil and gas industry,
Taking into consideration the principles enunciated in the Energy Charter Treaty,
HAVE AGREED AS FOLLOWS:
Definitions and Titles
1. For the purposes of the present Agreement,
I. Construction means the building of new oil and gas transportation systems or of any new part of an Interstate Oil and Gas Transportation System.
II. The Emergency Committee described in Article 8 paragraph 4 of the present Agreement is the committee composed by authorized representatives of all the Participating Parties, empowered to make recommendations on the co-ordination of all the steps, measures and common actions to be taken by the government of each Participating Party within its territory necessary to ensure the security and protection of the facilities of an Interstate Oil and Gas Transportation System established pursuant to this Agreement against events such as natural disasters, earthquakes, radioactive or chemical contamination, civil riots, acts of terrorism or sabotage, criminal damage and other events of similar nature.
III. Integrated Form of Project Implementation is the form of co-operation selected by the Participating Parties for the establishment of an Interstate Oil and Gas Transportation System which entrusts a single legal entity, or a group of legal entities, with two or more separate functions, as described in Article 7 of the present Agreement, or any other form of integration.
IV. The Interstate Committee described in Article 8 paragraph 3 of the present Agreement is the committee composed by authorized representatives of all the Participating Parties, empowered to monitor, in the name and on behalf of such Parties, the implementation of their decision to establish one or more Interstate Oil and Gas Transportation Systems.
V. Interstate Oil and Gas Transportation System means a transportation system of oil or natural gas and/or their processed products crossing the territories of more than one States.
VI. Maintenance means the technical activities necessary to preserve an Interstate Oil and Gas Transportation System, or any part or facility of such transportation system, in good functional order, for the purpose for which such a system is intended, in accordance with the applicable technical, safety and environmental standards.
VII. Maintenance Entity is a legal entity or a group of legal entities established or selected pursuant to the present Agreement in order to undertake the function of Maintenance of an Interstate Oil and Gas Transportation System or any part thereof.
VIII. Operation means all the activities, which are necessary for the continuous, uninterrupted, proper and efficient functioning of the Interstate Oil and Gas Transportation System, in accordance with the applicable rules and regulations.
IX. Operation Entity is a legal entity or a group of legal entities established or selected pursuant to the present Agreement in order to undertake the Operation of an Interstate Oil and Gas Transportation System.
X. Other Legal Entities Concerned, referred to in Articles 3 and 6 of the present Agreement, means the Authorized Competent Entities described in Article 13 of the present Agreement.
XI. Participating Parties means the Parties over whose territory an Interstate Oil and Gas Transportation System established pursuant to the present Agreement passes.
XII. Practices or usages, referred to in the Preamble and Article 3, are the forms and manners of conducting specific technical, commercial and financial activities within a specific industry or market, established through common use and followed by professionals operating within the same industry or market.
XIII. Project means the planning for and undertaking to carry out a specified activity or activities within the framework of an Interstate Oil and Gas Transportation System established under the present Agreement.
XIV. Project Management is the mobilization of a multi-disciplinary team required to implement the overall Project of the Rehabilitation or Construction of an Interstate Oil and Gas Transportation System, overseeing and co-ordinating activities related to engineering, procurement, technical monitoring and supervision, Construction management and commissioning of such a Project, within the applicable objectives of time schedule, quality and costs.
XV. Project Management Entity is a legal entity or a group of legal entities established or selected pursuant to the present Agreement in order to undertake the function of Project Management.
XVI. The Project Management Entity and the Operation Entity might be two different entities, acting at two different phases of the Project implementation and Operation, according to the provisions of the present Agreement, unless the dual function of Project Management (before the completion date) and Project Operation (after the completion date) is entrusted to a single legal entity or a group of legal entities under the terms of Article 6 paragraph 2 of the present Agreement.
XVII. Protocol or Protocols means any subsequent agreement or agreements concluded by two or more Parties in the framework and in implementation of this Agreement in compliance with the basic principles, rules and procedures set out in the present Agreement, to be annexed herein.
XVIII. Rehabilitation means the revitalization, reconstruction, refurbishment, expansion or modification of any existing Interstate Oil and Gas Transportation System or any existing part of such transportation system.
XIX. Umbrella Agreement means the present agreement which sets out the necessary framework in terms of basic principles, rules and procedures for the implementation of its scope of application, as well as for the protection of any third parties operating within the institutional framework established by it.
2. Titles in the present Agreement are intended solely for ease of reference and should not be construed as affecting the interpretation of the provisions of this Agreement.
Article 1
General Commitment
The Parties will co-operate, within the framework of the present Agreement, in order to establish, under mutually acceptable terms and conditions, one or more Interstate Oil and Gas Transportation System(s), by means of the Rehabilitation of the existing oil and gas transportation system(s), the Construction - where appropriate - of new Interstate Oil and Gas Transportation System(s) and the Operation and Maintenance of these transportation system(s).
Article 2
Scope of Application
1. For the purposes of Article 1, the Parties agree to undertake, or to pursue bilateral and/or multilateral negotiations with other Parties in order to determine by separate Protocol which parts of the existing, or under Construction, Interstate Oil and Gas Transportation Systems crossing their territory, they wish to be used as parts of one or more Interstate Oil and Gas Transportation Systems to be established, maintained and operated pursuant to the present Agreement, as well as which new parts they accept to be constructed, operated and maintained in their territory as parts of the aforementioned Interstate Oil and Gas Transportation Systems.
2. Without prejudice to the establishment of interconnections between two or more Interstate Oil and Gas Transportation Systems established pursuant to the present Agreement, such transportation systems could be considered as separate projects, to be designed, financed, rehabilitated, constructed, operated and maintained in accordance with different technical, commercial, financial and environmental considerations. Each Party may agree with other Parties to establish more than one Interstate Oil and Gas Transportation Systems.
Article 3
Operation
1. Without prejudice to Article 7 paragraph 2, and taking into consideration the need to provide for rules ensuring efficient functioning of any Interstate Oil and Gas Transportation System established pursuant to the present Agreement, the Operation of any such system, if agreed by the Participating Parties, may be assigned to a common Operation Entity, to be established or selected according to the principles rules and procedures, which will be negotiated and agreed upon by the Participating Parties and, as appropriate, by Other Legal Entities Concerned.
2. The Operation Entity could enter into a common Operation agreement with the Participating Parties and, as appropriate, with Other Legal Entities Concerned, describing the principles and rules according to which the Interstate Oil and Gas Transportation System established by these Parties shall be operated.
3. Without prejudice to Article 7, and unless otherwise expressly provided for in a Protocol to be subsequently annexed herein, a common Operation Entity may only provide transport services to oil and gas buyers and/or suppliers and to any other legal entity which has a right to such transportation services under a specific agreement, pursuant to oil and gas transportation agreements, following international standards and usages of the oil and gas industry.
Article 4
Rehabilitation and Construction
1. Unless otherwise expressly provided for in the present Agreement, each Participating Party, in implementing the decision of two or more Participating Parties relating to the establishment of one or more Interstate Oil and Gas Transportation Systems, maintains the right to rehabilitate the existing Interstate Oil and Gas Transportation System crossing its territory and to construct any new Interstate Oil and Gas Transportation System crossing its territory pursuant to the national legislation, rules and regulations in force in said Party.
2. The provisions of paragraph 1 do not preclude the right of a Party to enter into a different arrangement with other Participating Parties, in view of rehabilitating and constructing the parts of an Interstate Oil and Gas Transportation System crossing their territories. To this effect, two or more Parties may decide to assign the design, Rehabilitation and Construction of the works lying within their territories to a legal entity or to a group of legal entities, established or selected as the Participating Parties may jointly decide.
3. In order to ensure technical homogeneity and operational efficiency of one or more Interstate Oil and Gas Transportation Systems to be established between more than one Participating Parties, such Participating Parties agree to apply, when contracting out, as per paragraphs 1 and 2, the Rehabilitation and Construction of the national parts of one or more Interstate Oil and Gas Transportation Systems, commonly agreed technical specifications which are internationally recognized by the oil and gas industry.
Article 5
Maintenance
1. The provisions of Article 4 similarly apply to the Maintenance of the rehabilitated or newly constructed parts of one or more Interstate Oil and Gas Transportation Systems, established pursuant to the present Agreement.
2. Subject to the provisions of Article 3 paragraph 1, when a common Operation Entity operates an Interstate Oil and Gas Transportation System established pursuant to the present Agreement and should the Maintenance of such a system be assigned to a legal entity, or a group of legal entities, different from the common Operation Entity as described in Article 3, the legal entity, or the group of legal entities, responsible for the Maintenance of such a transportation system shall operate under the control and supervision of the common Operation Entity, as the Maintenance agreement, to be made by virtue of this Article, and the common Operation agreement, provided for in Article 3 paragraph 2, shall expressly provide.
Article 6
Project Management
1. In implementing their decision to establish an Interstate Oil and Gas Transportation System pursuant to the present Agreement, the Participating Parties and, as appropriate, Other Legal Entities Concerned, if they so agree, may decide to assign the overall responsibility of the feasibility study, design and supervision of the Rehabilitation and Construction of such a transportation system to a common Project Management Entity to be established or selected by the Participating Parties and, as appropriate, by Other Legal Entities Concerned, according to mutually acceptable principles, rules and procedures which will be negotiated and agreed upon by the Participating Parties and, as appropriate, by Other Legal Entities Concerned.
2. Without prejudice to the provisions of Article 7 paragraph 2, nothing precludes the Participating Parties and, as appropriate, the Other Legal Entities Concerned, from assigning the function of the Project Management Entity to the common Operation Entity described in Article 3 paragraph 1.
Article 7
Integrated Forms
of Project Implementation
1. Taking into consideration the specific technical, commercial and financial requirements for the establishment of any individual Interstate Oil and Gas Transportation System pursuant to the present Agreement, the Participating Parties might agree to assign two or more functions among those contemplated separately in Articles 3 to 6, to a single legal entity, or a group of legal entities, to be established or selected by the Participating Parties as more specifically described in:
a. Article 4 paragraph 2 in combination with Article 5 paragraph 1, for the functions of Rehabilitation/Construction and Maintenance;
b. Article 3 paragraph 1 in combination with Article 5 paragraph 2, for the functions of Maintenance and Operation;
c. Article 6 paragraph 2, for the functions of Project management and Operation, and
d. Article 6 paragraph 2 in combination with Article 5 paragraph 2, for the functions of Project management, Operation and Maintenance.
2. The Parties may adopt any other Integrated Form of Project Implementation, including but not limited to common Operation, in order to implement their decision to establish one or more Interstate Oil and Gas Transportation Systems pursuant to the present Agreement.
Article 8
Issues relating to the Exclusive
Jurisdiction of the Parties
1. In implementing the decision to establish one or more Interstate Oil and Gas Transportation Systems pursuant to the present Agreement, the Participating Parties shall establish, by separate Protocol, the rules governing issues relating to the application by each Participating Party of its exclusive jurisdiction over its territory, as well as over the natural and legal persons operating within such territory, concerning issues including but not limited to social security and labour legislation, Construction regulations, licensing procedures, safety and health regulations, fiscal and customs issues and environmental protection legislation, relating to the design, financing, Rehabilitation, Construction, Maintenance and Operation of the national parts of an Interstate Oil and Gas Transportation System established pursuant to the present Agreement.
2. Unless otherwise expressly provided for in the present Agreement or in the Protocols subsequently annexed herein, no Party will modify its national legislation to the extent that such legislation will impair the conditions of design, financing, Rehabilitation, Construction, Maintenance and Operation of an Interstate Oil and Gas Transportation System established pursuant to the present Agreement or Protocols subsequently annexed herein, after the present Agreement or Protocols subsequently annexed herein enter into force. In case of inconsistency between the provisions of the present Agreement or any Protocol subsequently annexed to this Agreement and the national legislation of the Parties, the provisions of this Agreement shall prevail.
3. The Parties shall co-operate in order to establish, by a Protocol to be subsequently annexed herein, an authorized Interstate Committee which will be empowered to monitor, in the name and on behalf of the Participating Parties, the implementation of their decision to establish one or more Interstate Oil and Gas Transportation Systems established pursuant to the present Agreement.
4. The Parties shall co-operate in order to establish, by a Protocol to be subsequently annexed herein, an authorized Emergency Committee which will make recommendations regarding the co-ordination of all the steps, measures and common actions to be taken by the government of each Participating Party within its territory necessary to ensure the security and protection of the facilities of an Interstate Oil and Gas Transportation System established pursuant to this Agreement against events such as natural disasters, earthquakes, radioactive or chemical contamination, civil riots, acts of terrorism or sabotage, criminal damage and other events of similar nature. Such events, as well as the functions and powers of the Emergency Committee shall be determined by the Participating Parties, on a mutually acceptable basis for each individual Interstate Oil and Gas Transportation System established pursuant to the present Agreement.
5. The Protocols subsequently annexed to the present Agreement shall constitute an integral part of this Agreement and shall be in force only for the Parties which have signed these Protocols.
Article 9
Protection of the Environment
In implementing the present Agreement, the Parties agree to develop tighter intergovernmental co-operation with a view to creating common institutions acting in accordance with international rules, such as those enunciated in the Kyoto Protocol to the United Nations Framework Treaty on Climate Change and the Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects, taking into account local environmental conditions, and to implement common policies safeguarding the environment against any harmful effect caused by the design, Construction, Rehabilitation, Maintenance and Operation of one or more Interstate Oil and Gas Transportation Systems established pursuant to the present Agreement.
Article 10
Implementation in the
National Legal Orders
1. The Parties shall take all the appropriate measures in order to incorporate and implement the provisions of the present Agreement in their national legal orders.
2. Where the present Agreement provides for or implies the conclusion of a separate Protocol to be subsequently annexed to this Agreement, such a Protocol or Protocols shall be negotiated and agreed upon by the Participating Parties, taking into consideration the specific requirements for the implementation of any individual Project to be established within the framework of the present Agreement. The incorporation and implementation of such a Protocol or Protocols in the national legal orders of the Participating Parties shall be pursued in accordance with the relevant constitutional and legislative provisions of said Parties.
3. A Party may not invoke the provisions of its national legal order as justification for its failure to perform its obligations under the present Agreement and the Protocols subsequently annexed herein.
Article 11
State and Interstate
Performance Guarantee
Each Party guarantees the proper and timely execution of its obligations arising out of the present Agreement and the Protocols subsequently annexed herein vis-?-vis all the other Parties, as well as vis-?-vis any third parties entering into a contract or agreement with this Party for the design, Rehabilitation, Construction, financing, Operation and Maintenance of an Interstate Oil and Gas Transportation System, established pursuant to the present Agreement.
Article 12
Settlement of Disputes
Any disputes arising between the Parties relating to the interpretation and to the implementation of the present Agreement and the Protocols subsequently annexed herein, as well as any disputes arising between a Party and a third party relating to the interpretation and implementation of any contract or agreement which is made between a Party and said third party for the implementation of this Agreement and the Protocols subsequently annexed herein, shall be settled in accordance with the rules provided for in a separate Protocol to be established by the Parties.
Article 13
Authorized Competent Entities
1. Each Party shall designate and notify to the other Parties the national authority, agency, state-owned enterprise or any other authorized legal entity, which will be responsible, according to its national legislation, for the implementation of the present Agreement in each one of the sectors (oil and gas) covered by this Agreement.
2. The Parties accept and guarantee the obligations undertaken by these entities for the implementation of the present Agreement and the Protocols subsequently annexed herein, as their own obligations.
Article 14
Relation to other International Treaties
1. The provisions of the present Agreement do not preclude the right of the Parties to have recourse to other forms of intergovernmental co-operation in the oil and gas transit sector.
2. The provisions of the present Agreement may not be interpreted as modifying or terminating any other international treaties in force in the oil and gas transit sector, as well as any other international treaties concluded by the Parties with other States, the purpose of which is related to the protection, treatment and promotion, within the territory of the Parties, of foreign investments originating from these other States.
Article 15
Final Provisions
1. The present Agreement is of indefinite duration.
2. The present Agreement shall be open for signature from the twenty-second day of July 1999 until the first day of January 2000. The present Agreement shall be subject to ratification by the Parliaments or other competent bodies of the signatory States. Instruments of ratification shall be deposited with the Depositary. The Depositary of the present Agreement shall be the Government of the Ukraine.
3. The present Agreement shall enter into force on the thirtieth day after the date of deposit of the third instrument of ratification by a State which is signatory to this Agreement. The present Agreement shall be open for accession from the date on which the Agreement is closed for signature. The instruments of accession shall be deposited with the Depositary. For each Party which shall deposit its instrument of ratification or accession after the present Agreement has entered into force, this Agreement shall enter into force on the date of such deposit with the Depositary.
4. The present Agreement is subject to the general principles of international law, including the Vienna Convention on the Law of Treaties.
Article 16
Authentic Texts
In witness whereof the undersigned, being duly authorized to that effect, have signed the present Agreement in English and the official language of each Party. In the case of discrepancy, the English text shall prevail.
The present Agreement is deposited with the Depository, which will retain it in its archives. Each of the Parties will receive from the Depository a true copy of the present Agreement. The Depository of this Agreement is equally requested to transmit an authentic copy of the present Agreement to the Secretary-General of the United Nations for registration under the Article 102 of the Charter of the United Nations.
Done at Kiev, on the twenty-second day of July in the year one thousand nine hundred and ninety-nine.
Republic of Armenia
Republic of Azerbaijan
Republic of Belarus
Republic of Bulgaria
Georgia
Republic of Kazakhstan
Kyrgyz Republic
Republic of Moldova
Romania
Republic of Tajikistan
Republic of Turkmenistan
Ukraine
Republic of Uzbekistan
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