WORLD TRADE
ORGANIZATIONWT/REG64/1
26 January 1999
(99-0292)
Committee on Regional Trade Agreements Original:  English
FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC
OF ESTONIA AND THE FAROE ISLANDS (GOVERNMENT OF DENMARK)
The following text reproduces the Free Trade Agreement.1
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Agreement between the Government of the Republic of Estonia and the
Government of Denmark and the Home  Government of the Faroe Islands
The Government of the Republic of Estonia , of the one part, and t he Government of Denmark
and the Home Government of the Faroe Islands , of the other part,
Hereinafter  referred to as the Contracting Parties,
Recalling  the status of the Faroe Islands as a self-governing part of Denmark;
Considering  the vital importance of fisheries for the Faroe Islands, which constitute their
essential economic activity, fish and fishery products being their main export articles;
Considering  the vital importance of fisheries for Estonia;
Desiring  to consolidate and to extend the economic relations existing between Estonia and the
Faroe Islands and to ensure, with due regard for fair conditions of competition, the harmoniousdevelopment of their mutual trade in the context of European co-operation;
Resolved  to this end to eliminate progressively the obstacles to substantially all their trade, in
accordance with the provisions of the General Agreement on Tariffs and Trade concerning the
establishment of free-trade areas;
Declaring  their readiness to examine, in the light of any relevant factor, and in particular of
developments in European co-operation, the possibility of developing and deepening their relations in
order to extend them to fields not covered by this Agreement;
                                                     
1The Annexes and Protocols thereto have been submitted to the Secretariat for consultation by
interested Members (Office 3006).WT/REG64/1
Page 2
Have decided , in pursuit of these objectives and considering that no provisions of this
Agreement may be interpreted as exempting the Cont racting Parties from their obligations under other
international agreements,
To conclude this Agreement :
Article 1
Objectives
1. The Contracting Parties shall establish a free-trade area, comprising the Republic of Estonia
and the Home Government of the Faroe Islands, in accordance with the provisions of the present
Agreement.
2. The objectives of this Agreement are:
(a) to promote, through the expansion of re ciprocal trade, the harmonious development
of the economic relations between the Contracting Parties and thus to foster the
advance of economic activity, the improvement of living and employment conditions,
and increased productivity and financial stability;
(b) to provide fair conditions of competitio n for trade between the Contracting Parties;
(c) to contribute in this way, by the removal of barriers to trade, to the harmonious
development and expansion of world trade.
CHAPTER I
Article 2
Scope
This Agreement shall apply:(a) to products falling within Chapters 01 to 97 of the Harmonized Commodity
Description and Coding System originating in Estonia or the Faroe Islands.
Article 3
Customs Duties on Imports and Exports and Charges Having Equivalent Effect
1 No new customs duties on imports and exports or charges having equivalent effect shall be
introduced in trade between the Contracting Parties.
2. The Contracting Parties shall abolish between them on the date of entry into force of this
Agreement all customs duties on imports and exports and all charges having equivalent effect.  The
paragraphs 1 and 2 of this article should be applied according to Protocol 1 of this Agreement.WT/REG64/1
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Article 4
Fiscal duties
The provisions of Article 3 shall also apply to customs duties of a fiscal nature.
Article 5
Quantitative Restrictions on Imports and Exports and Measures having Equivalent Effect
1. No new quantitative restrictions on imports and exports or measures having equivalent effect
shall be introduced in trade between the Contracting Parties.
2. All quantitative restrictions on imports and exports and measures having equivalent effect
shall be abolished on the date of entry into force of this Agreement.
Article 6
Concessions and Agricultural Policies
1. The provisions of this Chapter shall not rest rict in any way the pursuance of the respective
agricultural policies of the Contracting Parties or the taking of any measures under such policies,
including the implementation of the respective provisions of the Agreement on Agriculture within the
framework of the World Trade Organization.
2. The Contracting Parties shall notify each other of changes in their respective agricultural
policies pursued or measures applied which may affect the conditions of agricultural trade between
them as provided for in this Agreement. Prompt consultations shall be held in the Joint Committee,
upon request of any Contracting Party, to examine the situation.
Article 7
Special safeguards
Notwithstanding other provisions of this Agreement and, in particular, Article 24, if, given the
particular sensitivity of the agricultural markets, imports of products originating in a ContractingParty, which are subject to concessions granted under this Agreement, cause serious disturbance to the
markets of the other Contracting Party, the Contracting Party concerned shall enter into consultations
immediately to find the appropriate solution. Pending such solution, the Contracting Party concerned
may take the measures it deems necessary.
Article 8
Veterinary, Health and Phytosanitary Measures
The Contracting Parties shall apply their regulations in veterinary, health and plant health
matters  in a non-discriminatory fashion and shall not introduce any new measures  that have the
effect of unduly obstructing trade.WT/REG64/1
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CHAPTER II
General Provisions
Article 9
Rules of Origin and Administrative Co-operation
1. Protocol 2 to this Agreement lays down the rules of origin and related methods of
administrative co-operation.
2. The Contracting Parties shall take appropriate measures, including regular reviews by the
Joint Committee and arrangements for administrative co-operation.
Article 10
Internal Taxation
1. The Contracting Parties shall refrain from any measure or practice of an internal fiscal nature
establishing, whether directly or indirectly, discrimination between the products originating in the
Contracting Parties.
2. Products exported to the territory of one of the Contracting Parties may not benefit from
repayment of internal taxation in excess of the amount of direct or indirect taxation imposed on them.
Article 11
Payments
Payments relating to trade and the transfer of su ch payments to the territory of the Contracting
Party, depending on where the creditor resides, shall be free from any restrictions.
Article 12
General Exceptions
This Agreement shall not preclude prohibitions or restrictions on imports, exports or goods in
transit justified on the grounds of public morality, public policy or public security; the protection of
human, animal or plant life or health; the protection of national treasures possessing artistic, historic
or archaeological value; the protection of intellectual property or rules relating to gold or silver or to
the conservation of exhaustible natural resources if such measures are made effective in conjunctionwith restrictions on domestic production or consumption. Such prohibitions or restrictions shall not,
however, constitute a means of arbitrary discrimination or a disguised restriction on trade between the
Contracting Parties.WT/REG64/1
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Article 13
Security Exceptions
1. Nothing in this Agreement shall prevent a Co ntracting Party from taking any measure, which
it considers necessary:
(a) to prevent the disclosure of information contrary to its essential security interests;(b) for the protection of its essential security interests or for the implementation of
international obligations or national policies;
(i) relating to the traffic in arms, ammunition and implements of war, provided that such
measures do not impair the conditions of competition in respect of products not
intended for specifically military purposes, and to such traffic in other goods,
materials and services as is carried on directly or indirectly for the purpose of
supplying a military establishment; or
(ii) relating to the non-proliferation of biological and chemical weapons, nuclear weapons
or other nuclear explosive devices; or
(iii) taken in time of war or other serious international tension.
Article 14
Public Monopolies
1. The Contracting Parties shall adjust pr ogressively any State monopoly of commercial
character so as to ensure that no discrimination regarding the conditions under which goods are
procured and marketed exists between nationals of the Contracting Parties.
2. The provisions of this Article shall apply to any body through which the competent
authorities of the Contracting Parties, in law or in fact, either directly or indirectly, supervise,determine or appreciably influence imports or exports between the Contracting Parties. These
provisions shall likewise apply to monopolies delegated by a Contracting Party to other bodies.
Article 15
Rules of Competition Concerning Undertakings
1. The following are incompatible with the proper functioning of this Agreement in so far as
they may affect trade between the Contracting Parties:
(a) all agreements between undertakings, decisions by associations of undertakings and
concerted practices between undertakings which have as their object or effect the
prevention, restriction or distortion of competition;
(b) abuse by one or more undertakings of a dominant position in the territories of the
Contracting Parties as a whole or in substantial part thereof.WT/REG64/1
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2. The provisions of paragraph 1 shall apply to the activities of all undertakings including public
undertakings and undertakings to which the Contra cting Parties grant special or exclusive rights.
Undertakings entrusted with the operation of services of general economic interest or having the
character of a revenue-producing monopoly, shall be subject to provisions of paragraph 1 in so far as
the application of these provisions does not obstruct the performance, in law or in fact, of theparticular public tasks assigned to them.
3. If a Contracting Party considers that a given practice is incompatible with paragraphs 1 and 2
and if such practice causes or threatens to cause serious prejudice to the interest of that Contracting
Party or material injury to its domestic industry, it may take appropriate measures under the
conditions and in accordance with the procedure laid down in Article 24.
Article 16
Protection of Intellectual Property
1. Each Contracting Party shall recognize the copyright and neighbouring rights to works to which
citizens and institutions of the other Contracting Party, as well as their legal successors, are entitled,
independently of the place of their first publication. Each Contracting Party shall ensure the protection of
such rights on the same conditions as those created by its internal legislation with respect to its own
citizens and institutions. Furthermore, the Contracting Parties undertake to respect mutually the copyrightand neighbouring rights of their citizens and institutions in accordance with the standards binding in the
European Union. In particular, the Contracting Parties undertake to respect mutually the standards of
protection provided for in the Bern and Rome Conventions.
2. The Contracting Parties shall grant and ensure the protection of intellectual property rights on
a non-discriminatory basis, including measures for granting and enforcing such rights. The
Contracting Parties confirm their will to respect  obligations and requirements arising from the
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), as well as other
agreements, which are signed by both Contracting Parties, in particular the Paris Convention for the
protection of industrial property (Stockholm Act, 1967).
3. For the purposes of this Agreement "intellectual property protection" includes, in particular,
protection of copyright, comprisi ng computer programs and databases, and neighbouring rights, trade
marks, geographical indications, industrial designs, patents, topographies of integrated circuits, as
well as undisclosed information on know-how.
4. The Contracting Parties may conclude further agreements exceeding the requirements of this
Agreement.
5. The Contracting Parties shall co-operate in matters of industrial property protection.  They
shall hold, upon request of any Contracting Party, ex pert consultations on these matters, in particular,
on activities relating to the existing or to future international conventions on harmonization,administration and enforcement of intellectual property and on activities in international
organizations, such as the World Trade Organization and the World Intellectual Property
Organization, as well as relations of the Contracting Parties with any third country on matters
concerning intellectual property .WT/REG64/1
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Article 17
Public Procurement
1. The Contracting Parties consider the liberalization of their respective public procurement
markets as an objective of this Agreement.
2. The Contracting Parties shall progressively develop their respective regulations for public
procurement with a view to grant suppliers of the other Contracting Party, access to contract award
procedures on their respective public procurement markets according to the provisions of the
Agreement on Government Procurement in Annex IV to the Agreement Establishing the World Trade
Organization.
3. The Joint Committee shall examine developments related to the achievement of the objectives
of this Article and may recommend practical modalities of implementing the provisions of
paragraph 2 so as to ensure free access, transparency and full balance of rights and obligations.
4. During the examination referred to in paragraph 3, the Joint Committee may consider,
especially in the light of international developmen ts and regulations in this area, the possibility of
extending the coverage and/or the degree of the market opening provided for in paragraph 2.
5. The Contracting Parties shall endeavour to accede to the relevant Agreements negotiated
under the auspices of the General Agreement on Tariffs and Trade 1994 and the Agreement
establishing the World Trade Organization.
Article 18
Dumping
If one of the Contracting Parties finds that dumping is taking place in trade with the other
Contracting Party, it may take appropriate measures against this practice in accordance with the
Agreement on Implementation of Article VI of  the GATT 1994, under the conditions and in
accordance with the procedure laid down in Article 24.
Article 19
General Safeguards
1. Where any product is being imported in such increased quantities and under such conditions
as to cause or threaten to cause:
(a) serious injury to domestic producers of like or directly competitive products in the
territory of the importing Contracting Party, or
(b) serious disturbances in any related sector of the economy or difficulties which could
bring about serious deterioration in the economic situation of a region,
the Contracting Party concerned may take appropriate measures under the conditions and in
accordance with the procedure laid down in Article 24.WT/REG64/1
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Article 20
Re-export and Serious Shortage
1. Where compliance with the provisions of Articles 3 and 5 leads to:
(a) re-export towards a third country against which the exporting Contracting Party
maintains for the product concerned quantitative export restrictions, export duties or
measures or charges having equivalent effect; or
(b) a serious shortage, or threat thereof, of a product essential to the exporting
Contracting Party;
and where the situations referred to above give rise or are likely to give rise to major difficulties for
the exporting Contracting Party, that Contracting Party may take appropriate measures under the
conditions and in accordance with the procedure laid down in Article 24.
Article 21
Balance of Payments Difficulties
1. The Contracting Parties shall endeavor to avoid the imposition of restrictive measures
including measures relating to imports for balance of payments purposes.
2. Where one of the Contracting Parties is in serious balance of payments difficulties, or under
imminent threat thereof, the Contracting Party concerned may, in accordance with the relevantprovisions of the General Agreement on Tariffs and Trade 1994 adopt restrictive measures, including
measures related to imports, which shall be of limited duration and may not go beyond what is
necessary to remedy the balance of payments situation. The measures shall be progressively relaxed
as balance of payments conditions improve and they shall be eliminated when conditions no longer
justify their maintenance.  The Contracting Party concerned shall inform the other Contracting Party
forthwith of their introduction and, whenever practicable, of a schedule for their removal.
Article 22
State Aid
1. Any aid granted by a State being a Contracting Party or through state resources in any form
whatever, which distorts or threatens to distort competition by favouring certain undertakings or the
production of certain goods shall, in so far as it may affect trade between the Contracting Parties, be
incompatible with the proper functioning of this Agreement.
2. The Joint Committee shall, within three years from entry into force of this Agreement adopt
the criteria on the basis of which the practices contrary to paragraph 1 shall be assessed, as well as the
rules for their implementation.
3. The Contracting Parties shall ensure transparency in the area of state aid, inter alia , by
reporting annually to each other on the total amount and the distribution of the aid given and by
providing to the other Contracting Party, upon request, information on aid schemes and on particular
individual cases of  state aid.WT/REG64/1
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4. If a Contracting Party considers that a particular practice:
- is incompatible with the terms of paragraph 1, and is not adequately dealt with under
the implementing rules referred to in paragraph 3, or
- in the absence of such rules, and if such practice causes or threatens to cause serious
prejudice to the interest of that Contracting Party or material injury to its domestic
industry,
it may take appropriate measures under the conditions of and in accordance with the provisions of
Article  24. Such appropriate measures may only be taken in conformity with the procedures and under
the conditions of the World Trade Organization and any other relevant instrument negotiated under itsauspices which are applicable between the Contracting Parties.
Article 23
Fulfilment of Obligations
1. The Contracting Parties shall take any general or  specific measures required to fulfill their
obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are
attained.
2. If a Contracting Party considers that the other Contracting Party has failed to fulfill an
obligation under this Agreement, the Contracting Party concerned may take appropriate measures
under the conditions and in accordance with the procedure laid down in Article 24.
Article 24
Procedure for the Application of Safeguard Measures
1. Before initiating the procedure for the application of safeguard measures set out in the
following paragraphs of this Article, the Contract ing Parties shall endeavour to solve any differences
between them through direct consultations.
2. Without prejudice to paragraph 6 of this Article, the Contracting Party which considers
resorting to safeguard measures shall promptly notify the other Contracting Party thereof and supply
all relevant information. Consultations between the Parties shall take place without delay in the JointCommittee with a view of finding a mutually acceptable solution.
3. For the application of paragraph 2 the following provisions apply:
(a) With regard to Articles 17 and 22  , the Joint Committee shall examine the case or the
situation and may take any decision needed to put an end to the difficulties notified
by the Contracting Party concerned. In the case of the absence of such decision within
thirty days of the matter being referred to the Joint Committee the Contracting Party
concerned may adopt the appropriate measures to deal with the difficulties resulting
from practice in question.
(b) With regard to Article 23, the Contracting Party concerned may take appropriate
measures after the consultations have been concluded or a period of three months has
elapsed from the date of the first notification to the other Contracting Party.WT/REG64/1
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(c) With regard to Articles 18  and 21, the Contracting Party concerned shall give the
Joint Committee all the assistance required in order to examine the case and, where
appropriate, eliminate the practice objected to. If the Contracting Party in question
fails to put an end to the practice objected to within the period fixed by the JointCommittee or if the Joint Committee fails to reach an agreement within thirty days of
the matter being referred to it, the Contracting Party concerned may adopt the
appropriate measures to deal with the difficulties resulting from the practice in
question.
4. The safeguard measures taken shall be immediately notified to the other Contracting Party.
They shall be restricted with regard to their extent and to their duration to what is strictly necessary in
order to rectify the situation giving rise to their application and shall not be in excess of the injury
caused by the practice or the difficulty in question. Priority shall be given to such measures which will
least disturb the functioning of this Agreement.
5. The safeguard measures taken shall be the subject of periodic consultations within the Joint
Committee with a view to their relaxation as soon as possible.
6. Where exceptional circumstances requiring immediate action make prior examination
impossible, the Contracting Party concerned may, in the cases of Articles 15,18, 20 and 22, apply
forthwith the provisional measures strictly necessary to remedy the situation. The measures shall benotified without delay and consultations between the Contracting Parties shall take place as soon as
possible.
Article 25
Customs Unions, Free-Trade Areas and Frontier Trade
This Agreement shall not prevent the maintenance or establishment of customs unions,
free-trade areas or arrangements for frontier trade, to  the extent that these do not negatively affect the
trade regimes provided for by this Agreement, in particular the provisions concerning rules of origin.
CHAPTER III
Institutional and Final Provisions
Article 26
The Joint Committee
1. The Joint Committee is hereby established and shall consist of  representatives appointed by
the Contracting Parties.
2. The implementation of this Agreement shall be supervised and administered by the Joint
Committee.WT/REG64/1
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Article 27
Procedures of the Joint Committee
1. For the purpose of proper implementation of this Agreement, the Contracting Parties shall,
whenever necessary, exchange information and, at the request of either Contracting Party, hold
consultations.
2. For the implementation of this Agreement, the following shall apply:
(a) The exchange of information and the consultations referred to in paragraph 1, and
especially the consultations and decisions referred to in Article 24 , shall, whenappropriate, take place in the Joint Committee.
(b) The Joint Committee may take decisions in cases provided for in this Agreement. On
other matters the Joint Committee may make recommendations.
(c) For the purpose of the proper implementation of this Agreement the Joint Committee
shall meet whenever necessary. Each Contracting Party may request that a meeting be
held.
(d) The Joint Committee shall act by common agreement.(e) The Joint Committee shall lay down its own rules of procedure.(f) The Joint Committee may decide to set up  such sub-committees and working parties,
as it considers necessary to assist it in accomplishing its tasks.
(g) The Joint Committee may decide to amend the Protocols to this  Agreement.
Article 28
Evolutionary Clause
1. Where a Contracting Party considers that it would be useful in the interest of the Contracting
Parties to develop the relations established by this Agreement by extending them to fields not covered
thereby, it shall submit a reasoned request to the other Contracting Party.
2. Agreements resulting from the procedure referred to in paragraph 1 will be subject to
ratification or approval by the Contracting Parties in accordance with their own procedures.
Article 29
Annexes and Protocols
Annexes and Protocols to this Agreement are an integral part of it.WT/REG64/1
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Article 30
Entry into Force
This Agreement shall enter into force on the first day of the month following the date of
receipt of the latter diplomatic note confirming that  their respective internal legal requirements for the
entry into force of this Agreement have been fulfilled.
Article 31
Validity and Termination
Either Contracting Party may terminate this Agreement by a written notification to the other
Contracting Party. The Agreement shall cease to be in force twelve months after the date of which
such notification was received by the other Contracting Party.
IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized thereto,
have signed this Agreement.
Done at Torshavn, this … day of November 1997, in three originals, each in the English
language.
For the Government of For the Government of
the Republic of Estonia Denmark and the
Home Government of
the Faroe Islands
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