AGREEMENT BETWEEN
THE GOVERNMENT OF THE REPUBLIC OF LATVIA AND THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA
ON THE RECIPROCAL HOLDING OF STOCKS OF CRUDE OIL AND PETROLEUM PRODUCTS

The Government of the Republic of Latvia and the Government of the Republic of Lithuania, (the “Contracting Parties”):

HAVING REGARD to Council Directive 2006/67/EC of 24 July 2006 imposing obligations on Member States to maintain mandatory stocks of crude oil and/or petroleum products, (“the Directive”);

HAVING REGARD to Article 7 (1) of the Directive which envisages the establishment of stocks within the territory of a Member State for the account of undertakings located in another Member State, under agreements between Governments;

HAVING REGARD to national legislation regarding oil stockholding obligations;

HAVE AGREED as follows:

Article 1

For the purposes of this Agreement:

“competent authority” means the authority of each Contracting Party responsible for supervising the fulfilment by undertakings of stockholding obligations.

“supply crisis” means a supply shortfall as defined in the Article 1 (c) of the Commission Decision 78/890/EEC of 28 September 1978 applying Council Decision 77/186/EEC on the exporting of crude oil and petroleum products from one Member State to another in the event of supply difficulties.

“territory” means that area over which each Contracting Party exercises jurisdiction.

“undertaking” means any undertaking or body/entity established in the territory of one Contracting Party which is, according to the national legislation of that Contracting Party, entitled to hold stocks for the purpose of facilitating compliance, whether by that undertaking or body/entity or by a third party, with the national legislation relating to oil stockholding obligations of that or the other Contracting Party.

Article 2

This Agreement applies to stocks of crude oil and of any petroleum products including blending and finished products covered by the Directive, which have been accepted by the competent authorities of both Contracting Parties as being stocks to which this Agreement applies.

Article 3

(1) An undertaking established in the Republic of Lithuania may hold stocks to which this Agreement applies in the Republic of Latvia. Such stocks may be held either:

(a) directly by the undertaking established in the Republic of Lithuania, or

(b) by an undertaking established in the Republic of Latvia, on behalf of the undertaking established in the Republic of Lithuania.

(2) An undertaking established in the Republic of Latvia may hold stocks to which this Agreement applies in the Republic of Lithuania. Such stocks may be held either:

(a) directly by the undertaking established in the Republic of Latvia, or

(b) by an undertaking established in the Republic of Lithuania, on behalf of the undertaking established in the Republic of Latvia.

(3) For stocks to be eligible for acceptance under Article 2 of this Agreement, the undertaking seeking acceptance of those stocks under that Article must have agreed to hold them whether itself or through a third party, from the first day of any calendar month for three or more full calendar months, after acceptance by the competent authorities.

(4) If an undertaking holds stocks on behalf of another undertaking in accordance with paragraphs (1) (b) or (2) (b) of this Article, then those stocks shall not be taken into account by the first mentioned undertaking in its own stocking declarations.

Article 4

Neither Contracting Party shall oppose the transfer of stocks to which this Agreement applies from its territory in accordance with directions issued by the competent authority of the other Contracting Party.

Article 5

(1) No stocks may be accepted under Article 2 of this Agreement as being stocks to which this Agreement applies unless:

(a) the undertaking seeking to hold the stocks outside its State of establishment (“the first undertaking”) has furnished the competent authority of its State of establishment, not later than fifteen working days before the commencement of the period to which the acceptance relates, with the following particulars:

(i) its name and address and the name and address of the undertaking established in the State where the stocks are to be held (“the second undertaking”) which is to hold the stocks on its behalf;

(ii) the category and quantity of the stocks;

(iii) the period for which the stocks are to be held;

(iv) location of the depot(s) where the stocks are to be held;

(v) the provisions of any agreement whereby the stocks are to be held on behalf of the first undertaking by the second undertaking; and

(b) both the first and the second undertakings consent to the competent authorities of the Contracting Parties disclosing to each other any information obtained for the purpose of implementing this Agreement.

(2) Where an undertaking is seeking to hold outside its State of establishment stocks which will not be owned by that undertaking (the “beneficiary undertaking”) but will be held at its disposal by another undertaking (the “delegating undertaking”), then in addition to the provisions of paragraph (1) of this Article, no stocks which are to be so held may be accepted under Article 2 of this Agreement as being stocks to which this Agreement applies, unless

(a) the stocks are to be held by virtue of an agreement in writing between the beneficiary undertaking and the delegating undertaking (the “contract”) which will subsist throughout the period to which the acceptance relates;

(b) the beneficiary undertaking has the contractual right to acquire the stocks throughout the period of the contract and the methodology for establishing the price of such acquisition is agreed between the parties concerned;

(c) the actual availability of the stocks for the beneficiary undertaking is guaranteed at all times throughout the period of the contract, and

(d) the delegating undertaking is one which is subject to the jurisdiction of the Contracting Party on whose territory the stocks are situated insofar as the legal powers of that Contracting Party to control and verify the existence of the stocks are concerned.

(3) Where the competent authority of one Contracting Party has been furnished with particulars under paragraph (1) (a) of this Article, or any changes in respect of such particulars, and accepts the stocks in question as stocks to which this Agreement applies, that authority shall, not later than ten working days before the commencement of the period to which the acceptance relates, transmit the particulars to the competent authority of the other Contracting Party and notify it of such acceptance.

(4) The competent authority to which such notification is given (“the second competent authority”) shall use all reasonable endeavours to notify the competent authority of the other Contracting Party (“the first competent authority”) whether or not it accepts the stocks in question as stocks to which this Agreement applies no later than five working days before the commencement of the period to which the acceptance relates and in the event that no such notification is received by the first competent authority before the date of commencement of such period, the second competent authority shall be deemed not to have accepted the stocks in question as stocks to which this Agreement applies.

(5) Any acceptance under paragraphs (3) or (4) of this Article may be withdrawn by either competent authority if any significant inaccuracy is found in the particulars furnished in respect of that acceptance under paragraph (1) (a) of this Article, or if there is any material change in the matters to which those particulars relate. Before withdrawing an acceptance under this provision the competent authority concerned shall inform the competent authority of the other Contracting Party and afford the undertaking, which had furnished the particulars a reasonable opportunity to make representations.

Article 6

(1) Each competent authority shall require any undertaking holding stocks in the territory of the other Contracting Party to furnish it with a statistical return, at least monthly, of those stocks within three weeks of the expiry of the period to which the return relates. Each competent authority shall transmit to the other competent authority copies of every statistical return furnished under this Article.

(2) Each statistical return to be furnished under paragraph (1) of this Article shall include particulars of:

(a) the name and address of the undertaking holding the stocks in the territory of the other Contracting Party and, where applicable, the name and address of the undertaking located in the State where the stocks are to be held, which is to hold the stocks on its behalf;

(b) the category and quantity of the stocks; and

(c) location of the depot(s) where the stocks are held.

(3) The competent authority shall, by exercising from time to time its powers of inspection, check on the information contained in statistical returns so furnished and notify forthwith the competent authority of the other Contracting Party of any material discrepancy in respect of that information.

(4) The competent authorities shall cooperate in relation to the use of their powers of inspection in cases where either authority considers such cooperation to be necessary in relation to particular stocks held under the terms of the Agreement.

Article 7

The Contracting Parties shall consult each other as soon as reasonably practic­able:

(a) in the event of a supply crisis; or

(b) at the request of either of them, in order to:

(i) resolve any difficulty arising in the interpretation or application of this Agreement; or

(ii) amend any of the terms of this Agreement.

Article 8

This Agreement may be amended by written agreement between the Contracting Parties and the amended Agreement shall take effect on the date when a Contracting Party has received through the diplomatic channel the last notification of the completion of respective internal legal procedures of the Contracting Parties necessary for the entry into force of the amended Agreement.

Article 9

This Agreement shall enter into force on the date of signature.

Article 10

(1) This Agreement shall continue in force indefinitely but may be terminated by either Contracting Party upon giving notice in writing, through the diplomatic channel to the other Contracting Party, not less than six months before the end of any calendar year. The Agreement shall cease to be in force from the first day of the following calendar year.

(2) Neither Contracting Party shall exercise the power of termination set forth in paragraph (1) of this Article without having informed the Commission of the European Communities of its intention to do so.

(3) The provisions of paragraph (1) of this Article shall not apply during a supply crisis.

IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed this Agreement.

Done in duplicate in Vilnius on this 7 day of December 2008 in the Latvian, Lithuanian and English languages, all texts being equally authentic. In case of divergent interpretation, the English language version shall prevail.