The Government of the People's Republic of China and the Government of the Republic of Cyprus, desirous of further developing the friendship and trade relations between the two countries on the basis of equality and mutual benefit, have agreed as follows: -

Article 1

The exchange of goods between the People's Republic of China and the Republic of Cyprus shall be carried out in conformity with the import and export laws, rules and regulations in force in each country.

Article 2

The two Contracting Parties shall grant each other the most-favoured nation treatment with respect to customs duties, charges of any kind to be collected on export or import, taxes and customs formalities required for the import and export of goods between the two countries.

The above treatment shall not however apply to: -

(a) advantages that either Contracting Party has granted or shall grant to neighbouring countries with a view to facilitating frontier trade;

(b) advantages or privileges resulting from a Customs Union or Free Trade Area to which either Contracting Party is or may become associated.

Article 3

The two Governments shall take all possible measures to facilitate, strengthen and diversify trade between the two countries in respect of both traditional and potential exports.

Article 4

Merchant ships under the flag of either country with or without cargoes therein, will, while staying in or leaving the ports of the other country, enjoy the most-favoured facilities granted by its laws, rules and regulations to ships under any third country flag. This principle shall not, however, apply to ships engaged in coastal navigation.

Article 5

The deliveries of goods under this Agreement shall be carried out on the basis of contracts concluded between foreign trade organisations of the People's Republic of China, on the one hand, and physical or legal persons of the Republic of Cyprus, on the other hand.

Article 6

For the purpose of expanding trade between the two countries the two Contracting Parties shall facilitate the participation of their organisations and enterprises in trade fairs and commercial exhibitions to be held in their respective territory.

Articles destined for such fairs and exhibitions, as well as small tools and appliances to be used in assembling, shall, subject to the relevant legislation, be exempted from customs duties but shall not, however, be disposed of without the prior permission of the respective competent authorities of the importing country and the payment of the appropriate customs duties.

Subject to the relevant legislation, samples of no commercial value, catalogues, price lists and materials of no commercial value, destined for commercial and tourist publicity, shall also be exempted from customs duties.

Article 7

All payments between the two countries shall be effected in freely convertible currency, in accordance with the laws and regulations of each country.

Article 8

The Government of the People's Republic of China will encourage and facilitate effectively the competent Chinese foreign trade organisations to import products from the Republic of Cyprus.

The Government of the Republic of Cyprus will encourage and facilitate effectively physical and/or legal persons in Cyprus to import products from the People's Republic of China.

Article 9

For the purpose of promoting the aims of this Agreement, a Mixed Commission, consisting of representatives of the two Governments, will be established. The Commission shall meet alternately in the capitals of the two countries at the request of either Party, by mutual agreement.

The Commission shall examine the state of trade between the two countries, explore measures for the expansion of mutual trade between relevant commercial enterprises and organizations, seek solutions to problems which may arise in the course of the development of trade relations between the two countries and submit recommendations to the two Governments.

Article 10

This Agreement shall replace the Trade and Payments Agreement concluded between the two countries on 19th September, 1973.

The present Agreement shall come into force provisionally on 1st April, 1981 and definitively after the exchange of notes confirming that it has been approved in accordance with the legal procedures of the Contracting Parties and shall remain in force for three years.

The validity of the present Agreement shall thereafter be automatically extended for further periods of one year each, unless either Contracting Party, by a notice in writing, given at least six months before its validity, terminates its operation or proposes the conclusion of a new one.

Done in Nicosia on 16th February, 1981 in two originals in the Chinese and English languages, both texts being equally authentic.