Agreement between the Government of the Republic of Latvia and the Government of the Republic of Estonia Regarding the Terms of Use and Maintenance of the Joint Border Control Point Valka 2 -Valga 1

The Government of the Republic of Latvia and the Government of the Republic of Estonia, hereinafter together referred to as "Parties" and separately referred to as "Party", in accordance with the Agreement of March 5, 1999 between the Republic of Latvia and the Republic of Estonia on the transfer of the user's rights of the plot of land have agreed as follows:

Article 1. Subject of the Agreement

1.1. Parties shall jointly use the Joint Border Control Point Valka 2 - Valga 1 (hereinafter referred to as "Border Control Point") located on the plot of land with the Land Cadastre No 9401-008-0377 and total area of 42 150 square meters, in the Republic of Latvia in the city of Valka, Rūjienas Str. 31 (hereinafter referred to as "Land") in order to ensure effective customs and border control.

Site plan of the Border Control Point shall be the Appendix No 1 of this Agreement. The areas which each of the Parties shall be entitled to use corresponding to the legislation of the Republic of Latvia shall be reflected in the Appendices No 2, No 3, No 4 and No 5. The fore-mentioned Appendices shall be integral parts of this Agreement.

1.2. The Republic of Estonia shall carry out maintenance of the Border Control Point and other necessary activities related to maintenance, monitoring, use of movable and immovable assets of the Border Control Point as well as keep the assets in good condition during the duration period of this Agreement by not deteriorating its condition, carry out all the necessary activities against third parties the activities of which are turned against the assets, ensure the external service works on the territory comply with ecology, fire-safety, sanitary standards and safety rules according to the normative acts of the Republic of Latvia as well as other activities following the provisions of this Agreement. Movable assets related to telecommunications (telephones, computers, printers etc.) shall not be considered movable assets in the meaning of this Agreement.

1.3. The Republic of Latvia shall perform all legal operations concerning the Land. The Republic of Estonia shall perform all necessary actions related to the use of the Land.

Article 2. Maintenance Costs, Payment Procedures

2.1. Carrying out of maintenance works of the Border Control Point and covering of costs shall be ensured by the Republic of Estonia.

2.2. Conclusion of the agreements on public utilities with the corresponding services and making payments corresponding to these agreements shall be ensured by the Republic of Estonia.

2.3. Conclusion of the agreements and payments on telecommunication services shall be made by the Parties separately.

Article 3. Rights and Obligations of the Republic of Latvia

3.1. The Republic of Latvia shall be entitled to:

3.1.1. use autonomously its part as well as common premises of the Border Control Point, including all the necessary equipment and inventory located therein free of charge and for provided purposes;

3.1.2. make proposals in relation to the maintenance organisation of the Border Control Point;

3.1.3. make proposals in relation to the conclusion of the agreements with organisations and undertakings whose operating at the Border Control Point is related to the border-crossing procedures.

3.2. The Republic of Latvia shall be liable for:

3.2.1. ensuring the fulfilment of all the obligations in relation to the Land. By signing this Agreement, certifies that the third Parties have no rights or claims against the Land or in relation to the Land;

3.2.2. utilizing rationally and single-purposely the property of the Republic of Estonia and inform in written form the Republic of Estonia on damages made by the third parties to the property situated at the Border Control Point within 2 (two) working days from the day the damages have been detected;

3.2.3. providing information and assistance to the Republic of Estonia on necessary legal and technical requirements pertaining to the Border Control Point.

Article 4. Rights and Obligations of the Republic of Estonia

4.1. The Republic of Estonia shall be entitled to:

4.1.1. use autonomously its part as well as common premises of the Border Control Point, including all the necessary equipment and inventory located therein free of charge and for provided purposes;

4.1.2. conclude the agreements with third parties on carrying out specific maintenance works in the Border Control Point;

4.1.3. conclude lease agreements with the undertakings and organisations carrying out activities in Border Control Point;

4.1.4. enter information concerning the property rights to the buildings in the land register.

4.2. The Republic of Estonia shall be obliged to:

4.2.1. comply with the legislation of the Republic of Latvia;

4.2.2. use the Land only for the purposes provided in item 1.1.;

4.2.3. accurately carry out all the activities related to the maintenance of the Border Control Point.

Article 5. Liability of the Parties

5.1. Parties shall be liable for the fulfilment of the obligations under this Agreement.

5.2. In case of wrongful non-fulfilment or inappropriate fulfilment of the conditions of the Agreement result in causing tangible loss to the other Party, the Party shall be liable within the amount of tangible loss caused by the Party.

5.3. Parties shall not be liable for the non-fulfilment or inappropriate fulfilment of the obligations under this Agreement occurred as a result of Force Majeure circumstances after this Agreement has become effective, that have not been possible to predict nor to prevent. These Force Majeure circumstances shall include events that are outside control and liability of the Parties (natural calamities, flood, fire, earthquake and other disasters, as well as war and military operations, strikes, adoption of new legislative acts and other circumstances that are outside the margins of possible control of the Parties).

5.4. The Party, who finds itself under Force Majeure circumstances, shall immediately inform the other Party on it by telephone, as well as afterwards in writing within 3 (three) working days after Force Majeure circumstances have occurred, and the respective statement has to include certificate issued by competent authorities containing the approval and characteristics of the above-mentioned circumstances.

5.5. In case the Agreement due to above-mentioned circumstances shall not operate for a period exceeding 3 (three) months, each Party shall be entitled to refuse from the fulfilment of the Agreement by notifying the other Party at least 15 (fifteen) days before. In this case neither of the Parties shall be entitled to claim the recovery of losses arisen from the termination of this Agreement.

Article 6. Settlement of Disputes

6.1. All the disputes and disagreements which may arise from non-fulfilment or inappropriate fulfilment of this Agreement or in relation to this Agreement shall be settled by means of negotiations.

6.2. In case the dispute cannot be solved by means of negotiation it shall be settled in the court of the Republic of Latvia in accordance with the legislation of the Republic of Latvia.

Article 7. Amendment and Termination of this Agreement

7.1. The conditions of this Agreement shall be subject to change only upon written consent of the Parties.

7.2. An application of one Party on amendments to the conditions of this Agreement shall be considered by the other Party within 1 (one) month from the day the application is received.

7.3. The amendments to this Agreement shall be accepted by signing an additional protocol which shall become an integral part of this Agreement.

7.4. In case the amendments are not accepted the other Party shall be informed on it by providing written motivation.

7.5. Parties may terminate this Agreement after the termination of activities of the Border Control Point or in case of violation of essential conditions of this Agreement, legislation of the Republic of Latvia regulating the performance of the activities mentioned in item 1.2. or international agreements related to this Agreement by the other Party by notifying the other Party 6 (six) months before.

Article 8. Ownership Rights after the Termination of this Agreement

8.1. After the termination of this Agreement, pursuant to item 7.5., buildings and subterranean communications built on the expense of the Republic of Estonia shall remain the property of the Republic of Estonia for a period of 1 (one) year, during which the Republic of Estonia shall transport away, dismantle or alienate the buildings. Republic of Estonia shall cover all costs related to dismantling of the buildings, land recultivation works and similar expenses.

8.2. The Parties may agree in written form on a mutually profitable usage of the buildings in the future.

8.3. In case Parties do not agree on a mutually profitable usage of the buildings, item 8.1. shall apply.

8.4. The Republic of Latvia shall have pre-emption rights to these buildings and communications within 1 (one) month after the receipt of corresponding offer from the Republic of Estonia. If the Republic of Latvia does not use its pre-emption rights, the Republic of Estonia shall be entitled to transport away the property or alienate the property to any third party for dismantling buildings and communications and carrying out recultivation works.

8.5. After the release of the Land the Republic of Estonia shall transfer the Land to the Republic of Latvia by Deed of Transfer prepared by the Republic of Latvia in accordance with the legislation of the Republic of Latvia.

Article 9. Final Provisions

9.1. This Agreement is concluded for the period of existence and operation of the Border Control Point.

9.2. This Agreement shall enter into force from the moment when authorized persons of the Parties have signed it.

9.3. This Agreement has been signed in Valga on 21, 2004 in 2 (two) copies in Latvian, Estonian and English, all texts being equally authentic. In case of any dispute of interpretation of the text of this Agreement the English text shall prevail.