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Free Trade Agreement Between Canada and the Republic of Panama
CANADA and THE REPUBLIC OF PANAMA (“Panama”), hereinafter referred to as “the Parties”, resolved to: STRENGTHEN the special bonds of friendship and cooperation between their peoples; CONTRIBUTE to the harmonious development and expansion of world and regional trade and to provide a catalyst to broader international cooperation; BUILD on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other multilateral and bilateral instruments of cooperation; PROMOTE hemispheric economic integration; CREATE an expanded and secure market for the goods and services produced in their territories, as well as new employment opportunities and improved working conditions and living standards in their respective territories; REDUCE distortions to trade; ESTABLISH clear, transparent and mutually advantageous rules to govern their trade; ENSURE a predictable commercial framework for business planning and investment; ENHANCE the competitiveness of their firms in global markets; UNDERTAKE each of the preceding in a manner that is consistent with environmental protection and conservation; ENHANCE AND ENFORCE environmental laws and regulations, and strengthen their cooperation on environmental matters; PROTECT, ENHANCE AND ENFORCE basic workers’ rights, strengthen cooperation on labour matters and build on their respective international commitments on labour matters; PROMOTE sustainable development; ENCOURAGE enterprises operating within their territory or subject to their jurisdiction to respect internationally recognized corporate social responsibility standards and principles and pursue best practices; PROMOTE broad-based economic development in order to reduce poverty; PRESERVE their flexibility to safeguard the public welfare; AFFIRMING their rights and obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and other intellectual property agreements to which both Parties are party; AFFIRMING the right to fully avail themselves of the flexibilities established in the TRIPS Agreement, including those related to the protection of public health and in particular the promotion of access to medicines for all, and taking note of the WTO General Council Decision on the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health adopted 30 August 2003 and the Protocol amending the TRIPS Agreement of 6 December 2005; RECOGNIZING the differences in the level of development and the size of the Parties’ economies and the importance of creating opportunities for economic development; RECOGNIZING that the promotion and the protection of investments of investors of one Party in the territory of the other Party will be conducive to the stimulation of mutually beneficial business activity; RECOGNIZING that states must maintain the ability to preserve, develop and implement their cultural policies for the purpose of strengthening cultural diversity, given the essential role that cultural goods and services play in the identity and diversity of societies and the lives of individuals; and AFFIRMING their commitment to respect the values and principles of democracy and to promote and protect human rights and fundamental freedoms as proclaimed in the Universal Declaration of Human Rights; HAVE AGREED as follows: CHAPTER ONE Section A – General Definitions Article 1.01: Definitions of General Application 1. For purposes of this Agreement, unless otherwise specified: Agreement on the Environment means the Agreement on the Environment between Canada and the Republic of Panama; Commission means the Joint Commission established under Article 21.01 (Administration of the Agreement – Joint Commission); Coordinators means the Agreement Coordinators established under Article 21.02 (Administration of the Agreement – Agreement Coordinators); customs duty includes a customs or import duty and a charge of any kind imposed on or in connection with the importation of a good, including a form of surtax or surcharge in connection with that importation, but does not include:
Customs Valuation Agreement means the WTO Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994; days means calendar days, including weekends and holidays; enterprise means an entity constituted or organized under applicable law, whether or not for profit, and whether privately owned or governmentally owned, including a corporation, trust, partnership, sole proprietorship, joint venture or other association; existing means in effect on the date of entry into force of this Agreement; GATS means the WTO General Agreement on Trade in Services; GATT 1994 means the WTO General Agreement on Tariffs and Trade 1994; goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party; Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and subheading notes; heading means a four-digit number, or the first four digits of a number, used in the nomenclature of the Harmonized System; measure includes a law, regulation, procedure, requirement or practice; national means a natural person who has the nationality of a Party or is a citizen according to Article 1.02, or is a permanent resident of a Party; New York Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958; originating means qualifying under the rules of origin set out in Chapter Three (Rules of Origin); person means a natural person or an enterprise; person of a Party means a national, or an enterprise of a Party; sanitary or phytosanitary measure means a measure referred to in Annex A, paragraph 1 of the SPS Agreement; SPS Agreement means the WTO Agreement on the Application of Sanitary and Phytosanitary Measures; state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party; subheading means a six-digit number, or the first six digits of a number, used in the nomenclature of the Harmonized System; tariff classification means the classification of a good or material under a chapter, heading or subheading of the Harmonized System; tariff elimination schedule means Annex 2.04 (National Treatment and Market Access for Goods – Tariff Elimination); telecommunications means the transmission and reception of signals by electromagnetic means; Tribunal means an arbitration tribunal established under Article 9.23 or 9.27 (Investment – Submission of a Claim to Arbitration and Consolidation); TPA means the Trade Promotion Agreement between Panama and the United States of America, done on June 28, 2007; TRIPS Agreement means the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights; Uniform Regulations means “Uniform Regulations” established under Article 4.12 (Customs Procedures – Uniform Regulations); and WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994. 2. For purposes of this Agreement, a word in the singular includes that word in the plural, except where otherwise indicated. Article 1.02: Country-specific Definitions For purposes of this Agreement, unless otherwise specified: citizen means, with respect to Canada, a natural person who is a citizen of Canada under Canadian legislation; national government means:
natural person who has the nationality of a Party means, with respect to Panama, Panamanians by birth, naturalization or adoption, in accordance with Articles 9, 10, and 11 of the Constitution of the Republic of Panama; sub-national government means:
territory means:
Section B – Initial Provisions Article 1.03: Establishment of the Free Trade Area The Parties to this Agreement, consistent with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area. Article 1.04: Relation to Other Agreements 1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party. 2. In the event of any inconsistency between this Agreement and the agreements referred to in paragraph 1, this Agreement shall prevail, except as otherwise provided in this Agreement. 3. The WTO Agreement exclusively governs the rights and obligations of the Parties regarding subsidies and the application of anti-dumping and countervailing measures, including the settlement of any disputes about those matters. This paragraph does not apply to Articles 2.04(5) and 2.13 (National Treatment and Market Access for Goods - Tariff Elimination and Agricultural Export Subsidies). Article 1.05: Extent of Obligations Each Party is fully responsible for the observance of all provisions of this Agreement and shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement, except as otherwise provided in this Agreement, by the sub-national governments and authorities within its territory. Article 1.06: Relation to Environmental and Conservation Agreements In the event of an inconsistency between an obligation in this Agreement and an obligation of a Party under an agreement listed in Annex 1.06, the latter obligation shall prevail provided that the measure taken is necessary to comply with that obligation, and is not applied in a manner that would constitute, where the same conditions prevail, arbitrary or unjustifiable discrimination or a disguised restriction on international trade. Article 1.07: Reference to Other Agreements Where this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include related footnotes, interpretative and explanatory notes. Except where the reference affirms existing rights, such references also include, as the case may be, successor agreements to which the Parties are party or amendments binding on the Parties. Annex 1.06
CHAPTER TWO For purposes of this Chapter: advertising films and recordings means recorded visual media or audio materials, consisting essentially of images or sound, showing the nature or operation of a good or service offered for sale or lease by a person established or resident in the territory of a Party, provided that those materials are of a kind suitable for exhibition to a prospective customer but not for broadcast to the general public, and provided that they are imported in a packet that contains no more than one copy of each film or recording and that does not form part of a larger consignment; agricultural good means a product listed in Annex 1 of the WTO Agreement on Agriculture; commercial sample means:
commercial sample of negligible value means a commercial sample having a value, individually or in the aggregate as shipped, of not more than 1 USD, or the equivalent amount in the currency of either of the Parties, or so marked, torn, perforated or otherwise treated that it is unsuitable for sale or for use except as a commercial sample; consumed means:
duty-free means free of customs duties; good imported for sports purposes means a good required for use in sports contests, demonstrations or training in the territory of the Party into whose territory the good is imported; good intended for display or demonstration includes the good’s component parts, ancillary apparatus and accessories; printed advertising material means a good classified in Chapter 49 of the Harmonized System, including a brochure, pamphlet, leaflet, trade catalogue, yearbook published by a trade association, tourist promotional material or poster, that is:
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures; and TRQ means a tariff-rate quota described in Article 2.16. Article 2.02: Scope of Application This Chapter applies to trade in goods of a Party, except as otherwise provided in this Agreement. Section I – National Treatment Article 2.03: National Treatment 1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, and to this end Article III of the GATT 1994 is incorporated into and made part of this Agreement. 2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded by that sub-national government to a like, directly competitive or substitutable good, as the case may be, of the Party of which it forms a part. 3. Paragraphs 1 and 2 do not apply to a measure set out in Annex 2.03 (Exceptions to Articles 2.03 and 2.08). Article 2.04: Tariff Elimination 1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, on an originating good. 2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with its Schedule to Annex 2.04. 3. During the tariff elimination process, each Party shall apply to originating goods traded between the Parties the lesser of the customs duties resulting from a comparison between the rate established in the Party’s Schedule to Annex 2.04 and the existing rate under Article II of GATT 1994. 4. On the request of a Party, the Parties shall discuss accelerating the elimination of customs duties set out in their Schedules to Annex 2.04 or incorporating into a Schedule a good that is not subject to elimination. An agreement between the Parties to accelerate the elimination of a customs duty on a good or to include a good in a Schedule to Annex 2.04 shall supersede a rate of duty or staging category determined pursuant to a Schedule for such good when approved by each Party in accordance with its applicable legal procedures. 5. The Parties acknowledge Panama’s rights and obligations under Article 27.4 of the SCM Agreement and note the Decision of the General Council, WTO document WT/L/691 of July 31, 2007. However, if Panama enters or has entered into an agreement with a non-Party, in which it undertakes to eliminate a program permitted under Article 27.4 of the SCM Agreement as it applies to a good manufactured in its territory and exported to the non-Party, it shall also eliminate the program as it applies to a good manufactured in its territory and exported to Canada. 6. For greater certainty, a Party may:
Article 2.05: Temporary Admission of Goods 1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin and regardless of whether like, directly competitive or substitutable goods are available in the territory of the Party:
2. A Party may not impose a condition on the duty-free temporary admission of a good referred to in paragraph 1(a), (b) or (c), other than to require that the good:
3. A Party may not impose a condition on the the duty-free temporary admission of a good referred to in paragraph 1(d), other than to require that the good:
4. Where a good is temporarily admitted duty-free under paragraph 1 and a condition a Party imposes under paragraphs 2 or 3 has not been fulfilled, the Party may impose:
5. Except as otherwise provided in this Agreement, a Party may not:
6. For purposes of paragraph 5, “vehicle” means truck, truck tractor, tractor, trailer unit or trailer, locomotive, or railway car or other railroad equipment. Article 2.06: Duty-Free Entry of Certain Commercial Samples and Printed Advertising Material 1. A Party shall grant duty-free entry to a commercial sample of negligible value, and to printed advertising material, imported from the territory of the other Party, regardless of their origin, but may require that:
Article 2.07: Good Re-Entered after Repair or Alteration 1. A Party may not apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory. 2. A Party may not apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration. 3. For purposes of this Article, repair or alteration does not include an operation or process that:
4. Paragraph 1 does not cover a good imported in bond, into foreign trade zones, or in similar status, that is exported for repair and not re-imported in bond, into foreign trade zones, or in similar status. Section III – Non-Tariff Measures Article 2.08: Import and Export Restrictions 1. Except as otherwise provided in this Agreement, a Party may not adopt or maintain a prohibition or restriction on the importation of a good of the other Party or on the exportation or sale for export of a good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994, and to this end Article XI of the GATT 1994 is incorporated into and made a part of this Agreement. 2. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit:
3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, this Agreement does not prevent the Party from:
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on request of the other Party, shall discuss with a view to avoiding undue interference with or distortion of pricing, marketing and distribution arrangements in the other Party. 5. Paragraphs 1 through 4 do not apply to a measure set out in Annex 2.03. Article 2.09: Distilled Spirits A Party may not adopt or maintain a measure requiring that distilled spirits imported from the territory of the other Party for bottling be blended with distilled spirits of the Party. A Party may not adopt or maintain a duty, tax or other charge on the export of a good to the territory of the other Party unless the duty, tax or charge is adopted or maintained on the good when destined for domestic consumption. Article 2.11: Customs User Fees and Similar Charges 1. No Party may adopt or maintain a fee or charge on or in connection with importation of a good of the other Party that is not commensurate with the cost of services rendered. 2. Paragraph 1 does not prevent a Party from imposing a customs duty or a charge set out in paragraphs (a), (b), or (d) of the definition of “customs duty”. 3. The Parties affirm that nothing in this Article modifies Article VIII of GATT 1994 as it applies between them. Article 2.12: Customs Valuation Article 2.13: Agricultural Export Subsidies 1. The Parties share the objective of the multilateral elimination of agricultural export subsidies and shall work together toward an agreement in the WTO to eliminate those subsidies and avoid their reintroduction in any form. 2. A Party shall not adopt or maintain agricultural export subsidies on an agricultural good originating in or shipped from its territory that is exported directly or indirectly to the territory of the other Party. 3. If a Party adopts or maintains an export subsidy on an agricultural good that is exported to the other Party, the Party applying the measure, at the request of the other Party, shall discuss with a view to agreeing on specific measures that either Party may adopt to counter the effects of the export subsidy, including an increase of the rate of duty on such imports up to the applied Most-Favoured-Nation (MFN) tariff rate. Article 2.14: Domestic Support Measures for Agricultural Products 1. The Parties agree to cooperate in the WTO agricultural negotiations in order to achieve a substantial reduction of production and trade-distorting domestic support measures. 2. If a Party adopts or maintains a domestic support measure that the other Party considers to distort bilateral trade covered by this Agreement, the Party applying the measure, at the request of the other Party, shall consult with a view to avoiding the nullification and impairment of the concessions granted under this Agreement. Those consultations shall be deemed to satisfy the requirement of Article 22.05 (Dispute Settlement – Consultations). Article 2.15: State Trading Enterprises 1. Except as provided in Article 14.04 (Competition Policy, Monopolies And State Enterprises – State Enterprises), the rights and obligations of the Parties with respect to state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are incorporated into and made part of this Agreement. 2. The Parties agree to cooperate in the WTO negotiations to ensure transparency regarding the operation and maintenance of state trading enterprises. Article 2.16: Tariff-Rate Quotas – Pork and Beef 1. Notwithstanding the staging categories in Panama’s Schedule to Annex 2.04, on originating goods for the items listed below in paragraph 2, upon entry into force of this Agreement, Panama shall provide immediate duty-free access on 200MT subject to a 2% increase per year. 2. Paragraph 1 applies to the following pork tariff lines in the Arancel de Importación de la República de Panamá: 0203.11.10, 0203.11.20, 0203.12.10, 0203.12.90, 0203.19.10, 0203.19.20, 0203.19.90, 0203.21.10, 0203.21.20, 0210.11.11, 0210.11.19, 0210.11.90, 0210.19.10, 0210.19.21, 0210.19.29, 1602.49.13, 1602.49.14, 1602.49.19 and 1602.49.90. 3. Notwithstanding the staging categories in Panama’s Schedule to Annex 2.04, on originating goods for the items listed below in paragraph 4, upon entry into force of this Agreement, Panama shall provide immediate duty-free access on 450MT of WTO in-quota quantities. 4. Paragraph 3 applies to the following pork tariff lines in the Arancel de Importación de la República de Panamá: 0203.11.10, 0203.11.20, 0203.12.10, 0203.12.90, 0203.19.10, 0203.19.20, 0203.19.90, 0203.21.10, 0203.21.20, 0203.22.10, 0203.22.90, 0203.29.10, 0203.29.20, 0203.29.90, 0210.11.11, 0210.11.19, 0210.11.90, 0210.19.10, 0210.19.21, 0210.19.29, 0210.19.90, 1602.41.11, 1602.41.19, 1602.42.10, 1602.42.90, 1602.49.13 and 1602.49.19. 5. Notwithstanding the staging categories in Panama’s Schedule to Annex 2.04 on originating goods for the items listed below in paragraph 6, upon entry into force of this Agreement, Panama shall provide immediate duty-free access on 200 MT. 6. Paragraph 5 applies to the following beef tariff lines in the Arancel de Importación de la República de Panamá: 0201.20.00a, 0201.30.00a, 0202.20.00a and 0202.30.00a. Article 2.17: Administration and Implementation of Tariff-Rate Quotas 1. Panama shall implement and administer its TRQs in accordance with Article XIII of the GATT 1994, and the WTO Agreement on Import Licensing Procedures. 2. Panama shall ensure that:
3. Panama shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them. 4. Panama may not impose a condition on the application for or use of an in-quota quantity allocation under a TRQ on the re-export of an agricultural good. 5. Panama may not count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled. 6. Panama shall discuss with Canada, at Canada’s request, Panama’s administration of TRQs. Article 2.18: Agricultural Safeguard Measures for Frozen Pork 1. Notwithstanding Article 2.04, Panama may adopt an agricultural safeguard measure in the form of an additional customs duty on an originating agricultural good listed in Annex 2.18, following the entry into force of the TPA, provided the conditions of this Article are fulfilled. 2. The total customs duties applied on a good, including the additional customs duty referred to in paragraph 1, shall not exceed the lesser of the amounts resulting from the application of:
3. The additional customs duty referred to in paragraph 1 shall not exceed:
4. Panama may not adopt or maintain an agricultural safeguard measure on an originating good:
5. Panama may adopt or maintain an agricultural safeguard measure during a calendar year on an originating agricultural good only where the quantity of imports of the good during that year exceeds the trigger volume for that good, set out in Annex 2.18. 6. Panama may not adopt or maintain an agricultural safeguard measure under this Article and at the same time adopt or maintain with respect to the same good:
7. Panama shall adopt an agricultural safeguard measure in a transparent manner. To this end, Panama shall notify Canada in writing and provide relevant information regarding the measure within 60 days of its adoption. Panama shall discuss with Canada on Canada’s request regarding the adoption of the agricultural safeguard measure. 8. Panama may maintain an agricultural safeguard measure only until the end of the calendar year in which it applies the measure. 9. A Party may not adopt on an originating agriculture good that is subject to tariff elimination under Annex 2.04 a safeguard duty pursuant to Article 5 of the WTO Agreement on Agriculture. 10. For purposes of this Article and Annex 2.18, “agricultural safeguard measure” means a measure described in paragraph 1. Article 2.19: Consultations and Committee on Trade in Goods and Rules of Origin 1. The Parties hereby establish a Committee on Trade in Goods and Rules of Origin, comprising representatives of each Party. 2. The Committee shall meet periodically, and at any other time on the request of either Party or the Commission, to ensure the effective implementation and administration of this Chapter, Chapter Three (Rules of Origin), Chapter Four (Customs Procedures), Chapter Five (Trade Facilitation), Chapter Eight (Emergency Action) or any Uniform Regulations. In this regard, the Committee shall:
3. If the Committee fails to resolve a matter referred to it pursuant to paragraph 2(b) or(d) within 30 days of such referral, either Party may request a meeting of the Joint Commission under Article 21.01 (Administration of the Agreement – Joint Commission). 4. At the request of a Party, the Committee will establish a Sub-Committee on Agriculture that shall:
5. Each Party, to the maximum extent possible, shall take necessary measures to implement a revision to this Chapter, Chapter Three (Rules of Origin), Chapter Four (Customs Procedures), Chapter Five (Trade Facilitation) or Chapter Eight (Emergency Action) within 180 days of the date on which the Commission approves a revision. 6. The Parties shall convene on the request of either Party a meeting of their officials responsible for customs, immigration, inspection of food and agricultural products, border inspection facilities, or regulation of transportation as appropriate for the purpose of addressing issues related to movement of goods through the Parties’ ports of entry. Exceptions to Articles 2.03 and 2.08 Section I – Canadian Measures Without prejudice to the rights of Panama under the WTO Agreement, Articles 2.03 and 2.08 do not apply to:
Section II – Panamanian Measures Without prejudice to the rights of Canada under the WTO Agreement, Articles 2.03 and 2.08 do not apply to:
1. The following staging categories apply to the elimination of customs duties by each Party pursuant to Article 2.04:
2. For purposes of this Annex and each Party’s Schedule, year 1 means the year this Agreement enters into force as provided in Article 24.04 (Final Provisions - Entry into Force). 3. For purposes of this Annex and a Party’s Schedule, beginning in year 2, each annual stage of tariff reduction shall take effect on January 1 of the relevant year. 4. The base rate of customs duty for an item shall be the most-favoured-nation customs duty rate applied on January 1, 2009. 5. For the purpose of the elimination of customs duties in accordance with Article 2.04, interim staged rates shall be rounded down, except as set out in each Party’s Schedule attached to this Annex, at least to the nearest tenth of a percentage point or, if the rate of duty is expressed in monetary units, at least to the nearest 0.001 of the official monetary unit of the Party. 6. The Parties agree that:
Schedule of Canada Schedule of Panama Agricultural Safeguard Measures for Frozen Pork Panama may adopt or maintain an agricultural safeguard measure, in accordance with Article 2.18, only on an originating agricultural good listed in the table below:
For purposes of this Chapter: aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding or protection from predators; customs value means the value as determined under the Customs Valuation Agreement; fungible goods means goods that are interchangeable for commercial purposes and whose properties are essentially identical; fungible materials means materials that are interchangeable for commercial purposes and whose properties are essentially identical; Generally Accepted Accounting Principles means the principles used in the territory of each Party that provide substantial authorized support with regard to the recording of income, costs, expenses, assets and liabilities involved in the disclosure of information and preparation of financial statements; these principles may be broad guidelines of general application, as well as those standards, practices and procedures usually employed in accounting; good includes a product, article or material; good wholly obtained or produced entirely in the territory of one or both of the Parties means:
indirect material means a good used in the production, testing or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:
intermediate material means a material that is produced by a producer of a good and used in the production of that good; listed with a Party means a foreign registered vessel bare-boat chartered to a Canadian citizen, a permanent resident of Canada or a Canadian corporation which is listed in the Canadian Register of Vessels for the duration of the charter and whose registration in the foreign country is suspended for the duration of the charter; material means a good that is used in the production of another good, and includes a part or an ingredient; mola (or morra in the native Kuna language) means a good, traditional and historic in nature, produced in the territory of Panama through reverse appliqué of small decorative pieces of cloth onto a larger piece, elaborated back to front with a combination of fabrics of different bright colours; a mola is made up by hand in two or more layers of cut fabrics, hand sewn one over the other, and is usually inspired in nature, cosmic view, or geometrical designs; net cost means total cost minus sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost; non-allowable interest costs means interest costs incurred by a producer that exceed the applicable national government interest rate identified for comparable maturities by more than 700 basis points; non-originating good means a good that does not qualify as originating under this Chapter; non-originating material means a material that does not qualify as originating under this Chapter; other costs means all costs that are not product costs or period costs; period cost means a cost other than product cost that is expensed in the period in which it is incurred, including a selling expense or a general and administrative expense; product cost means a cost that is associated with the production of a good and includes the value of material, direct labour cost or direct overhead; producer means a person who grows, mines, raises, harvests, fishes, traps, hunts, manufactures, processes, assembles or disassembles a good; production means growing, mining, raising, harvesting, fishing, trapping, hunting, manufacturing, processing, assembling or disassembling a good; reasonably allocate means to apportion in a manner appropriate to the circumstances; remanufactured good means a good that is entirely or partially comprised of a recovered good; royalty means a payment, including a payment under a technical assistance or similar agreement, made as consideration for the use or right to use a copyright, literary, artistic, or scientific work, patent, trademark, design, model, plan, secret formula or process, excluding a payment under technical assistance or similar agreements that can be related to specific services such as:
sales promotion, marketing and after-sales service cost means a cost related to:
shipping and packing cost means a cost incurred in packing a good for shipment or shipping the good from the point of direct shipment to the buyer, excluding the cost of preparing and packaging the good for retail sale; tariff provision means a chapter, heading or subheading of the Harmonized System; total cost means a product cost, period cost, or other cost incurred in the territory of one or both of the Parties; transaction value means the price actually paid or payable for a good, including a material, with respect to a transaction of the producer of the good, adjusted in accordance with the principles of Article 8(1), (3) and (4) of the Customs Valuation Agreement to include, among other things, such costs as commissions, production assists, royalties or license fees; transaction value of the good, or transaction value of the set or assortment means:
and adjusted, if necessary, to exclude any cost incurred subsequent to the good leaving the place of production, such as freight and insurance; and value of a non-originating material means:
Article 3.02: Originating Goods Except as otherwise provided in this Chapter, a good originates in the territory of a Party where:
Article 3.03: Certain Textile and Apparel Goods Mola, or textile or apparel goods that incorporate mola, that are both cut or knit to shape, and sewn or otherwise assembled in the territory of one or both of the Parties originate in the territory of a Party. 1. Except as provided in paragraph 2, where the applicable rule of origin in Annex 3.02 for the tariff provision under which a good is classified specifies a value test, the value test is satisfied provided the value of all non-originating material used in the production of the good does not exceed the percentage specified in Annex 3.02 of the transaction value of the good under the following formula: Value of non-originating material used in the production of the good as a percentage of the transaction value of the good = Value of Non-Originating Material x 100 2. For the purpose of a good of headings 87.01 through 87.08, at the choice of an exporter or a producer of that good, the value test is satisfied if the value of a non-originating material used in the production of the good does not exceed the percentage specified in Annex 3.02 of either the transaction value or the net cost of the good. 3. The value of all non-originating material used by the producer in the production of a good does not, for the purposes of satisfying the value test under either paragraph 1 or 2, include the value of all non-originating material used to produce originating material that is subsequently used in the production of the good. 4. For the purpose of paragraph 3, the value of a non-originating material in paragraphs 1 and 2 does not include:
5. For the purpose of calculating the net cost of a good under paragraph 2, the producer of the good may:
6. For the purpose of this Article, value of an intermediate material means:
1. For the purpose of determining whether a good is an originating good, the production of the good in the territory of one or both of the Parties by one or more producer is, at the choice of the exporter or producer of the good, considered to have been performed in the territory of either of the Parties by that exporter or producer, if:
2. Subject to paragraph 3, where each Party has a trade agreement that establishes or leads to the establishment of a free trade area with the same non-Party, as contemplated by the WTO Agreement, the territory of that non-Party is deemed to form part of the territory of the free trade area established by this Agreement, for the purpose of determining whether a good is an originating good under this Agreement. 3. A Party shall give effect to paragraph 2 only once provisions with an effect equivalent to paragraph 2 are in force between each Party and the non-Party, and upon agreement by the Parties on whether to limit such provisions to specified goods or under specified conditions. 1. Except as provided in paragraphs 2 through 4, a good is an originating good if the value of all non-originating material used in the production of the good that does not undergo an applicable change in tariff classification set out in Annex 3.02 does not exceed 10 per cent of the transaction value of the good, if:
2. Except as provided in Annex 3.02, paragraph 1 does not apply to a non-originating material used in the production of a good of Chapters 1 through 22 of the Harmonized System unless the non-originating material is provided for in a different subheading from the good for which origin is being determined under this Article. However, paragraph 1 does apply when the good and the non-originating material are classified in the same subheading, provided that the material is different from the good. 3. A good of Chapters 50 through 60 of the Harmonized System that does not originate because certain non-originating yarns used in the production of the good do not fulfil the requirements set out in Annex 3.02 is nonetheless originating if the total weight of all those yarns does not exceed 10 per cent of the total weight of the good. 4. A good of Chapters 61 through 63 of the Harmonized System that does not originate because certain non-originating yarns used in the production of the component of the good that determines the tariff classification of that good do not fulfil the requirements set out in Annex 3.02, is nonetheless originating if the total weight of all those yarns in that component does not exceed 10 per cent of the total weight of that component. Article 3.07: Fungible Materials and Goods For the purpose of determining whether a good is an originating good, if:
Article 3.08: Sets or Assortments of Goods 1. Except as provided in Annex 3.02, a set, as referred to in Rule 3 of the General Rules for the Interpretation of the Harmonized System, or an assortment of goods is originating if:
2. The value of a non-originating component good, packaging material or container is calculated in the same manner as the value of a non-originating material. Article 3.09: Accessories, Spare Parts and Tools An accessory, spare part or tool delivered with the good that forms part of the good’s standard accessories, spare parts or tools, is originating if the good is originating. The accessory, spare part or tool is disregarded in determining whether all the non-originating materials used in the production of the good satisfy the requirements set out in Annex 3.02, if:
Article 3.10: Indirect Materials An indirect material is originating without regard to where it is produced. Article 3.11: Intermediate Materials Used In Production 1. If an intermediate material is originating, no account is taken of non-originating material contained in that intermediate material when it is subsequently used in the production of another good. 2. For the purpose of determining the origin of a good, a producer of a good may designate an intermediate material as a material to be taken into account as an originating or non-originating material, as the case may be, in determining whether the good satisfies the applicable requirements of the rules of origin. Article 3.12: Packaging Materials and Containers for Retail Sale Except as provided in Article 3.08 and Annex 3.02, a packaging material or container in which a good is packaged for retail sale is disregarded in determining whether:
Article 3.13: Packing Materials and Containers for Shipment A packing material, container, pallet or similar article, in which a good is packed for shipment is disregarded in determining whether that good is originating. Article 3.14: Transit and Transshipment 1. An originating good that is exported from a Party maintains its originating status only if the good:
2. The Parties recognize that a good qualifying as an originating good under a trade agreement between a Party and a non-Party, which establishes or leads to the establishment of a free trade area, does not lose its originating status under that agreement solely by reason of transiting or being transhipped through a Party’s territory or by reason of the wholesale purchase or sale of that good in a Party's free trade zone, if all the conditions required under the applicable provisions of that agreement are met. Article 3.15: Interpretation and Application For the purpose of this Chapter:
Article 3.16: Consultation and Modifications 1. The Parties shall consult regularly to ensure that this Chapter is administered effectively, uniformly and consistently with the spirit and objectives of this Agreement, and shall cooperate in the administration of this Chapter in accordance with Chapter Four (Customs Procedures). 2. A Party that considers that this Chapter requires modification to take into account developments in production processes or other matters may submit a proposed modification along with supporting rationale and any studies to the other Party for consideration and appropriate action by the Committee on Trade in Goods and Rules of Origin. CHAPTER FOUR For purposes of this Chapter: customs administration means the governmental authority that is responsible under the law of a Party for the administration of customs laws and regulations; determination of origin means a determination as to whether a good qualifies as originating in accordance with Chapter Three (Rules of Origin); exporter means an exporter located in the territory of a Party; identical goods means goods that are the same in all respects, including physical characteristics, quality and reputation, irrespective of minor differences in appearance that are not relevant to a determination of origin of those goods under Chapter Three (Rules of Origin); importer means an importer located in the territory of a Party; preferential tariff treatment means the rate of duty applicable under this Agreement to an originating good; and value means value of a good or material for purposes of calculating customs duties or for the purposes of applying Chapter Three (Rules of Origin). The following terms have the same meaning as in Article 3.01 (Rules of Origin-Definitions):
Section I – Certification of Origin Article 4.02: Certificate of Origin 1. The Parties shall establish, no later than the date of entry into force of this Agreement, a Certificate of Origin for the purpose of certifying that a good being exported from the territory of a Party into the territory of the other Party qualifies as an originating good. The Certificate of Origin may thereafter be modified as the Parties may decide. 2. Each Party shall permit the Certificate of Origin for a good imported into its territory to be completed in English, French or Spanish. 3. Each Party shall:
4. Under paragraph 3 neither Party may require a producer to provide a Certificate of Origin to an exporter. 5. Each Party shall permit a Certificate of Origin to apply to:
6. Each Party shall ensure that the Certificate of Origin is accepted by its customs administration for 4 years after the date on which the Certificate of Origin was signed. Article 4.03: Obligations Regarding Importations 1. Except as otherwise provided in this Chapter, each Party shall require an importer in its territory that claims preferential tariff treatment for a good imported into its territory from the territory of the other Party to:
2. For the purpose of paragraph 1(d), if the customs administration of the importing Party determines that the Certificate of Origin has not been completed in accordance with Article 4.02, the importing Party shall ensure that the importer is granted no less than 5 working days to provide the customs administration with a corrected Certificate of Origin. 3. When an importer claims preferential tariff treatment for a good imported into the territory of a Party from the territory of the other Party:
4. Each Party, through its customs administration, may require an importer to demonstrate that a good for which the importer claims preferential tariff treatment was shipped in accordance with Article 3.14 (Rules of Origin – Transit and Transshipment) by providing:
5. Where a good would have qualified as an originating good when it was imported into the territory of a Party, but no claim for preferential tariff treatment was made at the time of importation, the importing Party shall permit the importer, within a period of no less than 1 year after the date of importation, to apply for a refund of any excess duties paid as a result of the good not having been granted preferential tariff treatment, on presentation to the customs administration of the importing Party of:
A Party shall not require a Certificate of Origin for:
provided that the importation does not form part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the certification requirements of Articles 4.02 and 4.03. Article 4.05: Obligations Regarding Exportations 1. Each Party shall provide that:
2. Neither Party may impose penalties on an exporter or a producer in its territory that voluntarily provides written notification under paragraph 1(b) with respect to the making of an incorrect certification. 3. Each Party may apply a measure that the circumstances warrant if an exporter or a producer in its territory fails to comply with a requirement of this Chapter. Section II – Administration and Enforcement 1. Each Party shall provide that:
2. When a Party requires importers, exporters or producers in its territory to maintain documentation or records in relation to the origin of the good, in accordance with that Party’s laws and regulations, it shall permit them to do so in any medium, provided that the documentation or records can be retrieved and printed. 3. A Party may deny preferential tariff treatment to a good that is the subject of an origin verification where the exporter, producer or importer of the good that is required to maintain records or documentation under this Article:
Article 4.07: Origin Verifications 1. For purposes of determining whether a good imported into its territory from the territory of the other Party qualifies as an originating good, a Party may, through its customs administration, conduct a verification only by means of:
2. For purposes of verifying the origin of a good, the importing Party may request the importer of the good to voluntarily obtain and supply written information voluntarily provided by the exporter or producer of the good in the territory of the other Party. The importing Party shall not consider the failure or refusal of the importer to obtain and supply that information as a failure of the exporter or producer to supply the information or as a ground for denying preferential tariff treatment. 3. Each Party shall allow an exporter or producer who receives a verification letter under paragraph 1(a) or a questionnaire under paragraph 1(b) no less than 30 days from the date of receipt of that letter or questionnaire to provide the information and documentation required or the completed questionnaire. On written request by the exporter or producer made during that period, the importing Party may grant the exporter or producer a single extension of the deadline for a period of no more than 30 days. 4. If an exporter or producer fails to provide the information and documentation required by a verification letter or fails to return a duly completed questionnaire within the period or extension set out in paragraph 3, the importing Party may deny preferential tariff treatment to the good in question in accordance with the procedures set out in paragraphs 14, 15 and 16. 5. Prior to conducting a verification visit under paragraph 1(c), a Party, through its customs administration, shall:
6. The notification referred to in paragraph 5 must include:
7. If an exporter or producer has not given its written consent to a proposed verification visit within 30 days of receipt of a notification under paragraph 5, the notifying Party may deny preferential tariff treatment to the good that would have been the subject of the visit. 8. The Party whose customs administration receives notification under paragraph 5(a)(ii), within 15 days of receipt of the notification, may postpone in writing to the customs administration who sent the notice, the proposed verification visit for no more than 60 days from the date of that receipt or for a longer period that the Parties may decide. 9. Each Party shall allow, when the exporter or producer receives notification under paragraph 5(a)(i), the exporter or producer to, on a single occasion, within 15 days of receipt of the notification, request in writing the postponement of the proposed verification visit for no more than 60 days from the date of that receipt or for a longer period as accepted by the notifying Party. 10. A Party shall not deny preferential tariff treatment to a good based only on the postponement of a verification visit under paragraphs 8 or 9. 11. A Party shall permit an exporter or a producer whose good is the subject of a verification visit by the other Party to designate two observers to be present during the visit, provided that:
12. When a Party conducts a verification of origin involving a value test, de minimis calculation or any other provision in Chapter Three (Rules of Origin) to which Generally Accepted Accounting Principles may be relevant, it shall apply those principles as they apply in the territory of the other Party from which the good was exported. 13. When the producer of a good calculates the net cost of the good as set out in Article 3.04 (Rules of Origin – Value Test), the importing Party will not verify, during the period over which the net cost is being calculated, whether the good satisfies the value test. 14. The Party conducting a verification shall provide the exporter or producer whose good is the subject of the verification with a written determination of whether the good qualifies as originating, including findings of fact and the legal basis for the determination. 15. If a Party determines as a result of an origin verification that the good that is the subject of the verification does not qualify as originating, the Party shall include in its written determination under paragraph 14 a written notice of intent to deny preferential tariff treatment of the good. 16. Each Party shall ensure that a written notice of intent to deny preferential tariff treatment under paragraph 15 provides for at least 30 days during which the exporter or producer of the good may provide, with regard to that determination, written comments or additional information that will be taken into account by the Party prior to completing the verification. 17. In accordance with each Party’s laws and regulations, if verifications by a Party indicate a pattern of conduct by an exporter or a producer of false or unsupported representations that a good imported into its territory qualifies as originating, the Party may withhold preferential tariff treatment to identical goods exported or produced by that exporter or producer until that exporter or producer establishes compliance with Chapter Three (Rules of Origin). 18. If, in conducting a verification of origin of a good imported into its territory under this Article, a Party conducts a verification of the origin of a material that is used in the production of the good, the Party shall conduct the verification of origin of the material in accordance with the procedures in paragraphs 1 through 3, 5, 6, 8, 9 through 13 and 20. 19. When a Party conducts a verification under paragraph 18, the Party may consider the material to be non-originating in determining whether the good is an originating good if the producer or supplier of that material does not allow the Party access to information required to make a determination of whether the material is an originating material by the following or other means:
20. For purposes of this Article, the importing Party shall ensure that communication to the exporter or producer and to the other Party are sent by means that can produce a confirmation of receipt. The periods referred to in this Article begin from the date of that receipt. 1. Each Party shall maintain, in accordance with its domestic law, the confidentiality of the information collected under this Chapter and shall protect that information from disclosure that could prejudice the competitive position of a person providing the information. If the Party receiving or obtaining the information is required by its domestic law to disclose the information, that Party shall notify the person or Party who provided that information. 2. Each Party shall ensure that the confidential information collected under this Chapter is not used for purposes other than the administration and enforcement of determinations of origin and of customs matters, except with the authorization of the person or Party who provided the confidential information. 3. Notwithstanding paragraph 2, a Party may allow information collected under this Chapter to be used in any administrative, judicial or quasi-judicial proceedings instituted for failure to comply with customs related laws and regulations implementing Chapter Three (Rules of Origin) and this Chapter. A Party shall notify the person or Party who provided the information in advance of that use. Each Party shall adopt or maintain measures for imposing criminal, civil or administrative penalties for violations of its laws and regulations relating to this Chapter. 1. Each Party, through its customs administration, shall provide for the expeditious issuance of a written advance ruling, prior to the importation of a good into its territory, to an importer in its territory or an exporter or a producer in the territory of the other Party, on the basis of the facts and circumstances presented by that importer, exporter or producer of the good, concerning whether a good qualifies as an originating good in accordance with Chapter Three (Rules of Origin). 2. Each Party shall adopt or maintain procedures for the issuance of an advance ruling, including a detailed description of the information reasonably required to process an application for a ruling. 3. Each Party shall provide that its customs administration:
4. The customs administration may decline or postpone the issuance of an advance ruling if the ruling involves an issue that is the subject of:
5. Subject to paragraph 8, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning on the date of its issuance or a later date specified in the ruling. 6. Each Party shall provide to a person requesting an advance ruling the same treatment, including the same interpretation and application of provisions of Chapter Three (Rules of Origin) regarding a determination of origin, as it provided to another person to whom it issued an advance ruling, provided that the facts and circumstances are identical in all material respects.
8. Each Party shall provide that a modification or revocation of an advance ruling is effective on the date on which the modification or revocation is issued, or on a later date specified in that modification or revocation, and is not applied to importations of a good that have occurred prior to that date, unless the person to whom the advance ruling was issued has not acted in accordance with its terms and conditions. 9. Notwithstanding paragraph 8, the issuing Party shall postpone the effective date of that modification or revocation for no more than 90 days where the person to whom the advance ruling was issued demonstrates that it has relied in good faith to its detriment on that ruling. 10. Subject to paragraph 7, each Party shall provide that an advance ruling remains in effect and is honoured. Section IV – Review and Appeal of Determinations of Origin and Advance Rulings Article 4.11: Review and Appeal 1. Each Party shall grant substantially the same rights of review and appeal of determinations of origin and advance rulings issued by its customs administration as it provides to an importer in its territory, to a person who:
2. Further to Articles 20.04 (Transparency – Administrative Proceedings) and 20.05 (Transparency – Review and Appeal), each Party shall provide that the rights of review and appeal referred to in paragraph 1 includes access to:
Section V – Uniform Regulations Article 4.12: Uniform Regulations 1. The Parties may establish and implement, through their respective domestic law or administrative policy, by the date of entry into force of this Agreement, Uniform Regulations regarding the interpretation, application and administration of this Chapter. 2. Each Party shall implement a modification of or addition to the Uniform Regulations within a period that the Parties may decide. 1. The Parties shall cooperate, to the extent practicable, in jointly organizing training programs on customs-related issues, such as simulated audit environment exercises, for the officials and users who participate directly in customs procedures. 2. With respect to goods considered originating in accordance with Article 3.05 (Rules of Origin – Accumulation), the Parties may cooperate with a non-Party in developing customs procedures based on the principles of this Chapter. \Article 4.14: Customs Procedures Sub-Committee 1. The Parties hereby establish a Customs Procedures Sub-Committee comprising representatives of each Party. The Sub-Committee shall meet periodically at the request of a Party, and shall:
2. Nothing in this Chapter prevents a Party from issuing a determination of origin or an advance ruling relating to a matter under consideration by the Customs Procedures Sub-Committee or the Committee on Trade in Goods and Rules of Origin or from taking other action that it considers necessary, pending a resolution of the matter under this Agreement. CHAPTER FIVE Article 5.01: Objectives and Principles 1. With the objectives of facilitating trade under this Agreement and of cooperating to pursue trade facilitation initiatives on a multilateral basis, each Party shall administer its import and export procedures and measures for goods traded under this Agreement on the basis that, to the extent possible:
2. The Parties shall encourage cooperation, technical assistance and the exchange of information, including information on best practices, for the purpose of promoting the application of and compliance with the trade facilitation measures agreed upon under this Agreement and those agreed upon by the Parties under the auspices of the World Customs Organization or the World Trade Organization. Article 5.02: Rights and Obligations 1. The Parties affirm their rights and obligations under Article VIII (Fees and Formalities Connected with Importation and Exportation) and Article X (Publication and Administration of Trade Regulations) of the GATT 1994. 2. A Party shall promptly release an unrestricted, uncontrolled or non-regulated good. Subject to paragraph 3, each Party shall provide the option of releasing that good either:
3. The Parties recognize that, for certain goods, under certain circumstances, such as goods subject to a quota or to health-related or public safety requirements, a Party may require before releasing the goods the submission of more extensive information, before or at the time of arrival of the goods, to allow the competent authorities to examine the goods for release. 4. Each Party shall facilitate and simplify its procedures for the release of low-risk goods, and shall improve procedures on the release of high-risk goods. For these purposes, each Party shall base its examination and release procedures and its post-entry verification procedures on risk management principles, rather than examining every shipment offered for entry in a comprehensive manner for compliance with all import requirements. Nothing in this paragraph prevents a Party from conducting quality control and compliance reviews, which may require more extensive examinations. 5. Each Party shall ensure that the procedures of its competent authorities, whose requirements on the import or export of goods are maintained either by themselves or on their behalf by the Party’s customs administration, are coordinated to facilitate trade. To this end, each Party shall take steps to harmonize the data requirements of its competent authorities, with the objective of allowing importers and exporters to present all required data to only one competent authority. 6. In its procedures for the clearance of express consignments, each Party shall apply, to the extent possible, the World Customs Organization’s Guidelines for the Immediate Release of Consignments by Customs. 7. In accordance with its domestic law, each Party shall adopt or maintain simplified clearance procedures for the entry of a good that is low in value if the importing Party considers that the revenue associated with the import of that good is not significant. 8. The Parties shall endeavour to achieve common procedures and to simplify the information necessary for the release of goods, applying, when appropriate, existing international standards. With this objective, each Party shall set up a system for the electronic exchange of information between competent authorities and importers, exporters, their agents or their representatives, for the purpose of encouraging rapid release procedures. For the purpose of this Article, and without precluding the use of additional electronic data transmission standards, each Party shall, to the extent possible:
9. Each Party shall establish means of consultation with its trade and business communities to promote greater cooperation and the exchange of electronic information. 10. Subject to Chapter Four (Customs Procedures), a Party, prior to importation, shall upon request issue a written ruling pertaining to tariff classification, applicable rate of customs duty or any other tax applicable upon importation except a surtax or surcharge. That request may be made in writing by:
11. Each Party shall adopt or maintain procedures for the issuance of rulings referred to in paragraph 10. A Party may, at any time, modify or revoke a ruling:
12. When a Party determines that a request for a ruling is incomplete, it may request additional information, including, if appropriate, a sample of the goods or materials in question from the person requesting the ruling. A Party shall issue a ruling within 120 days of receiving all the information it considers necessary to issue the ruling. A ruling shall be binding upon the competent authority that issued the ruling at the time the good is actually imported provided that the facts and circumstances that were the basis for the issuance of the ruling remain in effect. 13. Each Party shall ensure that:
14. Further to Article 20.02 (Transparency – Publication), each Party shall promptly publish or otherwise make available, including through electronic means, all its legislation, regulations, judicial decisions and administrative rulings or policies of general application relating to its requirements for imported or exported goods. Each Party shall also make available notices of an administrative nature, such as general agency requirements and entry procedures, hours of operation and contact for information enquiries. 15. Each Party shall, in accordance with its domestic law, treat as strictly confidential all business information obtained pursuant to this Chapter that is by its nature confidential or that is provided on a confidential basis. 1. The Parties recognize that technical cooperation is fundamental to facilitating compliance with the obligations set forth in this Agreement and for reaching a better degree of trade facilitation. 2. The Parties agree to develop a technical cooperation program on customs-related matters on the basis of mutually decided terms relating to issues such as the scope, timing and cost of cooperative measures. Customs-related matters includes, among other matters:
3. The Parties shall cooperate:
Article 5.04: Future Work Program 1. With the objective of developing further steps to facilitate trade under this Agreement, the Parties establish the following work program:
2. The Parties may periodically review the work program referred to in paragraph 1 to decide on new cooperation actions and new measures that might be needed to promote application of the trade facilitation obligations and principles. 3. The Parties shall review relevant international initiatives on trade facilitation, including the Compendium of Trade Facilitation Recommendations, developed by the United Nations Conference on Trade and Development and the United Nations Economic Commission for Europe, to identify areas where further joint action would facilitate trade between the Parties and promote shared multilateral objectives. CHAPTER SIX Article 6.01: Relation to Other Agreements The SPS Agreement governs the rights and obligations of the Parties in respect of a sanitary or phytosanitary measure that may, directly or indirectly, affect trade between the Parties. The objective of this Chapter is to enhance the Parties’ implementation of the SPS Agreement. Article 6.02: SPS Issue Avoidance and Resolution 1. The Parties agree to work expeditiously to resolve a specific sanitary or phytosanitary trade-related issue. To that end, the Parties commit to undertake the necessary technical discussions, including an assessment of the scientific basis of the measures at issue. 2. At the request of either Party, the Parties shall meet in a timely manner to resolve a specific sanitary or phytosanitary trade-related matter. Unless the Parties decide otherwise, they shall meet within 45 days of the request, and if travel is required the Party requesting the meeting shall travel to the territory of the other Party. Article 6.03: SPS Coordinators 1. Each Party shall designate a SPS Coordinator to facilitate communication on sanitary or phytosanitary trade-related matters and shall notify the other Party of its SPS Coordinator through the Coordinators. 2. The functions of the SPS Coordinators include:
3. In order to facilitate the resolution of a sanitary or phytosanitary trade-related issue or to facilitate the fulfillment of the functions of the SPS Coordinators, the Parties may convene an ad hoc technical working group comprising officials from governmental institutions with responsibility for sanitary and phytosanitary measures on that issue. 4. The Parties agree to carry out their work under this Chapter, to the extent possible, through the use of any technological means available, for example via teleconference or videoconference, and opportunities that may arise at international fora. 5. In the event that the Parties are unable to resolve an issue expeditiously under this Chapter, the SPS Coordinators, upon request of a Party, shall report promptly to the Commission on the matter, in accordance with Article 21.01(2) (Administration of the Agreement – Joint Commission). CHAPTER SEVEN For purposes of this Chapter: TBT Agreement means the WTO Agreement on Technical Barriers to Trade; and TBT Committee means the WTO Committee on Technical Barriers to Trade. Article 7.02: WTO Agreement on Technical Barriers to Trade The Parties affirm with respect to each other their existing rights and obligations under the TBT Agreement. 1. This Chapter applies to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures of national governmental bodies that may affect the trade in goods between the Parties. 2. This Chapter does not apply to:
Article 7.04: Joint Cooperation 1. The Parties shall strengthen their joint cooperation in the areas of standards, technical regulations, accreditation, conformity assessment procedures and metrology in order to facilitate trade between the Parties. 2. Further to paragraph 1, the Parties shall seek to identify, develop and promote bilateral initiatives regarding standards, technical regulations, accreditation, conformity assessment procedures and metrology that are appropriate for particular issues or sectors. Such initiatives may include:
3. A Party shall give positive consideration to a reasonable sector-specific proposal made by the other Party for further cooperation under this Chapter. Article 7.05: International Standards 1. The Parties shall use relevant international standards, guides and recommendations as a basis for their technical regulations and conformity assessment procedures in accordance with Articles 2.4 and 5.4 of the TBT Agreement. 2. In determining whether an international standard, guide or recommendation exists within the meaning of Articles 2 or 5 or Annex 3 of the TBT Agreement, each Party shall consider the principles set out: in the Decisions and Recommendations adopted by the WTO Committee on Technical Barriers to Trade since 1 January 1995, G/TBT/1/Rev.9, 8 September 2008, Annex B, or a successor document, issued by the TBT Committee. 1. The obligations in this Article supplement those set out in Chapter Twenty (Transparency). In the event of an inconsistency between this Article and the obligations in Chapter Twenty, this Article prevails. 2. Each Party shall ensure that transparency procedures for the development of technical regulations and conformity assessment procedures allow an interested person to participate at an early appropriate stage, when amendments can still be introduced and comments taken into account, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise. Where a consultation process for the development of technical regulations and conformity assessment procedures is open to the public, each Party shall permit a person of the other Party to participate on terms no less favourable than those accorded to its own persons. 3. Each Party shall recommend to standardization bodies in its territory that they observe paragraph 2 with respect to their consultation processes for the development of a standard or voluntary conformity assessment procedure. 4. Each Party shall allow a period of at least 60 days following its notification to the WTO’s Central Registry of Notifications of proposed technical regulations and conformity assessment procedures for the public and the other Party to provide written comments, except where urgent problems arise, or threaten to arise, regarding safety, health, environmental protection or national security. 5. Each Party, at the request of the other Party, shall provide information regarding the objectives of, and rationale for, a technical regulation or conformity assessment procedure that the Party has adopted or is proposing to adopt. 6. Where a Party does not accept a technical regulation of the other Party as equivalent to its own, it shall explain its decision at the request of the other Party. The Parties recognize that it may be necessary to develop common views, methods and procedures to facilitate the use of equivalency. 7. Where a Party does not accept the results of a conformity assessment procedure conducted in the territory the other Party, it shall explain the reasons for its decision at the request of the other Party. 8. The Parties shall ensure that all adopted technical regulations and conformity assessment procedures are available on official websites that are publicly available without charge. 9. If a Party detains a good imported from the territory of the other Party at a port of entry on the basis that the good may not comply with a technical regulation, it shall immediately notify the importer of the reasons for the detention of the good. 1. The Contact Points designated in Annex 7.07 are responsible for communications related to matters arising under this Chapter. Those communications include:
2. A Contact Point is responsible for ensuring communication with the relevant institutions and persons in its territory as necessary to carry out its function. The Contact Points may communicate by electronic mail, video-conferencing or other means on which the Parties decide. The Contact Points are:
CHAPTER EIGHT For purposes of this Chapter: Agreement on Safeguards means the WTO Agreement on Safeguards; competent investigating authority means:
domestic industry means, with respect to an imported good, the producers as a whole of the like or directly competitive good operating in the territory of a Party or those whose collective production of the like or directly competitive good constitutes a major proportion of the total domestic production of such good; emergency action means an emergency action described in Article 8.03; serious injury means a significant overall impairment of a domestic industry; substantial cause means a cause that is important and not less important than any other cause; threat of serious injury means serious injury that is clearly imminent based on facts and not based on allegation, conjecture or remote possibility; and transition period means the 10-year period beginning on the entry into force of this Agreement, except where the tariff elimination for the good against which the action is taken occurs over a longer period of time, in which case the transition period is the period of the staged tariff elimination for that good. Article 8.02: Global Safeguard Measures 1. Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the Agreement on Safeguards, which shall exclusively govern global safeguard actions, including the resolution of a dispute in respect thereof. 2. This Agreement does not confer additional rights or obligations on the Parties with regard to actions taken pursuant to Article XIX of the GATT 1994 and the Agreement on Safeguards, except that a Party taking a global safeguard measure may exclude imports of an originating good of the other Party if the competent investigating authority of that Party concludes that those imports are not a substantial cause of serious injury or threat thereof. 3. A Party may not adopt or maintain with respect to the same good at the same time:
Article 8.03: Bilateral Emergency Actions 1. A Party may adopt an emergency action described in paragraph 2:
2. If the conditions set out in paragraph 1 and Articles 8.04 and 8.05 are met, a Party may to the extent necessary to prevent or remedy serious injury, or threat thereof, and to facilitate adjustment:
Article 8.04: Notification and Discussions 1. A Party shall, in writing, promptly notify and invite for discussions the other Party in connection with:
2. A Party shall without delay, provide to the other Party a copy of the public version of any notice or any report by a competent investigating authority issued in connection with matters notified pursuant to paragraph 1. 3. If a Party accepts an invitation for discussions made pursuant to paragraph 1, the Parties shall enter into discussions to review the notification under paragraph 1 or the public version of a document issued by a competent investigating authority in connection with the emergency action proceeding. 4. An emergency action shall be initiated no later than 1 year after the date the proceeding is instituted. Article 8.05: Standards for Emergency Actions 1. A Party may not maintain an emergency action:
2. A Party may not apply an emergency action against a good more than once. 3. On the termination of an emergency action, a Party shall set the rate of duty at the rate that would have been in effect but for the action according to the Party’s Schedule to Annex 2.04 (National Treatment and Market Access for Goods – Tariff Elimination) for the staged elimination of the tariff. 4. A Party may take an emergency action under Article 8.03 after the expiration of the transition period to deal with cases of serious injury, or threat thereof, to a domestic industry arising from the operation of this Agreement only with the consent of the other Party. 5. A Party taking an emergency action under Article 8.03 shall provide to the exporting Party mutually accepted trade liberalizing compensation in the form of concessions with substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the action. If the Parties are unable to decide on compensation, the Party whose goods are subject to the action may take tariff action with trade effects substantially equivalent to the emergency action taken under Article 8.03. The Party taking the tariff action shall apply the action only for the minimum period necessary to achieve the substantially equivalent effects and, in any event, only while the emergency action under Article 8.03 is in effect. Article 8.06: Administration of Emergency Action Proceedings 1. Each Party shall ensure the consistent, impartial and reasonable administration of its laws, regulations, decisions and rulings governing emergency action proceedings. 2. Each Party shall entrust determinations of serious injury, or threat thereof, in an emergency action proceeding to a competent investigating authority. Each Party shall:
3. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures for emergency action proceedings in accordance with the requirements set out in paragraph 4. 4. A Party shall apply an emergency action only following an investigation by the Party’s competent investigating authority in accordance with Articles 3 and 4.2 of the Agreement on Safeguards. To this end, Articles 3 and 4.2 of the Agreement on Safeguards are incorporated into and made part of this Agreement. For purposes of this Chapter: confidential information means confidential business information or information that is privileged or otherwise protected from disclosure; covered investment means, with respect to a Party, an investment in its territory of an investor of the other Party existing on the date of entry into force of this Chapter, or investments made or acquired thereafter; disputing investor means an investor that makes a claim under Section C; disputing Party means a Party against which a claim is made under Section C; disputing party means the disputing investor or the disputing Party; enterprise means an enterprise as defined in Article 1.01 (Initial Provisions and General Definitions – Definitions of General Application) and a branch of any such entity; ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes; ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on 18 March 1965; intellectual property rights means copyright and related rights, trademark rights, rights in geographical indications, rights in industrial designs, patent rights, rights in layout designs of integrated circuits, rights in relation to protection of undisclosed information and plant breeders’ rights; investment means:
but investment does not mean:
investment of an investor of a Party means an investment owned or controlled directly or indirectly by an investor of that Party; investor of a non-Party means an investor other than an investor of a Party, that seeks to make, is making, or has made, an investment; for greater certainty, an investor “seeks to make an investment” only when the investor has taken concrete steps necessary to make the investment, such as when the investor has made an application for a permit or license authorizing the establishment of an investment; investor of a Party means a Party or state enterprise, or a national or an enterprise of a Party, that seeks to make, is making, or has made, an investment; for greater certainty, an investor “seeks to make an investment” only when the investor has taken concrete steps necessary to make the investment, such as when the investor has made an application for a permit or license authorizing the establishment of an investment; non-disputing Party means the Party that is not a party to an investment dispute; Secretary-General means the Secretary-General of ICSID; and UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law. Article 9.02: Scope of Application 1. This Chapter applies to measures adopted or maintained by a Party relating to:
2. This Chapter does not apply to an act or fact that took place or a situation that ceased to exist before the date of entry into force of this Agreement. Article 9.03: Relation to Other Chapters 1. In the event of an inconsistency between this Chapter and another Chapter, the other Chapter prevails. 2. A requirement by a Party that a service provider of the other Party post a bond or other form of financial security as a condition of providing a service to its territory does not of itself make this Chapter applicable to that cross-border service. This Chapter applies to that Party’s treatment of the posted bond or financial security if the bond or financial security is a covered investment. 3. This Chapter does not apply to a measure adopted or maintained by a Party to the extent that the measure is covered by Chapter Twelve (Financial Services). 4. Articles 10.05 (Cross-Border Trade in Services – Market Access) and 10.08 (Cross-Border Trade in Services – Domestic Regulation) are incorporated into and made a part of this Chapter and apply to a measure adopted or maintained by a Party when that measure affects the supply of a service in its territory by a covered investment. 5. A reservation taken by a Party under Article 10.07 (Cross-Border Trade in Services – Reservations) against Article 10.05 (Cross-Border Trade in Services – Market Access) applies to a measure of that Party covered under paragraph 4. Article 9.04: National Treatment 1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory. 2. Each Party shall accord to a covered investment treatment no less favourable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory. 3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a sub-national government, treatment no less favourable than the treatment accorded in like circumstances by that sub-national government to investors and to investments of investors of the Party of which it forms a part. Article 9.05: Most-Favoured-Nation Treatment 1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory. 2. Each Party shall accord to a covered investment treatment no less favourable than that it accords in like circumstances to investments of investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory. 3. For greater certainty, the treatment accorded by a Party under this Article means, with respect to a sub-national government, treatment accorded, in like circumstances, by that sub-national government to investors, and to investments of investors, of a non-Party. Article 9.06: Minimum Standard of Treatment 1. Each Party shall accord to a covered investment treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security. 2. The concepts of “fair and equitable treatment” and “full protection and security” in paragraph 1 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens. 3. A breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article. Article 9.07: Performance Requirements 1. A Party may not impose or enforce the following requirements, or enforce a commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or a non-Party in its territory:
2. A measure that requires an investment to use a technology to meet generally applicable health, safety or environmental requirements is not inconsistent with paragraph 1(f). For greater certainty, Articles 9.04 and 9.05 apply to that measure. 3. A Party may not condition the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with the following requirements:
4. Paragraph 3 does not prevent a Party from conditioning the receipt or continued receipt of an advantage in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory. 5. Paragraph 1(f) does not apply if the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority to remedy an alleged violation of domestic competition law. 6. Paragraphs 1 and 3 do not apply to a requirement other than the requirements set out in those paragraphs. 7. This Article does not preclude enforcement of a commitment, undertaking or requirement between private parties. 8. The provisions of:
Article 9.08: Senior Management and Boards of Directors 1. A Party may not require that an enterprise of that Party that is a covered investment appoint individuals of any particular nationality to senior management positions. 2. A Party may require that a majority of the board of directors, or a committee thereof, of an enterprise that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment. Article 9.09: Reservations and Exceptions 1. Articles 9.04, 9.05, 9.07 and 9.08 do not apply to:
2. Articles 9.04, 9.05, 9.07 and 9.08 do not apply to a measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II. 3. Article 9.05 does not apply to treatment accorded by a Party under an agreement, or regarding a sector, set out in its Schedule to Annex II. 4. Regarding intellectual property rights, a Party may derogate from Articles 9.04, 9.05 and Article 9.07(1)(f) in a manner that is consistent with the TRIPS Agreement and waivers to the TRIPS Agreement adopted under Article IX of the WTO Agreement. 5. Articles 9.04, 9.05 and 9.08 do not apply to:
1. Each Party shall permit transfers relating to a covered investment to be made freely and without delay, into and out of its territory. Those transfers include:
2. Each Party shall permit transfers relating to a covered investment to be made in the convertible currency in which the capital was originally invested, or in another convertible currency agreed to by the investor and the Party concerned. Unless otherwise agreed by the investor, transfers shall be made at the market rate of exchange in effect on the date of transfer. 3. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its domestic law relating to:
4. A Party may not require one of its investors to transfer, or penalize one of its investors for failure to transfer, the income, earnings, profits or other amounts derived from, or attributable to, an investment in the territory of the other Party. 5. Paragraph 4 does not prevent a Party from imposing a measure through the equitable, non-discriminatory and good faith application of its domestic law relating to the matters in paragraphs 3(a) through (e). 6. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict transfers under Article XI of the GATT 1994. 1. A Party may not nationalize or expropriate a covered investment either directly or indirectly through a measure having an effect equivalent to nationalization or expropriation (“expropriation”) except for a public purpose, in accordance with due process of law, in a non-discriminatory manner and on payment of prompt, adequate and effective compensation. For greater certainty, this paragraph shall be interpreted consistent with Annex 9.11. 2. The compensation referred to in paragraph 1 must be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (“date of expropriation”), and shall not reflect any change in value occurring because the intended expropriation had become known earlier. Valuation criteria shall include going concern value, asset value including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value. 3. Compensation shall be paid without delay and shall be fully realizable and freely transferable. Compensation shall be paid in a freely convertible currency and shall include interest at a commercially reasonable rate for that currency from the date of expropriation until date of payment. 4. The investor affected shall have a right under the law of the expropriating Party to prompt review of its case and of the valuation of its investment by a judicial or other independent authority of that Party under the principles set out in this Article. 5. This Article does not apply to the issuance of a compulsory license granted in relation to intellectual property rights, or to the revocation, limitation or creation of an intellectual property right, to the extent that such issuance, revocation, limitation or creation is consistent with the WTO Agreement. Article 9.12: Compensation for Losses Notwithstanding Article 9.09(5)(b), each Party shall accord to an investor of the other Party, and to a covered investment, non-discriminatory treatment with respect to a measure it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife. 1. Further to Article 20.02 (Transparency – Publication), each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application respecting a matter covered by this Chapter are promptly published or otherwise made available in such a manner as to enable interested persons and the other Party to become acquainted with them. 2. To the extent possible, each Party shall:
3. Upon request by a Party, the other Party shall provide information on a measure that may have an impact on a covered investment. 1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance it has entered into in respect of an investment, the other Party shall recognize the validity of the subrogation in favour of that Party or agency to a right or title held by the investor. The subrogated right or claim may not be greater than the original right or claim of the investor. 2. A Party or an agency of a Party that is subrogated to a right of an investor in accordance with paragraph 1 is entitled to the same rights as those of the investor regarding the investment. These rights may be exercised by the Party or an agency of the Party, or by the investor if the Party or its agency so authorizes. Article 9.15: Denial of Benefits 1. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor if investors of a non-Party own or control the enterprise and the denying Party adopts or maintains a measure with respect to the non-Party that prohibits transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments. 2. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor if investors of a non-Party own or control the enterprise and the enterprise has no substantial business activities in the territory of the Party under whose domestic law it is constituted or organized. Article 9.16: Health, Safety and Environmental Measures The Parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures to encourage the establishment, acquisition, expansion or retention in its territory of an investment of an investor. If a Party considers that the other Party has offered such an encouragement, it may request discussions with the other Party and the two Parties shall enter discussions with a view to avoiding any such encouragement. Article 9.17: Corporate Social Responsibility Each Party should encourage enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate internationally recognized standards of corporate social responsibility in their internal policies, such as those statements of principle that have been endorsed or are supported by the Parties. These principles address issues such as labour, the environment, human rights, community relations and anti-corruption. Article 9.18: Special Formalities and Information Requirements 1. Article 9.04 does not prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of a covered investment, such as a requirement that an agent of an investor be a resident of the Party or that a covered investment be legally constituted under the laws or regulations of the Party, provided that those formalities do not materially impair the protections afforded by a Party to investors of the other Party and covered investments under this Chapter. 2. Notwithstanding Article 9.04 or 9.05, a Party may require an investor of the other Party, or its covered investment, to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect any confidential information from disclosure that would prejudice the competitive position of the investor or the covered investment. This paragraph does not prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law. Section C – Settlement of Disputes between an Investor and the Host Party Without prejudice to the rights and obligations of the Parties under Chapter Twenty-Two (Dispute Settlement), this Section establishes a mechanism for the settlement of investment disputes. Article 9.20: Claim by an Investor of a Party on Its Own Behalf An investor of a Party may submit to arbitration under this Section a claim that the other Party has breached:
and that the investor has incurred loss or damage by reason of, or arising out of, that breach. Article 9.21: Claim by an Investor of a Party on Behalf of an Enterprise 1. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that the other Party has breached:
and that the enterprise has incurred loss or damage by reason of that breach. 2. Where an investor makes a claim under this Article and the investor or a non-controlling investor in the enterprise makes a claim under Article 9.20 arising out of the same events that gave rise to the claim under this Article, and two or more of the claims are submitted to arbitration under Article 9.23, the claims should be heard together by a Tribunal established under Article 9.27, unless the Tribunal finds that the interests of a disputing party would be prejudiced as a result. 3. An investment may not make a claim under this Section. Article 9.22: Conditions Precedent to Submission of a Claim to Arbitration 1. The disputing parties shall hold consultations and attempt to settle a claim amicably before a disputing investor may submit a claim to arbitration. Consultations shall be held within 30 days of the submission of the notice of intent to submit a claim to arbitration, unless the disputing parties otherwise agree. The place of consultation shall be the capital of the disputing Party, unless the disputing parties otherwise agree. 2. A disputing investor may submit a claim to arbitration under Article 9.20 or Article 9.21 only if:
3. Paragraphs 2(e)(ii) and (iii) and 2(f)(ii):
4. The disputing enterprise or investor shall deliver the consent and waiver required under paragraph 2 to the disputing Party and shall include them in the submission of a claim to arbitration. 5. An investor may submit a claim relating to taxation measures covered by this Agreement to arbitration under this Section only if the taxation authorities of the Parties fail to reach the joint determinations specified in Article 23.04 (Exceptions – Taxation) within six months of being notified in accordance with those provisions. Article 9.23: Submission of a Claim to Arbitration 1. A disputing investor who meets the conditions precedent in Article 9.22 may submit the claim to arbitration under:
2. The applicable arbitration rules will govern the arbitration unless they are modified by this Agreement and supplemented by rules adopted by the Commission under this Section. 3. A claim is submitted to arbitration under this Section when:
4. Delivery of notice and other documents on a Party shall be made to the place named for that Party below:
Article 9.24: Consent to Arbitration 1. Each Party consents to the submission of a claim to arbitration in accordance with the terms of this Agreement. Failure to meet a condition precedent listed in Article 9.22 nullifies that consent. 2. The consent given in paragraph 1 and the submission by a disputing investor of a claim to arbitration satisfies the requirement of:
1. Except in respect of a Tribunal established under Article 9.27, and unless the disputing parties agree otherwise, the Tribunal shall be composed of three arbitrators. One arbitrator shall be appointed by each of the disputing parties and the third, who will be the presiding arbitrator, shall be appointed by agreement of the disputing parties. 2. Arbitrators shall have expertise or experience in public international law, international trade or international investment rules, or the resolution of disputes arising under international trade or international investment agreements. They shall be independent of, and not be affiliated with or take instructions from, either Party or the disputing investor. 3. If the disputing parties do not agree on the remuneration of the arbitrators before the constitution of the Tribunal, the prevailing ICSID rate for arbitrators shall apply. 4. If a Tribunal, other than a Tribunal established under Article 9.27, has not been constituted within 90 days from the date that a claim is submitted to arbitration, the Secretary-General of ICSID, on the request of either disputing party, shall appoint the arbitrator or arbitrators not yet appointed. The Secretary-General shall make the appointment in its discretion and, to the extent practicable, do so in consultation with the disputing parties. The Secretary-General may not appoint as presiding arbitrator a national of either Party. Article 9.26: Agreement to Appointment of Arbitrators For purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator based on a ground other than citizenship or permanent residence:
1. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, except as modified by this Section. 2. If a Tribunal established under this Article is satisfied that claims submitted to arbitration under Article 9.23 have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims and after hearing the disputing parties, by order:
3. A disputing party that seeks an order under paragraph 2 shall request that the Secretary-General of ICSID establish a Tribunal and shall specify in the request:
4. The disputing party shall deliver a copy of the request to the disputing Party or disputing investor against which the order is sought. 5. Within 60 days of receipt of the request, the Secretary-General of ICSID shall establish a Tribunal consisting of three arbitrators. The Secretary-General of ICSID shall appoint one member who is a national of the disputing Party, one member who is a national of the Party of the disputing investors and a presiding arbitrator who is not a national of either Party. 6. Where a Tribunal has been established under this Article, a disputing investor that has submitted a claim to arbitration under Article 9.23 and that has not been named in a request made under paragraph 3 may make a written request to the Tribunal that it be included in an order made under paragraph 2, and shall specify in the request:
7. A disputing investor referred to in paragraph 6 shall deliver a copy of its request to the disputing parties named in a request made under paragraph 3. 8. A Tribunal established under Article 9.23 does not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal established under this Article has assumed jurisdiction. 9. On application of a disputing party, a Tribunal established under this Article may order that the proceedings of a Tribunal established under Article 9.23 be stayed pending its decision under paragraph 2, unless that Tribunal has already adjourned its proceedings. Article 9.28: Documents to, and Participation of, the Other Party 1. A disputing Party shall deliver to the other Party a copy of the notice of intent to submit a claim to arbitration and other documents within 30 days of the date that those documents have been delivered to the disputing Party. The other Party is entitled, at its cost, to receive from the disputing Party a copy of the evidence that has been tendered to the Tribunal, copies of all pleadings filed in the arbitration and the written argument of the disputing parties. The Party receiving such information shall treat the information as if it were a disputing Party. 2. The other Party to this Agreement has the right to attend a hearing held under Section C of this Chapter. Upon written notice to the disputing parties, the other Party may make submissions to a Tribunal on a question of interpretation of this Agreement. Article 9.29: Place of Arbitration The disputing parties may agree on the legal place of arbitration under the arbitral rules applicable under Article 9.23(1). If the disputing parties fail to agree, the Tribunal shall determine the place in accordance with the applicable arbitral rules, provided that the place is in the territory of either Party or of a third State that is a party to the New York Convention. Article 9.30: Public Access to Hearings and Documents 1. A Tribunal award under this Section shall be publicly available, subject to the redaction of confidential information. All other documents submitted to, or issued by, the Tribunal shall be publicly available unless the disputing parties otherwise agree, subject to the redaction of confidential information. 2. Hearings held under this Section shall be open to the public. The Tribunal may hold portions of hearings in camera to the extent necessary to ensure the protection of confidential information, including business confidential information. 3. A disputing party may disclose to other persons in connection with the arbitral proceedings such unredacted documents as it considers necessary for the preparation of its case, but it shall ensure that those persons protect the confidential information in those documents. 4. The Parties may share with officials of their respective national and sub-national governments all relevant unredacted documents in the course of dispute settlement under this Chapter, but they shall ensure that those persons protect confidential information in those documents. 5. To the extent that a Tribunal’s confidentiality order designates information as confidential and a Party’s domestic law on access to information requires public access to that information, the Party’s domestic law on access to information prevails. However, a Party should endeavour to apply its domestic law on access to information so as to protect information designated confidential by the Tribunal. Article 9.31: Submissions by a Non-Disputing Party 1. A Tribunal has the authority to consider and accept written submissions from a person or entity that is not a disputing party with a significant interest in the arbitration. The Tribunal shall ensure that a non-disputing party submission does not disrupt the proceedings and does not unduly burden or unfairly prejudice either disputing party. 2. An application to the Tribunal for leave to file a non-disputing party submission, and the filing of a submission, if allowed by the Tribunal, must be made in accordance with Annex 9.31. 1. A Tribunal established under this Section shall decide the issues in dispute consistently with this Agreement and applicable rules of international law. An interpretation by the Commission of this Agreement is binding on a Tribunal established under this Section and an award under this Section must be consistent with that interpretation. 2. Where a disputing Party asserts as a defence that the measure alleged to be a breach is within the scope of a reservation or exception set out in Annex I, Annex II or Annex III, on request of the disputing Party the Tribunal shall request the interpretation of the Commission on the issue. Within 60 days of delivery of the request, the Commission shall submit in writing its interpretation to the Tribunal. The interpretation is binding on the Tribunal. If the Commission fails to submit an interpretation within 60 days, the Tribunal shall decide the issue. 1. Subject to paragraph 2, a Tribunal may appoint experts to report to it in writing on any factual issue concerning environmental, health, safety or other scientific matters raised by a disputing party, subject to such terms and conditions as the disputing parties may decide. 2. The Tribunal may not exercise the power conferred to it under paragraph 1 if the disputing parties decide that the Tribunal may not do so. 3. Paragraph 1 does not affect the appointment of other kinds of experts where the appointment is authorized by the applicable arbitration rules. Article 9.34: Interim Measures of Protection and Final Award 1. A Tribunal may order an interim measure of protection to preserve the rights of a disputing party or to ensure that the Tribunal’s jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party or to protect the Tribunal’s jurisdiction. A Tribunal may not order attachment or enjoin the application of the measure alleged to constitute a breach referred to in Articles 9.20 and 9.21. For purposes of this paragraph, an order includes a recommendation. 2. Where a Tribunal makes a final award against the disputing Party, the Tribunal may award only:
The Tribunal may also award costs in accordance with the applicable arbitration rules. 3. Subject to paragraph 2, where a claim is made under Article 9.21:
4. A Tribunal may not order a disputing Party to pay punitive damages. Article 9.35: Finality and Enforcement of an Award 1. An award made by a Tribunal has no binding force except between the disputing parties and in respect of that particular case. 2. Subject to paragraph 3 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay. 3. A disputing party may not seek enforcement of a final award until:
4. Each Party shall provide for the enforcement of an award in its territory. 5. A claim that is submitted to arbitration under this Section shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention. Article 9.36: Receipts under Insurance or Guarantee Contracts In an arbitration under this Section, a disputing Party may not assert as a defence, counterclaim, right of setoff or otherwise that the disputing investor has received or will receive, under an insurance or guarantee contract, indemnification or other compensation for all or part of its alleged damages. The dispute settlement provisions of this Section and of Chapter Twenty-Two (Dispute Settlement) do not apply to the matters referred to in Annex 9.37. Article 9.38: Suspension of Other Agreements 1. The Treaty between the Government of Canada and the Government of the Republic of Panama for the Promotion and Protection of Investments, done at Guatemala on 12 September 1996 (the “FIPA”) is suspended from the date of entry into force of this Agreement until such time as this Agreement is no longer in force. 2. Notwithstanding paragraph 1, the FIPA remains operative for a period of 15 years after the entry into force of this Agreement for the purpose of any breach of the obligations of the FIPA that occurred before the entry into force of this Agreement. During this period the right of an investor of a Party to submit a claim to arbitration concerning such a breach shall be governed by the relevant provisions of the FIPA. The Parties confirm their shared understanding that:
Annex 9.31 1. The application for leave to file a non-disputing party submission shall:
2. The submission filed by a non-disputing party shall:
1. A decision by Canada following a review under the Investment Canada Act (R.S.C. 1985, c. 28 (1st supp.)), with respect to whether to permit an acquisition that is subject to review, shall not be subject to the dispute settlement provisions of Section C of this Chapter or of Chapter Twenty-Two (Dispute Settlement). 2. A decision by a Party to prohibit or restrict the acquisition of an investment in its territory by an investor of the other Party, or its investment, under Article 23.03 (Exceptions – National Security) shall not be subject to the dispute settlement provisions of Section C of this Chapter or of Chapter Twenty-Two (Dispute Settlement). CHAPTER TEN For purposes of this Chapter: aircraft repair and maintenance services mean these activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include so-called line maintenance; computer reservation system (CRS) services mean services provided by computerised systems that contain information about air carriers’ schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued; cross-border trade in services means providing a service:
but does not include providing a service in the territory of a Party by a covered investment as defined in Article 9.01(Investment – Definitions); enterprise means an enterprise as defined in Article 1.01 (Initial Provisions and General Definitions – Definitions of General Application), and a branch of an enterprise; enterprise of a Party means an enterprise organized or constituted under the laws of a Party and a branch located in the territory of a Party and carrying out business activities there; measure adopted or maintained by a Party means a measure adopted or maintained by:
professional service means a service, the provision of which requires specialized post-secondary education, or equivalent training or experience, and for which the right to practise is granted or restricted by a Party, but does not include a service provided by a tradesperson or a crew member of a vessel or an aircraft; selling or marketing of an air transport service means opportunities for the air carrier concerned to sell and market freely its air transport services and all aspects of marketing such as market research, advertising and distribution, but does not include the pricing of air transport services nor the applicable conditions; and service provider of a Party means a person of that Party that seeks to provide or provides a service. Article 10.02: Scope of Application 1. This Chapter applies to measures adopted or maintained by a Party affecting cross-border trade in services by a service provider of the other Party, including a measure that affects:
2. This Chapter does not apply to:
3. This Chapter does not impose an obligation on a Party with respect to a national of the other Party seeking access to its employment market, or employed on a permanent basis in its territory, or confer any right on that national with respect to that access or employment. Article 10.03: National Treatment 1. Each Party shall accord to a service provider of the other Party treatment no less favourable than that it accords in like circumstances to its own service providers. 2. The treatment accorded by a Party under paragraph 1 means, with respect to a measure adopted or maintained by a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to service providers of the Party of which it forms a part. 3. The treatment accorded by a Party under paragraph 1 extends to a relevant service provided by that service provider. Article 10.04: Most-Favoured-Nation Treatment 1. Each Party shall accord to a service provider of the other Party treatment no less favourable than that it accords in like circumstances to service providers of a non-Party. 2. The treatment accorded by a Party under paragraph 1 extends to a relevant service provided by that service provider. A Party may not adopt or maintain a measure that:
A Party may not require as a condition for the cross-border provision of a service that a service provider of the other Party:
1. Articles 10.03, 10.04, 10.05 and 10.06 do not apply to:
2. Articles 10.03, 10.04, 10.05 and 10.06 do not apply to a measure that a Party adopts or maintains with respect to a sector, subsector or activity, as set out in its Schedule to Annex II. Article 10.08: Domestic Regulation The Parties note their mutual obligations related to domestic regulation in Article VI:4 of the GATS and affirm their commitment to develop necessary disciplines under Article VI:4. If any of those disciplines are adopted by the WTO Members, the Parties will, as appropriate, jointly review them to determine whether this Article needs to be supplemented. 1. For the purposes of fulfillment, in whole or in part, of its standards or criteria for the authorization, licensing or certification of services providers, and subject to the requirements of paragraph 3, a Party may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular country. That recognition, which may be achieved through harmonization or otherwise, may be based on an agreement or arrangement with the country concerned or may be accorded autonomously. 2. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for the other Party, if the other Party is interested, to negotiate its accession to that agreement or arrangement or to negotiate a comparable agreement or arrangement. Where a Party accords recognition autonomously, it shall afford adequate opportunity for the other Party to demonstrate that education, experience, licences or certifications obtained or requirements met in that other Party’s territory should be recognized. 3. A Party shall not accord recognition in a manner that would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization, licensing or certification of services providers, or a disguised restriction on trade in services. 4. The Parties shall encourage their relevant professional service bodies in their respective territories to:
Article 10.10: Denial of Benefits Subject to prior notification in accordance with Article 20.03 (Transparency – Notification and Provision of Information):
Article 10.11: Transfers and Payments 1. Each Party shall permit transfers and payments relating to the cross-border provision of services to be made freely and without delay into and out of its territory. 2. Each Party shall permit transfers and payments relating to the cross-border provision of services to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer. 3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer or payment through the equitable, non-discriminatory, and good faith application of its domestic law relating to:
Annex 10.09 Development of Professional Standards 1. The Parties shall encourage the relevant professional bodies in their respective territories to develop mutually acceptable standards and criteria for licensing and certification of professional service providers and to provide recommendations on mutual recognition to the Commission. 2. The standards and criteria referred to in paragraph 1 may be developed with regard to the following matters:
3. On receipt of a recommendation referred to in paragraph 1, the Commission shall review the recommendation within a reasonable time to determine whether it is consistent with this Agreement. If the Commission determines that the recommendation is consistent with this Agreement, each Party shall encourage its respective competent authorities, where appropriate, to implement the recommendation within a time determined by the Parties. Temporary licensing 4. If the Parties decide, each Party shall encourage the relevant bodies in its territory to develop procedures for the temporary licensing of a professional service provider of the other Party.
CHAPTER ELEVEN For purposes of this Chapter: cost-oriented means based on cost, including a reasonable profit, and may involve different cost methodologies for different facilities or services; end-user means a final consumer of or subscriber to a public telecommunications transport service, including a service supplier other than a supplier of public telecommunications transport services; enterprise means an “enterprise” as defined in Article 1.01 (Initial Provisions and General Definitions – Definitions of General Application) and a branch of an enterprise; essential facilities means facilities of a public telecommunications transport network or service that:
interconnection means linking suppliers providing a public telecommunications transport service to allow the users of one supplier to communicate with users of another supplier and to access a service provided by another supplier; intra-corporate communications means telecommunications through which a company communicates within the company or with or among its subsidiaries, branches and, subject to a Party’s domestic law, affiliates, but does not include a commercial or non-commercial service that is supplied to a company that is not a related subsidiary, branch or affiliate or that is offered to a customer or potential customer; for purposes of this definition, “subsidiaries”, “branches” and, where applicable, “affiliates” are as defined by each Party in its domestic law; leased circuits means telecommunications facilities between two or more designated points that are set aside for the dedicated use of or availability to a particular customer or other users of the customer’s choosing; major supplier means a supplier that has the ability to materially affect the terms of participation having regard to price and supply in the relevant market for public telecommunications transport networks or services as a result of:
network termination point means the final demarcation of the public telecommunications transport network at the user’s premises; non-discriminatory means treatment no less favourable than that accorded to another user of like public telecommunications transport networks or services in like circumstances; public telecommunications transport network means the public telecommunications infrastructure that permits telecommunications between and among defined network termination points; public telecommunications transport service means a telecommunications transport service required, explicitly or in effect, by a Party to be offered to the public generally that involves the real-time transmission of customer-supplied information between two or more points without an end-to-end change in the form or content of the customer’s information. Such services may include, inter alia, telegraph, telephone, telex and data transmission; regulatory body means the national body of a Party that is responsible for the regulation of telecommunications; service supplier means a person of a Party who is seeking to supply or who supplies a service, including a supplier of a telecommunications transport network or service; supply of a service means providing a service:
user means an end-user or a supplier of a public telecommunications transport service; and value-added service means a service that adds value to public telecommunications transport services through enhanced functionality, by:
Article 11.02: Scope of Application 1. This Chapter applies to:
2. This Chapter does not apply to a measure of a Party affecting the transmission by electromagnetic means, including broadcast and cable distribution, of radio or television programming intended for reception by the public. 3. This Chapter does not:
Article 11.03: Access to and Use of Public Telecommunications Transport Networks or Services 1. Subject to a Party’s right to restrict the supply of a service in accordance with the reservations in its Schedule to Annex I or II, a Party shall ensure that an enterprise of the other Party is accorded access to and use of a public telecommunications transport network or service on reasonable and non-discriminatory terms and conditions, including as set out in paragraphs 2 through 7. 2. Each Party shall ensure that an enterprise of the other Party has access to and use of a public telecommunications transport network or service offered within or across its borders, including private leased circuits, and to this end shall ensure, subject to paragraphs 6 and 7, that the enterprise is permitted to:
3. Each Party shall ensure that an enterprise of the other Party may use a public telecommunications transport network and service for the movement of information in its territory or across its borders, including for intra-corporate communications of such enterprises, and for access to information contained in a database or otherwise stored in machine-readable form in the territory of either Party. 4. Further to Article 23.02 (Exceptions - General Exceptions), a Party may take a measure necessary to:
5. A measure taken under paragraph 4 may not be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade. 6. Each Party shall ensure that no condition is imposed on access to and use of a public telecommunications transport network or service other than as necessary to:
7. Provided that they satisfy the criteria in paragraph 6, conditions for access to and use of a public telecommunications transport network or service may include:
Article 11.04: Procedures for Licences or Concessions Where a Party requires a supplier to have a licence or concession to supply a public telecommunications transport network or service, that Party shall ensure that:
Article 11.05: Conduct of Major Suppliers Competitive Safeguards 1. Each Party shall maintain appropriate measures for the purpose of preventing suppliers that, alone or together, are a major supplier from engaging in or continuing anti-competitive practices. 2. The anti-competitive practices referred to in paragraph 1 include:
Interconnection 3. Subject to a Party’s reservations in its Schedule to Annex I or II, each Party shall ensure that a major supplier provides interconnection:
Article 11.06: Universal Service 1. Each Party has the right to define the universal service obligation it wishes to adopt or maintain. 2. Each Party shall administer any universal service obligation that it adopts or maintains in a transparent, non-discriminatory and competitively neutral manner and shall ensure that a universal service obligation is not more burdensome than necessary for the kind of universal service that it has defined. Article 11.07: Allocation and Use of Scarce Resources 1. Each Party shall administer its procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, in an objective, timely, transparent and non-discriminatory manner. 2. Notwithstanding Article 10.05 (Cross-Border Trade in Services – Market Access), a Party may adopt or maintain a measure allocating and assigning spectrum and managing frequencies. Accordingly, each Party retains the right to establish and apply its spectrum and frequency management policies that may limit the number of suppliers of a public telecommunications transport service. Each Party also retains the right to allocate frequency bands taking into account present and future needs. Article 11.08: Regulatory Body 1. Each Party shall ensure that its regulatory body is separate from, and not accountable to, a supplier of a public telecommunications transport network or service or value-added service. 2. Each Party shall ensure that its regulatory body’s decisions and procedures are impartial with respect to market participants. Each Party shall maintain appropriate procedures and authority to enforce compliance with the Party’s domestic measures relating to the obligations in Articles 11.03 and 11.05. Those procedures shall include the ability to impose appropriate sanctions, which may include financial penalties, corrective orders or the modification, suspension or revocation of licences. Article 11.10: Resolution of Domestic Telecommunication Disputes Recourse to Regulatory Bodies 1. Further to Articles 20.04 (Transparency – Administrative Proceedings) and 20.05 (Transparency – Review and Appeal), each Party shall ensure that:
Reconsideration 2. Each Party shall ensure that a supplier of public telecommunications transport networks or services or value-added services aggrieved by the determination or decision of a regulatory body may petition that body for reconsideration of that determination or decision. 3. Paragraph 2 does not apply:
1. Further to Articles 20.02 (Transparency – Publication) and 20.03 (Transparency – Notification and Provision of Information), and in addition to the other provisions in this Chapter relating to the publication of information, each Party shall make publicly available:
2. Each Party shall, upon request, make available an interconnection agreement in force between a major supplier in its territory and another supplier of a public telecommunications transport service in its territory to the others suppliers of public telecommunications transport services of each Party. The Parties recognize the importance of relying on market forces to achieve wide choices in the supply of telecommunications services. To this end, each Party may refrain from applying a regulation to a telecommunications service when:
Article 11.13: Relation to Other Chapters In the event of an inconsistency between this Chapter and another Chapter in this Agreement, this Chapter prevails to the extent of the inconsistency. Article 11.14: International Standards and Organizations The Parties recognize the importance of international standards for global compatibility and interoperability of telecommunications networks or services and undertake to promote those standards through the work of relevant international bodies, including the International Telecommunication Union and the International Organization for Standardization. CHAPTER TWELVE For purposes of this Chapter: Appointing Authority means the Secretary-General, Deputy Secretary-General or next senior member of the staff of the International Centre for Settlement of Investment Disputes who is not a national of either Party; banking and other financial service (excluding insurance) means:
cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border trade in that service; cross-border trade in financial services or cross-border supply of financial services means the supply of a financial service:
financial institution means a financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the domestic law of the Party in whose territory it is located; financial institution of the other Party means a financial institution, including a branch, located in the territory of a Party that is controlled by a person of the other Party; financial service means a service of a financial nature, including an insurance or insurance-related service, a banking or other financial service (excluding insurance), or a service incidental or auxiliary to a service of a financial nature; financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party; insurance and insurance-related service means:
investment means “investment” as defined in Article 9.01 (Investment – Definitions), except that:
for greater certainty:
investor of a Party means “investor of a Party” as defined in Article 9.01 (Investment – Definitions); new financial service means a financial service not supplied in the Party’s territory that is supplied within the territory of the other Party, and includes a new form of delivery of a financial service or the sale of a financial product that is not sold in the Party’s territory; person of a Party means “person of a Party” as defined in Article 1.01 (Initial Provisions and General Definitions – Definitions of General Application) and, for greater certainty, does not include a branch of an enterprise of a non-Party; prudential reasons includes the maintenance of the safety, soundness, integrity, or financial responsibility of individual institutions or cross-border financial service suppliers; public entity means a central bank or monetary authority of a Party, or a financial institution owned or controlled by a Party; and self-regulatory organization means a non-governmental body that exercises its own or delegated regulatory or supervisory authority over financial service suppliers or financial institutions, including a securities or futures exchange or market, clearing agency, or other organization or association. Article 12.02: Scope of Application 1. This Chapter applies to a measure adopted or maintained by a Party relating to:
2. Chapters Nine (Investment) and Ten (Cross-Border Trade in Services) apply to measures described in paragraph 1 only to the extent that those Chapters are incorporated into this Chapter. 3. Articles 9.10 (Investment – Transfers), 9.11 (Investment – Expropriation), 9.15 (Investment – Denial of Benefits), 9.16 (Investment – Health, Safety and Environmental Measures), 9.18 (Investment– Special Formalities and Information Requirements) and 10.10 (Cross-Border Trade in Services – Denial of Benefits) are incorporated into and made a part of this Chapter. 4. Section C of Chapter Nine (Investment – Settlement of Disputes between an Investor and the Host Party) is incorporated into and made a part of this Chapter solely for claims that a Party has breached Articles 9.10 (Investment – Transfers), 9.11 (Investment – Expropriation), or 9.15 (Investment – Denial of Benefits) as incorporated into this Chapter, or claims pursuant to Article 9.20(c) (Investment – Claim by an Investor of a Party on Its Own Behalf) or Article 9.21(1)(c) (Investment – Claim by an Investor of a Party on Behalf of an Enterprise). 5. Article 10.11 (Cross-Border Trade in Services – Transfers and Payments) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 12.06. 6. This Chapter does not prevent a Party, including its public entities from exclusively conducting or providing in its territory:
Article 12.03: National Treatment 1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords to its own investors in like circumstances with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions or an investment in financial institutions in its territory. 2. Each Party shall accord to a financial institution of the other Party and to an investment of an investor of the other Party in a financial institution treatment no less favourable than that it accords to its own financial institutions and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments. 3. For purposes of the national treatment obligations in Article 12.06(1), a Party shall accord to a cross-border financial service supplier of the other Party treatment no less favourable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service. 4. The treatment that a Party is required to accord under paragraphs 1, 2 and 3 means, with respect to measures adopted or maintained by a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to investors in financial institutions, financial institutions, investments of investors in financial institutions and financial service providers of the Party of which it forms a part. 5. Differences in market share, profitability or size do not in themselves establish a breach of the obligations under this Article. Article 12.04: Most-Favoured-Nation Treatment 1. Each Party shall accord to an investor of the other Party, a financial institution of the other Party, an investment of an investor in a financial institution and a cross-border financial service supplier of the other Party treatment no less favourable than that it accords to the investors, financial institutions, investments of investors in financial institutions and cross-border financial service suppliers of a non-Party, in like circumstances. 2. A Party may recognize a prudential measure of a non-Party in the application of a measure covered by this Chapter. Such recognition may be:
3. A Party according recognition of a prudential measure under paragraph 2 shall provide adequate opportunity to the other Party to demonstrate that circumstances exist in which there are or will be equivalent regulation, oversight, implementation of regulation, and, if appropriate, procedures concerning the sharing of information between the Parties. 4. If a Party accords recognition of prudential measures under subparagraph 2(c) and the circumstances set out in paragraph 3 exist, the Party shall provide adequate opportunity to the other Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement. Article 12.05: Right of Establishment 1. A Party shall permit an investor of the other Party that does not own or control a financial institution in the Party’s territory to establish, without the imposition of numerical restrictions or requirements to take a specific juridical form, a financial institution that is permitted to supply a financial service that a like institution of the Party may supply under the domestic law of the Party at the time of establishment. The obligation not to impose a requirement to take a specific juridical form does not prevent a Party from imposing a condition or requirement in connection with the establishment of a particular type of entity chosen by an investor of the other Party. 2. A Party shall permit an investor of the other Party that owns or controls a financial institution in the Party’s territory to establish in that territory such additional financial institutions as may be necessary for the supply of the full range of financial services allowed under the domestic law of the Party at the time of establishment of the additional financial institutions. Subject to Article 12.03, a Party may impose a term or condition on the establishment of additional financial institutions and determine the institutional and juridical form to be used to supply a specified financial service or to carry out of a specified activity. 3. The right of establishment under paragraphs 1 and 2 includes the acquisition of an existing entity. 4. Subject to Article 12.03, a Party may prohibit a particular financial service or activity. Such a prohibition may not apply to all financial services or to a complete financial services sub-sector such as banking. 5. For the purpose of this Article, without prejudice to other forms of prudential regulation, a Party may require that an investor of the other Party be engaged in the business of providing financial services in the territory of that other Party. 6. For the purpose of this Article, “numerical restrictions” means limitations imposed either on the basis of a regional subdivision or on the basis of the entire territory of a Party, on the number of financial institutions whether in the form of a numerical quota, a monopoly, an exclusive service supplier or the requirements of an economic needs test. Article 12.06: Cross-Border Trade 1. Each Party shall permit, under terms and conditions that accord national treatment, a cross-border financial service supplier of the other Party to supply a financial service specified in Annex 12.06. 2. Each Party shall permit a person located in its territory, and its nationals wherever located, to purchase a financial service from a cross-border financial service supplier of the other Party located in the territory of the other Party. Subject to paragraph 1, this obligation does not require a Party to permit that supplier to do business or solicit in its territory. Each Party may define “doing business” and “solicitation” for the purposes of this Article. 3. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration of cross-border financial service suppliers of the other Party and of financial instruments. Article 12.07: New Financial Services 1. A Party shall permit a financial institution of the other Party to supply a new financial service that the first Party would permit its own financial institutions, in like circumstances, to supply under its domestic law. A Party may:
2. A Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorization for the supply of the service. Where a Party would permit the new financial service and authorization is required, the decision shall be made within a reasonable time and authorization may only be refused for prudential reasons. 3. This Article does not prevent a financial institution of a Party from applying to the other Party to consider authorizing the supply of a financial service that is not supplied within either Party’s territory. That application is subject to the domestic law of the Party receiving the application and is not subject to the obligations of this Article. Article 12.08: Treatment of Certain Information This Chapter does not require a Party to furnish or allow access to:
Article 12.09: Senior Management and Boards of Directors 1. A Party may not require a financial institution of the other Party to engage natural persons of any particular nationality as senior managerial or other essential personnel. 2. A Party may not require that more than a simple majority of the board of directors of a financial institution of the other Party be composed of nationals of the Party or natural persons residing in the territory of the Party. Article 12.10: Non-Conforming Measures 1. Articles 12.03, 12.04, 12.05 and 12.09 do not apply to:
2. Article 12.06 does not apply to:
3. Articles 12.03, 12.04, 12.05, 12.06 and 12.09 do not apply to a non-conforming measure that a Party adopts or maintains in accordance with Section II of its Schedule to Annex III. 4. Section III of each Party’s Schedule to Annex III sets out specific commitments by that Party. These commitments are subject to a Party’s right to apply a non-conforming measure adopted or maintained in accordance with Section II of its Schedule to Annex III. 5. Where a Party has set out a reservation to Article 9.04 (Investment – National Treatment), 9.05 (Investment – Most-Favoured-Nation Treatment), 10.03 (Cross-Border Trade in Services – National Treatment) or 10.04 (Cross-Border Trade in Services – Most-Favoured-Nation Treatment) in its Schedule to Annex I or II, the reservation also constitutes a reservation to Article 12.03 or 12.04 to the extent that the measure, sector, sub-sector or activity set out in the reservation is covered by this Chapter. 1. This Chapter or Chapter Nine (Investment), Ten (Cross-Border Trade in Services), Eleven (Telecommunications), Thirteen (Temporary Entry for Business Persons), Fourteen (Competition Policy, Monopolies and State Enterprises), or Fifteen (Electronic Commerce) do not prevent a Party from adopting or maintaining a measure for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service supplier, or to ensure the integrity and stability of the financial system. Where these measures do not conform with the provisions of this Agreement referred to in this paragraph, they shall not be used as a means of avoiding the Party’s obligations under those provisions. 2. This Chapter or Chapter Nine (Investment), Ten (Cross-Border Trade in Services), Eleven (Telecommunications), Thirteen (Temporary Entry for Business Persons), Fourteen (Competition Policy, Monopolies and State Enterprises), or Fifteen (Electronic Commerce) does not apply to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph does not affect a Party’s obligations under Article 9.07 (Investment – Performance Requirements) with respect to measures covered by Chapter Nine (Investment) or Article 9.10 (Investment – Transfers) or 10.11 (Cross-Border Trade in Services – Transfers and Payments). 3. Notwithstanding Article 9.10 (Investment – Transfers) and 10.11 (Cross-Border Trade in Services – Transfers and Payments) a Party may prevent or limit transfers by a financial institution or cross-border financial service supplier to, or for the benefit of, an affiliate of or person related to such institution or supplier, through the equitable, non-discriminatory and good-faith application of measures relating to maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service suppliers. 4. A Party may adopt or enforce a measure necessary to secure compliance with its laws or regulations that is not inconsistent with this Chapter, including a measure relating to the prevention of deceptive and fraudulent practices or to deal with the effects of a default on financial services contracts. A Party may not apply that measure in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment in a financial institution or on a cross-border trade in financial services. 1. The Parties recognize that transparent regulations and policies governing the activities of financial institutions and financial service suppliers are important in facilitating access of financial institutions and financial service suppliers to, and their operations in, each other’s markets. Each Party commits to promoting regulatory transparency in financial services. 2. Each Party shall ensure that a measure of general application to which this Chapter applies is administered in a reasonable, objective and impartial manner. 3. Article 20.02 (Transparency – Publication) does not apply to a regulation of general application that a Party proposes to adopt where that proposed regulation relates to the subject matter of this Chapter. For that regulation each Party shall, to the extent practicable:
4. Each Party shall ensure that its regulatory authorities make available to interested persons their requirements, including any documentation required, for completing applications relating to the supply of a financial service. 5. On the request of an applicant, a regulatory authority shall inform the applicant of the status of its application. If that authority requires additional information from the applicant, it shall promptly notify the applicant. 6. A regulatory authority shall make an administrative decision on a completed application of an investor in a financial institution, cross-border financial service supplier or a financial institution of the other Party relating to the supply of a financial service within 120 days, and shall promptly notify the applicant of the decision. An application shall not be considered complete until all relevant hearings are held and all necessary information is received. Where it is not practicable for a decision to be made within 120 days, the regulatory authority shall promptly notify the applicant and shall endeavour to make the decision within a reasonable time. 7. Each Party shall adopt or maintain appropriate mechanisms that will promptly respond to inquiries from an interested person regarding a measure of general application covered by this Chapter. Article 12.13: Self-Regulatory Organizations If a Party requires a financial institution or a cross-border financial service supplier of the other Party to be a member of, participate in, or have access to, a self-regulatory organisation to provide a financial service in or into the territory of that Party then the requiring Party shall ensure that the self-regulatory organisation observes the obligations of this Chapter. Article 12.14: Payment and Clearing Systems Under terms and conditions that accord national treatment, each Party shall grant to a financial institution of the other Party established in its territory access to payment and clearing systems operated by an entity exercising governmental authority delegated to it by a Party as well as access to official funding and refinancing facilities available in the normal course of ordinary business. This Article does not confer access to the Party’s lender of last resort facilities. Article 12.15: Financial Services Committee 1. The Parties establish a Financial Services Committee (the “Committee”). The principal representative of each Party shall be an official of the Party’s authority responsible for financial services set out in Annex 12.15. 2. The Committee shall:
3. The Committee shall meet annually, or as it otherwise decides, to assess the functioning of this Agreement as it applies to financial services. The Committee shall inform the Commission of the results of each meeting. 1. A Party may request consultations with the other Party regarding a matter arising under this Agreement that affects a financial service. The other Party shall give sympathetic consideration to the request. The Parties shall report the results of their consultations to the Committee. 2. Officials of the authorities specified in Annex 12.15 shall participate in the consultations under this Article. 3. A Party may request that regulatory authorities of the other Party participate in consultations under this Article regarding that other Party’s measures of general application which may affect the operations of financial institutions or cross-border financial service suppliers in the requesting Party’s territory. 4. A regulatory authority participating in consultations pursuant to paragraph 3 need not disclose information or take any action that would interfere with specific regulatory, supervisory, administrative or enforcement matters. 5. Where a Party requires information for a supervisory purpose concerning a financial institution in the other Party’s territory or a cross-border financial service supplier in the other Party’s territory, the Party may approach the competent regulatory authority in the other Party’s territory to seek the information. 6. A Party is not required to derogate from its relevant domestic law regarding sharing of information among financial regulators or the requirements of an agreement or arrangement between financial authorities of the Parties. Article 12.17: Dispute Settlement 1. The Provisions of Chapter Twenty-Two (Dispute Settlement), as modified by this Article, applies to the settlement of disputes arising under this Chapter. 2. Consultations held under Article 12.16 regarding a measure or matter constitute a consultation under Article 22.05 (Dispute Settlement – Consultation), unless the Parties otherwise decide. If the matter has not been resolved within 45 days of the beginning of consultations under Article 12.16 or 90 days of the delivery of the request for consultations under Article 12.16, whichever is earlier, the complaining Party may request in writing that a panel be established. 3. The following procedures replace Article 22.08 (Dispute Settlement – Panel Selection):
4. Each panelist on panels constituted for disputes arising under this Chapter shall have the qualifications required by Article 22.09 (Dispute Settlement – Qualifications of Panelists) with the exception of Article 22.09(d). In addition, each panelist shall have expertise or experience in financial services law or practice, which may include the regulation of financial institutions. 5. If a panel finds that a measure is inconsistent with the obligations of this Agreement and the measure affects:
Article 12.18: Investment Disputes in Financial Services 1. Where an investor of a Party submits a claim under Article 9.20 (Investment – Claim by an Investor of a Party on Its Own Behalf) or 9.21 (Investment – Claim by an Investor of a Party on Behalf of an Enterprise) to arbitration under Section C of Chapter 9 (Investment – Settlement of Disputes between an Investor and the Host Party) and the responding Party invokes an exception under Article 12.11, on request of the responding Party, the Tribunal shall refer the matter in writing to the Committee for a decision in accordance with paragraph 2. The Tribunal may not proceed pending receipt of a decision or report under this Article. 2. In a referral under paragraph 1, the Committee shall decide the issue of whether and to what extent Article 12.11 is a valid defence to the claim of the investor. The Committee shall transmit a copy of its decision to the Tribunal and to the Commission. The decision is binding on the Tribunal. 3. Where the Committee has not decided the issue within 60 days of the receipt of the referral under paragraph 1, either Party may within 10 days request that a panel be established under Article 22.07 (Dispute Settlement – Establishment of a Panel) to decide the issue. The panel shall be constituted in accordance with Article 12.17. The panel shall transmit its final report, established in accordance with Article 22.11 (Dispute Settlement – Panel Reports), to the Committee and to the Tribunal. The report is binding on the Tribunal. 4. Where a request for the establishment of a panel under paragraph 3 has not been made within 10 days of the expiration of the 60-day period referred to in paragraph 3, the Tribunal may proceed to decide the matter.
Annex 12.04 Without prejudice to a reservation to Article 12.04 taken by a Party under Article 12.10, regardless of Article 12.06, Article 12.04 applies to the supply by a cross-border financial service supplier of a financial service. Annex 12.06 Canada Insurance and Insurance-Related Services 1. For Canada, Article 12.06(1) applies to the supply of a financial service from the territory of one Party into the territory of the other Party with respect to:
2. Paragraph 1 applies only if a Panamanian entity is not in itself or through an agent insuring a risk in Canada. Banking and Other Financial Services (excluding insurance) 3. For Canada, Article 12.06(1) applies to the supply of a financial service from the territory of one Party into the territory of the other Party with respect to:
4. Paragraph 3 applies only if neither the foreign bank nor one of its affiliates, if subject to the Bank Act, maintains a financial establishment in Canada. Panama Insurance and Insurance-Related Services 1. For Panama, Article 12.06(1) applies to the supply of a financial service from the territory of one Party into the territory of the other Party with respect to:
2. Paragraph 1(a)(i) does not apply to insurance of risk relating to commercial aviation until two years after the date of entry into force of this Agreement. Banking and Other Financial Services (excluding insurance) 3. For Panama, Article 12.06(1) applies to the supply of a financial service from the territory of one Party into the territory of the other Party with respect to:
Annex 12.15 The authority of each Party responsible for financial services is:
or their respective successors.
CHAPTER THIRTEEN For purposes of this Chapter: business person means a national of a Party engaged in trading goods, providing services or conducting investment activities; executive means a business person within an organization who:
management trainee on professional development means an employee with a post-secondary degree who is on a temporary work assignment intended to broaden that employee’s knowledge of and experience in a company in preparation for a senior leadership position within the company; manager means a business person within an organization who:
persons engaged in a specialty occupation means nationals of a Party engaged in a specialty occupation requiring:
specialist means an employee possessing specialized knowledge of the company’s products or services and their application in international markets, or an advanced level of expertise or knowledge of the company’s processes and procedures; specialty occupation means, for Canada, an occupation that falls within the National Occupation Classification levels O or A; and temporary entry means entry into one Party's territory by a business person of the other Party without the intent to establish permanent residence. Article 13.02: General Principles Further to Article 13.03 (General Obligations), this Chapter reflects the preferential trading relationship between the Parties, the desirability of facilitating temporary entry on a reciprocal basis and of establishing transparent criteria and procedures for temporary entry in accordance with Annex 13.03, and the need to ensure border security and to protect the domestic labour force and permanent employment in their respective territories. Article 13.03: General Obligations Each Party shall apply its respective measures relating to the provisions of this Chapter in accordance with Article 13.02, including expeditiously applying those measures so as to avoid unduly impairing or delaying trade in goods or services or investment activities under this Agreement. Article 13.04: Grant of Temporary Entry 1. A Party shall grant temporary entry to a business person who complies with existing immigration measures applicable to temporary entry under this Chapter, including Annex 13.04. 2. A Party may refuse to issue a work permit or authorization to a business person where the temporary entry of that person might adversely affect:
3. Each Party shall limit its respective fees for processing applications for temporary entry of a business person to the approximate cost of services rendered. Article 13.05: Provision of Information 1. Further to Article 20.03 (Transparency - Notification and Provision of Information), and recognizing the importance to the Parties of transparency of temporary entry information, each Party shall make available, through electronic or other means, information on its measures relating to this Chapter. 2. Each Party shall, subject to its domestic law regarding protection of private information:
1. The Parties establish the following Contact Points:
or the occupants of any successor position notified to the other Party through the Coordinators. 2. The Contact Points shall meet as necessary to exchange information as described in Article 13.05 and to consider matters pertaining to this Chapter, such as:
3. The Contact Points shall meet within three years of the entry into force of this Agreement to consider further liberalization to enhance the temporary entry of business persons. Article 13.07: Dispute Settlement 1. A Party may not initiate proceedings under Chapter Twenty-Two (Dispute Settlement) regarding a refusal to grant temporary entry under this Chapter unless:
2. The remedies referred to in paragraph (1)(b) shall be deemed to have been exhausted if a final determination in the matter has not been issued by the competent authority within one year of the institution of an administrative proceeding, and the failure to issue a determination is not attributable to delay caused by the business person. Article 13.08: Relation to Other Chapters This Agreement does not impose an obligation on a Party regarding its immigration measures, except as specifically provided in this Chapter or Chapter 20 (Transparency). Annex 13.04 Section A – Business Visitors 1. A Party shall grant temporary entry to a business person to engage in a business activity set out in Appendix 13.04-A:
2. The Parties shall require a business person to satisfy the requirements of paragraph 1(b)(iii) by demonstrating that:
3. A Party shall normally accept an oral declaration as to the principal place of business and the actual place of accrual of profits. Where the Party requires further proof, it shall normally consider a letter from the employer attesting to these matters as sufficient proof. 4. The Parties may not:
5. Notwithstanding paragraph 3, a Party may require business persons seeking temporary entry under this Section to obtain a visa or an equivalent requirement prior to entry. Before imposing a visa or an equivalent requirement, the Party shall consult with the other Party whose business persons would be affected with a view to avoiding the imposition of the requirement. Section B – Traders and Investors 1. A Party shall grant temporary entry and provide a work permit or work authorization to a business person seeking to:
in a capacity that is supervisory, executive or involves essential skills, provided that the business person complies with existing immigration measures applicable to temporary entry. 2. A Party may not:
3. Notwithstanding paragraph 2, a Party may require business persons’ seeking temporary entry under this Section to obtain a visa or an equivalent requirement prior to entry. Before imposing a visa or an equivalent requirement, the Party shall consult with the other Party whose business persons would be affected with a view to avoiding the imposition of the requirement. 4. Paragraph 2 does not apply to:
5. Panama shall accord to business persons of Canada treatment no less favourable than that it accords, with respect to the proportionality requirement referred to in paragraph 4(a), to business persons of a non-Party. 6. If Panama ceases to apply the proportionality requirement referred to in paragraph 4(a) to business persons of Canada, Canada shall not require the labour market opinions referred to in paragraph 4(b) for business persons of Panama. Section C – Intra-Company Transferees 1. A Party shall grant temporary entry and provide a work permit or work authorization to a business person employed by an enterprise seeking to render services to that enterprise or its subsidiary or affiliate, as an executive or manager, a specialist, or a management trainee on professional development, provided that the business person complies with existing immigration measures applicable to temporary entry. A Party may require the business person to have been employed continuously by the enterprise for one year within the three-year period immediately preceding the date of the application for admission. 2. A Party may not:
3. Notwithstanding paragraph 2, a Party may require business persons seeking temporary entry under this Section to obtain a visa or an equivalent requirement prior to entry. Before imposing a visa or an equivalent requirement, the Party shall consult with the other Party whose business persons would be affected with a view to avoiding the imposition of the requirement. 4. Paragraph 2 does not apply to:
5. Panama shall accord to business persons of Canada treatment no less favourable than that it accords, with respect to the proportionality requirement referred to in paragraph 4(a), to business persons of a non-Party. 6. If Panama ceases to apply the proportionality requirement referred to in paragraph 4(a) to business persons of Canada, Canada shall not require the labour market opinions referred to in paragraph 4(b) for business persons of Panama. Section D – Persons Engaged in Specialty Occupations 1. A Party shall grant temporary entry and provide a work permit or work authorization to a business person seeking to engage in a specialty occupation in Appendix 13.04-D:
2. A Party may not:
3. Notwithstanding paragraph 2, a Party may require business persons seeking temporary entry under this Section to obtain a visa or an equivalent requirement prior to entry. Before imposing a visa or an equivalent requirement, the Party shall consult with the other Party whose business persons would be affected with a view to avoiding the imposition of the requirement. Section E – Spouses 1. A Party shall grant temporary entry and provide a work permit or work authorization to the spouse of a business person who qualifies for temporary entry under Section B (Traders and Investors), Section C (Intra-Company Transferees), or Section D (Persons Engaged in Specialty Occupations), if the spouse complies with existing immigration measures applicable to temporary entry. 2. A Party may not:
3. Notwithstanding paragraph 2, a Party may require spouses of business persons seeking temporary entry under this Section to obtain a visa or an equivalent requirement prior to entry. Before imposing a visa or an equivalent requirement, the Party shall consult with the other Party whose nationals would be affected with a view to avoiding the imposition of the requirement. 4. Paragraph 2 does not apply to:
5. Panama shall accord to spouses of business persons of Canada treatment no less favourable than that it accords, with respect to the proportionality requirement referred to in paragraph 4(a), to spouses of business persons of a non-Party. 6. If Panama ceases to apply the proportionality requirement referred to in paragraph 4(a) to spouses of business persons of Canada, Canada shall not require the labour market opinions referred to in paragraph 4(b) for spouses of business persons of Panama. Appendix 13.04-A Research and Design Technical, scientific and statistical researchers conducting independent research or research for an enterprise located in the territory of the other Party. Cultivation, Manufacture and Production Purchasing and production management personnel conducting commercial transactions for an enterprise located in the territory of the other Party. Marketing Market researchers and analysts conducting independent research or analysis or research or analysis for an enterprise located in the territory of the other Party. Trade fair and promotional personnel attending a trade convention. Sales Sales representatives and agents taking orders or negotiating contracts for goods or services for an enterprise located in the territory of the other Party but not delivering goods or providing services. Buyers purchasing for an enterprise located in the territory of the other Party. Distribution Transportation operators transporting goods or passengers to the territory of a Party from the territory of the other Party or loading and transporting goods or passengers from the territory of a Party, with no unloading in that territory, to the territory of the other Party. After-Sales or After-Lease Service Installers, repair and maintenance personnel, and supervisors, possessing specialized knowledge essential to a seller’s contractual obligation, performing services or training workers to perform services, pursuant to a warranty or other service contract incidental to the sale or lease of commercial or industrial equipment or machinery, including computer software, purchased or leased from an enterprise located outside the territory of the Party into which temporary entry is sought, during the life of the warranty or service agreement. Management and Supervisory Personnel engaging in a commercial transaction for an enterprise located in the territory of the other Party. Financial Services Insurers, bankers or investment brokers engaging in commercial transactions for an enterprise located in the territory of the other Party where the provision of such financial services does not require the authorization of the competent authority of the Party. Public Relations and Advertising Personnel consulting with business associates, or attending or participating in conventions. Tourism Tour and travel agents, tour guides or tour operators attending or participating in conventions or conducting a tour that has begun in the territory of the other Party. Translation/Interpretation Translators or interpreters performing services as employees of an enterprise located in the territory of the other Party, except for services performed by government-authorized translators. Appendix 13.04-D The specialty occupations listed below are covered under this Chapter:
Computer and Information Systems
Science
CHAPTER FOURTEEN For purposes of this Chapter: covered investment means “covered investment” as defined in Article 9.01 (Investment – Definitions); designate means to establish, authorize, or to expand the scope of a monopoly to cover an additional good or service after the date of entry into force of this Agreement; government monopoly means a monopoly owned or controlled through ownership interests by the national government of a Party, or by another such monopoly; in accordance with commercial considerations means consistent with normal business practices of privately held enterprises in the relevant business sector or industry; market means the geographic and commercial market for a good or service; monopoly means an entity, including a consortium or government agency, that in a relevant market in the territory of a Party is designated as the sole provider or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant; non-discriminatory treatment means the better of national treatment or most-favoured-nation treatment as set out in the relevant provisions of this Agreement; and state enterprise means an enterprise owned or controlled through ownership interests by a Party, except as set out in Annex 14.04. Article 14.02: Competition Policy 1. Each Party shall adopt or maintain measures to proscribe anti-competitive business conduct and take appropriate action regarding that conduct, recognizing that those measures will enhance the fulfilment of the objectives of this Agreement. To this end the Parties shall discuss from time to time the effectiveness of measures undertaken by each Party. The measures each Party adopts or maintains to proscribe anti-competitive business conduct and the enforcement actions it takes pursuant to those measures shall be consistent with principles of transparency, non-discrimination and procedural fairness. Exclusions from these measures shall be transparent. 2. Each Party shall maintain its independence in developing and enforcing its competition law. 3. Each Party recognizes the importance of cooperation and coordination between their competition authorities to further effective competition law enforcement in the free trade area. The Parties shall cooperate on matters relating to the enforcement of competition laws and policies in the free trade area. In this regard, the Parties, through their respective competition authorities, shall negotiate a cooperation instrument that may address, among other matters, notification, consultation, positive and negative comity, technical assistance and exchange of information. 4. To promote understanding between the Parties, or to address specific matters that arise under this Chapter, a Party shall enter into discussions on request of the other Party. The requesting Party shall indicate in its request how the matter affects trade or investment between the Parties. The other Party shall give full and sympathetic consideration to the concerns of the requesting Party. Article 14.03: Designated Monopolies 1. This Agreement does not prevent a Party from designating a monopoly. 2. Where a Party intends to designate a monopoly and the designation may affect the interests of a person of the other Party, the designating Party shall, wherever possible, provide prior written notification of the designation to the other Party. 3. Each Party shall ensure that a privately owned monopoly that it designates or a government monopoly that it maintains or designates:
4. Paragraph 3 does not apply to procurement by a government of a good or service for governmental purposes as long as the good or service is not intended for:
Article 14.04: State Enterprises 1. This Agreement does not prevent a Party from establishing or maintaining a state enterprise. 2. Each Party shall ensure that a state enterprise that it establishes or maintains acts in a manner that is consistent with the Party’s obligations under Chapters Nine (Investment) and Twelve (Financial Services) whenever that enterprise exercises a regulatory, administrative, or other governmental authority that the Party has delegated to it, such as the power to expropriate, grant licenses, approve commercial transactions, or impose quotas, fees, or other charges. 3. Each Party shall ensure that a state enterprise that it establishes or maintains accords non-discriminatory treatment in the sale of its goods or services to covered investments. Article 14.05: Dispute Settlement 1. A Party may not have recourse to dispute settlement under Chapter Twenty-Two (Dispute Settlement) for a matter arising under this Chapter except for those matters arising under Articles 14.03 and 14.04. 2. An investor may not have recourse to investor-state dispute settlement under Article 9.20 (Investment – Claim by an Investor of a Party on Its Own Behalf) or Article 9.21 (Investment – Claim by an Investor of a Party on Behalf of an Enterprise) for a matter arising under this Chapter except for a matter arising under Article 14.03(3)(a) or Article 14.04(2). Annex 14.04 For purposes of Article 14.04(3) “state enterprise” means, with respect to Canada, a “Crown corporation” within the meaning of the Financial Administration Act (R.S.C. 1985, c. F-11), a Crown corporation within the meaning of any comparable provincial law or equivalent entity that is incorporated under other applicable provincial law.
CHAPTER FIFTEEN For purposes of this Chapter: delivered electronically means delivered through telecommunications, alone or in conjunction with other information and communication technologies; digital product means a computer program, text, video, image, sound recording or other product that is digitally encoded; and electronic commerce means commerce conducted through telecommunications, alone or in conjunction with other information and communication technologies. Article 15.02: Scope and Coverage 1. The Parties confirm that this Agreement, including Chapter 2 (National Treatment and Market Access for Goods), Chapter 9 (Investment), Chapter 10 (Cross-Border Trade in Services), Chapter 11 (Telecommunications), Chapter 12 (Financial Services), Chapter 16 (Government Procurement) and Chapter 23 (Exceptions) applies to electronic commerce. In particular, the Parties recognize the importance of Article 11.03 (Telecommunications - Access to and Use of Public Telecommunications Transport Networks or Services) in enabling electronic commerce. 2. Nothing in this Chapter imposes an obligation on a Party to allow a product to be delivered electronically, except in accordance with the obligations of that Party under another Chapter of this Agreement. 3. For greater certainty, a Party’s reservations set out in its Schedule to Annex I, II or III apply to electronic commerce. Article 15.03: General Provisions 1. The Parties recognize the economic growth and opportunities provided by electronic commerce and the applicability of WTO rules to electronic commerce. 2. Considering the potential of electronic commerce as a social and economic development tool, the Parties recognize the importance of:
3. Each Party shall endeavour to adopt measures to facilitate electronic commerce that address issues relevant to the electronic environment. 4. The Parties recognize the importance of avoiding unnecessary barriers to electronic commerce. Having regard to its national policy objectives, each Party shall endeavour to guard against measures that:
Article 15.04: Customs Duties on Digital Products Delivered Electronically 1. A Party shall not apply a customs duty, fee or charge on a digital product delivered electronically. 2. For greater clarity, paragraph 1 does not prevent a Party from imposing an internal tax or other internal charge not prohibited by this Agreement on a digital product delivered electronically. Article 15.05: Relation to Other Chapters In the event of an inconsistency between this Chapter and another Chapter of this Agreement, the other Chapter prevails.
CHAPTER SIXTEEN For the purposes of this Chapter: commercial good or service means a good or service of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes; conditions for participation means a registration, qualification or other prerequisites for participation in a procurement; construction service means a contractual arrangement for the realization by any means of civil or building works paid for:
in writing or written means a worded or numbered expression that can be read, reproduced and later communicated; it may include electronically transmitted and stored information; limited tendering means a procurement method where the procuring entity contacts a supplier or suppliers of its choice; multi-use list means a list of suppliers that a procuring entity has determined satisfy the conditions for participation in that list, and that the procuring entity intends to use more than once; notice of intended procurement means a notice published by a procuring entity inviting interested suppliers to submit a request for participation or a tender; offsets means a condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter-trade or similar actions or requirements; open tendering means a procurement method where all interested suppliers may submit a tender; procurement means the process by which a government obtains the use of or acquires a good or service for governmental purposes and not with a view to commercial sale or resale, or use in the production or supply of a good or service for commercial sale or resale; procuring entity means an entity listed in Annexes 1 and 2 of Canada and Panama’s schedules to this Chapter; selective tendering means a procurement method where only suppliers satisfying the conditions for participation are invited by the procuring entity to submit a tender; service includes a construction service, unless otherwise specified; standard means a document approved by a recognized body that provides, for common and repeated use, rules, guidelines or characteristics for a good or service, or related processes and production methods, with which compliance is not mandatory; it may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a good, service, process or production method; supplier means a person that provides or could provide a good or service to a procuring entity; and technical specification means a tendering requirement that:
Article 16.02: Scope and Coverage Application of Chapter 1. This Chapter applies to a measure adopted or maintained by a Party relating to procurement by a procuring entity listed in Annex I to Canada or Panama Schedule to this Chapter:
2. This Chapter does not apply to:
3. Nothing in this Chapter prevents a Party from developing new procurement policies, procedures or contractual means, provided they are not inconsistent with this Chapter. 4. If a procuring entity awards a contract that is not covered by this Chapter, this Chapter does not cover a good or service component of that contract. Valuation 5. In estimating the value of a procurement for the purpose of ascertaining whether it is a procurement covered by this Chapter, a procuring entity:
Article 16.03: Security and General Exceptions 1. Nothing in this Chapter prevents a Party from taking action or not disclosing information that it considers necessary for the protection of its essential security interests relating to procurement:
2. Provided that a measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties if the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter prevents a Party from adopting or maintaining a measure:
3. The Parties understand that paragraph 2(b) includes an environmental measure necessary to protect human, animal or plant life or health. Article 16.04: General Principles National Treatment and Non-Discrimination 1. With respect to a measure relating to procurement covered by this Chapter, each Party shall accord immediately and unconditionally to a good or service of the other Party, and to a supplier of the other Party of such good or service, treatment no less favourable than the most favourable treatment the Party accords to a domestic good, service or supplier. 2. With respect to a measure relating to procurement covered by this Chapter, a Party shall not:
Conduct of Procurement 3. A procuring entity shall conduct procurement covered by this Chapter in a transparent and impartial manner that:
Tendering Procedures 4. A procuring entity shall use open tendering except where Articles 16.07(6) through 16.07(9) or Article 16.10 apply. Rules of Origin 5. With regard to the procurement of a good covered by this Chapter, each Party shall apply the rules of origin that it applies to that good in the normal course of trade. Offsets 6. A Party, including its procuring entities, shall not seek, take account of, impose or enforce offsets at any stage of a procurement covered by this Chapter. Measures Not Specific to Procurement 7. Paragraphs 1 and 2 do not apply to:
Article 16.05: Publication of Procurement Information 1. Each Party shall:
2. Article 20.02 (Transparency – Publication) does not apply to a measure that must be published under paragraph (a). Article 16.06: Publication of Notices Notice of Intended Procurement 1. For each procurement covered by this Chapter, a procuring entity shall publish a notice inviting suppliers to submit tenders, or a notice inviting applications to participate in the procurement. The procuring entity shall publish that notice in an electronic or paper medium that is widely disseminated and readily accessible to the public for the entire period established for tendering. Each Party shall maintain a gateway electronic site that includes links to all notices of procuring entities for procurements covered by this Chapter. 2. Each notice of intended procurement must include:
Notice of Planned Procurement 3. The Parties shall encourage procuring entities to publish as early as possible in each fiscal year notices regarding their respective procurement plans. These notices should include the subject matter of any planned procurement and the estimated date of the publication of the notice of intended procurement. Article 16.07: Conditions for Participation General Requirements 1. Where a procuring entity requires a supplier to satisfy a registration, qualification or other requirement or conditions for participation in a separate process in order to participate in a procurement covered by this Chapter, the procuring entity shall publish a notice inviting suppliers to apply for participation. The procuring entity shall publish the notice sufficiently in advance to provide interested suppliers time to prepare and submit applications and to provide the procuring entity with sufficient time to evaluate and make its determination based on those applications. 2. A procuring entity shall limit conditions for participation in a procurement covered by this Chapter to those that are essential to ensure that a supplier has the legal and financial capacity and the commercial and technical ability to undertake the relevant procurement. 3. In establishing the conditions for participation, a procuring entity:
4. In assessing whether a supplier satisfies the conditions for participation, a procuring entity shall:
5. In assessing whether a supplier satisfies the conditions for participation, a procuring entity shall recognize as qualified all domestic suppliers and suppliers of the other Party that satisfy the conditions for participation. Multi-use Lists 6. A procuring entity may establish or maintain a multi-use list of suppliers, provided that a notice inviting interested suppliers to apply for inclusion on the list is:
7. The notice referred to in paragraph 6 must include:
8. A procuring entity shall allow suppliers to apply at any time for inclusion on a multi-use list and shall include on the list all qualified suppliers within a reasonably short time. Selective Tendering 9. If a procuring entity intends to use selective tendering, the procuring entity shall:
Information on Procuring Entity Decisions 10. A procuring entity shall promptly inform a supplier that submits an application for participation in a procurement or for inclusion on a multi-use list of the procuring entity’s decision with respect to the application. 11. If a procuring entity:
the procuring entity shall promptly inform the supplier and, on request of the supplier, promptly provide the supplier with a written explanation of the reasons for its decision. 12. If there is supporting evidence, a procuring entity may exclude a supplier on grounds such as:
13. A procuring entity of a Party shall not adopt or maintain a registration system or qualification procedure with the purpose or the effect of creating an unnecessary obstacle to the participation of a supplier of the other Party in its procurement. Article 16.08: Technical Specifications and Tender Documentation Technical Specifications 1. A procuring entity shall not prepare, adopt, or apply a technical specification or prescribe a conformity assessment procedure with the purpose or the effect of creating an unnecessary obstacle to international trade between the Parties. 2. In prescribing the technical specifications for a good or service being procured, a procuring entity shall, where appropriate:
3. A procuring entity shall not prescribe a technical specification requiring or referring to a particular trademark or trade name, patent, copyright, design, type, specific origin, producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement requirement provided that, in those cases, the procuring entity includes words such as “or equivalent” in the tender documentation. 4. A procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation or adoption of a technical specification for a specific procurement covered by this Chapter from a person that may have a commercial interest in the procurement. 5. A procuring entity may, in accordance with this Article, prepare, adopt or apply a technical specification to promote the conservation of natural resources or protect the environment. Tender Documentation 6. A procuring entity shall make available to suppliers tender documentation that includes all information necessary to permit suppliers to prepare and submit responsive tenders. Unless already provided in the notice of intended procurement, that documentation shall include a complete description of:
7. A procuring entity shall promptly reply to a reasonable request for relevant information by a supplier participating in a procurement covered by this Chapter, except that the procuring entity shall not make available information with regard to a specific procurement in a manner that would give the requesting supplier an advantage over its competitors in the procurement. Modifications 8. If, prior to the award of a contract, a procuring entity modifies the criteria or requirements set out in the notice of intended procurement or tender documentation provided to participating suppliers, or amends or reissues a notice or tender documentation, it shall transmit in writing that modified, amended or re-issued notice or tender documentation:
Article 16.09: Time Limits for the Submission of Tenders 1. A procuring entity shall provide suppliers sufficient time to submit applications to participate in a procurement covered by this Chapter and prepare and submit responsive tenders, taking into account the nature and complexity of the procurement. Deadlines 2. Except as provided for in paragraphs 3 and 4, a procuring entity shall establish that the final date for the submission of tenders is not less than 40 days from the date on which:
3. A procuring entity may reduce by 5 days the time limit established under paragraph 2 for the submission of tenders, for each one of the following circumstances:
4. A procuring entity may establish a time limit of less than 40 days for the submission of tenders provided that the time given to suppliers is sufficient to enable them to prepare and submit responsive tenders, but not less than 10 days before the final date for the submission of tenders, if:
Article 16.10: Limited Tendering 1. Provided that a procuring entity does not use this provision to avoid competition among suppliers, to protect domestic suppliers, or in a manner that discriminates against suppliers of the other Party, the procuring entity may contact a supplier of its choice and may choose not to apply Articles 16.06, 16.07, 16.08, 16.09 and 16.11 only under the following circumstances, if:
2. A procuring entity shall prepare a report in writing on each contract awarded under paragraph 1. The report shall include the name of the procuring entity, the value and kind of good or service procured, and a statement indicating the circumstances and conditions described in paragraph 1 that justified the use of limited tendering. Article 16.11: Treatment of Tenders and Awarding of Contracts Treatment of Tenders 1. A procuring entity shall receive, open and treat all tenders under procedures that guarantee the fairness and impartiality of the procurement process and the confidentiality of tenders. 2. A procuring entity shall treat tenders in confidence until at least the opening of the tenders. 3. If a procuring entity provides a supplier with an opportunity to correct unintentional errors of form between the opening of tenders and the awarding of the contract, the procuring entity shall provide the same opportunity to all participating suppliers. Awarding of Contracts 4. To be considered for award, a tender must be submitted in writing by a supplier that satisfies the conditions for participation and must, at the time of opening, comply with the essential requirements of the notices and tender documentation. 5. Unless a procuring entity determines that it is not in the public interest to award a contract, it shall award the contract to the supplier that the procuring entity has determined to be fully capable of undertaking the contract and, based solely on the evaluation criteria specified in the notices and tender documentation, has submitted:
6. A procuring entity shall not use options, cancel a procurement or modify awarded contracts in a manner that circumvents the obligations in this Chapter. Information Provided to Suppliers 7. A procuring entity shall promptly inform suppliers participating in the procurement of the entity’s contract award decisions and, on request, shall do so in writing. Subject to Article 16.12, a procuring entity shall, on request, provide an unsuccessful supplier with an explanation of the reasons why the procuring entity did not select its tender and the relative advantages of the successful supplier’s tender. Publication of Award Information 8. Within 72 days of an award, a procuring entity shall publish in electronic or paper form in an officially designated publication, a notice including the following information about the contract:
Maintenance of Records 9. A procuring entity shall maintain reports and records of tendering procedures relating to procurements covered by this Chapter, including the reports provided for in Article 16.10(2), and shall retain such reports and records for a period of at least 3 years after the award of a contract. Article 16.12: Disclosure of Information Provision of Information to a Party 1. On request of the other Party, a Party shall promptly provide information necessary to determine whether a procurement was conducted fairly, impartially and in accordance with this Chapter, including information on the characteristics and relative advantages of the successful tender. In cases where release of the information would prejudice competition in future tenders, the Party that receives that information shall not disclose it to a supplier without the consent of the Party that provided the information. Non-Disclosure of Information 2. Notwithstanding any other provision of this Chapter, a Party, including its procuring entities, may not provide information to a particular supplier that might prejudice fair competition between suppliers. 3. A Party, including its procuring entities, administrative authorities and judicial authorities, is not required under this Chapter to release confidential information if the release:
Article 16.13: Domestic Review Procedures 1. For the purposes of this Article, “challenge” means a challenge by a supplier arising in the context of a procurement covered by this Chapter in which the supplier has, or has had, an interest. 2. Each Party shall ensure that its procuring entities give impartial and timely consideration to a complaint from a supplier regarding an alleged breach of measures implementing this Chapter arising in the context of a procurement covered by this Chapter in which the supplier has, or has had, an interest. Each Party shall encourage suppliers to seek clarification from its procuring entities through discussions with a view to facilitating the resolution of a complaint. 3. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge. 4. Each Party shall ensure that an authority it establishes or designates under paragraph 3 has written procedures that are generally available. Each Party shall ensure that those procedures are timely, effective, transparent, non-discriminatory and provide that:
5. Each Party shall provide that an authority it establishes or designates under paragraph 3 has authority to take interim measures to preserve the supplier’s opportunity to participate in the procurement. Those interim measures may result in a suspension of the procurement process. The procedures for taking interim measures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. 6. Each Party shall ensure that a supplier’s submission of a challenge will not prejudice the supplier’s participation in ongoing or future procurements. 7. If a body other than an authority referred to in paragraph 2 initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement is the subject of the challenge. Article 16.14: Modifications and Rectifications to Coverage 1. A Party may modify an Annex to this Chapter. 2. When a Party modifies an Annex to this Chapter, the Party shall:
3. Notwithstanding paragraph 2(b), a Party need not provide compensatory adjustments if:
4. If the other Party disputes that:
it shall object in writing within 30 days of receipt of the notification referred to in paragraph 1 or be deemed to have accepted the adjustment or proposed modification, including for the purposes of Chapter Twenty-Two (Dispute Settlement). Article 16.15: Committee on Procurement The Parties hereby establish a Committee on Procurement to address matters related to the implementation of this Chapter with a view to maximizing access to government procurement, including with respect to facilitating participation by small and medium enterprises in the government procurement market of the other Party. Article 16.16: Further Negotiations 1. If, after the entry into force of the provisions of this Chapter, a Party enters into another international agreement containing different procurement procedures and practices, including the introduction of shorter bid periods, a Party shall, if the other Party so requests, enter into negotiations to harmonize this Chapter with that international agreement. 2. If, after the entry into force of the provisions of this Chapter, a Party enters into another international agreement providing greater access to its procurement market than is provided under this Chapter, including with respect to sub-national government procurement, on the request of either Party, the Parties may decide to enter into negotiations with a view to achieving a level of market access under this Chapter equivalent to that of the other international agreement. Article 16.17: Information Technology The Parties, to the extent possible, shall endeavour to use electronic means of communication to efficiently disseminate information on government procurement, particularly regarding tender opportunities offered by procuring entities, while respecting the principles of transparency and non-discrimination. 1. The Parties recognize that each Party has sovereign rights and responsibilities to conserve and protect its environment, and affirm their environmental obligations under their domestic law, as well as their international obligations under multilateral environmental agreements. 2. The Parties recognize the mutual supportiveness between trade and environment policies and the need to implement this Agreement in a manner consistent with environmental protection and conservation and the sustainable use of their resources. Article 17.02: Agreement on the Environment In keeping with the spirit of Article 17.01, the Parties have set out their mutual obligations in the Agreement on the Environment to promote the following objectives:
Article 17.03: Relationship between this Agreement and the Agreement on the Environment 1. The Parties recognize the importance of balancing trade obligations and environmental obligations, and affirm that the Agreement on the Environment complements this Agreement and that they are mutually supportive. 2. The Commission may consider, as appropriate, reports and recommendations from the Committee on the Environment established under the Agreement on the Environment, in respect of any issues related to trade and the environment. The Parties affirm their obligations as members of the International Labour Organization (ILO) and their commitments to the ILO Declaration on Fundamental Principles and Rights at Work (1998) and its follow-up as well as their continuing respect for each other’s Constitution and laws. The Parties wish to build on their respective international commitments, strengthen their cooperation on labour matters and in particular to:
In order to further the objectives, the Parties’ mutual obligations are set out in the Agreement on Labour Cooperation between Canada and the Republic of Panama (“Agreement on Labour Cooperation”) addressing, among other things:
Article 18.04: Cooperative Activities The Parties recognize that labour cooperation plays an important role in advancing the level of compliance with labour principles and rights and as such the Agreement on Labour Cooperation provides for the development of a plan of action for cooperative labour activities to promote the objectives of the Agreement on Labour Cooperation. An indicative list of areas of possible cooperation between the Parties is set out in the Agreement on Labour Cooperation.
CHAPTER NINETEEN Recognizing that trade-related cooperation is a catalyst for the reforms and investments necessary to foster trade-driven economic growth and adjustment to liberalized trade, the Parties agree to promote trade-related cooperation, with the following objectives:
1. The Parties hereby establish Contact Points to facilitate communication concerning the interpretation and implementation of this Chapter. 2. Each Contact Point may share with the other an action plan outlining possible areas of trade-related cooperation to maximize the opportunities and benefits deriving from this Agreement. 3. The Contact Points shall work jointly to establish guidelines for conducting their work and coordinate with other contact points and committees established under this Agreement, as required, on trade-related cooperation pursuant to the objectives of this Chapter. 4. The Contact Points shall be responsible for ensuring communication with the relevant national institutions, as necessary, to carry out the objectives under this Chapter. 5. The Contact Points may communicate by electronic mail, video-conferencing or any other means decided on by the Parties. 6. The Contact Points are as follows:
Section A – Publication, Notification and Administration of Laws For purposes of this Section: administrative ruling of general application means an administrative ruling or interpretation applying to persons and situations of fact falling within the general scope of that ruling or interpretation and establishing a norm of conduct, but does not include:
1. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application respecting a matter covered by this Agreement are promptly published or made available in such a manner as to enable interested persons and the other Party to become acquainted with them. 2. To the extent possible, each Party shall:
Article 20.03: Notification and Provision of Information 1. To the maximum extent possible, a Party shall notify the other Party of an existing or proposed measure that the Party considers might materially affect the operation of this Agreement or substantially affect the other Party’s interests under this Agreement. 2. On request of the other Party, a Party shall promptly provide information and respond to questions pertaining to an existing or proposed measure, even if the Party was previously notified of that measure. 3. Any notification or information provided under this Article is without prejudice as to whether the measure is consistent with this Agreement. Article 20.04: Administrative Proceedings In order to ensure that measures of general application affecting matters covered by this Agreement are applied in a consistent, impartial and reasonable manner, a Party shall ensure that in administrative proceedings involving specific cases, where the measures referred to in Article 20.02 are applied to particular persons, goods or services of the other Party:
Article 20.05: Review and Appeal 1. Each Party shall establish or maintain judicial, quasi-judicial or administrative tribunals or procedures for the prompt review and, where warranted, correction of final administrative actions in matters covered by this Agreement. Each Party shall ensure that its respective tribunals are impartial and independent of the office or authority entrusted with administrative enforcement and do not have a substantial interest in the outcome of the matter. 2. Each Party shall ensure that the parties to the proceeding are given the following rights in regard to the tribunals or procedures referred to in paragraph 1:
3. Each Party shall ensure, subject to appeal or review as provided in its domestic law, that such decisions are implemented by, and govern the practice of, the offices or authorities with respect to the administrative action at issue. Article 20.06: Cooperation to Promote Increased Transparency The Parties agree to cooperate in bilateral, regional and multilateral fora to promote transparency regarding international trade and investment. For purposes of this Section: foreign public official means a natural person holding a legislative, executive, administrative, or judicial office of a foreign country, whether appointed or elected, and a natural person exercising a public function for a foreign country, including for a public agency or public enterprise; official of a public international organization means an international civil servant or a natural person who is authorized by such an organization to act on behalf of that organization; public function means a temporary or permanent, paid or honorary activity, performed by a natural person in the name of a Party or in the service of a Party or its institutions, at any level of its hierarchy; and public official means a natural person holding a legislative, executive, administrative or judicial office of a Party, whether appointed or elected and whether permanent or temporary. Article 20.08: Statement of Principles The Parties affirm their resolve to prevent and combat bribery and corruption in international trade and investment. Article 20.09: Anti-corruption Measures 1. Each Party shall adopt or maintain legislative or other measures establishing the following as criminal offences in matters of international trade or investment when committed intentionally:
2. Each Party shall adopt such measures as may be necessary to establish its jurisdiction over criminal offences referred to in paragraph 1 that are committed in its territory. 3. The Parties shall ensure that their respective sanctions for offences covered by this Section take into account the gravity of the offence. 4. Each Party shall adopt such measures, as may be necessary, consistent with its legal principles, to establish the liability of enterprises for offences covered by this Section. In particular, each Party shall ensure that enterprises held liable under this Section are subject to effective, proportionate and dissuasive criminal or non-criminal sanctions, including monetary sanctions. 5. Each Party shall consider incorporating in its domestic legal system at the national level appropriate measures to provide protection against unjustified treatment for a person who reports in good faith and on reasonable grounds to the competent authorities facts concerning an offence established in accordance with this Section. Article 20.10: Cooperation in International Fora The Parties recognize the importance of regional and multilateral initiatives to prevent and combat bribery and corruption in international trade and investment. The Parties agree to work together to advance efforts in regional and multilateral fora to prevent and combat bribery and corruption in international trade and investment, and to encourage and support appropriate initiatives.
CHAPTER TWENTY-ONE Article 21.01: The Joint Commission 1. The Parties hereby establish the Joint Commission, comprising representatives of the Parties at the Ministerial level, or their designees. 2. The Commission shall:
3. The Commission may:
4. At the request of the Committee on the Environment established under the Agreement on the Environment between Canada and the Republic of Panama, the Commission may revise Annex 1.06 (Initial Provisions and General Definitions – Multilateral Environmental Agreements) to include other Multilateral Environmental Agreements (MEAs), or to include amendments to an MEA or remove an MEA listed in that Annex. 5. The revisions referred to in subparagraph 3(d) and paragraph 4 shall be subject to the completion of any necessary domestic legal procedures of either Party. 6. The Commission may establish and delegate responsibilities to committees, subcommittees or working groups. Except where otherwise specifically provided for in this Agreement, the committees, subcommittees and working groups shall work under a mandate recommended by the Agreement Coordinators referred to in Article 21.02 and approved by the Commission. 7. The Commission shall establish its rules and procedures. All decisions of the Commission shall be taken by mutual consent. 8. The Commission shall normally convene once a year, or upon the request in writing of either Party. Unless otherwise decided by the Parties, sessions of the Commission shall be held alternately in the territory of each Party, or by any technological means available. Article 21.02: Agreement Coordinators 1. Each Party shall appoint an Agreement Coordinator and notify the other Party within 60 days following the entry into force of this Agreement. 2. The Agreement Coordinators shall jointly:
3. The Coordinators shall meet as often as required. 4. Each Party may request in writing at any time that a special meeting of the Coordinators be held. Such a meeting shall take place within 30 days of receipt of the request. Committees and Subcommittees, Country Coordinators and Contact Points 1. Committees and Subcommittees:
2. Country Coordinators:
3. Contact Points:
DISPUTE SETTLEMENT For purposes of this Chapter: complaining Party means a Party that requests the establishment of a panel under Article 22.07; panel means a panel established under Article 22.07; and Party complained against means the Party that receives the request for the establishment of a panel under Article 22.07. The Parties shall endeavour to agree on the interpretation and application of this Agreement, and shall attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of a matter that might affect its operation. Article 22.03: Scope and Coverage Except for matters arising under Chapters 17 (Environment) and 18 (Labour) and as otherwise provided in this Agreement, the dispute settlement provisions of this Chapter apply with respect to the settlement of disputes between the Parties regarding the interpretation or application of this Agreement or wherever a Party considers that:
Article 22.04: Choice of Forum 1. Subject to paragraph 2, a dispute regarding a matter arising under both this Agreement and the WTO Agreement or any other free trade agreement to which both Parties are party may be settled in a forum designated under the terms of one of these agreements at the discretion of the complaining Party. 2. Notwithstanding paragraph 1, if a Party complained against claims that a measure is subject to Article 1.06 (Initial Provisions and General Definitions – Relation to Environmental and Conservation Agreements) and requests in writing that the matter be considered under this Agreement, the complaining Party may resort only to the dispute settlement procedures in this Agreement. 3. If the complaining Party requests the establishment of a dispute settlement panel under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of the other, unless the Party complained against makes a request pursuant to paragraph 2. 1. A Party may request in writing a consultation with the other Party regarding a matter referred to in Article 22.03. 2. The Party requesting the consultation shall deliver the request to the other Party, setting out the reasons for the request, identifying the measure or matter at issue under Article 22.03 and indicating the legal basis for the complaint. 3. Subject to paragraph 4, the Parties, unless they otherwise decide, shall enter into a consultation within 30 days of the date of receipt of the request by the other Party. 4. In cases of urgency, including those involving a good or service that rapidly loses its trade value, such as a perishable good, consultation shall commence within 15 days of the date of receipt of the request by the other Party. 5. The requesting Party may ask that the other Party make available personnel of its governmental agencies or other regulatory bodies with expertise in the subject matter of the consultation. 6. The Parties shall attempt to arrive at a mutually satisfactory resolution of a matter through consultation under this Article. To this end, each Party shall:
7. Consultation is confidential and without prejudice to the rights of the Parties in proceedings under this Chapter. 8. Consultation may be held in person or by another means that the Parties decide. Article 22.06: Good Offices, Conciliation and Mediation 1. The Parties at any time may decide to undertake an alternative method of dispute resolution, such as good offices, conciliation or mediation. 2. The Parties shall conduct alternative methods of dispute resolution according to procedures on which they decide. 3. Either Party at any time may begin, suspend or terminate proceedings established under this Article. 4. Proceedings involving good offices, conciliation or mediation are confidential and without prejudice to the rights of the Parties in other proceedings. Article 22.07: Establishment of a Panel 1. Unless the Parties decide otherwise, and subject to paragraph 3, the complaining Party may refer the matter to a dispute settlement panel if a matter referred to in Article 22.05 has not been resolved:
2. The complaining Party shall deliver the written request for panel establishment to the other Party, indicating the reason for the request, identifying the specific measure or other matter at issue and providing a brief summary of the legal basis of the complaint sufficient to present the problem clearly. 3. A dispute settlement panel may not be established to review a proposed measure. Article 22.08: Panel Selection 1. The panel shall consist of three panellists. 2. Within 30 days of receiving the request to establish a panel, a Party shall notify the other Party of its appointment of a panellist, and propose up to four candidates to serve as the chair of the panel. If a Party fails to appoint a panellist within this time, the panellist shall be selected by the other Party from the candidates proposed for the chair. 3. The Parties, within 45 days of the date of receipt of the request for panel establishment, shall endeavour to select a panellist who will serve as chair from among the candidates proposed. If the Parties fail to select a chair within this time period, within a further 7 days the chair shall be selected randomly from the candidates proposed. 4. If a panellist appointed by a Party withdraws, is removed or becomes unable to serve, a replacement shall be appointed by that Party within 30 days, failing which the replacement shall be appointed in accordance with the second sentence of paragraph 2. 5. If the chair of the panel withdraws, is removed or becomes unable to serve, the Parties shall endeavour to decide on the appointment of a replacement within 30 days, failing which the replacement shall be appointed in accordance with the second sentence of paragraph 3. 6. If an appointment in paragraph 4 or 5 would require selecting from the list of candidates proposed for chair and there are no remaining candidates, each Party shall propose up to 3 additional candidates within 30 days and, within 7 days of that deadline, the panellist shall be selected randomly from the candidates proposed. 7. A time limit applicable to the proceeding is suspended as of the date the panellist withdraws, is removed or becomes unable to serve, and resumes on the date the replacement is selected. Article 22.09: Qualifications of Panellists Each panellist shall:
Article 22.10: Rules of Procedure 1. A panel shall follow the provisions of this Chapter, including Annex 22.10 (Rules of Procedure). A panel, in consultation with the Parties, may establish supplementary rules of procedure that do not conflict with the provisions of this Chapter. 2. Unless the Parties decide otherwise, the rules of procedure shall ensure that:
3. Unless the Parties decide otherwise within 15 days of the date of the establishment of the panel, the terms of reference of the panel shall be: 4. If the complaining Party claims that a benefit has been nullified or impaired within the meaning of Annex 22.03, the terms of reference shall so indicate. 5. If a Party wishes the panel to make findings as to the degree of adverse trade effects on a Party of a measure determined:
the terms of reference shall so indicate. 6. At the request of a Party, or on its own initiative, the panel may seek information and technical advice from a person or body it deems appropriate, subject to such terms and conditions that the Parties may decide. 7. The panel may rule on its own jurisdiction. 8. The panel may delegate to the chair authority to make administrative and procedural decisions. 9. The panel, in consultation with the Parties, may modify a time period applicable in the panel proceedings and make other procedural or administrative adjustments required for the fairness or efficiency of the proceeding. 10. Findings, determinations and recommendations of the panel under Article 22.11 shall be made by a majority of its members. 11. Panellists may furnish separate opinions on matters not unanimously agreed. A panel may not disclose which panellists are associated with majority or minority opinions. 12. Unless the Parties decide otherwise, the expenses of the panel, including the remuneration of the panellists, shall be borne in equal shares by the Parties. 1. Unless the Parties decide otherwise, the panel shall issue reports in accordance with the provisions of this Chapter. 2. The panel shall base its reports on the provisions of this Agreement applied and interpreted in accordance with the rules of interpretation of public international law, the submissions and arguments of the Parties and information and technical advice before it under the provisions of this Chapter. 3. The panel shall issue an initial report to the Parties within 120 days of the selection of the last panellist. This report shall contain:
4. Notwithstanding Article 22.10, the initial report of the panel shall be confidential. 5. A Party may submit written comments to the panel on its initial report, subject to time limits that may be set by the panel. After considering those comments, the panel, on its own initiative or on the request of a Party, may:
6. The panel shall present to the Parties a final report within 30 days of presentation of the initial report. 7. Unless the Parties decide otherwise, the final report of the panel may be published by either Party 15 days after it is presented to the Parties, subject to Article 22.10(2)(g). Article 22.12: Implementation of the Final Report 1. On receipt of the final report of a panel, the Parties shall decide on the resolution of the dispute. Unless the Parties decide otherwise, the resolution shall conform with a determination or recommendation made by the panel. 2. Wherever possible, the resolution shall be the removal of a measure not conforming to this Agreement or removal of the nullification or impairment within the meaning of Annex 22.03. 3. If the Parties are unable to reach a resolution within 30 days of presentation of the final report, or such other period as the Parties may decide, the Party complained against, if so requested by the complaining Party, shall enter into negotiations with a view to determining compensation. Article 22.13: Non-Implementation – Suspension of Benefits 1. The complaining Party, subject to paragraph 4 and following notice to the other Party, may suspend the application to the other Party of benefits of equivalent effect if:
2. The notice referred to in paragraph 1 shall specify the level of benefits that the complaining Party proposes to suspend. 3. In considering which benefits to suspend under paragraph 1:
4. A Party may only suspend benefits temporarily, and only until the other Party has brought the inconsistent measure or other matter into conformity with this Agreement, including as a result of the panel process described in Article 22.14, or until such time as the Parties arrive at a resolution of the dispute. 5. For purposes of paragraph 4, “inconsistent measure or other matter” means a measure or other matter found by a panel to be inconsistent with the obligations of this Agreement or otherwise nullifying or impairing benefits within the meaning of Annex 22.03. Article 22.14: Review of Compliance and Suspension of Benefits 1. A Party, by written notice to the other Party, may request that a panel be reconvened to make a determination regarding:
2. In the written notice of the request referred to in paragraph 1, the Party shall identify the specific measure or matter at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly. 3. The panel shall be reconvened when the other Party receives written notice of the request referred to in paragraph 1. In the event that a panellist is unable to serve on the reconvened panel, they shall be replaced under Article 22.08(4). 4. The provisions of Articles 22.10 and 22.11 apply to procedures adopted and a report issued by a panel reconvened under this Article, with the exception that, subject to Article 22.10(9), the panel shall present an initial report within 60 days of being reconvened where the request concerns only paragraph 1(a), and otherwise within 90 days. 5. A panel reconvened under this Article may include in its report a recommendation, where appropriate, that a suspension of benefits be terminated or that the amount of benefits suspended be modified. Article 22.15: Referrals of Matters from Judicial or Administrative Proceedings 1. If an issue of interpretation or application of this Agreement arises in a domestic, judicial or administrative proceeding of a Party that either Party considers would merit its intervention, or if a court or administrative body solicits the views of a Party, that Party shall notify the other Party. The Commission shall endeavour to determine an appropriate response as expeditiously as possible. 2. The Party in whose territory the court or administrative body is located shall submit any interpretation of the Commission to the court or administrative body in accordance with the rules of that forum. 3. If the Commission is unable to decide on the interpretation, each Party may submit its own views to the court or administrative body in accordance with the rules of that forum. A Party may not provide a right of action under its domestic law against the other Party on the ground that an act or omission of that Party is inconsistent with this Agreement. Article 22.17: Alternative Dispute Resolution 1. Each Party shall encourage and facilitate the use of arbitration and other means of alternative dispute resolution to the extent possible in order to settle international commercial disputes between private parties in the free trade area. 2. To this end, each Party shall provide appropriate procedures to ensure observance of agreements to arbitrate and for the recognition and enforcement of awards in such disputes. 3. A Party shall be deemed to comply with paragraph 2 if it is a party to and complies with the New York Convention. Nullification or Impairment 1. If a Party considers that a benefit it could reasonably have expected to accrue to it under a provision of:
is being nullified or impaired as a result of the application of a measure of the other Party that is not inconsistent with this Agreement, in the sense of Article XXIII:1(b) of the GATT 1994, Article XXIII(3) of GATS or Article XXII(2) of the Agreement on Government Procurement done April 15, 1994 (GPA), the Party may have recourse to dispute settlement under this Chapter. A panel established under this Chapter shall take into account relevant jurisprudence interpreting Article XXIII:1(b) of the GATT 1994, Article XXIII(3) of GATS and Article XXII(2) of the GPA. 2. A Party may not invoke paragraph 1(b) with respect to a measure subject to an exception under Article 23.02 (Exceptions – General Exceptions), nor invoke paragraph 1 with respect to a measure subject to the exception under Article 23.06 Annex 22.10 Application 1. The following rules of procedure apply to a dispute settlement proceeding under this Chapter, unless the Parties decide otherwise. Definitions 2. For purposes of this Annex: adviser means a person retained by a Party to advise or assist the Party in connection with the panel proceeding; legal holiday means every Saturday and Sunday and any other day designated by a Party as a holiday for the purposes of these rules; and representative means an employee of a government department or agency or of another government entity of a Party. Written Submissions and Other Documents 3. Each Party shall deliver the original and a minimum of 3 copies of any written submission to the panel and one 1 copy to the Embassy of the other Party. Delivery of submissions and any other document related to the panel proceeding may be made by 4. The complaining Party shall deliver an initial written submission no later than 10 days after the date on which the last panellist is appointed. The Party complained against, in turn, shall deliver a written counter-submission no later than 20 days after the date on which the initial written submission of the complaining Party is due. 5. The panel, in consultation with the Parties, shall establish dates for the delivery of the subsequent written rebuttal submissions of the Parties and any other written submissions that the panel and the Parties determine are appropriate. 6. A Party at any time may correct minor errors of a clerical nature in any written submission or other document related to the panel proceeding by delivering a new document clearly indicating the changes. 7. If the last day for delivery of a document falls on a legal holiday observed by a Party or on another day on which the government offices of a Party are closed by order of the government or by force majeure, the document may be delivered on the next business day. Burden of Proof 8. A complaining Party asserting that a measure of the other Party is inconsistent with the provisions of this Agreement shall have the burden of establishing such inconsistency. If the Party complained against asserts that a measure is subject to an exception under this Agreement, it shall have the burden of establishing that the exception applies. Written Submission by a Non-Governmental Person 9. A panel, on application, may grant leave to a non-governmental person of a Party to file written submissions. In making its decision to grant leave, the panel shall consider, among other things:
10. Where the panel has granted leave to a non-governmental person to file a written submission, the panel shall ensure that:
Role of Experts 11. On request of a Party, or on its own initiative, the panel may seek information and technical advice from a person or body that it deems appropriate, subject to paragraphs 12 and 13 and such additional terms and conditions as the Parties may decide. The requirements set out in Article 22.09 apply to the experts or bodies, as appropriate. 12. Before the panel seeks information or technical advice under paragraph 11, it shall:
13. When the panel takes into consideration the information or technical advice received under paragraph 11 for the preparation of its report, it shall also take into consideration comments or observations submitted by the Parties with respect to such information or technical advice. Operation of Panels 14. The chair shall preside at all of the panel’s meetings. 15. The panel may conduct its business by appropriate means, including by telephone, facsimile transmission and video or computer links. 16. Only panellists may take part in the deliberations of the panel. The panel, in consultation with the Parties, may employ such number of assistants, interpreters or translators, or stenographers as may be required for the proceeding and permit them to be present during such deliberations. The members of the panel and the persons employed by the panel shall maintain the confidentiality of the panel’s deliberations and information that is protected under Article 22.10. 17. A panel, in consultation with the Parties, may modify a time period applicable in the panel proceedings and make other procedural or administrative adjustments required in the proceeding. Hearings 18. The chair shall fix the date and time of the initial hearing and any subsequent hearing in consultation with the Parties and the panellists, and then notify the Parties in writing of those dates and times. 19. The location of hearings shall alternate between the territories of the Parties, with the first hearing to take place in the territory of the Party complained against, unless the Parties decide otherwise. 20. No later than 5 days before the date of a hearing, each Party shall deliver to the other Party and the panel a list of the names of the persons who will be present at the hearing on behalf of that Party and of other representatives or advisers who will be attending the hearing. 21. Each hearing shall be conducted by the panel in a manner that ensures that the complaining Party and the Party complained against are afforded equal time for arguments, replies and counter-replies. 22. Hearings shall be open to the public, except as necessary to protect information designated by either Party for confidential treatment. The panel, in consultation with the Parties, shall adopt appropriate logistical arrangements and procedures to ensure that hearings are not disrupted by the attendance of the public. Such procedures may include, among other methods, the use of live web-broadcasting or closed-circuit television. 23. The panel shall arrange the preparation of hearing transcripts, if any, and shall, as soon as possible after any such transcripts are prepared, deliver a copy to each Party. Ex Parte Contacts 24. A Party may not communicate with the panel without notifying the other Party. The panel shall not communicate with a Party in the absence of, or without notifying, the other Party. 25. A panellist may not discuss an aspect of the substantive subject matter of the proceeding with the Parties in the absence of the other panellists. Remuneration and Payment of Expenses 26. Unless the Parties decide otherwise, the expenses of the panel and the remuneration, travel and lodging expenses and all general expenses of the panellists and their assistants shall be born in equal shares by the Parties. 27. Each panellist shall keep a record and render a final account to the Parties of their time and expenses, and those of any assistant. The chair of the panel shall keep a record and render a final account to the Parties of all general expenses.
CHAPTER TWENTY-THREE For purposes of this Chapter: competition authority means:
cultural industry means a person engaged in the following activities:
designated authority means:
information protected under its competition laws means:
tax convention means a convention for the avoidance of double taxation or other international taxation agreement or arrangement; and tax and taxation measure does not include:
Article 23.02: General Exceptions 1. For the purposes of Chapters Two through Eight and Chapter Fifteen (National Treatment and Market Access for Goods, Rules of Origin, Customs Procedures, Trade Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Emergency Action and Electronic Commerce) and Annex IV (International Maritime Section), GATT 1994 Article XX is incorporated into and made part of this Agreement. The Parties understand that the measures referred to in GATT 1994 Article XX (b) include environmental measures necessary to protect human, animal or plant life or health. The Parties further understand that GATT 1994 Article XX (g) applies to measures for the conservation of living and non-living exhaustible natural resources. 2. For the purposes of Chapters Ten, Eleven, Thirteen and Fifteen (Cross-Border Trade in Services, Telecommunications, Temporary Entry for Business Persons, and Electronic Commerce) GATS Article XIV (a), (b) and (c) is incorporated into this Agreement. The Parties understand that the measures referred to in GATS Article XIV (b) include environmental measures necessary to protect human, animal or plant life or health. 3. For the purposes of Chapter Nine (Investment):
Article 23.03: National Security This Agreement does not:
1. Except as set out in this Article, this Agreement does not apply to a taxation measure. 2. This Agreement does not affect the rights and obligations of a Party under a tax convention. In the event of inconsistency between this Agreement and a tax convention, that convention prevails. 3. Where a provision with respect to a taxation measure under this Agreement is similar to a provision under a tax convention, the competent authorities identified in the tax convention shall use the procedural provisions of that tax convention to resolve an issue that may arise under this Agreement. 4. Notwithstanding paragraphs 2 and 3:
5. Subject to paragraphs 2, 3 and 6:
6. Paragraph 5 does not:
7. Subject to paragraphs 2 and 3, and without prejudice to the rights and obligations of the Parties under paragraph 4, Article 9.07 (Investment – Performance Requirements) applies to a taxation measure. 8. Notwithstanding paragraphs 2 and 3, Article 9.11 (Investment – Expropriation) applies to a taxation measure, but an investor may not invoke that Article as the basis for a claim under Articles 9.20 (Investment – Claim by an Investor of a Party on Its Own Behalf) or 9.21 (Investment – Claim by an Investor of a Party on Behalf of an Enterprise), where the designated authorities of the Parties have determined under this paragraph that a taxation measure is not an expropriation. The investor shall refer the issue of whether a measure is not an expropriation for a determination to the designated authorities of the Parties at the time that it gives notice under subparagraph 2(c) of Article 9.22 (Investment – Conditions Precedent to Submission of a Claim to Arbitration). If, within a period of six months from the date of this referral, the designated authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an expropriation, the investor may submit its claim to arbitration under Article 9.23 (Investment – Submission of a Claim to Arbitration). 9. A claim by:
may be submitted to arbitration under Section C of Chapter Nine (Settlement of Disputes between an Investor and the Host Party) unless the designated authorities of the Parties, within six months of being notified by the investor of its intention to submit the claim to arbitration, jointly determine that the measure does not contravene such agreement. The investor shall refer the issue of whether a taxation measure does not contravene such agreement for a determination to the designated authorities of the Parties at the same time that it gives notice under Article 9.22 (Investment – Conditions Precedent to Submission of a Claim to Arbitration). 10. In order to give effect to paragraphs 1 to 3:
11. If an investor invokes Article 9.11 (Investment – Expropriation) as the basis for a claim under Article 9.20 (Investment – Claim by an Investor of a Party on Its Own Behalf) or 9.21 (Investment – Claim by an Investor of a Party on Behalf of an Enterprise), the designated authorities shall make a determination under paragraph 8 of whether a measure is an expropriation concurrently with a decision under paragraph 10(b) of whether the measure is a taxation measure. 12. The designated authorities seized of an issue under paragraphs 8, 9 or 10 may modify the time period allowed to decide the issue. 13. This Agreement does not require a Party to furnish or allow access to information whose disclosure would be contrary to that Party’s law protecting information concerning the taxation affairs of a taxpayer. Article 23.05: Disclosure of Information 1. This Agreement does not require a Party to furnish or allow access to information which if disclosed would impede law enforcement, or would be contrary to the Party’s law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet level, personal privacy or the financial affairs and accounts of individual customers of financial institutions. 2. In the course of a dispute settlement procedure under this Agreement:
Article 23.06: Cultural Industries This Agreement does not apply to a measure adopted or maintained by a Party with respect to a cultural industry except as specifically provided in Article 2.04 (National Treatment and Market Access for Goods – Tariff Elimination). Article 23.07: World Trade Organization Waivers If a right or obligation in this Agreement duplicates one under the WTO Agreement, the Parties agree that a measure adopted by a Party in conformity with a waiver decision adopted by the WTO pursuant to Article IX of the WTO Agreement is deemed to be also in conformity with the present Agreement. Such conforming measure of either Party may not give rise to a claim by an investor of one Party against the other under Section C of Chapter Nine (Settlement of Disputes between an Investor and the Host Party).
CHAPTER TWENTY-FOUR Article 24.01: Annexes, Appendices and Footnotes The Annexes, Appendices and footnotes to this Agreement constitute integral parts of this Agreement. 1. The Agreement may be amended in writing by mutual consent of the Parties. 2. An amendment shall enter into force following an exchange of written notifications by the Parties certifying the completion of their respective necessary legal procedures. The amendment shall enter into force on the date agreed upon by the Parties. Article 24.03: Reservations and Unilateral Declarations This Agreement may not be subject to reservations nor to interpretive statements at the time of its ratification. Article 24.04: Entry into Force Each Party shall notify the other Party in writing of the completion of its legal or constitutional procedures required for the entry into force of this Agreement. This Agreement shall enter into force on the first day of the second month following the latter notification of the completion of the procedures for the entry into force. This Agreement may be terminated by either Party by giving notice in writing. It shall cease to be in force 6 months after the date of receipt of that notice. A state or a regional economic organisation may accede to this Agreement upon terms and conditions to be set out in an Agreement on Accession between the Parties and the acceding state. The Parties and the acceding state or regional economic organisation shall notify each other through diplomatic channels of the completion of the domestic procedures necessary to approve the Agreement on Accession. The Agreement on Accession shall enter into force on the first day of the second month following the later of these notifications. IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement. DONE in duplicate at , this day of 2010, in the English, French and Spanish languages, each version being equally authentic
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