(b) the Party complained against fails to notify any measure taken to comply or which it envisages to take to comply within the time period referred to in Article 31.14, or fails to notify any measure taken to comply before the date of expiry of the reasonable period of time referred to in Article 31.15;
(c) the panel finds that no measure taken to comply exists, in accordance with Article 31.16; or
(d) the panel finds that the measure taken to comply is inconsistent with the covered provisions, in accordance with Article 31.16.
2. In any of the circumstances referred to in subparagraph (a), (b), (c) or (d) of paragraph 1, the complaining Party may notify the Party complained against that it intends to suspend the obligations set out in the covered provisions if:
(a) the complaining Party decides not to make a request pursuant to paragraph 1; or
(b) the complaining Party has made a request pursuant to paragraph 1 and the Parties do not agree on the temporary compensation within 20 days after the date of expiry of the reasonable period of time referred to in Article 31.15 or the delivery of the panel decision pursuant to Article 31.16.
3. The complaining Party may suspend the obligations 10 days after the date of delivery of the notification referred to in paragraph 2, unless the Party complained against has made a request pursuant to paragraph 6.
4. The level of the suspension of obligations shall not exceed the level equivalent to the nullification or impairment caused by the violation. The notification referred to in paragraph 2 shall specify the level of the intended suspension of obligations.
5. In considering which obligations to suspend, the complaining Party should first seek to suspend the obligations in the same sector or sectors as those affected by the measure which the panel has found to be inconsistent with the covered provisions. The suspension of obligations may be applied to a sector or sectors covered by this Agreement other than those in which the panel has found nullification or impairment, in particular if the complaining Party is of the view that such suspension in the other sector or sectors is practicable or effective in inducing compliance.
6. If the Party complained against considers that the notified level of intended suspension of obligations exceeds the level equivalent to the nullification or impairment caused by the violation, it may, before the expiry of the time period set out in paragraph 3, deliver a written request to the original panel to decide on the matter. The panel shall deliver its decision on the level of the suspension of obligations to the Parties within 30 days after the date of the request. The complaining Party shall not suspend any obligations until the panel has delivered its decision. The suspension of obligations shall be consistent with that decision.
7. The suspension of obligations, or the compensation referred to in this Article, shall be temporary and shall not be applied after:
(a) the Parties have reached a mutually agreed solution pursuant to Article 31.32;
(b) the Parties have agreed that the measure taken to comply brings the Party complained against into conformity with the covered provisions; or
(c) any measure taken to comply which the panel has found to be inconsistent with the covered provisions has been withdrawn or amended so as to bring the Party complained against into conformity with those provisions.
Article 31.18. Review of Measures Taken to Comply after Temporary Remedies
1. The Party complained against shall notify the complaining Party of any measure it has taken to comply following the suspension of obligations or following the application of temporary compensation, as the case may be. With the exception of the cases referred to in paragraph 2, the complaining Party shall terminate the suspension of obligations within 30 days after the date of delivery of that notification. In cases where compensation has been applied, and with the exception of the cases referred to in paragraph 2, the Party complained against may terminate the application of such compensation within 30 days after the date of delivery of its notification that it has complied.
2. If the Parties do not reach an agreement on whether the measure notified in accordance with paragraph 1 brings the Party complained against into conformity with the covered provisions within 30 days after the date of delivery of that notification, the complaining Party shall deliver a written request to the original panel to decide on the matter. The panel shall deliver its decision to the Parties within 46 days after the date of the delivery of the request. If the panel finds that the measure taken to comply is in conformity with the covered provisions, the suspension of obligations or compensation, as the case may be, shall be terminated. If relevant, the complaining Party shall adjust the level of suspension of obligations or of compensation in light of the panel's decision.
3. If the Party complained against considers that the level of suspension implemented by the complaining Party exceeds the level equivalent to the nullification or impairment caused by the violation, it may deliver a written request to the original panel to decide on the matter.
Article 31.19. Replacement of Panellists
If during panel procedures under this Section, a panellist is unable to participate, withdraws or needs to be replaced because he or she does not comply with the requirements of Annex 31-B, a new panellist shall be appointed in accordance with Article 31.6. The time period for the delivery of a report or a decision referred to in this Section shall be extended for the time necessary for the appointment of the new panellist.
Article 31.20. Rules of Procedure
1. Panel procedures under this Section shall be governed by this Chapter and Annex 31-A.
2. Any hearing of the panel shall be open to the public unless otherwise provided for in Annex 31-A.
Article 31.21. Suspension and Termination
1. On a joint request of the Parties, the panel shall suspend its work at any time for a period agreed by the Parties and not exceeding 12 consecutive months.
2. The panel shall resume its work before the end of the suspension period on a written request of both Parties, or at the end of the suspension period on a written request of either Party. The requesting Party shall notify the other Party accordingly. If a Party does not request the resumption of the work of the panel at the end of the suspension period, the authority of the panel shall lapse and the dispute settlement procedure shall be terminated.
3. If the work of the panel is suspended pursuant to this Article, the relevant time periods under this Section shall be extended by the same period of time for which the work of the panel was suspended.
Article 31.22. Right to Seek Information
1. On request of a Party or upon its own initiative, the panel may seek, from the Parties, information it considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the panel for such information.
2. On request of a Party or upon its own initiative, the panel may seek information it considers necessary and appropriate from any source. The panel also has the right to seek the opinion, including information and technical advice, of experts, as it deems appropriate, and subject to any terms and conditions agreed by the Parties, if applicable.
3. The panel shall consider amicus curiae submissions from natural persons of a Party or juridical persons established in a Party in accordance with Annex 31-A.
4. Any information obtained by the panel pursuant to this Article shall be disclosed to the Parties, and the Parties may provide comments on that information.
Article 31.23. Rules of Interpretation
1. The panel shall interpret the covered provisions in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties.
2. The panel shall also take into account relevant interpretations in reports of WTO panels and the Appellate Body adopted by the Dispute Settlement Body of the WTO.
3. Reports and decisions of the panel cannot add to or diminish the rights and obligations of the Parties under this Agreement.
Article 31.24. Reports and Decisions of the Panel
1. The deliberations of the panel shall be kept confidential. The panel shall make every effort to draft reports and take decisions by consensus. If that is not possible, the panel shall decide the matter by majority vote. In no case shall separate opinions of panellists be disclosed.
2. Each Party shall make its submissions and the reports and decisions of the panel publicly available, subject to the protection of confidential information.
3. The reports and decisions of the panel shall be accepted unconditionally by the Parties. They shall not create any rights or obligations for persons.
4. The panel and the Parties shall treat as confidential any information submitted by a Party to the panel in accordance with Annex 31-A.
Section D. MEDIATION MECHANISM
Article 31.25. Objective
1. The objective of the mediation mechanism is to facilitate the finding of a mutually agreed solution through a comprehensive and expeditious procedure with the assistance of a mediator.
2. The mediation procedure may only be initiated by mutual agreement of the Parties in order to explore mutually agreed solutions and consider any advice from and proposed solutions by the mediator.
Article 31.26. Initiation of the Mediation Procedure
1. A Party ("the requesting Party") may, at any time, request the other Party ("the responding Party") in writing to enter into a mediation procedure with respect to any measure of the responding Party allegedly adversely affecting trade or investment between the Parties.
2. The request referred to in paragraph 1 shall be sufficiently detailed to present the concerns of the requesting Party clearly and shall:
(a) identify the measure at issue;
(b) provide a statement of the adverse effects that the requesting Party considers the measure has, or will have, on trade or investment between the Parties; and
(c) explain how the requesting Party considers that those effects are linked to the measure.
3. The responding Party shall give sympathetic consideration to the request and deliver its written acceptance or rejection to the requesting Party within 10 days after the date of its delivery; otherwise the request shall be regarded as rejected.
Article 31.27. Selection of the Mediator
1. The Parties shall endeavour to agree on a mediator within 14 days after the date of initiation of the mediation procedure.
2. If the Parties are unable to agree on the mediator within the time period laid down in paragraph 1 of this Article, either Party may request the co-chair of the Trade Committee of the requesting Party to select the mediator by lot, within five days after the date of the request, from the sub-list of chairpersons established pursuant to subparagraph (c) of Article 31.8(1). The co-chair of the Trade Committee of the requesting Party may delegate such selection by lot of the mediator.
3. If the sub-list of chairpersons referred to in subparagraph (c) of Article 31.8(1) has not been established at the time a request is made pursuant to Article 31.26, the mediator shall be selected by lot from the individuals who have been formally proposed by one Party or both Parties for that sub-list.
4. A mediator shall not be a national of either Party or employed by either Party, unless the Parties agree otherwise.
5. A mediator shall comply with Annex 31-B.
Article 31.28. Rules of the Mediation Procedure
1. Within 10 days after the date of the appointment of the mediator, the requesting Party shall deliver to the mediator and to the responding Party a detailed written description of its concerns, in particular relating to the operation of the measure at issue and its possible adverse effects on trade or investment. Within 20 days after the date of delivery of that description, the responding Party may deliver written comments on that description. A Party may include any information that it deems relevant in its description or comments.
2. The mediator shall assist the Parties in a transparent manner in bringing clarity to the measure at issue and its possible adverse effects on trade or investment. In particular, the mediator may organise meetings between the Parties, consult the Parties jointly or individually, seek the assistance of, or consult with, relevant experts and stakeholders and provide any additional support requested by the Parties. The mediator shall consult with the Parties before seeking the assistance of, or consulting with, relevant experts and stakeholders.
3. The mediator may offer advice and propose a solution for the consideration of the Parties. The Parties may accept or reject the proposed solution, or agree on a different solution. The mediator shall not advise or comment on the consistency of the measure at issue with this Agreement.
4. The mediation procedure shall take place in the territory of the responding Party or, by mutual agreement of the Parties, in any other location or by any other means.
5. The Parties shall endeavour to reach a mutually agreed solution within 60 days after the date of the appointment of the mediator. Pending a final agreement, the Parties may consider possible interim solutions, in particular if the measure relates to perishable goods or seasonal goods or services.
6. On request of either Party, the mediator shall deliver a draft factual report to the Parties, providing:
(a) a brief summary of the measure at issue;
(b) the procedures followed; and
(c) if applicable, any mutually agreed solution reached, including possible interim solutions.
7. The mediator shall allow the Parties 15 days after the date of the delivery of the draft factual report to comment on the draft factual report. After considering the comments received from the Parties, the mediator shall, within 15 days of the receipt of the comments, deliver a final factual report to the Parties. The draft and final factual reports shall not include any interpretation of this Agreement.
8. The mediation procedure shall be terminated:
(a) by the adoption of a mutually agreed solution by the Parties, on the date of the notification thereof to the mediator;
(b) by mutual agreement of the Parties at any stage of the procedure, on the date of the notification of that agreement to the mediator;
(c) by a written declaration of the mediator, after consultation with the Parties, that further efforts at mediation would be to no avail, on the date of the notification of that declaration to the Parties; or
(d) by a written declaration of a Party after having explored mutually agreed solutions under the mediation procedure and after having considered any advice from and proposed solutions by the mediator, on the date of the notification of that declaration to the mediator and the other Party.
Article 31.29. Confidentiality
Unless the Parties agree otherwise, all steps of the mediation procedure, including any advice or proposed solution, are confidential. A Party may disclose to the public the fact that a mediation is taking place.
Article 31.30. Relationship to Dispute Settlement Procedures
1. The mediation procedure is without prejudice to the Parties' rights and obligations under Sections B and C or dispute settlement procedures under any other agreement.
2. A Party shall not rely on, or introduce as evidence, in other dispute settlement procedures under this Agreement or any other agreement, and a panel shall not take into consideration:
(a) positions taken by the other Party in the course of the mediation procedure or information exclusively gathered under Article 31.28(2);
(b) the fact that the other Party has indicated its willingness to accept a solution to the measure subject to mediation; or
(c) advice given or proposals made by the mediator.
3. Unless the Parties agree otherwise, a mediator shall not serve as a panellist in dispute settlement procedures under this Agreement or under any other agreement involving the same matter for which he or she has been a mediator.
Section E. COMMON PROVISIONS
Article 31.31. Request for Information
1. Before a request for consultations or mediation is made pursuant to Article 31.4 or 31.26 respectively, a Party may request information from the other Party regarding a measure allegedly adversely affecting trade or investment between the Parties. The Party to which such request is made shall, within 20 days after the date of delivery of the request, deliver a written response with its comments on the requested information.
2. If the Party to which the request is made considers it will not be able to deliver a response within 20 days after the date of delivery of the request, it shall promptly notify the other Party, stating the reasons for the delay and providing an estimate of the shortest period within which it will be able to deliver its response.
3. A Party is normally expected to request information pursuant to paragraph 1 of this Article before a request for consultations or mediation is made pursuant to Article 31.4 or 31.26 respectively.
Article 31.32. Mutually Agreed Solution
1. The Parties may reach a mutually agreed solution at any time with respect to any dispute referred to in Article 31.2.
2. If a mutually agreed solution is reached during the panel or mediation procedure, the Parties shall jointly notify that solution to the chairperson of the panel or the mediator, respectively. Upon such notification, the panel or mediation procedure shall be terminated.
3. Each Party shall take the measures necessary to implement the mutually agreed solution immediately or within the agreed time period, as applicable.
4. No later than at the expiry of the agreed time period, the implementing Party shall inform the other Party, in writing, of any measure that it has taken to implement the mutually agreed solution.
Article 31.33. Time Periods
1. All time periods set out in this Chapter shall be counted from the day following the act to which they refer.
2. Any time period referred to in this Chapter may be modified by mutual agreement of the Parties.
3. Under Section C, the panel may at any time propose to the Parties to modify any time period referred to in this Chapter, stating the reasons for the proposal.
Article 31.34. Costs
1. Each Party shall bear its own expenses derived from the participation in the panel or mediation procedure.
2. The Parties shall share jointly and equally the expenses derived from organisational matters, including the remuneration and expenses of the panellists and of the mediator. The remuneration of the panellists shall be determined in accordance with Annex 31-A. The rules on the remuneration of the panellists laid down in Annex 31-A shall apply to mediators mutatis mutandis.
Article 31.35. Amendment of Annexes
The Trade Council may adopt a decision to amend Annexes 31-A and 31-B, pursuant to subparagraph (a) of Article 33.1(6).
Chapter 32. EXCEPTIONS
Article 32.1. General Exceptions
1. For the purposes of Chapters 2, 4, 8, 10(1), 19 and 22 of this Agreement, Article XX of GATT 1994, including its Notes and Supplementary Provisions, is incorporated into and made part of this Agreement, mutatis mutandis.
2. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment liberalisation or trade in services, nothing in Chapter 8, Chapters 10(2) to 20(3) or Chapter 22 of this Agreement shall be construed as preventing the adoption or enforcement by either Party of measures:
(a) necessary to protect public security or public morals or to maintain public order (4);
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not inconsistent with this Agreement, including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;
(ii) the protection of privacy in relation to the processing and dissemination of personal data, and the protection of the confidentiality of individual records and accounts; or
(iii) safety.
3. For greater certainty, the Parties understand that, to the extent that such measures are inconsistent with the provisions of the Chapters of this Agreement referred to in paragraphs 1 and 2 of this Article:
(a) the measures referred to in subparagraph (b) of Article XX of GATT 1994 and in subparagraph (b) of paragraph 2 of this Article include environmental measures which are necessary to protect human, animal or plant life or health;
(b) subparagraph (g) of Article XX of GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources; and
(c) measures taken to implement multilateral environmental agreements can fall under subparagraph (b) or (g) of Article XX of GATT 1994 or under subparagraph (b) of paragraph 2 of this Article.
4. Before a Party applies any measure provided for in subparagraphs (i) and (j) of Article XX of GATT 1994, that Party shall provide the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. If an acceptable solution is not reached within 30 days of the provision of the relevant information, the Party intending to apply the measure may do so. Where exceptional and critical circumstances requiring immediate action prevent the prior provision and examination of information, the Party intending to apply the measures may immediately apply any precautionary measures necessary to address the situation. That Party shall inform the other Party immediately of the application of such measures.
Article 32.2. Security Exceptions
1. Nothing in this Agreement shall be construed:
(a) to require a Party to furnish or provide access to any information the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent a Party from taking any action which it considers necessary for the protection of its essential security interests:
(i) connected to the production of or traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods and materials, services and technology, and to economic activities, as carried out directly or indirectly for the purposes of supplying a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from which they are derived; or
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent a Party from taking any action pursuant to its obligations under the Charter of the United Nations for the maintenance of international peace and security.
2. A Party shall inform the Trade Committee to the fullest extent possible of any action it takes under subparagraphs (b) and (c) of paragraph 1 and of the termination of that action.
Article 32.3. Taxation
1. For the purposes of this Article:
(a) "residence" means residence for tax purposes;
(b) "tax agreement" means an agreement on the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation to which any Member State, the European Union or Chile is a party; and
(c) "taxation measure" means a measure applying the tax law of the European Union, of any Member State, or of Chile.
2. This Agreement applies to taxation measures only in so far as their application is necessary to give effect to the provisions of this Agreement.
3. Nothing in this Agreement shall affect the rights and obligations of either the European Union, or its Member States or Chile under any tax agreement. In the event of any inconsistency between this Agreement and any tax agreement, the tax agreement shall prevail to the extent of the inconsistency. With regard to a tax agreement between the European Union or its Member States and Chile, the relevant competent authorities, of the European Union or of its Member States, on the one hand, and of Chile, on the other hand, under this Agreement and that tax agreement, shall jointly determine whether an inconsistency exists between this Agreement and that tax agreement.
4. Any most-favoured-nation obligation under this Agreement shall not apply with respect to an advantage accorded by the European Union, its Member States or Chile pursuant to a tax agreement.
5. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade and investment, nothing in this Agreement shall be construed as preventing the adoption, maintenance or enforcement by a Party of any measure aimed at ensuring the equitable or effective imposition or collection of direct taxes that:
(a) distinguishes between taxpayers who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested; or
(b) aims at preventing the avoidance or evasion of taxes under a tax agreement or fiscal law of that Party.
Article 32.4. Disclosure of Information
1. Nothing in this Agreement shall be construed as requiring a Party to make available confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private, except where a panel requires such confidential information in dispute settlement proceedings under Chapter 31. In such cases, the panel shall ensure that confidentiality is fully protected.
2. When a Party submits information considered confidential under its law to the Trade Council, Trade Committee, Sub-Committees or other bodies established under this Agreement, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.
Article 32.5. WTO Waivers
If an obligation under this Agreement is substantially equivalent to an obligation under the WTO Agreement, any measure taken in conformity with a waiver adopted pursuant to Article IX of the WTO Agreement shall be deemed to be in conformity with the substantively equivalent obligation under this Agreement.
Chapter 33. INSTITUTIONAL AND FINAL PROVISIONS
Section A. INSTITUTIONAL PROVISIONS
Article 33.1. Trade Council
1. The Parties hereby establish a Trade Council. The Trade Council shall oversee the fulfilment of the objectives of this Agreement and supervise its implementation. It shall examine any matters arising within the framework of this Agreement.