2. With respect to any measure covered by this Chapter, no Party may:
(a) to accord a locally established supplier less favorable treatment than that accorded to another locally established supplier because of the degree of association or foreign ownership; or
(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular covered procurement are goods or services of the other Party.
3. Paragraphs 1 and 2 do not apply to measures relating to customs duties or other charges of any kind imposed on or in connection with importation, to the method of levying such duties or charges, to other import regulations, including restrictions and formalities, or to measures affecting trade in services other than measures specifically regulating government procurement covered by this Chapter.
Article 10.4. Rules of Origin
For purposes of the application of Article 10.3, in government procurement covered by this Chapter, neither Party shall apply rules of origin different from or inconsistent with the rules of origin that the Party applies in the ordinary course of trade to goods imported from the other Party.
Article 10.5. Denial of Benefits
A Party may deny benefits under this Chapter to a service supplier of the other Party, after notification and consultations in accordance with Article 17.6 (Consultations), where the Party demonstrates that the service is being supplied by an enterprise that does not carry out substantive business activities (1) in the territory of the Parties and is owned or controlled by persons of a non-Party. (2) The Party may deny benefits under this Chapter to a service supplier of the other Party, after notification and consultations in accordance with Article 17.6 (Consultations).
Article 10.6. Special Compensatory Conditions
With respect to covered procurement, a procuring entity shall refrain from taking into account, requesting or imposing special countervailing conditions at any stage of a procurement.
Article 10.7. Valuation of Contracts
1. When calculating the value of a procurement for the purposes of implementing this Chapter, procuring entities shall base their valuation on the maximum total estimated value of the procurement covered for the entire duration of the procurement. For clarity, the maximum total estimated value of the procurement shall take into account all optional procurements indicated in the procurement documents, and other forms of remuneration, such as bonuses, fees, commissions, and interest.
2. In addition to the provisions of Article 10.2.5, a procuring entity may not choose a method of valuation or split procurements into separate contracts for the purpose of evading the obligations contained in this Chapter.
Article 10.8. Publication of Notices of Future Procurement
1. Notwithstanding Article 10.13, a procuring entity shall publish in advance in the media listed in Annex 10.8, a notice inviting interested suppliers to submit tenders for each covered procurement.
2. The information in each notice shall include, at a minimum:
(a) an indication that the procurement is covered by this Chapter;
(b) adescription of the engagement; and
(c) any conditions required of suppliers to participate, the name of the procuring entity, the address where any documentation related to the procurement may be obtained, if applicable, any amounts to be paid for procurement documents, deadlines and address for submission of bids.
3. Each Party shall encourage its procuring entities to publish information regarding plans for future covered procurement as early as possible in each year.
Article 10.9. Deadlines for Bid Submission and Delivery
1. A procuring entity shall provide suppliers with sufficient time to prepare and submit tenders, taking into account the nature and complexity of the procurement covered. In no case shall a procuring entity allow a period of less than 40 days from the date of publication of the notice of procurement to the deadline for submission of tenders.
2. A procuring entity may establish a procurement period of less than 40 days, but in no case less than 10 days, in the following circumstances:
(a) in the case of a second recruitment notice;
(b) where a procuring entity, subject to Article 10.13.3, contracts for commercial goods and services that are regularly sold or offered for sale to non-governmental purchasers for non-governmental purposes; or
(c) when an unforeseen emergency situation, duly justified by the contracting agency, makes it impossible to meet the deadline set forth in paragraph 1.
3. In establishing the date of delivery of goods or services, and in accordance with its reasonable needs, a procuring entity shall take into account the nature and complexity of the procurement.
Article 10.10. Procurement Documents
1. A procuring entity shall provide interested suppliers with bidding documents that include all necessary information to enable them to prepare and submit responsive bids. The information shall include the elements listed in Annex 10.10.
2. A procuring entity may comply with paragraph 1 by means of an electronic publication accessible to all interested suppliers. Where a procuring entity does not publish the tender documents by electronic means accessible to all interested suppliers, it shall, at the request of any supplier, promptly make the documents available in written form to that supplier.
3. If a procuring entity modifies the criteria referred to in paragraph 1 in the course of a bidding process, it shall transmit such modifications in writing:
(a) to all suppliers participating in the procurement at the time of the criteria modification, if the identities of those suppliers are known, and in cases where the identity of the participating suppliers is unknown, the same dissemination shall be given as to the original information; and
(b) with sufficient time to allow suppliers to modify and resubmit their bids, as appropriate.
Article 10.11. Technical Specifications
1. A contracting entity shall not prepare, adopt or apply any technical specification or require any conformity assessment procedure that has the purpose or effect of creating unnecessary obstacles to trade between the Parties.
2. Where appropriate, a procuring entity shall establish any technical specifications:
(a) in terms of performance rather than in terms of design or descriptive characteristics; and
(b) based on international standards where applicable, national technical regulations, recognized national standards or building codes.
3. A procuring entity shall not establish technical specifications that require or refer to specific trademarks or trade names, patents, designs or types, or specific origins, producers or suppliers, unless there is no other sufficiently precise or comprehensible way of describing the requirements of the covered procurement and provided that, in such cases, expressions such as "or equivalent" are included in the procurement documents.
4. A procuring entity shall not solicit or accept, in a manner that may have the effect of precluding competition, advice that could be used in preparing or adopting any technical specification for a specific covered procurement from a person that may have a commercial interest in that procurement.
5. For greater certainty, this Article is not intended to prevent a Party from preparing, adopting or applying technical specifications that promote the conservation of living or non-living exhaustible natural resources that protect the environment, provided that such specifications are not applied in a discriminatory manner or constitute a disguised restriction on trade and are consistent with this Article.
Article 10.12. Requirements and Conditions for Participation In Procurements
1. Where a procuring entity requires suppliers to meet registration, qualification or any other requirement or condition for participation in a covered procurement "conditions for participation", the procuring entity shall publish a notice inviting suppliers to apply for such registration or qualification, or to satisfy any other requirement for participation. The procuring entity shall publish the notice sufficiently in advance to allow interested suppliers sufficient time to prepare and submit their applications and for the procuring entity to evaluate and make its determinations on the basis of such applications.
2. Each procuring entity shall:
(a) limit the conditions for participation to those that are essential to guarantee that the supplier has the legal, technical and financial capacity to fulfill the corresponding contract, if awarded;
(b) recognize as a qualified supplier any supplier of the other Party that has fulfilled the necessary conditions for participation; and
(c) base qualification decisions solely on conditions for participation that have been established in advance, in notices or in the procurement documents.
3. Procuring entities may make publicly available lists of suppliers qualified to participate in covered procurement. Where a procuring entity requires suppliers to qualify for such a list as a condition of participation and an unqualified supplier requests qualification for inclusion on the list, the procuring entity shall promptly initiate qualification procedures and allow the supplier to submit a tender if it is determined that the supplier is a qualified supplier. This is provided that there is sufficient time to comply with the conditions for participation within the established deadline for submitting bids.
4. No procuring entity shall make it a condition of participation in a covered procurement that a supplier has previously been awarded one or more contracts by a procuring entity, or that the supplier has previous work experience in the territory of the Party. A procuring entity shall evaluate the financial and technical capability of a supplier in accordance with the supplier's business activity outside the territory of the Party of the procuring entity, as well as its activity, if any, in the territory of the Party of the procuring entity.
5. A procuring entity shall communicate in a timely manner to any supplier that has applied for qualification its decision thereon. In the event that a procuring entity rejects a request for qualification, or ceases to recognize a supplier as qualified, the procuring entity shall, upon request of the supplier, provide in writing the reasons for its decision.
6. Nothing in this Article shall prevent a procuring entity from prohibiting a supplier from participating in a covered procurement on grounds such as bankruptcy or misrepresentation.
Article 10.13. Contracting Procedures
1. A procuring entity shall award contracts through open tendering procedures, without prejudice to the provisions of paragraph 2.
2. Provided that procurement procedures are not used as a means to avoid competition or to protect domestic suppliers, a procuring entity may award contracts by means other than open tendering procedures in the following circumstances:
(a) in the absence of bids or if the bids submitted do not comply with the essential requirements set forth in the procurement documents, including any conditions for participation, provided that the requirements have not been substantially modified;
(b) in the case of works of art or for reasons related to the protection of exclusive intellectual property rights, such as patents or copyrights, or proprietary information, or when for technical reasons there is no competition, the goods or services can only be supplied by a particular supplier and there is no reasonable alternative or substitute;
(c) in the case of additional deliveries from the original supplier intended to be used as spare parts, upgrades or ongoing services for existing equipment, software, services or facilities, wnere a change of supplier would oblige the procuring entity to purchase goods or services that do not meet the requirements of compatibility with existing equipment, software, services or facilities;
(d) in the case of goods purchased in a commodities market;
(e) when a procuring entity acquires prototypes or a first product or service to be developed at its request in the course of, and for the performance of, a specific contract for research, experimentation, study or original development. Once such contracts have been executed, subsequent acquisitions of products or services shall be in accordance with the provisions of this Chapter;
(f) in the case of additional construction services, which were not included in the original contract, but which are included within the scope of the original procurement documentation and which due to unforeseen circumstances become necessary to complete the construction services described above. However, the total value of contracts awarded for such additional construction services will not exceed 50 percent of the original contract amount;
(g) to the extent strictly necessary, when, for reasons of urgency occasioned by events unforeseeable by the procuring entity, it is impossible to obtain the goods or services in time through open tendering procedures and the use of such procedures would cause serious prejudice to the procuring entity, its responsibilities with respect to its program or the Party; and
(h) in the case of contracts to be awarded to the winner of an architectural design competition, provided that the competition has been organized in a manner consistent with the principles of this Chapter and has been decided by an independent jury or body.
3. A procuring entity shall maintain records or prepare written reports setting out the specific justification for any procurement awarded pursuant to paragraph 2, ina manner consistent with Article 10.15.3.
Article 10.14. Award of Contracts
1. A procuring entity shall require that, in order for a tender to be considered for award, it must be submitted in writing and comply with the essential requirements of the procurement documents supplied in advance by the procuring entity to all participating suppliers, and be from a supplier that complies with the conditions for participation that the procuring entity has communicated in advance to all participating suppliers.
2. Unless a procuring entity decides not to award a procurement contract for reasons of public interest, the contract shall be awarded to the supplier that submits, as established in accordance with the specific objective evaluation criteria contained in the procurement documents:
(a) the bid determined to be the most advantageous; or
(b) the lowest price offer.
3. No procuring entity may cancel a procurement, or terminate or modify a contract it has awarded for the purpose of evading the obligations of this Chapter.
Article 10.15. Information on the Award of Contracts
1. A procuring entity shall promptly inform participating suppliers of contract award decisions. The procuring entity shall, at the specific request of the supplier whose tender was not selected, provide relevant information to that supplier of the reasons why its tender was not selected and the relative advantages of the successful tender.
2. Immediately following the award of a contract in a covered procurement, the procuring entity shall publish, in a medium listed in Exhibit 10.8, a notice that includes at least the following information:
(a) the name of the contracting entity;
(b) a description of the goods or services included in the contract;
(c) the name of the supplier to whom the contract was awarded;
(d) the value of the award; and
(e) the type of contracting used. 3. A procuring entity shall maintain records and reports relating to procurement and contract award procedures in procurement covered by this Chapter, including the records or reports set forth in Article 10.13.3, for at least 3 years after the date of award of a contract.
Article 10.16. Assurance of Integrity In Contracting Practices
Each Party shall adopt or maintain procedures to declare ineligible to participate in its covered procurement, either indefinitely or for a prescribed period, suppliers that it determines to have engaged in illegal, fraudulent or evasive procurement-related activities.
Article 10.17. National Review of Supplier Challenges
1. Each Party shall establish or designate at least one authority, impartial and independent of its procuring entities, to receive and review challenges by suppliers with respect to the obligations of the Party and its procuring entities under this Chapter and to issue relevant determinations and recommendations.
2. Where an authority other than such impartial authority initially reviews a challenge filed by a supplier, the Party shall ensure that suppliers may appeal the initial decision to an impartial administrative or judicial body, independent of the procuring entity that is the subject of the challenge.
3. Each Party shall provide that the authority established or designated in paragraph 1 may take appropriate precautionary measures, pending the resolution of a challenge, to preserve the opportunity to correct a potential non-compliance with this Chapter, including suspending the award of a contract or the performance of a contract that has been awarded.
4. Each Party shall ensure that its review procedures are publicly available in written form and that they are timely, transparent, effective and consistent with the principle of due process.
5. Each Party shall ensure that all documents relating to a challenge to a covered procurement are available to any impartial authority established or designated in accordance with paragraph 1.
6. A procuring entity shall reply in writing to any supplier's complaint.
7. Each Party shall ensure that the impartial authority to be established or designated in accordance with paragraph 1 provides the following to suppliers:
(a) asufficienttime period to prepare and submit written challenges, which shall not be less than 10 days from the time when the basis of the claim became known to the supplier or reasonably should have become known to the supplier;
(b) an opportunity to review relevant documents and be heard by the authority in a timely manner;
(c) an opportunity to reply to the procuring entity's response to the supplier's complaint; and
(d) the delivery in writing of its findings and recommendations with respect to the challenge, together with an explanation of the basis for each decision.
8. Each Party shall ensure that the filing of a challenge by a supplier shall not prejudice the supplier's participation in current or future tenders.
Article 10.18. Provision of Information
1. Each Party in a timely manner shall:
(a) publish all laws and regulations, and amendments thereto, relating to covered procurement in the media listed in Annex 10.8; and
(b) make available to the public any administrative ruling of general application related to covered public procurements.
2. At the request of a Party, the other Party shall provide, on a reciprocal basis, available statistical information with respect to the procurements provided for in this Chapter.
Article 10.19. Confidentiality of Information
1. A Party, its procuring entities and its review authorities shall not disclose confidential information, without formal consent of the person providing it, where such disclosure would prejudice the legitimate commercial interests of a particular person or might prejudice fair competition between suppliers.
2. Nothing in this Chapter shall prevent a Party or its contracting entities from refraining from disclosing information if such disclosure could:
(a) constitute an obstacle to law enforcement;
(b) harm fair competition among suppliers;
(c) prejudice the legitimate business interests of certain suppliers or entities, including the protection of intellectual property; or
(d) otherwise go against the public interest.
Article 10.20. Modifications and Amendments to Coverage
1. A Party may make technical rectifications of a purely formal nature with respect to the coverage of this Chapter or minor modifications to its lists of contracting entities, provided that it notifies the other Party in writing and that the other Party does not object in writing within 30 days of the notification. A Party making such rectification or minor modification shall not be required to provide compensatory adjustments to the other Party.
2. A Party may modify its coverage under this Chapter provided that:
(a) notifies the other Party in writing, and the other Party does not object in writing within 30 days after the notification; and
(b) except as provided for in paragraph 3, offers to the other Party within a period of 30 days after notifying the other Party, acceptable compensatory adjustments to maintain a level of coverage comparable to that which existed prior to the modification.
3. A Party shall not be required to provide compensatory adjustments in cases where the proposed modification covers one or more contracting entities where the Parties agree that governmental control or influence has been effectively eliminated. In the event that the Parties do not agree that such control or governmental influence has been effectively eliminated, the objecting Party may request further information or consultations, with a view to clarifying the nature of any such control or governmental influence and reaching agreement with respect to the continued coverage of the contracting entity under this Chapter.
4. The Administrative Commission shall adopt decisions, with respect to the corresponding modifications to Annex 10.2 in a manner that reflects any agreed modification, technical rectification or minor modification.
Chapter XI. Investment
Section A. Definitions and Scope of Application
Article 11.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
ICSID: the International Centre for Settlement of Investment Disputes established by the ICSID Convention;
Inter-American Convention: the Inter-American Convention on International Commercial Arbitration, concluded in Panama on January 30, 1975;
ICSID Convention: the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, D.C., on March 18, 1965;
New York Convention: the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded in New York, June 10, 1958;
claim: a claim brought by a disputing investor against a Party, the basis of which is an alleged violation of the provisions contained in this Chapter;
Respondent: the Party that is a party to an investment dispute;
claimant: the investor of a Party that is a party to an investment dispute with the other Party;
company: a company, as defined in Article 2.1 (Definitions of General Application), and the branch of a company;
enterprise of a Party: an enterprise incorporated or organized under the domestic law of that Party and having its domicile in the territory of that Party or a branch office located in the territory of a Party, which carries out substantive business activities in the territory of that Party;
protected information: confidential business information or information that is privileged or otherwise protected from disclosure under the Party's domestic law;
investment: any asset owned or controlled, directly or indirectly, by an investor of a Party, established or acquired in accordance with the domestic laws and regulations of the other Party in whose territory the investment is made, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. The forms that an investment may take include:
(a) a company;
(b) shares, equity and other forms of participation in the capital or equity of a company;
(c) debt instruments of a company:
(i) when the company is a subsidiary of the investor; or
(ii) when the original maturity date of the debt instrument is at least 3 years;
but does not include a debt instrument of a Party or a State enterprise, regardless of the original maturity date;
(d) a loan to a company:
(i) when the company is a subsidiary of the investor; or
(ii) when the original maturity date of the loan is at least 3 years;
but does not include a loan to a Party or a State enterprise, regardless of the original maturity date (1);
(e) other tangible or intangible, movable or immovable property rights and rights related to property, such as leases, mortgages and pledges, acquired or used for the purpose of economic benefit or other business purposes;
(f) the participation resulting from the capital or other resources destined for the development of an economic activity in the territory of the other Party, such as:
(i) contracts involving the presence of an investor's property in the territory of the other Party, including concessions, construction contracts and turnkey contracts; or
(ii) contracts where remuneration depends substantially on a company's production, revenues or profits;
(g) futures, options and other derivatives;
(h) intellectual property rights;
(i) licenses, authorizations, permits and similar instruments to the extent that they generate rights in accordance with national legislation;
but investment does not include:
(j) pecuniary claims arising exclusively from:
(i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of the other Party; or
(ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by the provisions of subsection (d); or
(l) any other pecuniary claim, which does not involve the interest rates set forth in paragraphs (a) through (i); and