Article 5.2. Definitions
For the purposes of this Chapter:
(a) juridical person means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(b) juridical person of a Party means a juridical person constituted or otherwise organised under the law of an EFTA State or of a Central American State and engaged in substantive business operations in the EFTA State concerned or in the Central American State concerned;
(c) natural person means a person who is a national of one of the EFTA States or of one of the Central American States in accordance with their respective legislations;
(d) commercial presence means any type of business establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office;
Within the territory of another Party for the purpose of performing an economic activity.
Article 5.3. National Treatment
With respect to commercial presence, and subject to Article 5.4 and the reservations set out in Annex XVIII each Party shall accord to juridical and natural persons of another Party and to the commercial presence of such persons, treatment no less favourable than that it accords, in like situations, to its own juridical and natural persons, and to the commercial presence of such persons.
Article 5.4. Reservations
1. Article 5.3 shall not apply to:
(a) any reservation that is listed by a Party in Annex XVIII;
(b) an amendment to a reservation referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the reservation with Article 5.3;
(c) any new reservation adopted by a Party in accordance with paragraph 4 and incorporated into Annex XVIII;
To the extent that such reservations are inconsistent with Article 5.3.
2. As part of the reviews provided for in Article 5.11 the Parties undertake to review the status of the reservations set out in Annex XVIII with a view to reducing the reservations or removing them.
3. A Party may, at any time, either upon the request of another Party or unilaterally, remove in whole or in part reservations set out in Annex XVIII by written notification to the other Parties.
4. In case of the adoption of a new reservation as referred to in subparagraph 1(c), the Party concerned shall ensure that the overall level of its commitments under this Agreement is not affected. It shall promptly notify the other Parties of the reservation and set out, where applicable, the measures aimed at maintaining the overall level of its commitments. On receiving such notification, any other Party may request consultations regarding the reservation and related issues. Such consultations shall be entered into without delay. The Party that requests consultations shall inform the other Parties and any of them may participate in the consultations. The parties to the consultations shall inform the other Parties of the results of the consultations.
Article 5.5. Key Personnel
1. Each Party shall, subject to its laws and regulations, grant natural persons of another Party who have established or seek to establish commercial presence in that Party, and key personnel who are employed by natural or juridical persons of another Party, temporary entry and stay in its territory in order to engage in activities connected with commercial presence, including the provision of advice or key technical services.
2. Each Party shall, subject to its laws and regulations, permit natural or juridical persons of another Party, and their commercial presence, to employ, in connection with commercial presence, any key personnel of the natural or juridical persons choice regardless of nationality and citizenship provided that such key personnel has been permitted to enter, stay and work in its territory and that the employment concerned conforms to the terms, conditions and time limits of the permission granted to such key personnel.
3. The Parties shall, subject to their laws and regulations, grant temporary entry and stay and provide any necessary confirming documentation to the spouse and minor children of a natural person who has been granted temporary entry and stay in accordance with paragraphs 1 and 2. The spouse and minor children shall be admitted for the period of the stay of that person.
Article 5.6. Right to Regulate
1. Subject to the provisions of this Chapter and Annex XVIII, a Party may, on a non-discriminatory basis, adopt, maintain or enforce any measure that is in the public interest, such as measures to meet health, safety or environmental concerns or reasonable measures for prudential purposes.
2. A Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion or retention in its territory of a commercial presence of persons of another Party or a non-party.
Article 5.7. Payments and Transfers
1. Except under the circumstances envisaged in Article 5.8, a Party shall not apply restrictions on current payments and capital movements relating to commercial presence activities in non-services sectors.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of Agreement of the IMF, including the use of exchange actions which are in conformity with the Articles of Agreement of the IMF, provided that a Party shall not impose restrictions on capital transactions inconsistent with its obligations under this Chapter except under Article 5.8 or at the request of the IMF.
Article 5.8. Restrictions to Safeguard the Balance-of-Payments
1. The Parties shall endeavour to avoid the imposition of restrictions to safeguard the balance of payments.
2. With respect to the rights and obligations of the Parties concerning restrictions referred to in paragraph 1, paragraphs 1 to 3 of Article XII of the GATS shall apply and are hereby incorporated into and made part of this Chapter, mutatis mutandis.
3. A Party adopting or maintaining such restrictions shall promptly notify the Joint Committee thereof.
Article 5.9. General Exceptions
With respect to the rights and obligations of the Parties concerning general exceptions, Article XIV of the GATS shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 5.10. Security Exceptions
With respect to the rights and obligations of the Parties concerning security exceptions, paragraph 1 of Article XIV bis of the GATS shall apply and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 5.11. Review
This Chapter shall be subject to periodic review within the framework of the Joint Committee regarding the possibility to further develop the Parties commitments.
Chapter 6. Protection of Intellectual Property
Article 6.1. Protection of Intellectual Property Rights
1. The Parties shall grant and ensure adequate, effective and non-discriminatory protection of intellectual property rights, and provide for measures for the enforcement of such rights against infringement thereof, counterfeiting and piracy, in accordance with the provisions of this Article, Annex XIX and the international agreements referred to therein.
2. The Parties shall accord to each others nationals, treatment no less favourable than that they accord to their own nationals with respect to the protection of intellectual property. Exemptions from this obligation must be in accordance with the substantive provisions of Articles 3 and 5 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the TRIPS Agreement).
3. The Parties shall grant to each others nationals treatment no less favourable than that accorded to nationals of any other state. Exemptions from this obligation must be in accordance with the substantive provisions of the TRIPS Agreement, in particular Articles 4 and 5 thereof.
4. The Parties may agree, upon mutual consent, to review in the future this Article and Annex XIX with a view to further developing the levels of protection and to avoiding or remedying trade distortions caused by the current levels of protection of intellectual property rights.
Chapter 7. Government Procurement
Article 7.1. Scope and Coverage
1. This Chapter applies to any measure of a Party regarding covered procurement. For the purposes of this Chapter, covered procurement means procurement for governmental purposes:
(a) of goods, services, or any combination thereof:
(i) as specified in each Party's Appendices to Annex XX; and
(ii) not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;
(b) by any contractual means, including purchase, lease, rental or hire purchase, with or without an option to buy;
(c) for which the value, as estimated in accordance with the rules specified in Appendix 9 of Annex XX, equals or exceeds the relevant threshold specified in Appendices 1 to 3 to Annex XX at the time of publication of a notice in accordance with Article 7.10;
(d) that is conducted by a procuring entity; and
(e) that is not otherwise excluded from coverage in paragraph 2 or in Annex XX.
2. This Chapter does not apply to:
(a) the acquisition or rental of land, existing buildings, or other immovable property or the rights thereon;
(b) non-contractual agreements or any form of assistance that a Party provides, including cooperative agreements, grants, loans, equity infusions, guarantees and fiscal incentives;
(c) the procurement or acquisition of fiscal agency or depository services, liquidation and management services for regulated financial institutions or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities;
(d) public employment contracts;
(e) Procurement conducted:
(i) for the specific purpose of providing international assistance, including development aid;
(ii) under the particular procedure or condition of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project; or
(iii) under the particular procedure or condition of an international organisation, or funded by international grants, loans or other assistance where the applicable procedure or condition would be inconsistent with this Chapter;
(f) for purchases made under exceptionally advantageous conditions that only arise in the very short term in the case of unusual disposals such as those arising from liquidation, receivership, or bankruptcy, but not for routine purchases from regular suppliers.
Article 7.2. Definitions
For the purposes of this Chapter:
(a) commercial goods or services means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for nongovernmental purposes;
(b) construction service means a service that has as its objective the realisation by whatever means of civil or building works, based on Division 51 of the Provisional Central Product Classification of the United Nations (hereinafter referred to as CPC);
(c) electronic auction means an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting in a ranking or re-ranking of tenders;
(d) in writing or written means any worded or numbered expression that can be read, reproduced, and later communicated, including electronically transmitted and stored information;
(e) limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;
(f) list of suppliers 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;
(g) measure means any law, regulation, procedure, administrative guidance or practice, or any action of a procuring entity relating to a covered procurement;
(h) notice of intended procurement means a notice published by a procuring entity inviting interested suppliers to submit a request for participation, a tender, or both;
(i) offset means any 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, and similar actions or requirements;
(j) open tendering means a procurement method where all interested suppliers may submit a tender;
(k) person means a natural person or a juridical person;
(l) procuring entity means an entity covered under Appendices 1 to 3 to Annex XX;
(m) qualified supplier means a supplier that a procuring entity recognises as having satisfied the conditions for participation;
(n) selective tendering means a procurement method whereby only qualified or registered suppliers are invited by the procuring entity to submit a tender;
(o) services includes construction services, unless otherwise specified;
(p) standard means a document approved by a recognised body, that provides, for common and repeated use, rules, guidelines, or characteristics for goods or services, 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;
(q) supplier means a person or group of persons that provides or could provide goods or services; and
(r) technical specification means a tendering requirement that:
(i) lays down the characteristics of goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or
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(ii) addresses terminology, symbols, packaging, marking, or labelling requirements, as they apply to a good or service.
Article 7.3. General Exceptions
1. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from imposing or enforcing measures:
(a) necessary to protect public morals, order or safety;
(b) necessary to protect human, animal or plant life or health;
(c) necessary to protect intellectual property; or
(d) relating to goods or services of persons with disabilities, philanthropic institutions, or prison labour.
2. The Parties understand that subparagraph 1(b) includes environmental measures necessary to protect human, animal or plant life or health.
Article 7.4. National Treatment and Non-Discrimination
1. With respect to any measure regarding covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of any other Party and to the suppliers of any other Party offering such goods or services, treatment no less favourable than the treatment accorded to domestic goods, services and suppliers.
2. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:
(a) treat a locally established supplier less favourably than another locally established supplier on the basis of degree of foreign affiliation or ownership; or
(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of any other Party.
Article 7.5. Use of Electronic Means
1. The Parties shall, to the extent possible, endeavour to use electronic means of communication to permit efficient dissemination of information on government procurement, particularly as regards tender opportunities offered by procuring entities, while respecting the principles of transparency and non-discrimination.
2. When conducting covered procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using information technology systems and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available information technology systems and software; and
(b) maintain mechanisms that ensure the integrity of requests for participation and tenders, including establishment of the time of receipt and the prevention of inappropriate access.
Article 7.6. Conduct of Procurement
A procuring entity shall conduct covered procurement in a transparent and impartial manner that:
(a) is consistent with this chapter, using methods such as open tendering, selective tendering and limited tendering;
(b) avoids conflicts of interest; and
(c) prevents corrupt practices.
Article 7.7. Rules of Origin
No Party shall apply rules of origin to goods or services imported from or supplied by any other Party that are different from the rules of origin the Party applies at the same time in the normal course of trade.
Article 7.8. Offsets
With respect to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset.
Article 7.9. Information on the Procurement System
1. Each Party shall promptly publish any measure of general application regarding covered procurement and any modification to this information, in an officially designated electronic or paper medium that is widely disseminated and remains readily accessible to the public.
2. Each Party shall, on request, provide to any other Party further information concerning the application of such measures.
Article 7.10. Notices
1. For each covered procurement, a procuring entity shall publish a notice of intended procurement, except in the circumstances referred to in Article 7.18. The notice shall be published in the electronic or paper media listed in Appendix 7 to Annex XX. Such media shall be widely disseminated and such notices shall remain accessible, at least, until expiration of the time period indicated in the notice. These notices shall be accessible by electronic means free of charge through a single point of access, where such single point of access exists.
2. Except as otherwise provided in this chapter, each notice of intended procurement shall include the information specified in Appendix 10 to Annex XX.
3. Each Party shall encourage its procuring entities to publish in the appropriate paper or electronic media listed in Appendix 7 to Annex XX, as early as possible in each year, a notice regarding their future procurement plans (hereinafter referred to as notice of planned procurement). The notice of planned procurement should include the subject-matter of the procurement and the estimated date of the publication of the notice of intended procurement or the date on which the procurement will be held.
4. A procuring entity covered under Appendix 2 or 3 to Annex XX may use a notice of planned procurement as a notice of intended procurement provided that the notice of planned procurement includes as much of the information referred to in paragraph 2 as is available to the entity and a statement that interested suppliers should express their interest in the procurement to the procuring entity.
Article 7.11. Conditions for Participation
1. In establishing the conditions for participation and assessing whether a supplier satisfies such conditions, a Party, including its procuring entities:
(a) shall limit any conditions for participation in a procurement to those that are essential to ensure that a supplier has the legal and financial capacities and the commercial and technical abilities to undertake the relevant procurement;
(b) shall evaluate the financial capacity and the commercial and technical abilities of a supplier on the basis of that supplier's business activities both inside and outside the territory of the Party of the procuring entity;
(c) shall base its evaluation solely on the conditions that the procuring entity has specified in advance in notices or tender documentation;
(d) shall not impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by a procuring entity of a given Party; and
(e) may require relevant prior experience where essential to meet the requirements of the procurement.
2. Where there is supporting evidence, a Party, including its procuring entities, may exclude a supplier on grounds such as:
(a) bankruptcy;
(b) false declarations;
(c) significant or persistent deficiencies in performance of any substantive
Requirement or obligation under a prior contract or contracts;
(d) final judgments in respect of serious crimes or other serious offences;
(e) professional misconduct or acts or omissions that adversely reflect upon
The commercial integrity of the supplier; or
(f) failure to pay taxes.
Article 7.12. Registration Systems and Qualification Procedures
1. A Party, including its procuring entities, may maintain a supplier registration system under which interested suppliers are required to register and provide certain information.
2. A Party, including its procuring entities, shall not adopt or apply any registration system or qualification procedure with the purpose or the effect of creating unnecessary obstacles to the participation of suppliers of any other Party in its procurement.
3. A procuring entity shall promptly inform any supplier that submits a request for participation in a procurement of the procuring entitys decision with respect to the request. Where an entity rejects a suppliers request for participation or ceases to recognise a supplier as qualified, the entity shall, on request of the supplier, promptly provide it with a written explanation of the reasons for its decision.
4. A procuring entity shall recognise as qualified suppliers any domestic suppliers and any suppliers of the other Party that meet the conditions for participation in a particular procurement, unless the procuring entity states in the notice of intended procurement any limitation on the number of suppliers that will be permitted to tender and the criteria for selecting the limited number of suppliers.
Article 7.13. List of Suppliers
1. A procuring entity may maintain a list of suppliers, provided that a notice inviting interested suppliers to apply for inclusion in the list is published annually in the appropriate medium listed in Appendix 7 to Annex XX. Where a list of suppliers will be valid for three years or less, a procuring entity may publish the notice only once, at the beginning of the period of validity of the list, provided that the notice states the period of validity and that further notices will not be published.
2. The notice provided for in paragraph 1 shall include the information specified in Appendix 10 to Annex XX.
3. A procuring entity shall allow suppliers to apply at any time for inclusion on a list of suppliers and shall include on that list within a reasonable short time all suppliers that have complied with the corresponding requirements. Where a procuring entity rejects a supplier's application for inclusion on a list of suppliers or removes a supplier from a list of suppliers, the 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.