(b) reviewing the implementation and operation of this Chapter;
(c) discussing any issues related to this Chapter with the objective of obtaining mutually acceptable solutions;
(d) reporting, where appropriate, the findings of the Committee to the Commission; and
(e) carrying out other functions as may be delegated by the Commission in accordance with Article 190.
3. The Committee shall be composed of government officials of the Parties.
4. The Committee shall meet at such venues and times as may be agreed by the Parties.
Article 71. Non-Application of Chapter 16
The dispute settlement procedures provided for in Chapter 16 shall not apply to this Chapter.
Chapter 8. Investment
Section 1. Investment
Article 72. Scope
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) investments of investors of the other Party in the Area of the former Party; and
(c) with respect to Articles 77 and 87, all investments in the Area of the former Party.
2. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail to the extent of the inconsistency.
3. This Chapter shall not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter 10.
4. This Chapter is subject to Annex 5.
Article 73. National Treatment
Each Party shall accord to investors of the other Party and to their investments made in the Area of the former Party, treatment no less favorable than that it accords, in like circumstances, to its own investors and to their investments with respect to investment activities in its Area.
Article 74. Most -Favored-Nation Treatment
Each Party shall accord to investors of the other Party and to their investments made in the Area of the former Party, treatment no less favorable than that it accords, in like circumstances, to investors of a non-Party and to their investments with respect to investment activities in its Area.
Article 75. General Treatment
Each Party shall accord to investments made in its Area by investors of the other Party, treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.
Note 1: Article 75 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to investments made in the Area of a Party by investors of the other Party. The customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interests of aliens. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.
Note 2: A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of Article 75.
Note 3: Each Party shall accord to investors of the other Party, non-discriminatory treatment with regard to access to the courts of justice and administrative tribunals and agencies of the former Party in pursuit and in defense of rights of such investors.
Article 76. Protection from Strife
1. Each Party shall accord to investors of the other Party that have suffered loss relating to their investments made in the Area of the former Party due to armed conflict, revolution, insurrection, civil disturbance or any other similar event, treatment, as regards restitution, indemnification, compensation or any other settlement, that is no less favorable than that it accords to its own investors or to investors of a non-Party.
2. Any payments as a means of settlement referred to in paragraph 1 shall be fully realizable, freely transferable and freely convertible at the market exchange rate into the currency of the Party of the investors concerned and freely usable currencies.
3. Paragraphs 1 and 2 shall not apply to any subsidies including grants, government supported loans, guarantees and insurance as provided for in subparagraph 5(b) of Article 79.
Article 77. Performance Requirements
1. Neither Party may impose or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with investment activities of an investor of a Party or of a non-Party in its Area:
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services supplied in its Area, or to purchase goods or services from persons in its Area;
(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with investments of the investor;
(e) to restrict sales of goods or services in its Area that investments of the investor produce or supply by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to transfer technology, a production process or other proprietary knowledge to a person in its Area except when:
(i) the requirement is imposed or the commitment or undertaking is enforced by a court of justice, administrative tribunal or competition authority to remedy a practice determined after judicial or administrative process to be anti-competitive under its competition laws and regulations; or
(ii) the requirement concerns the transfer of intellectual property rights which is undertaken in a manner not inconsistent with the TRIPS Agreement; or
(g) to supply to a specific region or the world market exclusively from its Area, the goods that the investor produces or the services that the investor supplies.
2. Neither Party may condition the receipt or continued receipt of an advantage, in connection with investment activities of an investor of a Party or of a non-Party in its Area, on compliance with any of the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to goods produced in its Area, or to purchase goods from persons in its Area;
(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with investments of the investor; or
(d) to restrict sales of goods or services in its Area that investments of the investor produce or supply by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.
3. (a) Nothing in paragraph 2 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with investment activities of an investor of a Party or of a non-Party in its Area, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its Area.
(b) Subparagraphs 1(a), 1(b), 1(¢c), 2(a) and 2(b) shall not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs.
(c) Subparagraphs 1(b), l(c), 1(f), 1(g), 2(a) and 2(b) shall not apply to government procurement.
(d) Subparagraphs 2(a) and 2(b) shall not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
4. Paragraphs 1 and 2 shall not apply to any requirement other than the requirements set out in those paragraphs.
Article 78. Senior Management and Boards of Directors
1. Neither Party may require that an enterprise of that Party that is an investment made in its Area by an investor of the other Party appoint, to senior management positions, individuals of any particular nationality.
2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is an investment made in its Area by an investor of the other Party, be of a particular nationality, or resident in the former Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
Article 79. Non-Conforming Measures
1. Articles 73, 74, 77 and 78 shall not apply to:
(a) any existing non-conforming measure that is maintained by:
(i) with respect to Chile:
(A) the national government, as set out in its Schedule in Annex 6; or
(B) a local government; and
Note: "The national government" includes regional governments.
(ii) with respect to Japan:
(A) the central government or a prefecture, as set out in its Schedule in Annex 6; or
(B) a local government other than prefectures;
(b) the continuation or prompt renewal of any non- conforming measure referred to in subparagraph (a); or
(c) an amendment or a modification to any non- conforming measure referred to in subparagraph (a), to the extent that the amendment or modification does not decrease the conformity of the measure, as it existed immediately before the amendment or modification, with Articles 73, 74, 77 and 78.
2. Articles 73, 74, 77 and 78 shall not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities, as set out in its Schedule in Annex 7.
3. Neither Party may, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule in Annex 7, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment that exists at the time the measure becomes effective.
4. Articles 73 and 74 shall not apply to any measure that is an exception to, or derogation from, the obligations under the TRIPS Agreement.
5. Articles 73, 74 and 78 shall not apply to: (a) government procurement; or
(b) subsidies provided by a Party or a state enterprise, including grants, government - supported loans, guarantees and insurance.
Article 80. Notification
1. In the case where a Party makes an amendment or a modification to any existing non-conforming measure as set out in its Schedule in Annex 6, the Party shall notify the other Party, as soon as possible, of such amendment or modification.
2. In the case where a Party adopts any measure after the entry into force of this Agreement, with respect to sectors, sub-sectors or activities as set out in its Schedule in Annex 7, the Party shall, to the extent possible, notify the other Party of such measure.
Article 81. Transfers
1. Each Party shall allow all transfers relating to investments made in its Area by an investor of the other Party to be made freely and without delay into and out of its Area. Such transfers shall include:
(a) the initial capital and additional amounts to maintain or increase such investments;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance fees and other fees;
(c) proceeds from the sale or liquidation of all or any part of such investments;
(d) payments made under a contract, including payments made pursuant to a loan agreement;
(e) payments made pursuant to paragraphs 1 and 2 of Article 76 and Article 82; and
(f) payments arising under Section 2.
2. Each Party shall allow transfers referred to in paragraph 1 to be made in a freely usable currency at the market rate of exchange prevailing on the date of each transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may delay or prevent a transfer through the equitable, non- discriminatory and good-faith application of its laws relating to:
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities or derivatives;
(c) criminal or penal offenses;
(d) reports or record keeping of transfers of currency or other monetary instruments; or
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings.
4. This Article is subject to Annex 8.
Article 82. Expropriation and Compensation
1, Neither Party may expropriate or nationalize investments made in its Area by investors of the other Party either directly or indirectly through measures equivalent to expropriation or nationalization (hereinafter referred to as "expropriation"), except:
(a) for a public purpose;
(b) on a non-discriminatory basis;
(c) on payment of prompt, adequate and effective compensation in accordance with paragraphs 2 through 4; and
(d) in accordance with due process of law and Article 75.
2. The compensation shall be equivalent to the fair market value of the expropriated investments at the time when the expropriation was officially announced or when the expropriation occurred, whichever is the earlier. The fair market value shall not reflect any change in market value occurring because the expropriation had become publicly known prior to such official announcement or occurrence of the expropriation. The compensation shall be paid without delay and be fully realizable and freely transferable.
3. If payment is made in a freely usable currency, the compensation paid shall include interest, at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
4. If a Party elects to pay in a currency other than a freely usable currency, the compensation paid, converted into the currency of payment at the market rate of exchange prevailing on the date of payment, shall be no less than the sum of the following:
(a) the fair market value on the date of expropriation, converted into a freely usable currency at the market rate of exchange prevailing on that date; and
(b) interest, at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.
5. This Article shall not apply with respect to the grant of compulsory licenses concerning intellectual property rights in accordance with the TRIPS Agreement.
Note: For greater certainty, Article 82 shall be interpreted in accordance with Annex 9.
Article 83. Subrogation
1. If a Party or its designated agency makes a payment to any of its investors pursuant to an indemnity, guarantee or insurance contract, pertaining to an investment made by that investor within the Area of the other Party, the other Party shall:
(a) recognize the assignment, to the former Party or its designated agency, of any right of the investor that formed the basis of such payment; and
(b) recognize the right of the former Party or its designated agency to exercise by virtue of subrogation such right to the same extent as the original right of the investor.
2. For greater certainty, the investor shall continue to be entitled to exercise its rights that have not been subrogated pursuant to paragraph 1.
Article 84. Special Formalities and Information Requirements
1. Nothing in Article 73 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with investment activities of investors of the other Party and their investments made in the Area of the former Party, such as the compliance with registration requirements, or requirements that investors be residents of the Party or that investments be legally constituted under the laws and regulations of the Party, provided that such formalities do not materially impair the protections afforded by the Party to investors of the other Party and their investments pursuant to this Chapter.
2. Notwithstanding Articles 73 and 74, a Party may require investors of the other Party, or their investments made in its Area, to provide information concerning those investments solely for informational or statistical purposes. The Party shall protect such information that is confidential from any disclosure that would prejudice the competitive position of the investors or their investments. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good-faith application of its law.
Article 85. Temporary Safeguard Measures
1. A Party may adopt or maintain measures not conforming with its obligations under Articles 73 and 81, regarding payments and transfers related to an investment:
(a) in the event of serious balance-of-payments and external financial difficulties or threat thereof; or
(b) in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic Management, in particular, monetary and exchange rate policies.
2. Measures referred to in paragraph 1:
(a) shall be consistent with the Articles of Agreement of the International Monetary Fund;
(b) shall not exceed those necessary to deal with the circumstances set out in paragraph 1;
(c) shall be temporary and eliminated as soon as conditions permit;
(d) shall be promptly notified to the other Party; and
(e) shall avoid unnecessary damages to the commercial, economic and financial interests of the other Party.
3. Nothing in this Article shall be regarded as altering the rights enjoyed and obligations undertaken by a Party as a party to the Articles of Agreement of the International Monetary Fund.
Article 86. 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 the other Party and to its investments if the enterprise is owned or controlled by an investor of a non-Party and the denying Party:
(a) does not maintain diplomatic relations with the non-Party; or
(b) adopts or maintains measures with respect to the non-Party that prohibit 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 the other Party and to its investments if the enterprise is owned or controlled by an investor of a non-Party or of the denying Party and the enterprise has no substantial business activities in the Area of the other Party, subject to prior notification to and consultation with the other Party.
Article 87. Environmental Measures
Each Party recognizes that it is inappropriate to encourage investments by investors of the other Party by relaxing its environmental measures. To this effect each Party should not waive or otherwise derogate from such environmental measures as an encouragement for establishment, acquisition or expansion of investments in its Area.
Section 2. Settlement of Investment Disputes between a Party and an Investor of the other Party
Article 88. Consultation and Negotiation
In the event of an investment dispute between a Party and an investor of the other Party, they should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures.
Article 89. Submission of a Claim to Arbitration
1. In the event that an investment dispute cannot be settled by consultation and negotiation:
(a) the investor of a Party, on its own behalf, may submit to arbitration under this Section a claim:
(i) that the other Party has breached an obligation under Section 1; and
(ii) that the investor has incurred loss or damage by reason of, or arising out of, that breach; and
(b) the investor of a Party, on behalf of an enterprise of the other Party that is a juridical person that such investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim:
(i) that the other Party has breached an obligation under Section 1; and
(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
2. An investment made by an investor of a Party may not submit a claim to arbitration under this Section.
3. For greater certainty:
(a) no claim may be submitted to arbitration under this Section that alleges a violation of any provision of this Agreement other than an obligation under Section 1; and
(b) an investor of a Party may not submit a claim to arbitration under this Section in relation to any act or fact that took place or any situation that ceased to exist before the date of entry into force of this Agreement.
4. At least 90 days before submitting any claim to arbitration under this Section, an investor of a Party shall deliver to the other Party a written notice of its intention to submit the claim to arbitration (hereinafter referred to as "notice of intent"). The notice of intent shall specify:
(a) the name and address of the investor and, in the case of subparagraph 1(b), the name, address, and place of incorporation of the enterprise;
(b) the provision of Section 1 alleged to have been breached;
(c) the legal and factual basis for that claim; and
(d) the relief sought and the approximate amount of damages claimed.