2. For the purposes of this Article and Article 207, "interested party" means any natural or legal person, economic actor or association of economic actors whose interest might be affected by the granting of a state aid, in particular the beneficiary, economic actors competing with the beneficiary or relevant trade associations.
3. Point (c) of paragraph 1 shall not apply to any measure to grant or alter state aid referred to in Article 201 on the basis of an Act of the Gibraltar Parliament save that, if a court or tribunal is satisfied that such aid is incompatible with this Agreement, it may make a declaration of that incompatibility. The United Kingdom, in respect of Gibraltar, shall have regard to such a declaration and propose amendments to the Act in question for the Gibraltar Parliament to consider or take other appropriate steps, where applicable.
Article 207. Recovery
1. Each Party shall have in place an effective mechanism of recovery in respect of state aid in accordance with the following provisions, without prejudice to the power of the independent authority or body as set out in Article 205 and other remedies that exist in that Party's law.
2. Without prejudice to paragraph 3, each Party shall ensure that, provided that an interested party has challenged a decision of that Party to grant state aid before a court or a tribunal within the relevant time period, in accordance with that Party's state aid control system, recovery may be ordered if a court or tribunal of that Party makes a finding of a material error of law or fact, in that:
(a) a measure constituting state aid was not treated by the granting authority as a state aid;
(b) the granting authority has not complied with the relevant state aid control system that binds it; or
(c) the granting authority has, by deciding to grant that state aid, acted outside the scope of its powers or misused those powers in accordance with this Chapter.
3. Each Party shall suspend payment of any new state aid to a beneficiary until the aid granted to that beneficiary, in respect of which an order for recovery has been made, has been fully recovered, including any recovery interests due.
4. In accordance with Articles 205(6) and (7) and 206(3), recovery of a state aid shall not be required where such aid is granted or altered on the basis of an Act of the Gibraltar Parliament.
Article 208. Consultations
1. If a Party considers that state aid has been granted by the other Party or that there is clear evidence that the other Party intends to grant state aid and that the granting of the state aid has or could have a negative effect on trade in goods or investment between the Parties, it may request the other Party to provide an explanation of how this Agreement has been respected with regard to that state aid.
2. A Party may also request the information listed in Article 203 to the extent that the information has not already been made publicly available on an official website or a public database as referred to in Article 203, or to the extent that the information has not been made available in an easily and readily accessible manner.
3. The other Party shall provide the requested information in writing no later than 45 days from receipt of the request. If any requested information cannot be provided, that Party shall explain the absence of such information in its written response.
4. If, after receiving the information requested, the requesting Party still considers that the state aid granted or intended to be granted by the other Party has or could have a negative effect on trade in goods or investment between the Parties, the requesting Party may request consultations within the Specialised Committee on Economy and Trade. The request shall be in writing and shall include an explanation of the requesting Party's reasons for requesting the consultation.
5. The Specialised Committee on Economy and Trade shall make every attempt to arrive at a mutually satisfactory resolution of the matter. It shall hold its first meeting within 30 days of the request for consultation.
6. The timeframes for the consultations referred to in paragraphs 3 and 5 may be extended by agreement between the Parties.
Article 209. Remedial Measures
1. A Party may deliver to the other Party a written request for information and consultations regarding a state aid that it considers causes, or there is a serious risk that it will cause, a significant negative effect on trade in goods or investment between the Parties. The requesting Party should provide in that request all relevant information to enable the Parties to find a mutually acceptable solution, including a description of the state aid and the concerns of the requesting Party regarding its effect on trade in goods or investment.
2. No later than 30 days from the date of delivery of the request, the requested Party shall deliver a written response providing the requested information to the requesting Party, and the Parties shall enter into consultations, which shall be deemed concluded 60 days from the date of delivery of that request, unless the Parties agree otherwise. Such consultations, and in particular all information designated as confidential and positions taken by the Parties during consultations, shall be confidential and shall be without prejudice to the rights of either Party in any further proceedings.
3. No earlier than 60 days from the date of delivery of the request referred to in paragraph 1, the requesting Party may unilaterally take appropriate remedial measures if there is evidence that a state aid of the requested Party causes, or there is a serious risk that it will cause, a significant negative effect on trade in goods or investment between the Parties.
4. No earlier than 45 days from the date of delivery of the request referred to in paragraph 1, the requesting Party shall notify the requested Party of the remedial measures that it intends to take in accordance with paragraph 3. The requesting Party shall provide all relevant information in relation to the measures that it intends to take to enable the Parties to find a mutually acceptable solution. The requesting Party may not take those remedial measures earlier than 15 days from the date of delivery of the notification of those measures to the requested Party.
5. A Party's assessment of the existence of a serious risk of a significant negative effect shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances that would create a situation in which the state aid would cause such a significant negative effect must be clearly predictable.
6. A Party's assessment of the existence of a state aid or of a significant negative effect on trade in goods or investment between the Parties caused by the state aid shall be based on reliable evidence and not merely on conjecture or remote possibility, and shall relate to identifiable goods or economic actors, including, if relevant, in the case of state aid schemes.
7. The Specialised Committee on Trade and Economy may maintain an illustrative list of what would amount to a significant negative effect on trade in goods or investment between the Parties within the meaning of this Article. This shall be without prejudice to the right of the Parties to take remedial measures.
8. The remedial measures taken pursuant to paragraph 3 shall be restricted to what is strictly necessary and proportionate in order to remedy the significant negative effect caused or to address the serious risk of such an effect. Priority shall be given to measures that will least disturb the functioning of this Agreement.
9. Within five days from the date on which the remedial measures referred to in paragraph 3 enter into effect and without having prior recourse to consultations in accordance with Article 304, the notified Party may request, in accordance with Article 305(2), the establishment of an arbitration tribunal by means of a written request delivered to the requesting Party in order for the arbitration tribunal to decide whether:
(a) a remedial measure taken by the requesting Party is inconsistent with paragraphs 3 or 5;
(b) the requesting Party did not participate in the consultations after the requested Party delivered the requested information and agreed to the holding of such consultations; or
(c) there was a failure to take or notify a remedial measure in accordance with the time periods referred to in paragraph 3 or 4 respectively.
That request shall not have a suspensive effect on the remedial measures. Furthermore, the arbitration tribunal shall not assess the application by a Party of its state aid control system.
10. The arbitration tribunal established following the request referred to in paragraph 9 shall conduct its proceedings in accordance with Article 327 and deliver its final ruling within 30 days from its establishment.
11. In the case of a finding against the respondent Party, the respondent Party shall, at the latest 30 days from the date of delivery of the ruling of the arbitration tribunal, deliver a notification to the complaining Party of any measure that it has taken to comply with that ruling.
12. Following a finding against the respondent Party in the procedure referred to in paragraph 10 of this Article, the complaining Party may request the arbitration tribunal, within 30 days from its ruling, to determine a level of suspension of obligations under this Agreement or a supplementing agreement not exceeding the level equivalent to the nullification or impairment caused by the application of the remedial measures, if it finds that the inconsistency of the remedial measures with paragraph 3 or 8 of this Article is significant. The request shall propose a level of suspension of obligations in accordance with the principles set out in Article 316. The complaining Party may suspend obligations under this Agreement or a supplementing agreement in accordance with the level of suspension of obligations determined by the arbitration tribunal. Such suspension shall not be applied sooner than 15 days following such ruling.
13. A Party shall not invoke the WTO Agreement or any other international agreement to preclude the other Party from taking measures pursuant to this Article, including where those measures consist in the suspension of obligations under this Agreement or a supplementing agreement.
14. For the purposes of assessing whether imposing or maintaining remedial measures on imports of the same product is restricted to what is strictly necessary or proportionate for the purposes of this Article, a Party:
(a) shall take into account countervailing measures applied or maintained in accordance with the requirements of the SCM Agreement and pursuant to a fair and transparent process; and
(b) may take into account anti-dumping measures applied or maintained in accordance with the requirements of the Anti-Dumping Agreement and pursuant to a fair and transparent process.
15. If the Party against which remedial measures were taken does not submit a request pursuant to paragraph 9 within the time period laid down in that paragraph, that Party may initiate the arbitration procedure referred to in Article 305 to challenge a remedial measure on the grounds set out in paragraph 9 without having prior recourse to consultations in accordance with Article 304. An arbitration tribunal shall treat the issue as a case of urgency for the purpose of Article 310.
16. For the purposes of the proceedings under paragraph 9 or 15, in assessing whether a remedial measure is strictly necessary or proportionate, the arbitration tribunal shall pay due regard to the principles set out in paragraphs 5, 6 and 13.
Article 210. Dispute Settlement
1. Subject to paragraphs 2 and 3, Title I of Part Six applies to disputes between the Parties concerning the interpretation and application of this Chapter, except for Articles 205 and 206.
2. An arbitration tribunal shall have no jurisdiction regarding:
(a) an individual state aid measure, including whether such a measure has complied with the relevant Party's state aid control system; and
(b) whether the recovery remedy within the meaning of Article 207 has been correctly applied in any individual case.
3. Title I of Part Six shall apply to Article 209 in accordance with that Article and Article 327.
Chapter 3. TAXATION
Article 211. Good Governance
The Parties recognise and commit to implementing the principles of good governance in the area of taxation, in particular the global standards on tax transparency and exchange of information and fair tax competition. The Parties reiterate their support for the Organisation for Economic and Cooperation Development (OECD) Base Erosion and Profit Shifting (BEPS) Action Plan and affirm their commitment to implementing the OECD minimum standards against BEPS. The Parties will promote good governance in tax matters, improve international cooperation in the area of taxation and facilitate the collection of tax revenues.
Article 212. Taxation Standards
1. A Party shall not weaken or reduce the level of protection provided for in its legislation on 31 December 2020 below the level provided for by the standards and rules which have been agreed in the OECD at the end of the transition period, in relation to:
(a) the exchange of information, whether upon request, spontaneously or automatically, concerning financial accounts, cross-border tax rulings, country-by-country reports between tax administrations, and potential cross-border tax planning arrangements;
(b) rules on interest limitation, controlled foreign companies and hybrid mismatches.
2. A Party shall not weaken or reduce the level of protection provided for in its legislation on 31 December 2020 in respect of public country-by-country reporting by credit institutions and investment firms, other than small and non-interconnected investment firms.
Article 213. Dispute Settlement
This Chapter shall not be subject to dispute settlement under Title I of Part 6.
Chapter 4. LABOUR AND SOCIAL STANDARDS
Article 214. Definition
1. For the purposes of this Chapter, "labour and social levels of protection" means the levels of protection provided overall in a Party's law and standards (1), in each of the following areas (2):
(a) fundamental rights at work;
(b) occupational health and safety standards;
(c) fair working conditions and employment standards;
(d) information and consultation rights at company level; or
(e) restructuring of undertakings.
2. For the Union, "labour and social levels of protection" means labour and social levels of protection that are applicable to and in, and are common to, all Member States.
Article 215. Non-regression from Levels of Protection
1. The Parties affirm the right of each Party to set its policies and priorities in the areas covered by this Chapter, to determine the labour and social levels of protection it deems appropriate and to adopt or modify its law and policies in a manner consistent with each Party's international commitments, including those under this Chapter.
2. A Party shall not weaken or reduce, in a manner affecting trade or investment between the Union and the United Kingdom, in respect of Gibraltar, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards.
3. The Parties recognise that each Party retains the right to exercise reasonable discretion and to make bona fide decisions regarding the allocation of labour enforcement resources with respect to other labour law determined to have higher priority, provided that the exercise of that discretion, and those decisions, are not inconsistent with its obligations under this Chapter.
4. The Parties shall continue to strive to increase their respective labour and social levels of protection referred to in this Chapter.
Article 216. Enforcement
For the purposes of enforcement as referred to in Article 215, each Party shall have in place and maintain a system for effective domestic enforcement and, in particular, an effective system of labour inspections in accordance with its international commitments relating to working conditions and the protection of workers; ensure that administrative and judicial proceedings are available that allow public authorities and individuals with standing to bring timely actions against violations of labour law and social standards; and provide for appropriate and effective remedies, including interim relief, as well as where appropriate, apply proportionate and dissuasive sanctions in line with their domestic law. In the domestic implementation and enforcement of Article 215, each Party shall respect the role and autonomy of the social partners at a domestic level, where relevant, in line with applicable law and practice.
Article 217. Dispute Settlement
1. The Parties shall make all efforts through dialogue, consultation, exchange of information and cooperation to address any disagreement on the application of this Chapter.
2. By way of derogation from Title I of Part Six, in the event of a dispute between the Parties regarding the application of this Chapter, the Parties shall have recourse exclusively to the procedures established under Articles 235 to 237.
Chapter 5. ENVIRONMENT AND CLIMATE
Article 218. Definitions
1. For the purposes of this Chapter, "environmental and climate levels of protection" means the levels of protection provided overall in a Party's law which have the purpose of protecting the environment and climate, including the prevention of a danger to human life or health from environmental impacts and fighting against climate change, in each of the following areas:
(a) access to environmental information;
(b) public participation and access to justice in environmental matters;
(c) environmental impact assessment and strategic environmental assessment;
(d) air emissions and air quality;
(e) nature and biodiversity conservation;
(f) waste management, including the port reception facilities where relevant;
(g) noise emissions;
(h) the protection and preservation of the aquatic and marine environment, including the use of port reception facilities where relevant;
(i) the prevention, reduction and elimination of risks to human health or the environment arising from the production, use, release or disposal of chemical substances; or
(j) climate change in particular emissions and removal of greenhouse gases, including the effective carbon pricing systems or equivalent measures to reduce emissions.
2. For the Union, "environmental and climate levels of protection" means environmental and climate levels of protection that are applicable to and in, and are common to, all Member States.
3. For the United Kingdom, in respect of Gibraltar, "environmental and climate levels of protection" means environmental and climate levels of protection in Gibraltar domestic law, including international commitments which have been extended to Gibraltar.
Article 219. Levels of Protection
1. The Parties affirm the right of each Party to set its policies and priorities in the areas covered by this Chapter, to determine the environmental and climate levels of protection it deems appropriate, and to adopt or modify its law and policies in a manner consistent with each Party's international commitments, including those under this Chapter.
2. The Parties recognise that each Party retains the right to exercise reasonable discretion and to make bona fide decisions regarding the allocation of environmental enforcement resources with respect to other environmental law and climate policies determined to have higher priorities, provided that the exercise of that discretion, and those decisions, are not inconsistent with its obligations under this Chapter.
3. The Union shall not weaken or reduce its environmental and climate levels of protection below the levels in place on 31 December 2020 including by failing to effectively enforce its environmental and climate law.
4. The United Kingdom, in respect of Gibraltar, shall uphold environmental and climate levels of protection that are equivalent to the levels in place in the Union, including by effectively enforcing environmental and climate law applicable to and in Gibraltar.
Article 220. Carbon Pricing
1. Each Party shall have in place an effective system of carbon pricing or equivalent measures to reduce emissions by the date of the entry into force the agreement.
2. The United Kingdom, in respect of Gibraltar, shall ensure that the system of carbon pricing or equivalent measures to reduce emissions applying in Gibraltar shall have an equivalent scope and effectiveness as the one in place in the Union at the time of the entry into force of the agreement.
3. As regards aviation, the scope of the Union system of carbon pricing shall cover all flights between the European Economic Area and Gibraltar. The scope of the United Kingdom system of carbon pricing shall cover all flights between the United Kingdom and Gibraltar.
4. The Specialised Committee on Economy and Trade shall regularly be informed about the effective implementation of paragraphs 1 to 3.
5. The United Kingdom, in respect of Gibraltar, shall review the implementation of its system of carbon pricing or equivalent measures in 2030 and regularly in the context of progression beyond its current frameworks to reduce emissions.
Article 221. Environmental and Climate Principles
Taking into account the fact that the Union and Gibraltar share a common biosphere in respect of cross-border pollution, the Union and the United Kingdom, in respect of Gibraltar, commit to respecting the internationally recognised environmental principles to which they have committed, such as in the Rio Declaration on Environment and Development, adopted at Rio de Janeiro on 14 June 1992 (the "1992 Rio Declaration on Environment and Development") and multilateral environmental agreements which apply in relation to the Union and to the United Kingdom which have been extended to Gibraltar, including the United Nations Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity, done at Rio de Janeiro on 5 June 1992 (the "Convention on Biological Diversity"), in particular:
(a) the principle that environmental protection should be integrated into the making of policies, including through impact assessments;
(b) the principle of preventative action to avert environmental damage;
(c) the precautionary principle referred to in Article 200;
(d) the principle that environmental damage should as a priority be rectified at source; and
(e) the polluter pays principle.
Article 222. Enforcement
For the purposes of enforcement, each Party shall, in accordance with its law, ensure that:
(a) domestic authorities competent to enforce the relevant law with regard to environment and climate give due consideration to alleged violations of such law that come to their attention; those authorities shall have adequate and effective remedies available to them, including injunctive relief as well as proportionate and dissuasive sanctions, if appropriate; and
(b) domestic administrative or judicial proceedings are available to natural and legal persons with a sufficient interest to bring actions against violations of such law and to seek effective remedies, including injunctive relief, and that the proceedings are not prohibitively costly and are conducted in a fair, equitable and transparent way.
Article 223. Dispute Settlement
1. The Parties shall make all efforts through dialogue, consultation, exchange of information and cooperation to address any disagreement on the application of this Chapter.
2. By way of derogation from Title I of Part Six, in the event of a dispute between the Parties regarding the application of this Chapter, the Parties shall have recourse exclusively to the procedures established under Articles 235 to 237.
Chapter 6. OTHER INSTRUMENTS FOR TRADE AND SUSTAINABLE DEVELOPMENT
Article 224. Context and Objectives
1. The Parties recall Agenda 21, adopted at Rio de Janeiro on 13 June 1992, and the 1992 Rio Declaration on Environment and Development, the Johannesburg Plan of Implementation of the World Summit on Sustainable Development of 2002, the International Labour Organization (ILO) Declaration on Social Justice for a Fair Globalization, adopted at Geneva on 10 June 2008 by the International Labour Conference at its 97th Session, as amended in 2022 (the "2008 ILO Declaration on Social Justice for a Fair Globalization"), the Outcome Document of the UN Conference on Sustainable Development of 2012 entitled "The Future We Want", endorsed by the UN General Assembly Resolution 66/288 adopted on 27 July 2012, and the UN 2030 Agenda for Sustainable Development, adopted by the UN General Assembly Resolution 70/1 on 25 September 2015 and its Sustainable Development Goals.
2. In light of paragraph 1, the objective of this Chapter is to enhance the integration of sustainable development, notably its labour and environmental dimensions, in the Parties' trade and investment relationship and in this respect to complement the commitments of the Parties under Chapters 4 and 5 of this Title.
Article 225. Transparency
The Parties stress the importance of ensuring transparency as a necessary element to promote public participation and of making information public within the context of this Chapter. In accordance with their laws and regulations and the provisions of this Chapter, each Party shall:
(a) ensure that any measure of general application pursuing the objectives of this Chapter is administered in a transparent manner, including by providing the public with reasonable opportunities and sufficient time to comment, and by publishing such measures;
(b) ensure that the general public is given access to relevant environmental information held by or for public authorities, as well as ensuring the active dissemination of that information to the general public by electronic means;
(c) encourage public debate with and among non-state actors as regards the development and definition of policies that may lead to the adoption of law relevant to this Chapter by its public authorities; this includes, in relation to the environment, public participation in projects, plans and programmes; and
(d) promote public awareness of its laws and standards relevant to this Chapter, as well as enforcement and compliance procedures, by taking steps to further the knowledge and understanding of the public; in relation to labour laws and standards, this includes workers, employers and their representatives.
Article 226. Multilateral Labour Standards and Agreements
1. The Parties affirm their commitment to promoting the development of international trade in a way that is conducive to decent work for all, as expressed in the 2008 ILO Declaration on Social Justice for a Fair Globalization.
2. In accordance with the ILO Constitution and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up, adopted at Geneva on 18 June 1998 by the International Labour Conference at its 86th Session, as amended in 2022, each Party commits to respecting, promoting and effectively implementing the principles concerning the fundamental rights, as defined in the fundamental ILO conventions, which are:
(a) freedom of association and the effective recognition of the right to collective bargaining;
(b) the elimination of all forms of forced or compulsory labour;
(c) the effective abolition of child labour;
(d) the elimination of discrimination in respect of employment and occupation; and
(e) a safe and healthy working environment.
3. Each Party commits to effectively implementing all the ILO conventions that the United Kingdom has extended to Gibraltar and the Member States have respectively ratified.
4. Each Party shall make continued and sustained efforts to ratify or extend to Gibraltar, as the case may be, the fundamental ILO conventions if they have not yet done so.
5. The Parties shall exchange information, regularly and as appropriate, on the respective situations and progress of the Member States and of the United Kingdom, in respect of Gibraltar, with regard to the ratification of ILO conventions or protocols classified as up-to-date by the ILO and of other relevant international instruments.
6. Each Party shall continue to promote, through its laws and practices, the ILO Decent Work Agenda as set out in the 2008 ILO Declaration on Social Justice for a Fair Globalization, as amended in 2022 (the "ILO Decent Work Agenda") and other relevant ILO conventions, and other international commitments, in particular:
(a) decent working conditions for all, with regard to, inter alia, wages and earnings, working hours, maternity leave and other conditions of work;
(b) health and safety at work, including the prevention of occupational injury or illness and compensation in cases of such injury or illness; and
(c) non-discrimination in respect of working conditions, including for migrant workers.
7. Each Party shall protect and promote social dialogue on labour matters among workers and employers, and their respective organisations, and with relevant government authorities.
Article 227. Multilateral Environmental Agreements
1. The Parties recognise the importance of the UN Environment Assembly of the UN Environment Programme and of multilateral environmental governance and agreements as a response of the international community to global or regional environmental challenges and stress the need to enhance the mutual supportiveness between trade and environment policies, rules and measures.
2. In light of paragraph 1, each Party commits to effectively implementing the multilateral environmental agreements, protocols and amendments to which it is a party. In relation to the United Kingdom, in respect of Gibraltar, this means multilateral environmental agreements which have been extended to Gibraltar or are otherwise reflected in its laws and practices.
3. The Parties reaffirm the right of each Party to adopt or maintain measures to further the objectives of multilateral environmental agreements to which it is party.
Article 228. Trade and Climate Change
1. The Parties recognise the importance of taking urgent action to combat climate change and its impacts, and the role of trade and investment in pursuing that objective, in line with the UNFCCC, with the purpose and goals of the Paris Agreement and with other multilateral environmental agreements and multilateral instruments in the area of climate change.
2. In light of paragraph 1, each Party: