(a) commits to effectively implementing the UNFCCC, and the Paris Agreement of which one principal aim is strengthening the global response to climate change and holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1,5 °C above pre-industrial levels;
(b) shall promote the mutual supportiveness of trade and climate policies and measures thereby contributing to the transition to a low greenhouse gas emission, resource-efficient economy and to climate-resilient development; and
(c) shall facilitate the removal of obstacles to trade and investment of particular relevance for climate change mitigation and adaptation, such as renewable energy, energy efficient products and services, for instance through addressing tariff and non-tariff barriers or through the adoption of policy frameworks conducive to the deployment of the best available solutions.
Article 229. Trade and Biological Diversity
1. The Parties recognise the importance of conserving and sustainably using biological diversity and the role of trade in pursuing these objectives, including by promoting sustainable trade or controlling or restricting trade in endangered species, in line with the relevant multilateral environmental agreements to which they are party and to the extent the United Kingdom has extended such agreements to Gibraltar, and the decisions adopted thereunder, notably the Convention on Biological Diversity and its protocols, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora, done at Washington D.C. on 3 March 1973 ("CITES").
2. In light of paragraph 1, each Party shall:
(a) implement effective measures to combat illegal wildlife trade, including with respect to third countries, as appropriate;
(b) promote the use of CITES as an instrument for conservation and sustainable management of biodiversity, including through the inclusion of animal and plant species in the appendices to CITES where the conservation status of that species is considered at risk because of international trade;
(c) encourage trade in products derived from a sustainable use of biological resources and contributing to the conservation of biodiversity; and
(d) continue to take measures to conserve biological diversity when it is subject to pressures linked to trade and investment, including measures to prevent the spread of invasive alien species and measures for the possible eradication of those already present.
Article 230. Trade and Forests
1. The Parties recognise the importance of conservation and sustainable forest management for providing environmental functions and economic and social opportunities for present and future generations, and the role of trade in pursuing that objective.
2. In light of paragraph 1 and in a manner consistent with its international obligations, each Party shall:
(a) continue to implement measures to combat illegal logging and related trade, including with respect to third countries, as appropriate, and to promote trade in legally harvested forest products;
(b) promote the conservation and sustainable management of forests and trade and consumption of timber and timber products harvested in accordance with the law of the country of harvest and from sustainably managed forests.
Article 231. Trade and Sustainable Management of Marine Biological Resources and Aquaculture
Each Party shall comply with international law, including adopting and maintaining their respective effective tools to combat Illegal Unreported and Unregulated (IUU) fishing, and shall adopt measures to exclude the products of IUU fishing from trade flows, and cooperate to that end.
Article 232. Trade and Investment Favouring Sustainable Development
1. The Parties confirm their commitment to enhancing the contribution of trade and investment to the goal of sustainable development in its economic, social and environmental dimensions.
2. Pursuant to paragraph 1, the Parties shall continue to promote:
(a) policies concerning trade and investment that support the four strategic objectives of the ILO Decent Work Agenda, consistent with the 2008 ILO Declaration on Social Justice for a Fair Globalization, including the minimum living wage, health and safety at work, and other aspects related to working conditions;
(b) trade and investment in environmental goods and services, such as renewable energy and energy efficient products and services, including through addressing related non-tariff barriers or through the adoption of policy frameworks conducive to the deployment of the best available solutions;
(c) trade in goods and services contributing to enhanced social conditions and environmentally sound practices, including those subject to voluntary sustainability assurance schemes such as fair and ethical trade schemes and eco-labels.
3. The Parties recognise the importance of addressing specific sustainable development issues by reviewing, monitoring and assessing the potential economic, social and environmental impacts of possible actions, taking account of the views of stakeholders.
Article 233. Trade and Responsible Supply Chain Management
1. The Parties recognise the importance of responsible management of supply chains through responsible business conduct and corporate social responsibility practices and the role of trade in pursuing this objective.
2. In light of paragraph 1, each Party shall:
(a) encourage corporate social responsibility and responsible business conduct, including by providing supportive policy frameworks that encourage the uptake of relevant practices by businesses; and
(b) support the adherence, implementation, follow-up and dissemination of relevant international instruments, such as the OECD Guidelines for Multinational Enterprises adopted by the OECD Council on 27 June 2000, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy adopted by the Governing Body of the ILO at its 204th session in Geneva in November 1977, the UN Global Compact, and the UN Guiding Principles on Business and Human Rights.
3. The Parties recognise the utility of international sector-specific guidelines in the area of corporate social responsibility and responsible business conduct and shall encourage joint work in this regard. In respect of the OECD Due Diligence Guidance for responsible supply chains of minerals from conflict-affected and high-risk areas and its supplements, the Parties shall also implement measures to promote the uptake of that Guidance.
Article 234. 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 [Dispute settlement], 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 and 236.
Chapter 7. HORIZONTAL AND INSTITUTIONAL PROVISIONS
Article 235. Consultations
1. A Party may request consultations with the other Party regarding any matter arising under Article 199(3) and Chapters 4, 5, and 6 of this Title by delivering a written request to the other Party. The complaining Party shall specify in its written request the reasons and basis for the request, including identification of the measures at issue, specifying the provisions that it considers applicable. Consultations must commence promptly after a Party delivers a request for consultations and in any event not later than 30 days after the date of delivery of the request, unless the Parties agree to a longer period.
2. The Parties shall enter into consultations with the aim of reaching a mutually satisfactory resolution of the matter. During consultations, each Party shall provide the other Party with sufficient information in its possession to allow a full examination of the matters raised. Each Party shall endeavour to ensure the participation of personnel of their competent authorities who have expertise in the matter subject to the consultations.
3. In matters relating to Article 199(3) or to the multilateral agreements or instruments referred to in Chapters 4, 5 or 6, the Parties shall take into account available information from the ILO or relevant bodies or organisations established under multilateral environmental agreements. Where relevant, the Parties shall jointly seek advice from such organisations or their bodies, or any other expert or body they deem appropriate.
4. Any resolution reached by the Parties shall be made available to the public.
Article 236. Panel of Experts
1. For any matter that is not satisfactorily addressed through consultations under Article 235, a Party may, after 90 days from the receipt of a request for consultations under that Article, request that a panel of experts be convened to examine that matter, by delivering a written request to the other Party. The request shall identify the measure at issue, specify and explain how that measure does not conform with the provisions of the relevant Chapter or Chapters in a manner sufficient to present the complaint clearly.
2. The panel of experts shall be composed of three panellists.
3. The Cooperation Council shall, no later than 1 year after the entry into force of this Agreement, establish a list of at least 15 individuals who are willing and able to serve as panellists. Each Party shall name at least five individuals to the list to serve as panellists. The Parties shall also name at least five individuals who are not nationals of either Party and who are willing and able to serve as chairperson of a panel of experts. The Cooperation Council shall ensure that the list is kept up to date and that the number of experts is maintained at a minimum of 15 individuals.
4. The experts proposed as panellists must have specialised knowledge or expertise in labour or environmental law, other issues addressed in the relevant Chapter or Chapters, or in the resolution of disputes arising under international agreements. They must serve in their individual capacities and not take instructions from any organisation or government with regard to matters related to the dispute. They must not be affiliated with or take instructions from either Party. They shall not be persons who are members, officials or other servants of the Union institutions, of the Government of a Member State, or of the Government of the United Kingdom or Gibraltar.
5. Unless the Parties agree otherwise within five days from the date of establishment of the panel of experts, the terms of reference shall be:
"to examine, in the light of the relevant provisions, the matter referred to in the request for the establishment of the panel of experts, and to deliver a report in accordance with this Article that makes findings on the conformity of the measure with the relevant provisions".
6. In respect of matters related to multilateral standards or agreements covered in this Title, the panel of experts should seek information from the ILO or relevant bodies established under those agreements, including any pertinent available interpretative guidance, findings or decisions adopted by the ILO and those bodies.
7. The panel of experts may request and receive written submissions or any other information from persons with relevant information or specialised knowledge.
8. The panel of experts shall make available such information to each Party, allowing them to submit their comments within 20 days of its receipt.
9. The panel of experts shall issue to the Parties an interim report and a final report setting out the findings of fact, its determinations on the matter including as to whether the respondent Party has conformed with its obligations under the relevant Chapter or Chapters and the rationale behind any findings and determinations that it makes. For greater certainty, the Parties share the understanding that if the Panel makes recommendations in its report, the respondent Party does not need to follow these recommendations in ensuring conformity with this Agreement.
10. The panel of experts shall deliver to the Parties the interim report within 100 days after the date of establishment of the panel of experts. When the panel of experts considers that this deadline cannot be met, the chairperson of the panel of experts shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel of experts plans to deliver its interim report. The panel of experts shall, under no circumstances, deliver its interim report later than 125 days after the date of establishment of the panel of experts.
11. Each Party may deliver to the panel of experts a reasoned request to review particular aspects of the interim report within 25 days of its delivery. A Party may comment on the other Party's request within 15 days of the delivery of the request.
12. After considering those comments, the panel of experts shall prepare the final report. If no request to review particular aspects of the interim report are delivered within the time period referred to in paragraph 11, the interim report shall become the final report of the panel of experts.
13. The panel of experts shall deliver its final report to the Parties within 175 days of the date of establishment of the panel of experts. When the panel of experts considers that this time limit cannot be met, its chairperson shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel of experts plans to deliver its final report. The panel of experts shall, under no circumstances, deliver its final report later than 195 days after the date of establishment of the panel of experts.
14. The final report shall include a discussion of any written request by the Parties on the interim report and clearly address the comments of the Parties.
15. The Parties shall make the final report available to the public within 15 days of its delivery by the panel of experts.
16. If the final report of the panel of experts determines that a Party has not conformed with its obligations under the relevant Chapter or Chapters, the Parties shall, within 90 days of the delivery of the final report, discuss appropriate measures to be implemented taking into account the report of the panel of experts.
17. The Cooperation Council shall monitor the follow-up to the report of the panel of experts.
18. When the Parties disagree on the existence of, or the consistency with, the relevant provisions of any measure taken to address the non-conformity, the complaining Party may deliver a request, which shall be in writing, to the original panel of experts to decide on the matter. The request shall identify any measure at issue and explain how that measure is not in conformity with the relevant provisions in a manner sufficient to present the complaint clearly. The panel of experts shall deliver its findings to the Parties within 45 days of the date of the delivery of the request.
19. Except as otherwise provided for in this Article, Article 305, Article 306 and Articles 318 to 323, shall apply mutatis mutandis.
Article 237. Panel of Experts for Non-regression Areas
1. Article 236 shall apply to disputes between the Parties concerning the interpretation and application of Chapters 4 and 5.
2. For the purposes of such disputes, in addition to the Articles listed in Articles 236, 316 and 317 shall apply mutatis mutandis.
3. The Parties recognise that, where the respondent Party chooses not to take any action to conform with the report of the panel of experts and with this Agreement, any remedies authorised under Article DS.17 (Temporary measures) continue to be available to the complaining Party.
Title II. ARRANGEMENTS ON CUSTOMS, INDIRECT TAXATION AND TRADE RELATED ISSUES
Chapter 1. GENERAL PRINCIPLES AND OBJECTIVES
Article 238. Principles and Objectives
The purpose of this Title is to set up the necessary arrangements to remove all physical barriers and related procedures between Gibraltar and the Union for goods moving by land, while protecting the integrity of the Union's Single Market and the Parties' financial interests.
Article 239. Definitions
For the purposes of this Title, the following definitions apply:
(a) "competent authorities of the United Kingdom, in respect of Gibraltar" means His Majesty's Customs Gibraltar or other relevant authorities in Gibraltar;
(b) "competent authorities within the Union" means customs or other relevant authorities of the Member States or of the Union;
(c) "customs clearance formalities" means all procedures, measures and controls to be carried out for the release for free circulation of the goods in accordance with Union law. It covers customs formalities, conformity with product rules, requirements and standards, prohibitions and restrictions, sanitary and phytosanitary measures as provided for in Union law, and any other formalities necessary to release the goods for free circulation in the Union;
(d) "designated customs post" means those customs posts listed in Appendix 1 of Annex 21.
Chapter 2. CUSTOMS UNION
Article 240. Establishment of a Customs Union
A customs union between the Union and the United Kingdom, in respect of Gibraltar, is hereby established in accordance with the provisions set out under this Chapter.
Article 241. Customs Territories
The customs territory of the customs union between the Union and the United Kingdom, in respect of Gibraltar, shall comprise:
(a) the customs territory of the Union as defined in Article 4 of Regulation (EU) No 952/2013 of the European Parliament and of the Council (1) (the "Union Customs Code"); and
(b) the customs territory of Gibraltar, which constitutes a customs territory separate from the customs territory of the United Kingdom.
Article 242. Free Movement of Goods Within the Customs Union
1. The provisions of this Chapter shall apply to:
(a) goods produced in the customs territory of the Union or in the customs territory of Gibraltar, including those obtained wholly or in part from goods which come from countries or territories outside the customs union and are in free circulation in the Union or in Gibraltar; and
(b) goods which come from countries or territories outside the customs union and are in free circulation in the Union or in Gibraltar.
2. Goods coming from countries or territories outside the customs union shall be considered to be in free circulation in the Union or in Gibraltar if the customs clearance formalities have been fulfilled, and any customs duties or charges having equivalent effect which are payable have been levied, and if there has been no total or partial drawback of such duties or charges in respect of the said goods.
3. The provisions of this Chapter shall also apply to goods obtained or produced in the Union or in Gibraltar in the manufacture of which products from countries or territories outside the customs union that are not in free circulation either in the Union or in Gibraltar were used, provided the customs clearance formalities have been completed and any customs duties or charges having equivalent effect payable on such products from countries or territories outside the customs union have been levied.
4. The modalities of the proof that the goods satisfy the conditions of this Article are contained in Annex 19.
Article 243. Prohibition of Customs Duties
No customs duties on imports or exports or charges having equivalent effect shall be applied between the Union and Gibraltar. This prohibition shall also apply to customs duties of a fiscal nature.
Article 244. Prohibition of Quantitative Restrictions
Quantitative restrictions on imports or exports and all measures having equivalent effect shall be prohibited between the Union and Gibraltar.
Article 245. Internal Taxation
1. The Union and the United Kingdom, in respect of Gibraltar, shall not impose directly or indirectly on goods of each other any taxation discriminating directly or indirectly in favour of similar domestic goods.
2. Goods moved between the territories referred to in Article 241 shall not be eligible for a refund of domestic charges which is higher than the charges which have been levied directly or indirectly.
Article 246. Removal of Physical Barriers
1. All physical barriers present between Gibraltar and the Union for goods moving between them by land shall be removed, without prejudice to Article 252 or to formalities required and checks and controls that may be carried out by the Parties to ensure the correct application of this Title.
2. Until the entry into force of the decision referred to in Article 247(1), customs clearance formalities, export formalities, and Union levy and duty collection procedures provided for in this Title that refer to the United Kingdom, in respect of Gibraltar, shall be carried out, as provided for in Article 247(3).
Article 247. Imports Into and Exports from Gibraltar
1. The provisions of Union law listed in Annex 20 shall apply to the United Kingdom, in respect of Gibraltar, and in Gibraltar, provided that the Cooperation Council adopts a decision:
(a) specifying the date as from which the provisions of Union law listed in Annex 20 apply to the United Kingdom, in respect of Gibraltar, and in Gibraltar; and
(b) declaring that border control posts and customs offices have been established in the port and airport and that they operate and are controlled in accordance with modalities and procedures defined in that decision and that competent authorities within the Union have been designated.
2. When adopting the decision referred to in paragraph 1, the Cooperation Council may amend the list of provisions of Union law in Annex 20.
3. Until the entry into force of the decision referred to in paragraph 1, and without prejudice to paragraph 4, goods other than those carried by travellers in their personal luggage in accordance with Annex 23 shall be brought into Gibraltar and be exported from Gibraltar only by land and in accordance with the rules laid down in Annex 19, 21, 22 and 24.
4. By derogation from paragraph 3:
(a) Union goods may also be brought into Gibraltar by sea in accordance with the rules laid down in Article 4 of Annex 19, Article 7 of Annex 21, and in Annexes 22 and 24;
(b) goods may also be moved by sea from Gibraltar to third countries in accordance with the rules laid down in Article 5 of Annex 19, Articles 7 and 8 of Annex 21 and in Annexes 22 and 24.
5. Until the entry into force of the decision referred to in paragraph 1, Gibraltar shall be regarded as a third territory for Union customs purposes.
6. The decision referred to in paragraph 1 shall lay down arrangements for joint actions and controls, as well as customs cooperation and administrative cooperation between the competent authorities of the United Kingdom, in respect of Gibraltar, and the competent authorities within the Union as well as any other rules or procedures necessary to ensure the correct application of the provisions of Union law listed in Annex 20 to the United Kingdom, in respect of Gibraltar, and in Gibraltar, the correct application of this Title, as well as of the correct application of that decision.
7. When adopting the decision referred to in paragraph 1, the Cooperation Council shall also consider the manner in which any border formalities and any relevant border controls and checks at the border posts or customs offices in Gibraltar, including the performance of risk analysis and post release controls, shall be carried out in order to protect the proper functioning of the Union's Single Market.
Article 248. Indirect Taxation
1. Until the entry into force of the decision referred to in Article 247(1), paragraphs 2 to 4 of this Article shall apply.
2. Goods produced in or imported into Gibraltar shall be liable to a transaction tax.
3. Goods liable to excise duties under Union law imported into or produced in Gibraltar shall also be liable to an excise duty in Gibraltar.
4. The transaction tax and the excise duty shall be levied in accordance with the provisions laid down in Annex 24.
5. An independent consultative body established by the United Kingdom, in respect of Gibraltar, and the Kingdom of Spain established on […] shall:
(a) advise at any time, at the request of the Parties, based on its ongoing assessment of the relevant market conditions in Gibraltar and the contiguous frontier zone whether the conditions under points (a) to (c) of Article 249(1) are met; and
(b) assess and advise annually the impact of the transaction tax rates, including reduced and super reduced rates, and excise duty rates applied in Gibraltar on the level of competition and any significant actual distortions in trade between Gibraltar and the contiguous frontier zone.
6. Should any distortion within the meaning of paragraph 4 be established by the independent consultative body, the United Kingdom, in respect of Gibraltar, shall adjust the indirect taxation rates to be applied in Gibraltar to a level deemed appropriate according to the recommendations of the independent consultative body to avoid such distortions and within the limits set out in Articles 2 and 6 of Annex 24.
Article 249. Safeguard Procedure
1. The Union may use the safeguard procedure provided for in this Article should the United Kingdom, in respect of Gibraltar, not comply with its obligation under Article 248(5) in relation to Article 248(4)(a) and if considered appropriate by the Union, if the following conditions are met:
(a) significant distortions in trade between Gibraltar and the Union are occurring in respect of the good or category of goods concerned;
(b) the distortions referred to in point (a) are linked to differences in the levels of transaction tax and excise duties charged on that good by the United Kingdom, in respect of Gibraltar, compared to the rates of VAT and excise duties charged by the Kingdom of Spain on the same good or category of goods;
(c) the distortions referred to in point (a) have existed for a period of at least 30 days; and
(d) the Union has objective, compelling and verifiable information to support a finding that the conditions set out in points (a) to (c) are met.
2. The Union may use the safeguard procedure of this Article should the United Kingdom in respect of Gibraltar not comply with its obligation under Article 248(5) in relation to Article 248(4)(b) and if considered appropriate by the Union.
3. The Union shall notify the United Kingdom, in respect of Gibraltar, in full of the information referred to in point (d) of paragraph 1 and shall enter into immediate consultations with the United Kingdom, in respect of Gibraltar, with a view to reaching a mutually acceptable solution. The notification must provide details of the relevant recommendation of the independent consultative body, the specific good or category of goods in respect of which the finding has been made, including, where relevant, the brand or make and the model.
4. If, after 10 working days of the consultations commencing, a mutually acceptable solution is not reached, the Union may, for a period not longer than 30 days, levy the VAT and excise applicable to the specific good or category of goods identified in the notification when opening the transit procedure for any such goods in accordance with Annexes 19 and 21 when they are destined for Gibraltar. The rate of VAT and excise applied shall be that applicable in the Member State of the relevant designated customs post.
5. Subject to paragraph 6, the 30-day period referred to in paragraph 4 may be extended by a further period of 30 days if the conditions set out in paragraphs 1 and 2 persist.
6. The Union shall notify the United Kingdom, in respect of Gibraltar, that it intends to extend the 30-day period referred to in paragraph 4, pursuant to paragraph 5, not less than 4 working days before such extension takes effect. The information referred to in point (d) of paragraph 1 supporting a finding that the conditions set out in points (a) to (c) of paragraph 1 continue to be met or that the situation referred to in paragraph 1 persists, shall be provided in full to the United Kingdom, in respect of Gibraltar, with that notification.
7. The processes set out in paragraphs 5 and 6 may be repeated until such time as the conditions set out in paragraph 1 are no longer met, an alternative mutually agreed solution has been reached, or until the conclusion of the arbitration process referred to in paragraph 8.
8. If the United Kingdom, in respect of Gibraltar, initiates the arbitration procedure referred to in Article 305 to challenge any act by the Union under this Article, the arbitration tribunal shall treat the issue as a case of urgency for the purposes of Article 310.
9. During any period that the Union levies VAT and excise on goods pursuant to this Article, the provisions of the Agreement requiring the United Kingdom, in respect of Gibraltar, to levy transaction tax and excise duties on those goods shall not apply.
10. Article 6(1) shall not apply to communications made under this Article.
11. Amounts of VAT and excise duties collected by the Member State concerned shall be kept by that Member State.
Article 250. Cooperation and Mutual Administrative Assistance
1. Until the entry into force of the decision referred to in Article 247(1), paragraphs 2 to 8 of this Article shall apply.
2. The Parties shall cooperate in the area of customs and indirect taxation, including by:
(a) communicating and exchanging information in a rapid and secure way to ensure the proper application of customs and tax legislation and to prevent and combat customs and tax fraud, smuggling, in particular of products subject to excise duties or any other indirect taxes, such as tobacco products, drug trafficking, trafficking in firearms and explosives precursors, including cash movements and money laundering and terrorist financing in relation thereto and illegal waste trafficking. Such exchanges may take place in an automated and systematic way and may include import and export declaration data on trade between the Parties;
(b) coordinating customs and tax controls;
(c) cooperation relating to the movement of goods that are subject to customs and tax controls; and
(d) adopting other measures to facilitate and promote secure and licit trade, including with respect to authorised economic operators and collaborating on special forms of cooperation provided for by Union law or agreed between the Parties.
3. The competent authorities within the Union and the competent authorities of the United Kingdom, in respect of Gibraltar, shall provide each other with mutual administrative assistance in customs matters in accordance with Protocol on mutual administrative assistance in customs matters.
4. The competent authorities within the Union and the competent authorities of the United Kingdom, in respect of Gibraltar, shall cooperate with each other to ensure compliance with legislation relating to VAT, transaction tax and excise duties and in recovering claims relating to taxes and duties in accordance with the Protocol on administrative cooperation and combating fraud in the field of value added tax and excise duty and on mutual assistance for the recovery of claims relating to taxes and duties.
5. Any exchange of information between the competent authorities within the Union and the competent authorities of the United Kingdom, in respect of Gibraltar, in accordance with this Chapter shall be subject to the requirements of confidentiality and protection of information set out in Article PCUST.12 of the Protocol on mutual administrative assistance in customs matters, mutatis mutandis, as well as to any confidentiality requirements set out in the law of the Union and of the United Kingdom, in respect of Gibraltar.
6. The competent authorities within the Union and the competent authorities of the United Kingdom, in respect of Gibraltar, may cooperate and exchange information in the area of non-food product safety and compliance.
7. The Union and the United Kingdom, in respect of Gibraltar, shall notify their respective competent authorities to carry out the cooperation and mutual administrative assistance on customs and indirect taxes provided for in this Article.
8. Article 6(1) shall only apply to exchanges of periodic complied data and information under this Article.