(c) measures taken to implement multilateral environmental agreements can fall under points (b) or (g) of Article XX of GATT 1994.
5. Before a Party takes any measures in accordance with points (i) and (j) of Article XX of GATT 1994, it shall provide the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. If an agreement is not reached within 30 (thirty) days of providing such information, the Party may apply the relevant measures. Whenever exceptional and critical circumstances require immediate action, the Party intending to take the measures may apply the measure necessary to deal with the circumstances without prior notification and shall inform the other Party immediately thereof.
ARTICLE 28.3
Taxation
1. Nothing in this Part of the Agreement shall affect the rights and obligations of the European Union or its Member States or of the Signatory MERCOSUR States under any tax convention. In the event of any inconsistency between this Part of the Agreement and any such tax convention, the tax convention shall prevail to the extent of the inconsistency.
2. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries, where like conditions prevail, or a disguised restriction on trade or investment, nothing in this Part of the Agreement shall be construed to prevent the adoption, maintenance or enforcement by a Party of any measure aimed at ensuring the equitable or effective imposition or collection of direct taxes 90 that:
(a) distinguishes between taxpayers, who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested; or
(b) aims at preventing the avoidance or evasion of taxes pursuant to the provisions of any tax convention or domestic fiscal legislation.
3. For the purpose of this Article:
(a) "residence" means residence for tax purposes; and
(b) "tax convention" means a convention for the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation that the European Union or its Member States or a Signatory MERCOSUR State is party to.
ARTICLE 28.4
Disclosure of information
1. Nothing in this Part of the Agreement shall be construed to require a Party to make available confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private, except where a panel requires such confidential information in dispute settlement proceedings under Chapter 29. In such cases, the panel shall ensure that confidentiality is fully protected.
2. When a Party provides information which is considered as confidential under its laws and regulations, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.
ARTICLE 28.5
WTO Waivers
If an obligation in this Part of the Agreement is substantially equivalent to an obligation contained in the WTO Agreement, any measure taken in conformity with a waiver adopted pursuant to paragraphs 3 and 4 of Article IX of the WTO Agreement is deemed to be in conformity with the substantively equivalent provision in this Part of the Agreement.
CHAPTER 29
DISPUTE SETTLEMENT
SECTION A
OBJECTIVE, DEFINITIONS AND SCOPE
ARTICLE 29.1
Objective
The objective of this Chapter is to establish an effective and efficient mechanism to:
(a) avoid and settle disputes between the Parties regarding the interpretation and application of Part III of this Agreement with a view to reaching, if possible, a mutually agreed solution; and
(b) preserve the balance of concessions accorded by Part III of this Agreement, when applicable.
ARTICLE 29.2
Definitions
For the purposes of this Chapter and Annexes 29-A, 29-B and 29-C:
(a) "adviser" means an individual retained by a party to advise or assist that party in connection with the arbitration proceedings;
(b) "arbitration panel" means a panel established pursuant to Article 29.9;
(c) "arbitrator" means an individual who is a member of an arbitration panel;
(d) "assistant" means an individual who, under the terms of appointment of an arbitrator, conducts researches or provides assistance to that arbitrator;
(e) "candidate" means an individual whose name is on the list of arbitrators referred to in Article 29.8(3) and who is under consideration for selection as a member of an arbitration panel established pursuant to Article 29.9;
(f) "complaining party" means a party that requests the establishment of an arbitration panel pursuant to Article 29.7;
(g) "expert" means an individual with specialised and recognised knowledge and experience in a certain field that is requested by an arbitration panel or mediator to provide an opinion, or whose opinion in that field is submitted to or requested by any of the parties;
(h) "mediator" means an individual who conducts a mediation pursuant to Article 29.6;
(i) "representative of a party" means an employee or any person appointed by a government department or agency or any other public entity of a Party who represents that Party for the purposes of a dispute under this Chapter; and
(j) "staff" means, in respect of an arbitrator, individuals under the direction and control of an arbitrator, other than assistants.
ARTICLE 29.3
Parties to the dispute
1. For the purposes of this Chapter, the European Union and MERCOSUR or one or more of the Signatory MERCOSUR States, may be parties to a dispute. The parties to the dispute shall be hereinafter referred to as "party" or "parties".
2. The European Union may initiate dispute settlement proceedings against MERCOSUR regarding a measure that concerns the European Union or one or more of its Member States, if the measure at issue is a measure of MERCOSUR.
3. The European Union may initiate dispute settlement proceedings against one or more of the Signatory MERCOSUR States regarding a measure that concerns the European Union or one or more of its Member States, if the measure at issue is a measure of such Signatory MERCOSUR States.
4. MERCOSUR may initiate dispute settlement proceedings against the European Union regarding a measure that concerns MERCOSUR or all of the Signatory MERCOSUR States, if the measure at issue is a measure of the European Union 91 or of one or more of the European Union's Member States.
5. One or more Signatory MERCOSUR States may individually initiate dispute settlement proceedings against the European Union regarding a measure that concerns such Signatory MERCOSUR State or Signatory MERCOSUR States, if the measure is a measure of the European Union or of one or more of the European Union's Member States.
6. If more than one Signatory MERCOSUR State initiate dispute settlement proceedings against the European Union on the same matter, Article 9 of the DSU shall apply mutatis mutandis 92 .
ARTICLE 29.4
Scope
The provisions of this Chapter apply with respect to any dispute:
(a) concerning the interpretation and application of the provisions of Part III of this Agreement (hereinafter referred to as "covered provisions"), except if otherwise expressly provided; or
(b) concerning an allegation by a party that a measure applied by the other party nullifies or substantially impairs any benefit accruing to it under the covered provisions in a manner adversely affecting trade between the parties, whether or not such measure conflicts with the provisions of Part III of this Agreement, except if otherwise expressly provided.
SECTION B
CONSULTATIONS AND MEDIATION
ARTICLE 29.5
Consultations
1. The parties shall endeavour to resolve any dispute regarding the alleged non-compliance with the covered provisions referred to in point (a) of Article 29.4 or regarding the alleged nullification or substantial impairment referred to in point (b) of Article 29.4 by entering into consultations in good faith with the aim of reaching a mutually agreed solution. In this context, additional consideration shall be given to the specific challenges of landlocked developing countries.
2. A party shall seek consultations through a written request delivered to the other party and to the Joint Committee in trade configuration, giving the reason for the request, including identification of the measure at issue and, in the case of a dispute referred to in point (a) of Article 29.4, the covered provisions that it considers applicable and not complied with by the other party, or, in the case of a dispute referred to in point (b) of Article 29.4, the benefits it considers to have been, as a result of the measure at issue, nullified or substantially impaired in a manner adversely affecting trade between the parties.
3. Consultations shall be held no later than 15 (fifteen) days after the date of receipt of the request, and shall, unless the parties agree otherwise, be held in the territory of the consulted party. Consultations shall be deemed to have been concluded no later than 30 (thirty) days after the date of receipt of the request, unless both parties agree to continue consultations. Consultations, and in particular the positions taken by the parties therein, shall be confidential and without prejudice to the rights of a party in any further proceedings.
4. Consultations on matters of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time, shall be held no later than 15 (fifteen) days after the date of receipt of the request and shall be deemed to have been concluded within those 15 (fifteen) days, unless both parties agree to continue consultations.
5. During consultations, each party shall provide factual information, so as to allow a complete examination of the manner in which the measure at issue could, in the case of a dispute referred to in point (a) of Article 29.4, affect the application of Part III of this Agreement, or, in the case of a dispute referred to in point (b) of Article 29.4, nullify or substantially impair the benefits accruing to the requesting party under Part III of this Agreement in a manner adversely affecting trade between the parties.
6. If consultations are not held within the time period laid down in paragraphs 3 or 4, as the case may be, or if consultations are concluded and a mutually agreed solution is not reached, the party which has requested consultations may have recourse to the establishment of an arbitration panel in accordance with Article 29.7.
7. A request for consultations concerning a dispute referred to in point (a) of Article 29.4 shall be without prejudice to the right of the requesting party to request, concurrently or subsequently, consultations concerning a dispute referred to in point (b) of Article 29.4 in respect of the same measure, and vice versa.
ARTICLE 29.6
Mediation
A party may request pursuant to Annex 29-C to enter into mediation with respect to any measure by a party adversely affecting trade between the parties. Mediation may only be initiated by mutual consensus of the parties.
SECTION C
ARBITRATION
ARTICLE 29.7
Initiation of arbitration panel proceedings
1. If the parties have failed to resolve the dispute through consultations in accordance with Article 29.5, or if the complaining party considers that the defending party has failed to comply with a solution mutually agreed during consultations, the complaining party may seek the establishment of an arbitration panel by means of a written request delivered to the defending party and to the Joint Committee in trade configuration.
2. The complaining party shall give the reasons for the request, including identification of the measure at issue and explain, in the case of a dispute referred to in point (a) of Article 29.4, how that measure constitutes a breach of the covered provisions in a manner that clearly presents the legal basis for the complaint, or, in the case of a dispute referred to in point (b) of Article 29.4, how the measure at issue nullifies or substantially impairs the benefits accruing to the complaining party under Part III of this Agreement.
3. A request for establishment of an arbitration panel concerning a dispute referred to in point (a) of Article 29.4 shall be without prejudice to the right of the complaining party to request, concurrently or subsequently, the establishment of an arbitration panel concerning a dispute referred to in point (b) of Article 29.4 in respect of the same measure, and vice versa.
4. If the complaining party has, at the same time and in respect of the same measure, requested the establishment of an arbitration panel both concerning a dispute referred to in point (a) of Article 29.4 and a dispute referred to in point (b) of Article 29.4, a single arbitration panel shall be established conducting a single arbitration in respect of both disputes. In case of subsequent arbitrations concerning the same measure, the latter arbitration shall be referred to the same panel as the preceding dispute, wherever possible.
ARTICLE 29.8
Appointment of arbitrators
1. Arbitrators must have specialised knowledge or experience in law and international trade. Arbitrators that are not nationals of a party shall be jurists.
2. Arbitrators shall:
(a) be independent;
(b) serve in their individual capacity;
(c) not take instructions from any organisation or government or be affiliated to any government or governmental organisation of a Party to this Agreement; and
(d) comply with Annex 29-B.
3. The Joint Committee in trade configuration shall, no later than 6 (six) months after the date of entry into force of this Agreement, establish a list of 32 (thirty-two) individuals who are willing and able to serve as arbitrators. That list shall be composed of the following 3 (three) sub-lists:
(a) one sub-list of 12 (twelve) individuals proposed by the European Union;
(b) one sub-list of 12 (twelve) individuals proposed by MERCOSUR; and
(c) one sub-list of 8 (eight) individuals, proposed by both Parties, who are not nationals of either Party and who shall act as chairperson of the arbitration panel.
4. The Joint Committee in trade configuration shall ensure that the list referred to in paragraph 3 of this Article contains the number of individuals therein required. The Joint Committee in trade configuration may amend the list of arbitrators, in accordance with Rule 25 of the Rules of Procedure as set out in Annex 29-A.
5. If, at the moment of the establishment of a particular arbitration panel pursuant to Article 29.9, the list provided for in paragraph 3 of this Article has not been established or, once established, not all individuals included in a particular sub-list are able to serve as arbitrator in a dispute, the co-chair of the Joint Committee in trade configuration of the complaining party shall draw by lot the arbitrators in accordance with Rules 10, 26 and 28 to 31 of the Rules of Procedure as set out in Annex 29-A.
ARTICLE 29.9
Establishment of the arbitration panel
1. An arbitration panel shall be composed of 3 (three) arbitrators.
2. No later than 10 (ten) days after the date of receipt of the written request for the establishment of an arbitration panel pursuant to Article 29.7(1), the parties shall consult one another with a view to agreeing on its composition 93 . Expertise relevant to the subject matter of the dispute may be taken into consideration by the parties for the selection of arbitrators. The arbitration panel shall always be chaired by a non-national of either Party.
3. If there is no agreement on the composition of the arbitration panel within the time period set out in paragraph 2 of this Article, each party shall appoint one member of the arbitration panel from the sub-list of that party referred to in Article 29.8(3) no later than 10 (ten) days after the expiry of the time period referred to in paragraph 2 of this Article. If a party fails to appoint an arbitrator within that time period the co-chair of the Joint Committee in trade configuration of the complaining party or his or her designee shall, no later than 5 (five) days after the expiry of the time period referred to in the previous sentence, select the arbitrator by lot from the sub-list of that party.
4. During the time period referred to in paragraph 2 of this Article, the parties shall endeavour to agree on the chairperson of the arbitration panel. If they are unable to agree, either party shall request the co-chair of the Joint Committee in trade configuration of the complaining party to select the chairperson of the arbitration panel by lot from the sub-list referred to in Article 29.8(3) no later than 5 (five) days after that request.
5. The date of the establishment of the arbitration panel shall be that on which all selected arbitrators have accepted the appointment in accordance with the Rules of Procedure set out in Annex 29-A.
6. If a party considers that an arbitrator does not comply with Annex 29-B, the procedures provided for in Annex 29-A apply.
7. If an arbitrator is unable to participate in the proceedings, withdraws or needs to be replaced, a new arbitrator shall be selected in accordance with the selection procedures set out in this Article and the Rules of Procedure set out in Annex 29-A. The arbitration proceedings shall be suspended during that period for up to a maximum of 25 (twenty-five) days.
8. The parties shall accept as binding, ipso facto and with no need for a special agreement, the authority of any arbitration panel established in accordance with this Chapter.
ARTICLE 29.10
Decision on urgency
If a party so requests, the arbitration panel shall decide, within 10 (ten) days of its establishment, whether the case concerns matters of urgency.
ARTICLE 29.11
Hearings
The hearings of the arbitration panel shall be open to the public, unless the parties to the dispute decide otherwise. The hearings of the arbitration panel shall be partially or completely closed to the public when the submission or arguments of a party contain information which that party has designated as confidential.
ARTICLE 29.12
Information and technical advice
1. The arbitration panel may request, in accordance with Annex 29-A, the opinion of experts or obtain information from any source deemed relevant.
2. The opinions of experts as well as information obtained from any relevant source shall be non-binding.
3. Experts must be persons of professional standing and experience in the relevant field. The arbitration panel shall consult the parties before choosing such experts.
4. The arbitration panel shall set a reasonable time period for the submission of information or the report of the experts.
5. Persons of the Parties shall be authorised to submit amicus curiae briefs to the arbitration panels in accordance with the conditions set out in Annex 29-A. Those conditions shall ensure that the amicus curiae briefs do not create an undue burden for the parties to the dispute or unduly delay or complicate the arbitration panel proceedings.
6. Any information obtained under this Article shall be disclosed to each of the parties and submitted for their comments.
ARTICLE 29.13
Applicable law and rules of interpretation
1. In the case of a dispute referred to in point (a) of Article 29.4, the arbitration panel shall resolve the dispute in accordance with the covered provisions.
2. In all disputes referred to in Article 29.4, the arbitration panel shall interpret the covered provisions in accordance with customary rules of interpretation of public international law. When interpreting an obligation under this Agreement which is identical to an obligation under the WTO Agreement, the arbitration panel shall take into consideration any relevant interpretation established in the rulings of the WTO Dispute Settlement Body.
ARTICLE 29.14
Arbitral award
1. The arbitration panel shall deliver an interim arbitral report to the parties no later than 90 (ninety) days after the date of establishment of the arbitration panel. The interim arbitral report shall set out the findings of fact, the applicability of covered provisions where relevant, and the basic rationale behind any findings and recommendations that the arbitration panel makes.
2. When the arbitration panel considers that the deadline referred to in paragraph 1 cannot be met, the chairperson of the arbitration panel shall notify the parties and the Joint Committee in trade configuration in writing, stating the reasons for the delay and the date on which the arbitration panel plans to deliver its interim arbitral report. Under no circumstances shall the interim arbitral report be delivered later than 120 (one hundred and twenty) days after the date of establishment of the arbitration panel.
3. In cases of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time, the arbitration panel shall make every effort to deliver its interim arbitral report within 45 (forty‑five) days and, in any case, no later than 60 (sixty) days after the date of establishment of the arbitration panel.
4. A party may deliver a written request to the arbitration panel to review precise aspects of the interim arbitral report no later than 14 (fourteen) days after its receipt or, in cases of urgency, including those involving perishable goods or seasonal goods or services, no later than 7 (seven) days after its receipt. After considering any written comments by the parties on the interim arbitral report, the arbitration panel may modify it and make any further examination it considers appropriate.
5. If no written request to review precise aspects of the interim arbitral report are delivered within the time period referred to in paragraph 4, the interim arbitral report shall become the arbitral award.
6. The arbitration panel shall deliver its arbitral award to the parties and the Joint Committee in trade configuration no later than 120 (one hundred and twenty) days after the establishment of the arbitration panel. If the arbitration panel considers that that deadline cannot be met, the chairperson of the arbitration panel shall notify the parties and the Joint Committee in trade configuration in writing, stating the reasons for the delay. Under no circumstances shall the arbitral award be delivered later than 150 (one hundred and fifty) days after the establishment of the arbitration panel.
7. In cases of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time, the arbitration panel shall make every effort to deliver its arbitral award no later than 60 (sixty) days after the date of its establishment. Under no circumstances shall the arbitral award be delivered later than 75 (seventy-five) days after such date.
8. The arbitral award shall set out the findings of fact, the applicability of covered provisions where relevant, and the basic rationale behind the findings and recommendations. The arbitral award shall include sufficient analysis of the arguments made by the parties, and shall clearly respond to the questions and observations of both parties, including those made to the interim arbitral report.
9. The arbitration panel shall make an objective assessment of the matter before it, including an objective assessment of the facts of the case and of the arguments and evidence presented by both parties and:
(a) in the case of a dispute referred to in point (a) of Article 29.4, the applicability of and conformity with the covered provisions; or
(b) in the case of a dispute referred to in point (b) of Article 29.4, the existence of a nullification or substantial impairment of any benefit accruing to the complaining party under the covered provisions in a manner adversely affecting trade between the parties.
10. In the case of a dispute referred to in point (b) of Article 29.4, unless the parties agree otherwise, the arbitration panel shall:
(a) determine if the measure at issue nullifies or substantially impairs any benefit accruing to the complaining party under the covered provisions, in a manner adversely affecting trade between the parties;
(b) if applicable, determine the level of benefits accruing to the complaining party under the covered provisions which have been nullified or substantially impaired in a manner adversely affecting trade between the parties;
(c) if it has found that the measure at issue nullifies or substantially impairs any benefit accruing to the complaining party under the covered provisions, in a manner adversely affecting trade between the parties, recommend that the defending party make a mutually satisfactory adjustment; the defending party is not obliged to withdraw the measure at issue; and
(d) if applicable, and if so requested by both parties, suggest ways and means of reaching a mutually satisfactory adjustment, including by means of compensation; such suggestions shall not be binding on the parties.
11. The arbitration panel shall make every effort to take any decision by consensus. If, nevertheless, a decision cannot be reached by consensus, the matter at issue shall be decided by majority vote. The arbitrators shall not issue dissenting or separate opinions and shall maintain confidentiality as regards the voting.
12. The Joint Committee in trade configuration shall make the arbitral award of the arbitration panel publicly available in its entirety, unless the parties decide, by mutual agreement, not to make public parts thereof which contain confidential information.
13. The arbitral award shall be binding on the parties from the date on which it is delivered and shall not be subject to appeal.
14. The arbitral award cannot add to or diminish the rights and obligations provided for in the covered provisions. The arbitral award shall not be construed as conferring rights on or imposing obligations for persons.
15. Paragraphs 2, 4, 6, 8 and 11 shall be applicable to the rulings of the arbitration panel referred to in Articles 29.18, 29.19, 29.20 and 29.21.
ARTICLE 29.15
Withdrawal, mutually agreed solution or suspension of a dispute
1. The complaining party may, subject to the consent of the defending party, withdraw its complaint before the arbitral award has been issued.
2. If the parties reach a mutually agreed solution at any time either before or following the issuance of the arbitral award, the Joint Committee in trade configuration shall be notified in writing by both parties.
3. The arbitration panel shall, at the request of both parties, suspend its work at any time, before the arbitral award has been issued, for a period agreed by the parties and not exceeding 12 (twelve) consecutive months. Within that period, the arbitration panel shall resume its work only at the written request of both parties. The request shall be notified to the Joint Committee in trade configuration. The proceedings shall be resumed from the stage at which they were suspended 20 (twenty) days after the date of receipt of the request. If the work of the arbitration panel has been suspended for more than 12 (twelve) months, the authority of the arbitration panel shall lapse, without prejudice to the right of the complaining party to request at a later point in time the establishment of an arbitration panel on the same subject matter.
ARTICLE 29.16
Request for clarification
No later than 10 (ten) days the after the receipt of the arbitral award, a party may submit to the arbitration panel, with the other party and the Joint Committee in trade configuration in copy, a written request for clarification with regard to specific aspects of any finding or recommendation in the arbitral award that the requesting party considers ambiguous. The other party to the dispute may submit comments on that request to the arbitration panel no later than 5 (five) days after its receipt. The arbitration panel shall respond to the request for clarification of the arbitral award no later than 15 (fifteen) days after its receipt. Requests for clarification shall not be used as a means to review the arbitral award.
ARTICLE 29.17
Compliance with the arbitral award