1. The Arbitration Panel shall issue a preliminary report based on the applicable provisions of this Agreement, the arguments and submissions made by the disputing Parties, and any information it has received pursuant to Article 18.12.
2. Unless the disputing Parties agree otherwise, the Arbitration Panel shall, within 90 days of the establishment of the Panel, notify the disputing Parties of a preliminary report containing:
(a) findings of fact, including any arising from a request pursuant to Article 18.11(7);
(b) a determination as to whether the measure at issue is inconsistent with the obligations under this Agreement, or is a cause for nullification or impairment within the meaning of Annex 18.3 or any other determination requested in the terms of reference; and
(c) the draft final report and its recommendations, if any, for the resolution of the dispute.
3. The Arbitral Panel shall not disclose any confidential information in its report, but may state conclusions derived from such information.
4. Where the Arbitration Panel considers that it cannot issue its preliminary report within 90 days, or within 60 days in cases of urgency, it shall inform the disputing Parties in writing of the reasons for the delay, and shall provide at the same time and at the earliest possible stage of the proceedings, an estimate of the time within which it will issue its report. In this case, unless exceptional circumstances apply, the time limit for issuing the report shall not exceed 120 days from the date of establishment of the Arbitration Panel.
5. The Arbitration Panel shall endeavor to reach all its decisions by consensus. However, where a decision cannot be made by consensus, the matter shall be decided by majority vote.
6. The disputing Parties may make written comments to the Arbitration Panel on the preliminary report within 15 days of its submission or within such other period of time as the disputing Parties may agree.
7. In such a case, and after considering the written observations, the Arbitration Panel may, on its own initiative or at the request of any disputing Party:
(a) request the observations of any disputing Party;
(b) conduct any due diligence it considers appropriate; or
(c) reconsider the preliminary report.
Article 18.15. Final Report
1. The Arbitration Panel shall notify the disputing Parties of its final report and, if any, written views on issues on which there was no unanimity within 30 days of the submission of the preliminary report.
2. The panelists may issue written opinions on matters on which there is no unanimity. However, neither the preliminary report nor the final report shall disclose the identity of the panelists who voted with the majority or minority.
3. The disputing Parties shall communicate the final report to the Commission within 5 days of its notification to them, and shall make it available to the public within 15 days of its communication to the Commission, subject to the protection of confidential information in the report.
Article 18.16. Compliance with the Final Report
1. The final report of the Arbitration Panel shall be final and binding on the disputing Parties.
2. Upon receipt of the final report of the Arbitration Panel, the disputing Parties shall agree on the resolution of the dispute, which shall normally be in accordance with the findings of the Arbitration Panel and its recommendations, if any.
3. If in its final report the Arbitration Panel determines that the Party complained against has failed to comply with its obligations under this Agreement, or that the measure causes nullification or impairment within the meaning of Annex 18.3, the remedy shall, where possible, be non-enforcement or termination of the measure that is inconsistent with this Agreement or that causes nullification or impairment within the meaning of Annex 18. In the absence of a remedy, the Party complained against may submit offers of compensation, which shall be considered by the complaining Party and, unless otherwise agreed, shall be equivalent to the benefits foregone.
Article 18.17. Non-performance and Suspension of Benefits
1. Where the Arbitration Panel finds that a measure is inconsistent with the obligations of this Agreement or is a cause of nullification or impairment within the meaning of Annex 18.3, and the disputing Parties:
(a) do not reach compensation in terms of Article 18.16(3) or a mutually satisfactory settlement of the dispute within 30 days of receipt of the final report, or
(b) have reached an agreement on the settlement of the dispute or on compensation in accordance with Article 18.16(3), and the complaining Party considers that the Party complained against has not complied with the terms of the agreement,
the complaining Party may, upon notice to the Party complained against, suspend the application to that Party of benefits under this Agreement that are equivalent in effect to the benefits foregone.
2. The suspension of benefits shall last until the Party complained against complies with the final report or until the disputing Parties reach a mutually satisfactory settlement of the dispute, as the case may be.
3. In considering the benefits to be suspended pursuant to this Article:
(a) the complaining Party shall first seek to suspend benefits within the same sector or sectors that are affected by the measure, or by another matter that the Arbitration Panel has found to be inconsistent with the obligations under this Agreement, or to be a cause of nullification or impairment within the meaning of Annex 18.3; and
(b) if the complaining Party considers that it is not practicable or effective to suspend benefits in the same sector or sectors, it may suspend benefits in other sectors.
Article 18.18. Review of Suspension of Benefits or Compliance
1. A disputing Party may, by written communication to the other disputing Party, request that the original Arbitration Panel established pursuant to Article 18.8 be reconvened to determine:
(a) whether the level of suspension of benefits applied by the complaining Party pursuant to Article 18.17(1) is manifestly excessive; or
(b) on any disagreement between the disputing Parties as to compliance with the final report of the Arbitration Panel, or with an agreement reached between them, or with respect to the compatibility of any measures taken to comply.
2. If the Arbitration Panel hearing a matter pursuant to subparagraph 1(a) decides that the level of suspended benefits is manifestly excessive, it shall determine the level of benefits applied that it considers to be of equivalent effect. In this case, the complaining Party shall adjust the suspension it is applying to that level. If the Arbitration Panel hearing a matter pursuant to subparagraph 1(b) decides that the Party complained against has complied, the complaining Party shall immediately terminate the suspension of benefits.
3. The proceedings before the arbitration panel constituted for the purposes of paragraph 1 shall be conducted in accordance with the Model Rules of Procedure. The Arbitration Panel shall render its final decision within 60 days of the election of the last panelist, or within such other period as the disputing Parties may agree.
4. The provisions of Article 18.10 shall apply where the original Arbitral Panel or any of its members cannot be reconstituted to hear the matters referred to in this Article.
Article 18.19. Judicial and Administrative Proceedings
1. The Commission shall endeavor to agree, as soon as possible, on an appropriate interpretation or response where a Party:
(a) considers that a question of interpretation or application of this Agreement arising or arising in a judicial or administrative proceeding of another Party warrants interpretation by the Commission; or
(b) receives a request for an opinion on a question of interpretation or application of this Agreement from a court or administrative body of that Party.
2. The Party in whose territory the court or administrative body is located shall submit to it the appropriate response or any interpretation agreed to by the Commission, in accordance with the procedures of that body.
3. Where the Commission is unable to agree on an appropriate response or interpretation, the Party in whose territory the tribunal or administrative body is located may submit its own views to the tribunal or administrative body in accordance with the procedures of that body.
Article 18.20. Rights of Individuals
Neither Party may grant a right of action under its domestic law against the other Party on the ground that a measure of the other Party is inconsistent with this Agreement.
Article 18.21. Alternative Means of Dispute Settlement
1. Each Party shall, in accordance with its domestic law, promote and facilitate recourse to arbitration and other alternative means for the settlement of international commercial disputes between private parties.
2. To this end, each Party shall provide appropriate procedures to ensure the enforcement of arbitration agreements and the recognition and enforcement of arbitral awards rendered in such disputes.
3. Parties shall be deemed to be in compliance with the provisions of paragraph 2 if they are party to and comply with the provisions of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the 1975 Inter-American Convention on International Commercial Arbitration.
4. The Commission may establish an Advisory Committee on Private Commercial Disputes composed of persons having expertise or experience in the settlement of private international commercial disputes. The Committee shall make general reports and recommendations to the Commission on the existence, use and effectiveness of arbitration and other procedures for the settlement of such disputes.
Annex 18.3 . ANNULMENT AND IMPAIRMENT
The Parties may have recourse to the dispute settlement mechanism of this Chapter when, by virtue of the application of a measure that does not contravene the Agreement, they consider that the benefits that they could reasonably have expected to receive from the application of Chapters 3 (National Treatment and Market Access for Goods); 4 (Rules of Origin and Customs Procedures); 7 (Sanitary and Phytosanitary Measures); 8 (Technical Barriers to Trade); and 9 (Cross-Border Trade in Services) are nullified or impaired.
Chapter 19. EXCEPTIONS
Article 19.1. Definitions
For the purposes of Article 19.5, the following definitions shall apply:
competent authority: for each Party as defined in Annex 19.5;
tax convention: a convention for the avoidance of double taxation or other international tax convention or arrangement; and
taxation measures do not include:
(a) a "customs duty" as defined in Article 2.1 (Definitions of General Application), or.
(b) the measures listed in subparagraphs (b), (c), and (d) of the definition of "customs duty" in Article 2.1 (Definitions of General Application).
Article 19.2. General Exceptions
1. For purposes of Chapters 3 (National Treatment and Market Access for Goods); 4 (Rules of Origin and Customs Procedures); 5 (Trade Facilitation and Customs Cooperation); 7 (Sanitary and Phytosanitary Measures), 8 (Technical Barriers to Trade), and 14 (Electronic Commerce), Article XX of the GATT 1994 and its interpretative notes are incorporated into and form an integral part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XX(b) of GATT 1994 include environmental measures necessary to protect human, animal or plant life or health, and that Article XX(g) of GATT 1994 applies to measures relating to the conservation of living or non-living exhaustible natural resources.
2. For the purposes of Chapters 9 (Cross-Border Trade in Services); 12 (Telecommunications); 13 (Entry and Temporary Stay of Business Persons); and 14 (Electronic Commerce), Article XIV of the GATS (including the footnotes) is incorporated into and made an integral part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XIV(b) of the GATS include environmental measures necessary to protect human, animal or plant life or health.
Article 19.3. National Security
Nothing in this Agreement shall be construed to:
(a) compel a Party to provide or give access to information the disclosure of which it considers contrary to its essential security interests; or
(b) preventing a Party from taking any measure that it considers necessary to protect its essential security interests:
(i) relating to trade in arms, ammunition, and munitions of war, and trade and transactions in goods, materials, services, and technology carried on for the direct or indirect purpose of providing supplies to a military institution or other defense establishment;
(ii) adopted in time of war or other emergency in international relations; or
(iii) relating to the implementation of national policies or international agreements relating to the non-proliferation of nuclear weapons or other nuclear explosive devices; or (iv) relating to the implementation of national policies or international agreements relating to the non-proliferation of nuclear weapons or other nuclear explosive devices, or
(c) to prevent a Party from taking action in accordance with its obligations under the United Nations Charter for the Maintenance of International Peace and Security.
Article 19.4. Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or give access to information the disclosure of which would impede compliance with, or be contrary to, its Constitution or domestic law, or which would be contrary to the public interest, or which would prejudice the legitimate commercial interest of particular enterprises, whether public or private.
Article 19.5. Taxation
1. Except as provided in this Article, nothing in this Agreement shall apply to taxation measures.
2. Nothing in this Agreement shall affect the rights and obligations of any Party under any tax treaty. In the event of any inconsistency between this Agreement and any such treaty, the treaty shall prevail to the extent of the inconsistency. In the case of a tax treaty between the Parties, the competent authorities under that treaty shall have sole responsibility for determining whether there is any inconsistency between this Agreement and that treaty.
3. Notwithstanding paragraph 2:
(a) Article 3.3 (National Treatment) and such other provisions in this Agreement necessary to give effect to that Article shall apply to taxation measures to the same extent as Article III of the GATT 1994; and
(b) Article 3.12 (Export Taxes) shall apply to taxation measures.
4. Articles 10.11 (Expropriation and Compensation) and 10.17 (Submission of a Claim to Arbitration) shall apply to taxation measures that are claimed to be expropriatory, except that no investor may invoke Article 10.11 (Expropriation and Compensation) as a basis for a claim where it has been determined pursuant to this paragraph that the measure does not constitute an expropriation. An investor seeking to invoke Article 10.11 (Expropriation and Compensation) with respect to a taxation measure shall first submit the matter at the time of the written notice referred to in Article 10.17 (Submission of a Claim to Arbitration) to the competent authorities of the claimant and respondent set out in Annex 19.5 for those authorities to determine whether the measure does not constitute an expropriation. If the competent authorities do not agree to examine the matter or, having agreed to examine the matter, do not agree that the measure does not constitute an expropriation, within 6 months after the matter has been submitted to them, the investor may submit a claim to arbitration in accordance with Article 10.17 (Submission of a Claim to Arbitration).
Article 19.6. Balance of Payments
1. A Party may adopt or maintain temporary, nondiscriminatory restrictions to protect the balance of payments where:
(a) there is serious economic and financial disruption or threat thereof in the Party's territory that cannot be adequately addressed by some alternative measure, or.
(b) the balance of payments, including the state of its monetary reserves, is seriously threatened or facing serious difficulties.
2. The measures referred to in paragraph 1, with respect to trade in goods shall be taken in accordance with the GATT 1994, including the Declaration on Trade Measures Taken for Balance of Payments Purposes of 1979 and the Understanding on Balance of Payments Provisions of the General Agreement on Tariffs and Trade 1994; and with respect to trade in services shall be taken in accordance with the GATS.
3. Any measure adopted or maintained pursuant to paragraph 1 shall:
(a) be applied in a non-discriminatory manner such that no Party receives less favorable treatment than any other Party or non-Party;
(b) be consistent with the Articles of Agreement of the International Monetary Fund;
(c) avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(d) not go beyond what is necessary to overcome the circumstances set out in paragraph (1); and
(e) be temporary and progressively removed as soon as the situations specified in paragraph 1 improve.
4. Without prejudice to the obligations under the legal instruments referred to in paragraph 2, a Party adopting or maintaining measures in accordance with paragraph 1 shall communicate to the other Party as soon as possible, through the Commission:
(a) what the nature and extent of the serious threats to, or serious difficulties faced by, its balance of payments consist of;
(b) the economic and foreign trade situation of the Party;
(c) the alternative measures available to it to correct the problem;
(d) the economic policies it adopts to deal with the problems referred to in paragraph 1, as well as the direct relationship between such policies and the solution of such problems; and
(e) the evolution of the events that gave rise to the adoption of the measure.
Annex 19.5 . COMPETENT AUTHORITIES
For the purposes of Article 19.5, a Competent Authority shall be understood as follows
(a) in the case of Mexico, the Secretaría de Hacienda y Crédito Público (SHCP), and.
(b) in the case of Panama, the Autoridad Nacional de Ingresos Públicos (ANIP);
or their successors.
It shall be the responsibility of each Party to keep this Annex updated. To this end, the Parties shall notify in writing any changes to the information contained in paragraph 1.
Chapter 20. FINAL PROVISIONS
Article 20.1. Annexes, Appendices and Footnotes
The annexes, appendices, and footnotes to this Agreement constitute an integral part of this Agreement.
Article 20.2. Entry Into Force
This Agreement shall be of indefinite duration and shall enter into force 30 days following the date of the last written communication in which the Parties have notified each other, through diplomatic channels, that their respective internal legal procedures for its entry into force have been completed, unless the Parties agree on a different period of time.
Article 20.3. Reservations and Interpretative Declarations
This Treaty may not be the subject of reservations or interpretative declarations at the time of ratification.
Article 20.4. Amendments
1. The Parties may agree on any amendment to this Treaty.
2. The agreed amendment shall enter into force and become an integral part of this Agreement 30 days after the date of the last written communication in which the Parties have notified each other through diplomatic channels that their respective internal legal procedures for its entry into force have been completed, unless the Parties agree on a different time limit.
Article 20.5. Accession
1. Any State may accede to this Treaty subject to such terms and conditions as may be agreed between that State and the Commission.
2. Accession shall enter into force 30 days after the date of the last written communication in which the Parties and the acceding State have notified each other through diplomatic channels that their respective internal legal procedures for entry into force have been completed, unless the Parties and the acceding State agree on a different time limit.
Article 20.6. Denunciation
1. Any Party may denounce this Agreement. Termination shall take effect 180 days after written notice of termination is given to the other Party, unless the Parties agree otherwise.
2. Notwithstanding paragraph 1, the investment provisions shall continue in force for a period of 10 years after the termination of this Agreement with respect to investments made only during its term.
Article 20.7. Termination of Partial Scope Agreement No. 14
1. Upon the entry into force of this Agreement, Partial Scope Agreement No. 14 signed between the United Mexican States and the Republic of Panama, signed pursuant to Article 25 of the Treaty of Montevideo 1980, as well as its annexes and protocols, shall be terminated.
2. Notwithstanding the provisions of the preceding paragraph, the preferential tariff treatment granted by Partial Scope Agreement No. 14 signed between the United Mexican States and the Republic of Panama, shall remain in force for 30 days following the entry into force of this Agreement for importers who request it and use the certificates of origin issued within the framework of that Agreement, provided that they were issued prior to the entry into force of this Agreement and are still in force.
Article 20.8. Termination of the Agreement between the United Mexican States and the Republic of Panama for the Reciprocal Promotion and Protection of Investment
1. Upon the entry into force of this Agreement, the Agreement between the United Mexican States and the Republic of Panama for the Reciprocal Promotion and Protection of Investments and its Annexes (Agreement), signed in Mexico City on October 11, 1995, shall be terminated.
2. Notwithstanding the provisions of paragraph 1, as of the entry into force of this Agreement, the Third Chapter "Dispute Settlement", First Section and Second Section of the Agreement, shall remain in force for a period of 10 years in the cases of:
(a) investments covered by the Agreement at the time of entry into force of this Agreement, or.
(b) disputes arising prior to the date of entry into force of this Agreement and otherwise eligible for settlement under Chapter Three "Dispute Settlement", Sections One and Two of the Agreement.
Article 20.9. Future Negotiations
Unless the Parties agree otherwise, the Commission, no later than 2 years after the entry into force of this Agreement, may decide to initiate negotiations on the following chapters:
(a) Regulatory Improvement.
(b) Maritime Services.
(c) Government Procurement.
(d) Cooperation and Trade Capacity Building.
Conclusion
IN WITNESS WHEREOF, the undersigned, duly authorized by their respective governments, have signed this Agreement in the city of Panama, on the third day of April of the month of two thousand fourteen, in two original copies in the Spanish language, both being equally authentic.
For the United Mexican States
Ildefonso Guajardo Villarreal
Secretary of the Economy
For the Republic of Panama
Ricardo A. Quijano Jiménez
Minister of Commerce and Industry
Honorary Witnesses
Enrique Peña Nieto
President
Ricardo Martinelli B.
President
Attachments
Annex I . INTERPRETATIVE NOTES
1. A Party's Schedule indicates, in accordance with Articles 9.7 (Nonconforming Measures) and 10.8 (Nonconforming Measures), a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 9.3 (Most-Favored-Nation Treatment) or 10.4 (Most-Favored-Nation Treatment);