1. Each Party shall, to the maximum extent possible, encourage and facilitate the use of arbitration and other means of alternative dispute resolution for the settlement of international commercial disputes between private parties in the free trade area.
2. To this end, each Party shall provide appropriate procedures to ensure observance of agreements to arbitrate and for the recognition and enforcement of arbitral awards in such disputes.
3. A Party shall be deemed to be in compliance with paragraph 2 if it is a party to and is in compliance with 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 comprising persons with expertise or experience in the resolution of private international commercial disputes.
This committee shall:
(a) report and provide recommendations to the Commission on general issues referred to it by the Commission respecting the availability, use, and effectiveness of arbitration and other procedures for the resolution of such disputes in the free trade area; and
(b) when the committee considers appropriate, promote technical cooperation between the Parties, in furtherance of the objectives identified in paragraph 1.
Annex 20.2. Nullification or Impairment
1. If any Party considers that any benefit it could reasonably have expected to accrue to it under any provision of:
(a) Chapters Three through Five (National Treatment and Market Access for Goods, Rules of Origin and Origin Procedures, and Customs Administration and Trade Facilitation);
(b) Chapter Seven (Technical Barriers to Trade);
(c) Chapter Nine (Government Procurement);
(d) Chapter Eleven (Cross-Border Trade in Services); or
(e) Chapter Fifteen (Intellectual Property Rights),
is being nullified or impaired as a result of the application of any measure that is not inconsistent with this Agreement, the Party may have recourse to dispute settlement under this Chapter.
2. A Party may not invoke paragraph 1(d) or (e) with respect to any measure subject to an exception under Article 21.1 (General Exceptions).
Annex 20.17. Inflation Adjustment Formula for Monetary Assessments
1. An annual monetary assessment imposed before December 31, 2005 shall not exceed 15 million dollars (U.S.).
2. Beginning January 1, 2006, the 15 million dollar (U.S.) annual cap shall be adjusted for inflation in accordance with paragraphs 3 through 5.
3. The period used for the accumulated inflation adjustment shall be calendar year 2004 through the most recent calendar year preceding the one in which the assessment is owed.
4. The relevant inflation rate shall be the U.S. inflation rate as measured by the Producer Price Index for Finished Goods published by the U.S. Bureau of Labor Statistics.
5. The inflation adjustment shall be estimated according to the following formula: $15 million x (1+ πi ) =A
πi = accumulated U.S. inflation rate from calendar year 2004 through the most recent calendar year preceding the one in which the assessment is owed.
A= cap for the assessment for the year in question.
Chapter Twenty-One. Exceptions
Article 21.1. General Exceptions
1. For purposes of Chapters Three through Seven (National Treatment and Market Access for Goods, Rules of Origin and Origin Procedures, Customs Administration and Trade Facilitation, Sanitary and Phytosanitary Measures, and Technical Barriers to Trade), Article XX of the GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XX(b) of the GATT 1994 include environmental measures necessary to protect human, animal, or plant life or health, and that Article XX(g) of the GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources.
2. For purposes of Chapters Eleven, Thirteen, and Fourteen (1) (Cross-Border Trade in Services, Telecommunications, and Electronic Commerce), Article XIV of the GATS (including its footnotes) is incorporated into and made 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 21.2. Essential Security
Nothing in this Agreement shall be construed:
(a) to require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests; or
(b) to preclude a Party from applying measures that it considers necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.
Article 21.3. Taxation
1. Except as set out 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 convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency. In the case of a tax convention between two or more Parties, the competent authorities under that convention shall have sole responsibility for determining whether any inconsistency exists between this Agreement and that convention.
3. Notwithstanding paragraph 2:
(a) Article 3.2 (National Treatment) and such other provisions of this Agreement as are necessary to give effect to that Article shall apply to taxation measures to the same extent as does Article III of the GATT 1994; and
(b) Article 3.10 (Export Taxes) shall apply to taxation measures.
4. Subject to paragraph 2:
(a) Article 11.2 (National Treatment) and Article 12.2 (National Treatment) shall apply to taxation measures on income, capital gains, or on the taxable capital of corporations that relate to the purchase or consumption of particular services, except that nothing in this subparagraph shall prevent a Party from conditioning the receipt or continued receipt of an advantage relating to the purchase or consumption of particular services on requirements to provide the service in its territory; and
(b) Articles 10.3 (National Treatment) and 10.4 (Most-Favored-Nation Treatment), Articles 11.2 (National Treatment) and 11.3 (Most-Favored-Nation Treatment) and Articles 12.2 (National Treatment) and 12.3 (Most-Favored-Nation Treatment) shall apply to all taxation measures, other than those on income, capital gains, or on the taxable capital of corporations, taxes on estates, inheritances, gifts, and generation-skipping transfers,
except that nothing in those Articles shall apply:
(c) any most-favored-nation obligation with respect to an advantage accorded by a Party pursuant to any tax convention;
(d) to a non-conforming provision of any existing taxation measure;
(e) to the continuation or prompt renewal of a non-conforming provision of any existing taxation measure;
(f) to an amendment to a non-conforming provision of any existing taxation measure to the extent that the amendment does not decrease its conformity, at the time of the amendment, with any of those Articles;
(g) to the adoption or enforcement of any taxation measure aimed at ensuring the equitable or effective imposition or collection of taxes (as permitted by Article XIV(d) of the GATS); or
(h) to a provision that conditions the receipt, or continued receipt, of an advantage relating to the contributions to, or income of, pension trusts or pension plans on a requirement that the Party maintain continuous jurisdiction over the pension trust or pension plan.
5. Subject to paragraph 2 and without prejudice to the rights and obligations of the Parties under paragraph 3, Article 10.9.2, 10.9.3, and 10.9.4 (Performance Requirements) shall apply to taxation measures.
6. Article 10.7 (Expropriation and Compensation) and Article 10.16 (Submission of a Claim to Arbitration) shall apply to a taxation measure alleged to be an expropriation or a breach of an investment agreement or investment authorization. However, no investor may invoke Article 10.7 as the basis of a claim where it has been determined pursuant to this paragraph that the measure is not an expropriation. An investor that seeks to invoke Article 10.7 with respect to a taxation measure must first refer to the competent authorities of the Parties of the claimant and the respondent set out in Annex 21.3 at the time that it gives its notice of intent under Article 10.16.2 the issue of whether that taxation measure involves an expropriation. If the competent authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an expropriation within a period of six months of such referral, the investor may submit its claim to arbitration under Article 10.16.
Article 21.4. Balance of Payments Measures on Trade In Goods
Should a Party decide to impose measures for balance of payments purposes, it shall do so only in accordance with that Partyâs rights and obligations under the GATT 1994, including the Declaration on Trade Measures Taken for Balance of Payments Purposes (1979 Declaration) and the Understanding on the Balance of Payments Provisions of the GATT 1994 (BOP Understanding). In adopting such measures, the Party shall immediately consult with the other Parties and shall not impair the relative benefits accorded to the other Parties under this Agreement. (2)
Article 21.5. Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to 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.
Article 21.6. Definitions
For purposes of this Chapter:
tax convention means a convention for the avoidance of double taxation or other international taxation agreement or arrangement; and
taxes and taxation measures do not include:
(a) a customs duty; or
(b) the measures listed in exceptions (b) and (c) of the definition of customs duty.
Annex 21.3. Competent Authorities
For purposes of this Chapter:
competent authorities means
(a) in the case of Costa Rica, the Viceministro de Hacienda;
(b) in the case of the Dominican Republic, the Subsecretario de Estado de Finanzas;
(c) in the case of El Salvador, the Viceministro de Hacienda;
(d) in the case of Guatemala, the Viceministro de Finanzas Piblicas;
(e) in the case of Honduras, the Subsecretario en el Despacho de Finanzas;
(f) in the case of Nicaragua, the Viceministro de Hacienda y Crédito Público; and
(g) in the case of the United States, the Assistant Secretary of the Treasury (Tax Policy), Department of the Treasury,
or their successors.
Chapter Twenty-Two. Final Provisions
Article 22.1. Annexes, Appendices, and Footnotes
The Annexes, Appendices, and footnotes to this Agreement constitute an integral part of this Agreement.
Article 22.2. Amendments
1. The Parties may agree on any amendment of this Agreement. The original English and Spanish texts of any amendment shall be deposited with the Depositary, which shall promptly provide a certified copy to each Party.
2. When so agreed, and approved in accordance with the applicable legal procedures of each Party, an amendment shall constitute an integral part of this Agreement to take effect on the date on which all Parties have notified the Depositary in writing that they have approved the amendment or on such other date as the Parties may agree.
Article 22.3. Amendment of the WTO Agreement
If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended, the Parties shall consult with a view to amending the relevant provision of this Agreement, as appropriate, in accordance with Article 22.2.
Article 22.4. Reservations
No Party may enter a reservation in respect of any provision of this Agreement without the written consent of the other Parties.
Article 22.5. Entry Into Force
1. (a) This Agreement shall enter into force on January 1, 2005, provided that the United States and one or more other signatories notify the Depositary in writing by that date that they have completed their applicable legal procedures.
(b) If this Agreement does not enter into force on January 1, 2005, this Agreement shall enter into force after the United States and one or more other signatories make such a notification, on such later date as they may agree.
2. Thereafter, this Agreement shall enter into force for any other signatory 90 days after the date on which that signatory notifies the Depositary in writing that it has completed its applicable legal procedures. Unless the Parties otherwise agree, a signatory may not provide a notification under this paragraph later than two years after the date of entry into force of this Agreement.
3. The Depositary shall promptly inform the Parties and non-Party signatories of any notification under paragraph 1 or 2.
Article 22.6. Accession
1. Any country or group of countries may accede to this Agreement subject to such terms and conditions as may be agreed between such country or countries and the Commission and following approval in accordance with the applicable legal procedures of each Party and acceding country.
2. The instrument of accession shall be deposited with the Depositary, which shall promptly inform each Party of the accession.
Article 22.7. Withdrawal
1. Any Party may withdraw from this Agreement by providing written notice of withdrawal to the Depositary. The Depositary shall promptly inform the Parties of such notification.
2. A withdrawal shall take effect six months after a Party provides written notice under paragraph 1, unless the Parties agree on a different period. If a Party withdraws, the Agreement shall remain in force for the remaining Parties.
Article 22.8. Depositary
The original English and Spanish texts of this Agreement shall be deposited with the General Secretariat of the Organization of American States, which shall serve as depositary. The Depositary shall promptly provide a certified copy of the original texts to each signatory.
Article 22.9. Authentic Texts
The English and Spanish texts of this Agreement are equally authentic.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
DONE, at Washington in English and Spanish, on this 5" day of August, 2004.
FOR THE GOVERNMENT OF THE REPUBLIC OF COSTA RICA:
FOR THE GOVERNMENT OF THE DOMINICAN REPUBLIC:
FOR THE GOVERNMENT OF THE REPUBLIC OF EL SALVADOR:
FOR THE GOVERNMENT OF THE REPUBLIC OF GUATEMALA:
FOR THE GOVERNMENT OF THE REPUBLIC OF HONDURAS:
FOR THE GOVERNMENT OF THE REPUBLIC OF NICARAGUA:
FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
Attachments
Annex I. Explanatory Notes
1. The Schedule of a Party to this Annex sets out, pursuant to Articles 10.13 (Non- Conforming Measures) and 11.6 (Non-Conforming Measures), a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Articles 10.3 (National Treatment) or 11.2 (National Treatment);
(b) Articles 10.4 (Most-Favored-Nation Treatment) or 11.3 (Most-Favored-Nation Treatment);
(c) Article 11.5 (Local Presence);
(d) Article 10.9 (Performance Requirements);
(e) Article 10.10 (Senior Management and Boards of Directors); or
(f) Article 11.4 (Market Access).
2. Each Schedule entry sets out the following elements:
(a) Sector refers to the sector for which the entry is made;
(b) Obligations Concerned specifies the obligation(s) referred to in paragraph 1 that, pursuant to Articles 10.13 (Non-Conforming Measures) and 11.6 (Non- Conforming Measures), do not apply to the listed measure(s);
(c) Level of Government indicates the level of government maintaining the listed measure(s);
(d) Measures identifies the laws, regulations, or other measures for which the entry is made. A measure cited in the Measures element:
(i) means the measure as amended, continued, or renewed as of the date of entry into force of this Agreement, and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and
(e) Description sets out commitments, if any, for liberalization on the date of entry into force of the Agreement, and the remaining non-conforming aspects of the existing measures for which the entry is made.
3. In the interpretation of a Schedule entry, all elements of the entry shall be considered. An entry shall be interpreted in light of the relevant provisions of the Chapters against which the entry is made. To the extent that:
(a) the Measures element is qualified by a liberalization commitment from the Description element, the Measures element as so qualified shall prevail over all other elements; and
(b) the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements considered in their totality is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case the other elements shall prevail to the extent of that discrepancy.
4. In accordance with Article 10.13 (Non-Conforming Measures) and 11.6 (Non- Conforming Measures), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the law, regulation, or other measure identified in the Measures element of that entry.
5. Where a Party maintains a measure that requires that a service provider be a citizen, permanent resident, or resident of its territory as a condition to the provision of a service in its territory, a Schedule entry for that measure taken with respect to Article 11.2 (National Treatment), 11.3 (Most-Favored-Nation Treatment), or 11.5 (Local Presence) shall operate as a Schedule entry with respect to Article 10.3 (National Treatment), 10.4 (Most-Favored-Nation Treatment), or 10.9 (Performance Requirements) to the extent of that measure.
6. For greater certainty, Article 11.4 (Market Access) refers to non-discriminatory measures.
Annex I. Schedule of Costa Rica
Sector: Irrigation Services
Obligations Concerned: Market Access (Article 11.4)
Level of Government: Central
Measures: Law No. 7593 of 9 August 1996 - Ley de la Autoridad Reguladora de los Servicios Públicos - Arts. 5, 9, and 13
Description: Cross-Border Services
Costa Rica reserves the right to limit the number of concessions to supply irrigation services based on demand for those services.
Priority will be given to concessionaires already supplying the service.
Sector: Solid Waste Treatment Services
Obligations Concerned: Market Access (Article 11.4)
Level of Government: Central
Measures: Law No. 7593 of 9 August 1996 - Ley de la Autoridad Reguladora de los Servicios Públicos - Arts. 5, 9, and 13
Description: Cross-Border Services
Costa Rica reserves the right to limit the number of concessions to supply solid waste treatment services based on demand for those services. Priority will be given to concessionaires already supplying the service.
Sector: Maritime and Specialty Air Services
Obligations Concerned: Market Access (Article 11.4)
Level of Government: Central