6. If a Party wishes the panel to make findings as to the degree of adverse trade effects on a Party of any measure determined:
(a) to be inconsistent with the obligations of the Agreement; or
(b) to have caused nullification or impairment in the sense of subparagraph 1(c) of Article 2102, the terms of reference shall so indicate.
7. On the request of a Party, or on its own initiative, the panel may seek information and technical advice from any person or body it deems appropriate in accordance with the Model Rules of Procedure.
8. The panel may rule on its own jurisdiction.
9. The panel may delegate to the chair authority to make administrative and procedural decisions.
10. The panel may, in consultation with the Parties, modify any time-period applicable in the panel proceedings and make other procedural or administrative adjustments as may be required for the fairness or efficiency of the proceeding.
11. Findings, determinations and recommendations of the panel in the sense of Article 2110 shall be made by a majority of its members.
12. Panelists may furnish separate opinions on matters not unanimously agreed. No panel may disclose which panelists are associated with majority or minority opinions.
13. The Parties shall bear the expenses of a panel, including the remuneration of the panelists, in accordance with the Model Rules of Procedure.
Article 2110. Panel Reports
1. Unless the Parties otherwise agree, the panel shall issue reports in accordance with the provisions of this Chapter.
2. The panel shall base its reports on the provisions of this Agreement applied and interpreted in accordance with the rules of interpretation of public international law, the submissions and arguments of the Parties and on any information and technical advice put before it pursuant to the provisions of this Chapter.
3. The panel shall present to the Parties an initial report within 90 days after the last panelist is selected. The report shall contain:
(a) findings of fact;
(b) determinations as to whether or not a Party has conformed with its obligations under this Agreement and any other finding or determination requested in the terms of reference; and
(c) recommendations for resolution of the dispute, if requested by a Party.
4. Notwithstanding the provisions of Article 2109, the initial report of the panel shall be confidential.
5. A Party may submit written comments to the panel on its initial report, subject to time limits that may be set by the panel. After considering any such comments, the panel, on its own initiative or on the request of a Party, may:
(a) request the views of a Party;
(b) reconsider its report; or
(c) make any further examination that it considers appropriate.
6. The panel shall present to the Parties a final report within 30 days of presentation of the initial report.
7. Unless the Parties decide otherwise, the final report of the panel may be published by either Party 15 days after it is transmitted to the Parties, subject to subparagraph 3(g) of Article 2109.
Article 2111. Request for Clarification of the Report
1. Within 10 days after the presentation of the final report, a Party may submit a written request to the panel for clarification of any determinations or recommendations in the report that the Party considers ambiguous. The panel shall respond to the request within 10 days after the presentation of such request.
2. The submission of a request pursuant to paragraph 1 shall affect the time periods referred to in paragraph 3 of Article 2113 and paragraph 1 of Article 2114, unless the panel decides otherwise.
Article 2112. Suspension and Termination of Proceedings
1. The Parties may agree to suspend the work of the panel at any time for a period not exceeding 12 months following the date of such agreement. If the work of the panel has been suspended for more than 12 months, the authority of the panel shall lapse, unless the Parties agree otherwise. If the authority of the panel lapses and the Parties have not reached an agreement on the settlement of the dispute, nothing in this provision shall prevent a Party from requesting a new proceeding regarding the same matter.
2. The Parties may agree to terminate the proceeding before a panel at any time by jointly notifying the chair of the panel.
Article 2113. Implementation of the Final Report
1. On receipt of the final report of a panel, the Parties shall agree on the resolution of the dispute, which shall be in conformity with the determinations and the recommendations, if any, of the panel, unless otherwise agreed by the Parties.
2. Wherever possible, the resolution shall be removal of any measure not conforming to this Agreement or removal of the nullification or impairment in the sense of subparagraph 1(c) of Article 2102.
3. If the Parties are unable to agree on a resolution within 30 days of presentation of the final report, or such other period as the Parties may agree, the Party complained against shall, if so requested by the complaining Party, enter into negotiations with a view to agreeing to compensation.
Article 2114. Non-implementation – Suspension of Benefits
1. If no agreement on compensation has been reached pursuant to paragraph 3 of Article 2113 within 20 days after the date of the complaining Party's request, or if 30 days have passed following the presentation of the final report where compensation is not requested pursuant to paragraph 3 of Article 2113, or the Parties have agreed on the resolution of the dispute or on a compensation, and the complaining Party considers that the other Party has failed to observe the terms of the agreement, the complaining Party may suspend the application to the other Party of benefits of equivalent effect, following notice to the other Party, until such time as they have reached agreement on a resolution of the dispute. The notice shall specify the level of benefits that the complaining Party proposes to suspend.
2. In considering which benefits to suspend pursuant to paragraph 1:
(a) the complaining Party should first seek to suspend benefits or other obligations in the same sector or sectors as that affected by the measure or other matter that the panel has found to be inconsistent with the obligations of this Agreement or to have caused nullification or impairment in the sense of subparagraph 1(c) of Article 2102; and
(b) a complaining Party that considers it is not practicable or effective to suspend benefits or other obligations in the same sector or sectors may suspend benefits in other sectors.
3. The suspension of benefits shall be temporary and be applied by the complaining Party only until the measure found to be inconsistent with the obligations of this Agreement or otherwise nullifying or impairing benefits in the sense of subparagraph 1(c) of Article 2102 has been brought into conformity with this Agreement, including as a result of the panel process described in Article 2115, or until such time as the Parties have otherwise reached agreement on a resolution of the dispute.
Article 2115. Review of Compliance and Suspension of Benefits
1. A Party may, by written notice to the other Party, request that a panel established pursuant to Article 2106 be reconvened to make a determination with respect to:
(a) whether the level of benefits suspended by a Party pursuant to paragraph 1 of Article 2114 is manifestly excessive; or
(b) any disagreement as to the existence or consistency with this Agreement of measures taken to comply with the determinations or recommendations of the previously established panel. (1)
2. In the written notice of the request, the Party shall identify the specific measures or matters at issue and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.
3. The panel shall be reconvened upon receipt by the other Party of the written notice of the request. In the event that any original panelist is unable to serve on the panel the provisions of Article 2108 shall apply mutatis mutandis.
4. The provisions of Articles 2109 and 2110 apply mutatis mutandis to procedures adopted and reports issued by a panel reconvened under this Article, with the exception that, subject to paragraph 10 of Article 2109, the panel shall present an initial report within 60 days of being reconvened where the request concerns paragraph 1(a) only, and otherwise within 90 days.
5. A panel reconvened under this Article may include in its reports a recommendation, where appropriate, that any suspension of benefits be terminated or that the amount of benefits suspended be modified.
Article 2116. Referrals of Matters from Judicial or Administrative Proceedings
1. If an issue of interpretation or application of this Agreement arises in any domestic judicial or administrative proceeding of a Party that either Party considers would merit its intervention, or if a court or administrative body solicits the views of a Party, that Party shall notify the other Party. The Commission shall endeavour to agree on an appropriate response as expeditiously as possible.
2. The Party in whose territory the court or administrative body is located shall submit any agreed interpretation of the Commission to the court or administrative body in accordance with the rules of that forum. 3. If the Commission is unable to agree, each Party may submit its own views to the court or administrative body in accordance with the rules of that forum.
Article 2117. Private Rights
No Party may provide for 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 2118. Alternative Dispute Resolution
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 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 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958.
Chapter Twenty-Two. Exceptions
Article 2201. General Exceptions
1. For the purposes of Chapters Two to Seven and Fifteen (National Treatment and Market Access for Goods, Rules of Origin, Origin Procedures and Trade Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Emergency Action and Trade Remedies and Electronic Commerce), except to the extent that a provision of these chapters applies to services or investment, Article XX of GATT 1994 is incorporated into and made 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. The Parties further understand that Article XX (g) of GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources.
2. For the purposes of Chapters Nine, Ten, Twelve and Fifteen (Cross-Border Trade in Services, Telecommunications, Temporary Entry for Business Persons and Electronic Commerce), and of Chapters Two to Seven (National Treatment and Market Access for Goods, Rules of Origin, Origin Procedures and Trade Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, and Emergency Action and Trade Remedies) to the extent that a provision of these chapters applies to services, Article XIV (a), (b) and (c) of GATS is incorporated into and made part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XIV (b) of GATS include environmental measures necessary to protect human, animal or plant life or health.
3. For the purposes of Chapter Eight (Investment), subject to the requirement that such measures are not applied in a manner that constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures necessary:
(a) to protect human, animal or plant life or health, which the Parties understand to include environmental measures necessary to protect human, animal or plant life or health;
(b) to ensure compliance with laws and regulations that are not inconsistent with this Agreement; or
(c) for the conservation of living or non-living exhaustible natural resources.
Article 2202. National Security
Nothing in this Agreement shall be construed:
(a) to require either Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests;
(b) to prevent either Party from taking any actions that it considers necessary for the protection of its essential security interests:
(i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment,
(ii) taken in time of war or other emergency in international relations, or
(iii) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or
(c) to prevent either Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 2203. Taxation
1. Except where express reference is made thereto, 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, the convention shall prevail to the extent of the inconsistency.
3. Where similar provisions with respect to a taxation measure exist under this Agreement and under a tax convention, the procedural provisions of the tax convention alone shall be used, by the competent authorities identified in the tax convention, to resolve any issue related to such provisions arising under this Agreement.
4. Notwithstanding paragraphs 2 and 3:
(a) Article 202 (National Treatment and Market Access for Goods -National Treatment) and such other provisions of this Agreement as are necessary to give effect to that Article applies to taxation measures to the same extent as does Article III of the GATT 1994; and
(b) Article 210 (National Treatment and Market Access for Goods - Export Taxes) applies to taxation measures.
5. Subject to paragraphs 2, 3, and 6:
(a) Articles 903 (Cross-Border Trade in Services - National Treatment) and Article 1102 (Financial Services - National Treatment) 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; and
(b) Articles 803 and 804 (Investment - National Treatment and Most-Favoured Nation Treatment), 903 and 904 (Cross-Border Trade in Services - National Treatment and Most-Favoured Nation Treatment) and 1102 and 1103 (Financial Services - National Treatment and Most-Favoured Nation Treatment) apply to all taxation measures, other than those on income, capital gains or on the taxable capital of corporations.
6. Paragraph 5 shall not:
(a) impose any most-favoured-nation obligation with respect to an advantage accorded by a Party pursuant to a tax convention;
(b) impose on a Party any national treatment obligation with respect to the conditioning of a 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;
(c) impose on a Party any national treatment obligation with respect to the conditioning of a receipt, or continued receipt, of an advantage relating to the purchase or consumption of a particular service on a requirement that the service be provided in its territory;
(d) apply to a non-conforming provision of any existing taxation measure;
(e) apply to the continuation or prompt renewal of a non-conforming provision of any existing taxation measure;
(f) apply 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 the Articles referred to in paragraph 5; or
(g) apply to any new taxation measure that is aimed at ensuring the equitable and effective imposition or collection of taxes (including, for greater certainty, any measure that is taken by a Party in order to ensure compliance with the Party's taxation system or to prevent the avoidance or evasion of taxes) and that does not arbitrarily discriminate between persons, goods or services of the Parties.
7. Subject to paragraphs 2 and 3, and without prejudice to the rights and obligations of the Parties under paragraph 4, Article 807 (Investment - Performance Requirements) shall apply to taxation measures.
8. Notwithstanding paragraphs 2 and 3, Article 812 (Investment - Expropriation) shall apply to taxation measures except that no investor may invoke that Article as the basis for a claim under Article 819 (Investment - Claim by an Investor of a Party on Its Own Behalf) or 820 (Investment - Claim by an Investor of a Party on Behalf of an Enterprise), where it has been determined pursuant to this paragraph that a taxation measure is not an expropriation. The investor shall refer the issue of whether a measure is not an expropriation for a determination to the designated authorities of the Parties at the time that it gives notice under subparagraph 1(c) of Article 823 (Investment - Conditions Precedent to Submission of a Claim to Arbitration). If, within a period of six months from the date of such referral, the designated authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an expropriation, the investor may submit its claim to arbitration under Article 824 (Investment - Submission of a Claim to Arbitration).
9. In order to give effect to paragraphs 1 to 3:
(a) Where in a dispute between Parties, an issue arises as to whether a measure of a Party is a taxation measure, either Party may refer the issue to the designated authorities of the Parties. The designated authorities shall decide the issue of whether the measure is a taxation measure, and their decision shall bind any Tribunal constituted pursuant to Section B of Chapter Eight (Investment) for the dispute. Where the designated authorities have not decided the issue within six months of the referral, the Tribunal shall decide the issue in place of the designated authorities.
(b) Where in connection with a claim by an investor of a Party, an issue arises as to whether a measure is a taxation measure, the Party that has received notice of intention to submit a claim or against which an investor of a Party has submitted a claim may refer the issue to the designated authorities of the Parties. The designated authorities shall decide the issue of whether the measure is a taxation measure, and their decision shall bind any Tribunal formed pursuant to Section B of Chapter Eight (Investment) with jurisdiction over the claim. A Tribunal seized of a claim in which the issue arises may not proceed pending receipt of the decision of the designated authorities. Where the designated authorities have not decided the issue within six months of the referral, the Tribunal shall decide the issue in place of the designated authorities.
(c) Where in a dispute between Parties, an issue arises as to whether a tax convention prevails over this Agreement, a Party to the dispute may refer the issue to the designated authorities of the Parties. The designated authorities shall consider the issue and decide whether the tax convention prevails. If within six months of the referral of the issue to the designated authorities, they decide with respect to the measure that gives rise to the issue that the tax convention prevails, no procedures concerning that measure may be initiated under Article 2106 (Dispute Settlement - Establishment of a Panel). No procedures concerning the measure may be initiated during the period that the issue is under consideration by the designated authorities.
(d) Where prior to the submission of a claim by an investor of a Party, an issue arises as to whether a tax convention prevails over this Agreement, the Party that has received notice of intention to submit a claim may refer the issue to the designated authorities of the Parties. The designated authorities shall consider the issue and decide whether the tax convention prevails. If within six months of the referral of the issue to the designated authorities, they decide with respect to the measure that gives rise to the issue that the tax convention prevails, no claim concerning that measure may be submitted under Article 824 (Investment - Submission of a Claim to Arbitration). No claim concerning the measure may be submitted during the period that the issue is under consideration by the designated authorities. An investor of a Party that fails to identify a taxation measure in its notice of intention to submit a claim may not submit a claim concerning that measure under Article 824 (Investment - Submission of a Claim to Arbitration).
10. Where an investor invokes Article 812 (Investment - Expropriation) as the basis for a claim under Article 819 (Investment - Claim by an Investor of a Party on Its Own Behalf) or 820 (Investment - Claim by an Investor of a Party on Behalf of an Enterprise), any determination under paragraph 8 of whether a measure is an expropriation shall be made concurrently with any decision by the designated authorities under subparagraph 9(b) of the issue whether the measure is a taxation measure.
11. The designated authorities seized of an issue under paragraphs 8 or 9 may agree to modify the time period allowed for their consideration of the issue.
12. Nothing in this Agreement shall be construed to require a Party to furnish or allow access to information the disclosure of which would be contrary to the Party's law protecting information concerning the taxation affairs of a taxpayer.
Article 2204. Disclosure of Information
1. Nothing in this Agreement shall be construed to require a Party to furnish or allow access to information the disclosure of which would impede law enforcement or would be contrary to the Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet level, personal privacy or the financial affairs and accounts of individual customers of financial institutions.
2. Nothing in this Agreement shall be construed to require, during the course of any dispute settlement procedure under this Agreement, a Party to furnish or allow access to information protected under its competition laws, or a competition authority of a Party to furnish or allow access to any other information that is privileged or otherwise protected from disclosure.
Article 2205. Cultural Industries
Nothing in this Agreement shall be construed to apply to measures adopted or maintained by either Party with respect to cultural industries except as specifically provided in Article 203 (National Treatment and Market Access for Goods - Tariff Elimination).
Article 2206. World Trade Organization Waivers
To the extent that there are overlapping rights and obligations in this Agreement and the WTO Agreement, the Parties agree that any measures adopted by a Party in conformity with a waiver decision adopted by the WTO pursuant to Article IX:3 of the WTO Agreement shall be deemed to be also in conformity with the present Agreement, except as otherwise agreed by the Parties. Such conforming measures of either Party may not give rise to legal actions by an investor of one Party against the other under Chapter Eight (Investment).
Article 2207. Definitions
For purposes of this Chapter:
competition authority means:
(a) with respect to Canada, the Commissioner of Competition or any successor; and
(b) with respect to Peru, the Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI) and the Organismo Supervisor de Inversión Privada en Telecomunicaciones (OSIPTEL) for the telecommunications sector, or any successor agency;
cultural industries means persons engaged in any of the following activities:
(a) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
(b) the production, distribution, sale or exhibition of film or video recordings;
(c) the production, distribution, sale or exhibition of audio or video music recordings;
(d) the publication, distribution or sale of music in print or machine readable form; or
(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television and cable broadcasting undertakings and all satellite programming and broadcast network services;
designated authority means:
(a) with respect to Canada, the Assistant Deputy Minister for Tax Policy, Department of Finance, or any successor;
(b) with respect to Peru, the Superintendencia Nacional de Administracion Tributaria (SUNAT), or any successor;
information protected under its competition laws means:
(a) with respect to Canada, information within the scope of Section 29 of the Competition Act, R.S. 1985, c.34, or any successor provision, and
(b) with respect to Peru, information protected under Article 6 of Decreto Legislativo 807 or any successor provision;
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" as defined in Article 221 (National Treatment and Market Access for Goods – Definitions); or
(b) the measures listed in exceptions (b) and (c) of that definition.
Chapter Twenty-Three. Final Provisions
Article 2301. Annexes, Appendices and Footnotes
The Annexes, Appendices and footnotes to this Agreement constitute integral parts of this Agreement.
Article 2302. Amendments
1. The Parties shall agree in writing on any amendment of this Agreement.
2. When so agreed, such an amendment shall enter into force and constitute an integral part of this Agreement following an exchange of written notifications by the Parties certifying the completion of their respective necessary legal procedures and on such date or dates to be agreed upon between the Parties.
Article 2303. Reservations
This Agreement shall not be subject to unilateral reservations.
Article 2304. Entry Into Force
Each Party shall notify the other Party in writing of the completion of its domestic procedures required for the entry into force of this Agreement. This Agreement shall enter into force on January 1, 2009, or on the date of the second of these notifications, whichever is later.
Article 2305. Termination
This Agreement shall remain in force unless terminated by either Party on six months' written notice to the other Party.
Article 2306. Accession
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 Parties, and following approval in accordance with the legal requirements of each Party and acceding country.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
DONE in duplicate at , this day of 2008 in the English, Spanish and French languages, each version being equally authentic.
FOR CANADA
FOR THE REPUBLIC OF PERU