1. For purposes of this Chapter:
environmental law means any statute or regulation of a Party, or provision thereof, the primary purpose of which is the protection of the environment, or the prevention of a danger to human, animal, or plant life or health, through:
(a) the prevention, abatement, or control of the release, discharge, or emission of pollutants or environmental contaminants;
(b) the control of environmentally hazardous or toxic chemicals, substances, materials, and wastes, and the dissemination of information related thereto; or
(c) the protection or conservation of wild flora and fauna, including endangered species, their habitat, and specially protected natural areas, in areas with respect to which a Party exercises sovereignty, sovereign rights, or jurisdiction, but does not include any statute or regulation, or provision thereof, directly related to worker safety or health.
For greater certainty, environmental law does not include any statute or regulation, or provision thereof, the primary purpose of which is managing the commercial harvest or exploitation, or subsistence or aboriginal harvesting, of natural resources.
For purposes of the definition of “environmental law,” the primary purpose of a particular statutory or regulatory provision shall be determined by reference to its primary purpose, rather than to the primary purpose of the statute or regulation of which it is part;
laws, regulations, and all other measures to fulfill its obligations under a covered agreement means a Party’s laws, regulations, and other measures at the central level of government; and
statute or regulation means:
(a) for Panama, a law promulgated by its legislature or a regulation promulgated pursuant to such a law that is enforceable by the executive branch or regulations issued by the Panama Canal Authority.
(b) for the United States, an act of Congress or regulation promulgated pursuant to an act of Congress that is enforceable by action of the federal government.
2. For purposes of Article 17.7.5, judicial or administrative proceeding means:
(a) a domestic judicial, quasi-judicial, or administrative action pursued by the Party in a timely fashion and in accordance with its law. Such actions comprise: mediation; arbitration; the process of issuing a license, permit, or authorization; seeking an assurance of voluntary compliance or a compliance agreement; seeking sanctions or remedies in an administrative or judicial forum; and the process of issuing an administrative order; and
(b) an international dispute resolution proceeding to which the Party is a party.
Chapter Eighteen. Transparency
Section A. Transparency
Article 18.1. Contact Points
1. Each Party shall designate a contact point to facilitate communications between the Parties on any matter covered by this Agreement.
2. On the request of the other Party, the contact point shall identify the office or official responsible for the matter and assist, as necessary, in facilitating communication with the requesting Party.
Article 18.2. Publication
1. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application respecting any matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested persons and the other Party to become acquainted with them.
2. To the extent possible, each Party shall:
(a) publish in advance any such measure that it proposes to adopt; and
(b) provide interested persons and the other Party a reasonable opportunity to comment on such proposed measures.
Article 18.3. Notification and Provision of Information
1. To the maximum extent possible, each Party shall notify the other Party of any proposed or actual measure that the Party considers might materially affect the operation of this Agreement or otherwise substantially affect the other Party’s interests under this Agreement.
2. On request of the other Party, a Party shall promptly provide information and respond to questions pertaining to any actual or proposed measure, whether or not the other Party has been previously notified of that measure.
3. Any notification or information provided under this Article shall be without prejudice as to whether the measure is consistent with this Agreement.
Article 18.4. Administrative Proceedings
With a view to administering in a consistent, impartial, and reasonable manner all measures of general application affecting matters covered by this Agreement, each Party shall ensure that in its administrative proceedings applying measures referred to in Article 18.2 to particular persons, goods, or services of the other Party in specific cases that:
(a) wherever possible, persons of the other Party that are directly affected by a proceeding are provided reasonable notice, in accordance with domestic procedures, when a proceeding is initiated, including a description of the nature of the proceeding, a statement of the legal authority under which the proceeding is initiated, and a general description of any issues in controversy;
(b) such persons are afforded a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, when time, the nature of the proceeding, and the public interest permit; and
(c) its procedures are in accordance with domestic law.
Article 18.5. Review and Appeal
1. Each Party shall establish or maintain judicial, quasi-judicial, or administrative tribunals or procedures for the purpose of the prompt review and, where warranted, correction of final administrative actions regarding matters covered by this Agreement. Such tribunals shall be impartial and independent of the office or authority entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter.
2. Each Party shall ensure that, in any such tribunals or procedures, the parties to the proceeding are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and submissions of record or, where required by domestic law, the record compiled by the administrative authority.
3. Each Party shall ensure, subject to appeal or further review as provided in its domestic law, that such decisions shall be implemented by, and shall govern the practice of, the office or authority with respect to the administrative action at issue.
Article 18.6. Definitions
For purposes of this Section:
administrative ruling of general application means an administrative ruling or interpretation that applies to all persons and fact situations that fall generally within its ambit and that establishes a norm of conduct but does not include:
(a) a determination or ruling made in an administrative or quasi-judicial proceeding that applies to a particular person, good, or service of the other Party in a specific case; or
(b) a ruling that adjudicates with respect to a particular act or practice.
Section B. Anti-Corruption
Article 18.7. Statement of Principle
The Parties affirm their resolve to eliminate bribery and corruption in international trade and investment.
Article 18.8. Anti-Corruption Measures
1. Each Party shall adopt or maintain the necessary legislative or other measures to establish that it is a criminal offense under its law, in matters affecting international trade or investment, for:
(a) a public official of that Party or a person who performs public functions for that Party intentionally to solicit or accept, directly or indirectly, any article of monetary value or other benefit, such as a favor, promise, or advantage, for himself or for another person, in exchange for any act or omission in the performance of his public functions;
(b) any person subject to the jurisdiction of that Party intentionally to offer or grant, directly or indirectly, to a public official of that Party or a person who performs public functions for that Party any article of monetary value or other benefit, such as a favor, promise, or advantage, for himself or for another person, in exchange for any act or omission in the performance of his public functions;
(c) any person subject to the jurisdiction of that Party intentionally to offer, promise, or give any undue pecuniary or other advantage, directly or indirectly, to a foreign official, for that official or for another person, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business; and
(d) any person subject to the jurisdiction of that Party to aid or abet, or to conspire in, the commission of any of the offenses described in subparagraphs (a) through (c).
2. Each Party shall adopt or maintain appropriate penalties and procedures to enforce the criminal measures that it adopts or maintains in conformity with paragraph 1.
3. In the event that, under the legal system of a Party, criminal responsibility is not applicable to enterprises, that Party shall ensure that enterprises shall be subject to effective, proportionate, and dissuasive non-criminal sanctions, including monetary sanctions, for any of the offenses described in paragraph 1.
4. Each Party shall endeavor to adopt or maintain appropriate measures to protect persons who, in good faith, report acts of bribery or corruption described in paragraph 1.
Article 18.9. Cooperation In International Fora
The Parties recognize the importance of regional and multilateral initiatives to eliminate bribery and corruption in international trade and investment. The Parties shall work jointly to encourage and support appropriate initiatives in relevant international fora.
Article 18.10 . Definitions
For purposes of this Section:
act or refrain from acting in relation to the performance of official duties includes any use of the official’s position, whether or not within the official’s authorized competence;
foreign official means any person holding a legislative, administrative, or judicial office of a foreign country, at any level of government, whether appointed or elected; any person exercising a public function for a foreign country at any level of government, including for a public agency or public enterprise; and any official or agent of a public international organization;
public function means any temporary or permanent, paid or honorary activity, performed by a natural person in the name of a Party or in the service of a Party, such as procurement, at the central level of government; and
public official means any official or employee of a Party at the central level of government, whether appointed or elected.
Chapter Nineteen. Administration of the Agreement and Trade Capacity Building
Section A. Administration of the Agreement
Article 19.1. The Free Trade Commission
1. The Parties hereby establish the Free Trade Commission, comprising cabinet-level representatives of the Parties, as set out in Annex 19.1, or their designees.
2. The Commission shall:
(a) supervise the implementation of this Agreement;
(b) oversee the further elaboration of this Agreement;
(c) seek to resolve disputes that may arise regarding the interpretation or application of this Agreement;
(d) supervise the work of all councils, committees, and working groups established under this Agreement; and
(e) consider any other matter that may affect the operation of this Agreement.
3. The Commission may:
(a) establish and delegate responsibilities to committees and working groups;
(b) modify in fulfillment of the Agreement’s objectives:
(i) the Schedules to Annex 3.3 (Tariff Elimination), by accelerating tariff elimination;
(ii) the rules of origin established in Annex 4.1 (Specific Rules of Origin);
(iii) the Common Guidelines referenced in Article 4.21 (Common Guidelines); and
(iv) Annex 9.1 (Government Procurement);
(c) issue interpretations of the provisions of this Agreement;
(d) seek the advice of non-governmental persons or groups; and
(e) take such other action in the exercise of its functions as the Parties may agree.
4. Subject to the completion of its applicable legal procedures, each Party shall give effect to any modification referred to in subparagraph 3(b) within such period as the Parties may agree.
5. The Commission shall establish its rules and procedures. All decisions of the Commission shall be taken by mutual agreement.
6. The Commission shall convene at least once a year in regular session, unless the Commission otherwise decides. Regular sessions of the Commission shall be chaired successively by each Party.
Article 19.2. Free Trade Agreement Coordinators
1. Each Party shall appoint a free trade agreement coordinator, as set out in Annex 19.2.
2. The coordinators shall work jointly to develop agendas and make other preparations for
Commission meetings and shall follow-up on Commission decisions, as appropriate.
Article 19.3. Administration of Dispute Settlement Proceedings
1. Each Party shall:
(a) designate an office that shall provide administrative assistance to the panels established under Chapter Twenty (Dispute Settlement) and perform such other functions as the Commission may direct; and
(b) notify the Commission of the location of its designated office.
2. Each Party shall be responsible for:
(a) the operation and costs of its designated office; and
(b) the remuneration and payment of expenses of panelists and experts, as set out in Annex 19.3.
Section B. Trade Capacity Building
Article 19.4. Committee on Trade Capacity Building
1. Recognizing that trade capacity building assistance is a catalyst for the reforms and investments necessary to foster trade-driven economic growth, poverty reduction, and adjustment to liberalized trade, the Parties hereby establish a Committee on Trade Capacity Building, comprising representatives of each Party.
2. In furtherance of the Parties’ ongoing trade capacity building efforts and in order to assist Panama to implement this Agreement and adjust to liberalized trade, Panama should periodically update and provide to the Committee its national trade capacity building strategy.
3. The Committee shall:
(a) seek the prioritization of trade capacity building projects at the national or regional level, or both;
(b) invite appropriate international donor institutions, private sector entities, and non- governmental organizations to assist in the development and implementation of trade capacity building projects in accordance with the priorities set out in Panama’s national trade capacity building strategy;
(c) work with other committees or working groups established under this Agreement, including through joint meetings, in support of the development and implementation of trade capacity building projects in accordance with the priorities set out in Panama’s national trade capacity building strategy;
(d) monitor and assess progress in implementing trade capacity building projects; and
(e) provide a report annually to the Commission describing the Committee’s activities, unless the Committee otherwise decides.
4. During the transition period, the Committee shall meet at least twice a year, unless the
Committee otherwise decides.
5. The Committee may establish terms of reference for the conduct of its work.
6. The Committee may establish ad hoc working groups, which may comprise government or non-government representatives, or both.
7. All decisions of the Committee shall be taken by mutual agreement.
8. The Parties hereby establish a working group on customs administration and trade facilitation, which shall work under and report to the Committee. The initial capacity building priorities of the working group should be related to implementation of Chapter Five (Customs Administration and Trade Facilitation) and Section G of Chapter Three (National Treatment and Market Access for Goods) and any other priority that the Committee establishes.
Section C. Trade Security
Article 19.5. Trade Security
1. The Parties recognize that a firm commitment to a secure international trading environment provides a foundation for robust international trade.
2. In furtherance of the Parties’ ongoing cooperation, the Commission shall periodically review progress on trade security matters.
Chapter Twenty . Dispute Settlement
Section A. Dispute Settlement
Article 20.1. Cooperation
The Parties shall at all times endeavor to agree on the interpretation and application of this Agreement, and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation.
Article 20.2. Scope of Application
Except as otherwise provided in this Agreement, the dispute settlement provisions of this Chapter shall apply:
(a) with respect to the avoidance or settlement of all disputes between the Parties regarding the interpretation or application of this Agreement;
(b) wherever a Party considers that an actual or proposed measure of the other Party is or would be inconsistent with the obligations of this Agreement or that the other Party has otherwise failed to carry out its obligations under this Agreement; and
(c) wherever a Party considers that an actual or proposed measure of the other Party causes or would cause nullification or impairment in the sense of Annex 20.2.
Article 20.3. Choice of Forum
1. Where a dispute regarding any matter arises under this Agreement and under another free trade agreement to which the Parties are party or the WTO Agreement, the complaining Party may select the forum in which to settle the dispute.
2. Once the complaining Party has requested a panel under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of the others.
Article 20.4. Consultations
1. Either Party may request in writing consultations with the other Party with respect to any actual or proposed measure or any other matter that it considers might affect the operation of this Agreement.
2. The requesting Party shall deliver the request to the other Party, and shall set out the reasons for the request, including identification of the actual or proposed measure or other matter at issue and an indication of the legal basis for the complaint.
3. Consultations on matters regarding perishable goods (1) shall commence within 15 days of the date of delivery of the request.
4. The Parties shall make every attempt to arrive at a mutually satisfactory resolution of any matter through consultations under this Article or other consultative provisions of this Agreement. To this end, the Parties shall:
(a) provide sufficient information to enable a full examination of how the actual or proposed measure or other matter might affect the operation and application of this Agreement; and
(b) treat any confidential information exchanged in the course of consultations on the same basis as the Party providing the information.
5. In consultations under this Article, a Party may request the other Party to make available personnel of its government agencies or other regulatory bodies who have expertise in the matter subject to consultations. (2)
Article 20.5. Commission – Good Offices, Conciliation, and Mediation
1. If the Parties fail to resolve a matter pursuant to Article 20.4 within:
(a) 60 days of delivery of a request for consultations;
(b) 15 days of delivery of a request for consultations in matters regarding perishable goods; or
(c) such other period as they may agree,
either Party may request in writing a meeting of the Commission.
2. A Party may also request in writing a meeting of the Commission where consultations have been held pursuant to Article 7.8 (Committee on Technical Barriers to Trade), Article 16.7 (Cooperative Labor Consultations), or Article 17.11 (Collaborative Environmental Consultations and Panel Procedure).
3. The requesting Party shall deliver the request to the other Party, and shall set out the reasons for the request, including identification of the actual or proposed measure or other matter at issue and an indication of the legal basis for the complaint.
4. Unless it decides otherwise, the Commission shall convene within ten days of delivery of the request and shall endeavor to resolve the dispute promptly. The Commission may:
(a) call on such technical advisers or create such working groups or expert groups as it deems necessary;