(e) receive any notifications and information submitted under this Agreement, unless otherwise provided for in this Agreement; and
(f) assist the Joint Committee in any other matters referred to them by the Joint Committee.
3. The coordinators of this Agreement may meet as often as necessary by any technological means available.
Chapter 20. DISPUTE SETTLEMENT
Article 20.1. COOPERATION
The Parties shall 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
1. Except as otherwise provided in this Agreement or as the Parties otherwise agree, this Chapter shall apply with respect to the avoidance or settlement of all disputes between the Parties regarding the interpretation or application of this Agreement or wherever a Party considers that:
(a) a measure of the other Party is inconsistent with its obligations under this Agreement;
(b) the other Party has otherwise failed to carry out its obligations under this Agreement; or
(c) a benefit the Party could reasonably have expected to accrue to it under Chapter 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin), 8 (Government Procurement), or 10 (Cross-border Trade in Services) is being nullified or impaired as a result of a measure that is not inconsistent with this Agreement.
2. A Party may not invoke paragraph 1(c) with respect to any measure subject to an exception under Article 21.1 (General Exceptions).
Article 20.3. CHOICE OF FORUM
1. Where a dispute regarding any matter arises under this Agreement and under the WTO Agreement or any other trade agreement to which both Parties are party, the complaining Party may select the forum in which to settle the dispute.
2. Once the complaining Party has requested the establishment of, or referred a matter to, a dispute settlement panel under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of other fora.
Article 20.4. CONSULTATIONS
1. Any Party may request consultations with any other Party with respect to any matter described in Article 20.2 by delivering written notification. The complaining Party shall set out the reasons for the request, including identification of the measure or other matter at issue and an indication of the legal basis for the complaint. The other Party shall reply in writing within 10 days of the date of receipt of the request.
2. Consultations shall be held within 30 days of the date of the receipt of the request and take place, unless the Parties agree otherwise, in the territory of the Party complained against. The consultations shall be deemed concluded within 55 days of the date of the receipt of the request, unless the Parties agree to continue consultations. All information disclosed during the consultations shall remain confidential.
3. Consultations on matters of urgency, including those regarding perishable or seasonal goods, or goods or services that rapidly lose their trade value, such as certain seasonal goods or services, shall be held within 15 days of the date of the receipt of the request, and shall be deemed concluded within 25 days of the date of the receipt of the request.
4. If consultations are not held within the time frames laid down in paragraphs 2 or 3 respectively, or if consultations have been concluded and no mutually agreed solution has been reached, the complaining Party may request the establishment of a panel in accordance with Article 20.7.
5. Each Party shall:
(a) provide sufficient information that is reasonably available to it to the other Party during the consultations to enable a full examination of how the matter subject to consultations might affect the operation 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.
6. A Party may request the other Party to make available during consultations under this Article personnel of its government agencies or other regulatory bodies who have expertise in the matter subject to consultations.
7. Consultations are confidential and without prejudice to the rights of the Parties in proceedings under this Chapter.
Article 20.5. REFERRAL TO THE JOINT COMMITTEE
1. If the Parties fail to resolve a matter within 55 days of the receipt of a request for consultations under Article 20.4 or 25 days where the matter concerns cases of urgency, including those concerning perishable or seasonal goods, or goods or services that rapidly lose their trade value such as certain seasonal goods or services, only the complaining Party may request the intervention of the Joint Committee by delivering written notification to the other Party.
2. The complaining Party shall deliver the request to the other Party and shall set out in the request the reasons thereof, including identification of the measure at issue and an indication of the legal and factual basis for the complaint.
3. Unless it decides otherwise, the Joint Committee shall convene within 10 days of delivery of the request and shall endeavor to resolve the dispute promptly, with the objective to arrive at a mutually satisfactory resolution.
4. The Joint Committee may meet in person or through any other technological means available to the Parties.
Article 20.6. GOOD OFFICES, CONCILIATION, OR MEDIATION
1. Good offices, conciliation, and mediation are procedures undertaken voluntarily if the Parties so agree. 2. Proceedings involving good offices, conciliation, and mediation, and in particular
positions taken by the Parties during these proceedings, shall be confidential and without prejudice to the rights of either Party in any further proceedings.
3. Good offices, conciliation, or mediation may be requested at any time by any Party. Either Party at any time may begin, suspend or terminate proceedings established under this Article. Once procedures for good offices, conciliation, or mediation are concluded without an agreement between the Parties, the complaining Party may request the establishment of a panel.
Article 20.7. ESTABLISHMENT OF PANEL
1. The complaining Party may deliver a written request to establish a dispute settlement panel to the other Party, provided that a matter has not been resolved in any of the following cases:
(a) when the Parties have not settled the dispute through consultations within the 55 day period established in Article 20.4 or 25 days where the matter concerns cases of urgency, including those concerning perishable goods, or goods or services that rapidly lose their trade value such as certain seasonal goods or services, or within any other period that the Parties may agree during consultations;
(b) within 20 days following the receipt of the request to refer the matter to the Joint Committee, or 10 days where the matter concerns cases of urgency, or any other period agreed by the Parties, or when the meeting has not been held pursuant to the provisions established in Article 20. 5.3; or
(c) when the complaining Party that referred the matter to the Joint Committee considers, once the period indicated by the Joint Committee has expired, that the measures aimed at complying with the agreement reached pursuant to Article 20.5 were not adopted.
2. The complaining Party shall set out the reasons for the request, including identification of the measure or other matter at issue and a brief summary of the legal basis for the complaint sufficient to present the problem clearly.
3. A panel shall be established upon the date of the appointment of the last panelist.
Article 20.8. PANEL APPOINTMENT
1. the Panel Shall Consist of Three Panelists.
2. Within 30 days of the date of receipt of the notice referred to in Article 20.7, each Party shall notify the other Party of its appointment of a panelist and propose up to four candidates to serve as the chair of the panel whom are not nationals of either Party. If a Party fails to appoint a panelist within this time, the panelist shall be appointed by the other Party from the candidates proposed for the chair by the Party that failed to appoint a panelist, if such list exists or, in the absence of such a list, from the other Party's proposed candidates.
3. The Parties, within 45 days of the date of receipt of the notice referred to in Article 20.7, shall endeavor to agree on a panelist who will serve as chair from among the candidates proposed. If the Parties fail to agree on a chair within this time period, within a further 7 days the chair shall be appointed after selection by lot, from the candidates proposed, in the presence of representatives of both Parties.
4. If a panelist appointed by a Party withdraws, is removed, or becomes unable to serve, a replacement shall be appointed by that Party within 30 days, and in cases of urgency within 15 days, failing which the replacement shall be appointed by the other Party from the candidates proposed for the chair in accordance with the second sentence of paragraph 2.
5. If the chair of the panel withdraws, is removed, or becomes unable to serve, the Parties shall endeavor to agree on the appointment of a replacement within 30 days, and in cases of urgency within 15 days, failing which the replacement shall be appointed in accordance with the second sentence of paragraph 3.
6. If an appointment in paragraph 4 or 5 would require selecting from the list of candidates proposed for chair and there are no remaining candidates, each Party shall propose up to 3 additional candidates within 30 days and, within a further 7 days, the chair shall be appointed after selection by lot from the candidates proposed, in the presence of representatives of both Parties.
7. Any time limit applicable to the proceeding shall be suspended as of the date the panelist or chair withdraws, is removed, or becomes unable to serve, and shall resume on the date the replacement is appointed.
Article 20.9. QUALIFICATIONS OF PANELISTS
1. Individuals appointed to a panel pursuant to Article 20.8 (Panel Appointment) shall:
(a) be chosen strictly on the basis of objectivity, reliability, and sound judgment;
(b) have expertise or experience in law, international trade, other matters covered by this Agreement, or the resolution of disputes arising under international trade agreements;
(c) be a national of states having diplomatic relations with both Parties;
(d) not have been involved in an alternative dispute settlement proceeding referred to in Article 20.6 regarding the same dispute, unless the Parties agree otherwise;
(e) be independent of, and not be affiliated with or take instructions from, either Party; and
(f) comply with the code of conduct established in Annex 20-A. 2. Removal of a panelist shall take place in case of a violation of the Code of Conduct (Annex A) and in accordance with the procedures detailed in Rule 20 of the Rules of Procedures (Annex B).
Article 20.10. RULES OF PROCEDURE
1. Unless the Parties otherwise agree, the panel shall follow the rules of procedure established in Annex 20-B, which shall ensure:
(a) a right to at least one hearing before the panel;
(b) that, subject to subparagraph (d), any hearing before the panel shall be open to the public;
(c) an opportunity for each Party to provide initial and rebuttal submissions; and
(d) the protection of information designated by either Party for confidential treatment.
2. Unless the Parties otherwise agree within 20 days of the delivery of the request for the establishment of the panel, the panel's terms of reference shall be:
"To examine, in light of the relevant provisions of this Agreement, the matter referenced in the request for the establishment of the panel; to make findings, determinations, and recommendations as provided in Article 20.11.1 and 20.11.2; and to present the written reports referred to in Article 20.11.1 and 20.11.4."
3. The decisions of the panel, including the adoption of the report, shall be adopted by a majority of its members. No panel may disclose which panelists are associated with the majority or minority opinions.
4. The venue for the proceedings of the panel shall be decided by mutual agreement between the Parties. If the Parties are unable to reach an agreement, the vere shall be Seoul if the complaining party is Israel and Jerusalem if the complaining party is Korea.
Article 20.11. PANEL REPORT
1. Unless the Parties otherwise agree, the panel shall, within 90 days after the chair is appointed, present to the Parties an initial report containing findings of fact and its determination as to:
(a) (i) whether the measure at issue is inconsistent with the obligations of this Agreement; (ii) whether a Party has otherwise failed to carry out its obligations under this Agreement; or (iii) whether the measure at issue is causing nullification or impairment in the sense of Article 20.2.1(c); and
(b) any other matter, including recommendations, that the Parties have jointly requested that the panel address, as well as the reasons for its findings and determinations.
2. The panel shall base its report on the relevant provisions of this Agreement and the submissions and arguments of the Parties. The panel shall consider this Agreement in accordance with customary rules of interpretation of public international law.
3. Each Party may submit written comments to the panel on its initial report within 14 days of the presentation of the report. After considering any written comments by the Parties on the initial report, the panel may modify its report and make any further examination it considers appropriate.
4. The panel shall present a final report to the Parties within 30 days of the presentation of the initial report, unless the Parties otherwise agree. The Parties shall make the final report available to the public within 15 days thereafter, subject to the protection of confidential information.
5. The final report of a panel shall be final and binding. The report of the panel shall set out the findings of fact, the applicability of the relevant provisions of this Agreement, and the basic rationale behind any findings and determinations that it makes.
Article 20.12. SUSPENSION AND TERMINATION OF PROCEEDINGS
1. The Parties may agree that the panel suspend its work at any time for a period not exceeding 12 months from the date of such agreement. Within this period, the suspended panel shall be resumed upon the request of either Party. If the work of the panel has been continuously suspended for more than 12 months, the authority for establishment of the panel shall lapse unless the Parties otherwise agree.
2. The suspension or termination of the panel's proceedings is without prejudice to the rights of either Party in another proceeding on the same matter under this Chapter.
3. The Parties may agree to terminate the proceedings of a panel in the event that a mutually satisfactory solution to the dispute has been found. In such event the Parties shall jointly notify the chair of the panel.
4. Before the panel provides its final report, it may at any stage of the proceedings propose to the Parties that the dispute be settled amicably.
Article 20.13. IMPLEMENTATION OF THE FINAL REPORT
1. On receipt of the final report of a panel, the Parties shall decide on the implementation of the final report. Unless the Parties decide otherwise, the implementation shall conform with the determination or recommendation made by the panel.
2. If, in its final report, the panel determines that a Party has not conformed with its obligations under this Agreement or that a Party's measure is causing nullification or impairment in the sense of Article 20.2.1(c), the implementation, whenever possible, shall be the elimination of the non-conformity or the nullification or impairment.
Article 20.14. NON-IMPLEMENTATION AND SUSPENSION OF BENEFITS
1. If a Panel has made a determination of the type described in Article 20.13.2, and the Parties are unable to reach an agreement on a implementation pursuant to Article 20.13.1, within 30 days of receiving the final report, or such other period as the Parties may agree, the Party complained against shall enter into negotiations with the complaining Party with a view to developing mutually acceptable compensation.
2. If the Parties:
(a) are unable to agree on compensation within 30 days after the period for developing such compensation has begun; or
(b) have agreed on compensation or on a resolution pursuant to Article 20.13.1, and the complaining Party considers that the Party complained against has failed to observe the terms of the Agreement.
the complaining Party may at any time thereafter provide written notice to the Party complained against that it intends to suspend the application to the Party complained against of benefits of equivalent effect. The notice shall specify the level of benefits that the complaining Party proposes to suspend. The complaining Party may begin suspending benefits of equivalent effect 15 days after the later of the date on which it provides notice to the other Party under this paragraph or the panel issues its determination under paragraph 5, as the case may be.
3. In considering which benefits to suspend pursuant to paragraph 2:
(a) the complaining Party should first seek to suspend benefits or other obligations in the same sector or sectors as those 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 Article 20.2.1(c); and
(b) the 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.
4. 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 under Article 20.2.1(c) has been brought into conformity with this Agreement, or until such time as the Parties have otherwise reached an agreement on a resolution of the dispute.
5. If the Party complained against considers that:
(a) the level of benefits that the complaining Party has proposed to be suspended is manifestly excessive; or
(b) it has eliminated the non-conformity or the nullification or impairment that the panel has found,
it may, within 30 days after the complaining Party provides notice under paragraph 2, request that the original panel be reconvened to consider the matter. The panel shall reconvene as soon as possible after delivery of the request and shall present its determination to the Parties within 90 days after it reconvenes to review a request under either subparagraph (a) or (b), or within 120 days for a request under both subparagraphs (a) and (b). If the panel determines that the level of benefits proposed to be suspended is manifestly excessive, it shall determine the level of benefits it considers to be of equivalent effect.
6. The complaining Party may suspend benefits up to the level the panel has determined under paragraph 5 or, if the panel has not determined the level, the level the Party has proposed to suspend under paragraph 2, unless the panel has determined that the Party complained against has eliminated the non-conformity or the nullification or impairment.
Article 20.15. COMPLIANCE REVIEW
1. Without prejudice to the procedures set out in Article 20.14.5, if the Party complained against considers that it has eliminated the non-conformity or the nullification or impairment that the panel has found, it may refer the matter to the panel by providing written notice to the complaining Party. The panel shall reconvene as soon as possible after delivery of the request and shall issue its report on the matter within 60 days after the Party complained against provides notice.
2. If the panel decides that the Party complained against has eliminated the non- conformity or the nullification or impairment, the complaining Party shall promptly reinstate any benefits it has suspended under Article 20.14.
Article 20.16. TIME LIMITS
Any time limit referred to in this Chapter may be reduced, waived, or extended, by mutual agreement of the Parties.
Article 20.17. EXPENSES
Unless the Parties otherwise agree, the expenses of the panel, the remuneration of the panelists and their assistants, their travel and lodging expenses, and all general expenses shall be borne in equal shares between the Parties, in accordance with Annex 20-B (Rules of Procedure).
Chapter 21. EXCEPTIONS
Article 21.1. GENERAL EXCEPTIONS
1. For the purposes of Chapter 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin), 4 (Customs Procedures and Trade Facilitation), 5 (Sanitary and Phytosanitary Measures), 6 (Technical Barriers to Trade), 7 (Trade Remedies), Article XX of 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 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 and non-living exhaustible natural resources.
2. For the purposes of Chapters 10 (Cross-Border Trade in Services), 11 (Temporary Entry of Business Persons), 12 (Telecommunications) and 13 (Electronic Commerce), (1) Article XIV of 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 GATS include environmental measures necessary to protect human, animal, or plant life or health.
3. For the purposes of Chapter 9 (Investment), subject to the requirement that such measures are not applied in an arbitrary or unjustifiable manner, and do not constitute a disguised restriction on international trade or investment, nothing in this agreement shall be construed to prevent a Party from adopting or maintaining measures including environmental measures:
(a) necessary to secure compliance with laws and regulations that are not inconsistent with this agreement;
(b) necessary to protect human, animal or plant life or health; (c) related to the conservation of living or non-living exhaustible natural resources;
(d) necessary to protect national treasures of artistic, historic or archeological value; or
(e) necessary to protect public morals or to maintain public order, provided that the public order exception may only be invoked where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.
4. This Agreement shall not apply to financial services as defined in Article 1.7 (Definitions).
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 under the United Nations Charter with respect to the maintenance or restoration of international peace or security, or for the protection of its own essential security interests, or in order to carry out obligations it has accepted for the purposes of maintaining international security.
Article 21.3. TAXATION
1. Except as set out in this Article, nothing in this Agreement shall apply to taxation measures,
2. (a) Nothing in this Agreement shall affect the rights and obligations of either 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.
(b) In the case of a tax convention between the 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 2.2 (National Treatment) and such other provisions of this Agreement as ate necessary to give effect to that Article shall apply to taxation measures to the same extent as does Article I of GATT 1994; and
(b) Article 2.12 (Export Duties, Taxes, or Other Charges) shall apply to taxation measures.
4. Subject to paragraph 2:
(a) Article 10.2 (National Treatment) shall apply to taxation measures on income, on 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 9.3 (National Treatment), 9.4 (Most-Favored-Nation Treatment), 10.2 (National Treatment), and 10.3 (Most-Favored-Nation Treatment) shall apply to all taxation measures, other than those on income, on capital gains, or on the taxable capital of corporations; or taxes on estates, inheritances, gifts, and generation-skipping transfers;
except that nothing in the Articles referred to in subparagraphs (a) and (b) shall apply:
(c) any most-favored-nation obligation with respect to an advantage accorded by a Party pursuant to a 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 GATS); or
(h) to a provision that conditions the receipt, or continued receipt, of an advantage relating to the contributions to, or income of, a pension trust or pension plan, 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, paragraphs 2 and 5 of Article 9.9 (Performance Requirements) shall apply to taxation measures.
6. (a) Article 9.19 (Submission of a Claim to Arbitration) shall apply to a taxation measure alleged to be an expropriation.
(b) Article 9.7 (Expropriation and Compensation) shall apply to taxation measures. However, no investor may invoke Article 9.7 as the basis for a claim where it has been determined pursuant to this subparagraph that the measure is not an expropriation. An investor that seeks to invoke Article 9.7 with respect to a taxation measure must first refer to the competent authorities, at the time that it gives its notice of intent under Article 9.19 (Submission of a Claim to Arbitration), the issue of whether that taxation measure is not 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 180 days of such referral, the investor may submit its claim to arbitration under Article 9.19.
(c) For the purposes of this paragraph, competent authorities means:
(i) for Korea, the Deputy Minister for Tax and Customs, Ministry of Economy and Finance; and
(ii) for Israel, the Chief Economist, the Ministry of Finance.
7. For the purposes of this Article, “taxes” and “taxation measures” do not include:
(a) customs duties as defined in Article 1.7 (Definitions); or
(b) the measures listed in exceptions (b), (c) and (d) of that definition.
Article 21.4. 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 be contrary to its law, impede law enforcement or otherwise be contrary to the public interest or which would prejudice the legitimate commercial interests of particular individuals and enterprises, public or private.