Article 24.2. Security Exceptions
Nothing in this Agreement shall be construed:
(a) to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to fissionable and fusionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
(iii) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;
(iv) taken in time of national emergency;
(v) taken in time of war or other emergency in international relations; or
(vi) relating to critical public infrastructure, whether publicly or privately owned, including communications, power, transport and water infrastructure; or
(c) to prevent any Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 24.3. Taxation
1. Except as provided in this Article, nothing in this Agreement shall apply to taxation measures.
2. This Agreement shall only grant rights or impose obligations with respect to taxation measures where corresponding rights and obligations are also granted or imposed under the WTO Agreement.
3. 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 tax convention, that convention shall prevail to the extent of any inconsistency. The competent authorities under that convention shall have the sole responsibility for jointly determining whether any inconsistency exists between this Agreement and that convention.
4. Nothing in this Agreement shall oblige a Party to extend to the other Party the benefit of any treatment, preference or privilege arising from any existing or future tax convention by which the Party is bound.
5. For the purposes of this Article:
(a) tax convention means a convention for the avoidance of double taxation or other international taxation agreement or arrangement to which the Parties are party; and
(b) taxes and taxation measures do not include customs duties.
Article 24.4. Restrictions to Safeguard the Balance of Payments
1. Where a Party is in serious balance of payments and external financial difficulties or under threat thereof, it may:
(a) in the case of trade in goods, in accordance with the GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the GATT 1994 in Annex 1A to the WTO Agreement, adopt restrictive import measures; or
(b) in the case of trade in services, adopt or maintain restrictions on trade in services on which it has undertaken commitments, including on payments or transfers for transactions related to such commitments.
2. Any measure adopted or maintained under paragraph 1 shall:
(a) be applied on a non-discriminatory basis such that the other Party is treated no less favourably than any non-Party;
(b) be consistent with the Articles of Agreement of the International Monetary Fund;
(c) avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(d) not exceed those necessary to deal with the circumstances described in paragraph 1(b); and
(e) be temporary and be phased out progressively as the situations specified in paragraph 1(b) improve.
3. A Party adopting or maintaining measures under paragraph 1 shall:
(a) promptly notify, in writing, the other Party of the measures, including any changes therein; and
(b) on request of the other Party, promptly commence consultations with the other Party to review the measures adopted or maintained under paragraph 1, provided that:
(i) in the case of capital movements, such consultations are not otherwise taking place outside of this Agreement; or
(ii) in the case of current account restrictions, such consultations are not otherwise taking place under the framework of the WTO Agreement.
Article 24.5. Disclosure of Information
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 its laws and regulations, or 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 24.6. Confidentiality of Information
Unless otherwise provided in this Agreement, where a Party provides information to the other Party in accordance with this Agreement and designates the information as confidential, the other Party shall maintain the confidentiality of the information. Such information shall be used only for the purposes specified, and shall not be otherwise disclosed without the specific permission of the Party providing the information, except where such use or disclosure is necessary to comply with legal requirements, or for the purpose of judicial proceedings.
Chapter 25. DISPUTE SETTLEMENT
Article 25.1. Definitions
For the purposes of this Article:
cases of urgency means those cases which concern goods that rapidly lose their quality, current condition, or commercial value in a short period of time, including perishable goods;
Code of Conduct means the code of conduct referred to in Article 25.12 (Functions of the Panel) set out in Annex 25B (Code of Conduct for Panellists and Others Engaged In Dispute Settlement Proceedings under this Agreement);
complaining Party means the Party that requests the consultations under Article 25.6 (Consultations);
confidential information means information which is treated and designated as confidential by a Party;
DSU means the Understanding on Rules and Procedures Governing the Settlement of Disputes in Annex 2 to the WTO Agreement;
panel means a panel established under Article 25.8 (Request for Establishment of a Panel);
responding Party means the Party to which a request for consultations is made under Article 25.6 (Consultations); and
Rules of Procedure means the rules of procedure referred to in Article 25.12 (Functions of the Panel) and set out in Annex 25A (Rules of Procedure for the Panel).
Article 25.2. Objective
The objective of this Chapter is to establish an effective and efficient mechanism for the avoidance and settlement of any disputes between the Parties.
Article 25.3. Cooperation
The Parties shall endeavour, at all times, to agree on the interpretation and application of this Agreement and shall make every attempt through cooperation to arrive at a mutually satisfactory resolution of any matter that might affect its operation.
Article 25.4. Scope of Application
1. Unless otherwise provided in this Agreement, the dispute settlement provisions of 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 when a Party considers that:
(a) a measure of the other Party is inconsistent with its obligations under this Agreement; or
(b) the other Party has otherwise failed to carry out its obligations under this Agreement.
2. This Chapter shall not cover non-violation complaints and other situation complaints.
3. This Chapter applies subject to special and additional provisions on dispute settlement contained in other Chapters of this Agreement.
Article 25.5. Contact Points
1. Each Party shall designate a contact point to facilitate communications between the Parties with respect to any dispute initiated under this Chapter.
2. Any request, notification, written submission, or other document made in accordance with this Chapter shall be delivered to the other Party through its designated contact point.
Article 25.6. Consultations
1. A Party may request consultations with the other Party with respect to any matter described in Article 25.4 (Scope of Application). The Party making a request for consultations shall do so by means of a written request delivered to the other Party identifying the reasons for the request, including the measure at issue and a description of its factual basis and the legal basis specifying the covered provisions that it considers applicable.
2. The responding Party shall reply to the request promptly, but no later than 10 days after the date of receipt of the request. Consultations shall be held within 30 days of the date of receipt of the request. The consultations shall be deemed to be concluded within 30 days of the date of receipt of the request, unless the Parties agree otherwise.
3. Consultations on cases of urgency shall be held within 15 days of the date of receipt of the request. The consultations shall be deemed to be concluded within those 15 days unless the Parties agree otherwise.
4. The Parties shall make every effort to attempt to reach a mutually agreed solution through consultations. To this end, each Party shall:
(a) provide sufficient factual information to enable a full examination of how the matter subject to consultations might affect the operation or application of this Agreement; and
(b) treat as confidential any information exchanged in the course of the consultations that is designated as confidential by the Party providing the information or material.
5. Consultations, including all information disclosed and positions taken by the Parties during consultations, shall be confidential and without prejudice to the rights of either Party in any further proceedings.
6. Consultations may be held in person or by any other means of communication agreed by the Parties. Unless the Parties agree otherwise, consultations, if held in person, shall take place in the territory of the Party to which the request is made.
Article 25.7. Good Offices, Conciliation or Mediation
1. The Parties may, at any time, agree to enter into procedures for, good offices, conciliation or mediation, or any other alternative method of dispute resolution. They may begin at any time, and be suspended or terminated by either Party at any time.
2. Procedures undertaken pursuant to paragraph 1, 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 under this Chapter or any other proceedings before a forum selected by the Parties.
3. If the Parties agree, procedures referred to in paragraph 1 may continue while the matter is being examined by a panel established or reconvened under this Chapter.
Article 25.8. Request for Establishment of a Panel
1. The complaining Party may request the establishment of a panel if:
(a) the responding Party does not reply to the request for consultations within the time frames specified in Article 25.6 (Consultations); or
(b) the consultations referred to in Article 25.6 (Consultations) are not held or the Parties fail to settle a dispute within 60 days, or 20 days in cases of urgency, after the date of the receipt of the request for consultations by the responding Party.
2. The request for the establishment of a panel shall be made in writing to the responding Party. In the request, the complaining Party shall identify the measure or other matter at issue and indicate the factual and legal basis of the complaint, including specifying the relevant provisions of the Agreement alleged to have been breached in a manner sufficient to present the problem clearly.
3. When a request is made by the complaining Party in accordance with paragraph 1, a panel shall be established in accordance with Article 25.9 (Composition of a Panel).
Article 25.9. Composition of a Panel
1. Within five days of receipt by the responding Party of a request under Article 25.8 (Request for Establishment of a Panel), the Parties shall enter into consultations with a view to reaching agreement on the composition of the panel, taking into account the factual, technical, and legal circumstances of the dispute.
2. If the Parties are unable to reach agreement on the composition of the panel within 10 days of receipt of the request referred to in paragraph 1, the panel shall be composed in accordance with paragraphs 3 through 10.
3. Unless the Parties agree otherwise, a panel shall consist of three panellists.
4. Each Party shall appoint one panellist, who may be a citizen of a Party, within 20 days of the date of the written notification requesting the establishment of a panel.
5. Within 40 days of the date of the written notification requesting the establishment of a panel, the Parties shall agree on the appointment of the third panellist who shall serve as the chair of the panel. To assist in reaching this agreement, each Party shall provide to the other Party a list of up to three nominees for appointment as the chair.
6. If either Party fails to appoint a panellist within the period established in paragraph 4, the other Party, within a period of 20 days, may request the Director-General of the WTO to appoint the unappointed panellist within 20 days of that request.
7. If the Director-General of the WTO notifies the Parties to the dispute that they are unavailable or does not appoint the unappointed panellist within 20 days of the date of the request made pursuant to paragraph 6, any Party to the dispute may request the Secretary-General of the Permanent Court of Arbitration to appoint the unappointed panellist within 20 days of that request.
8. If the Parties do not agree on the chair of the panel within the time period established in paragraph 5, the chair shall be appointed by draw of lot from the lists exchanged in accordance with paragraph 5 within 10 days.
9. The date of establishment of the panel shall be the date on which the last of the three selected panellists has notified the acceptance of their appointment to the Parties.
10. If a panellist appointed under this Article resigns or becomes unable to act, the panellist shall notify the Parties and a successor panellist shall be appointed in accordance with this Article and shall have all the powers and duties of the original panellist. The work of the panel, including any applicable time periods, shall be suspended until the successor panellist has been appointed.
11. If a panel is reconvened under Article 25.21 (Compliance Review), Article 25.22 (Temporary Remedies in the Event of Non-Compliance), or Article 25.23 (Review of Measures Taken to Comply After the Adoption of Temporary Remedies), the reconvened panel shall, if possible, have the same panellists as the original panel. If this is not possible, any successor panellist shall be appointed in accordance with this Article and shall have all the powers and duties of the original panellist.
Article 25.10. Decision on Urgency
If a Party requests, the panel shall determine whether the dispute concerns a case of urgency and shall make best endeavours to determine the matter within a reasonable period of time.
Article 25.11. Requirements for Panellists
1. All panellists, including the chair appointed pursuant to Article 25.9 (Composition of a Panel), shall:
(a) have demonstrated expertise or experience in law, international trade, other matters covered by this Agreement, or the resolution of disputes arising under international trade agreements;
(b) be independent of, and not be affiliated with or take instructions from, either Party;
(c) serve in their individual capacities and not take instructions from any organisation or government with regard to matters related to the dispute;
(d) comply with the Code of Conduct; and
(e) be chosen strictly on the basis of objectivity, reliability, and sound judgment.
2. Unless the Parties agree otherwise, the chair of the panel shall not:
(a) be a citizen of a Party;
(b) have their usual place of residence in the territory of a Party; or
(c) be employed by a Party.
3. An individual shall not serve as a panellist for a dispute in which that person has participated under Article 25.7 (Good Offices, Conciliation or Mediation) in relation to the same matter.
Article 25.12. Functions of the Panel
1. Unless the Parties otherwise agree, the panel shall perform its functions and conduct its proceedings in a manner consistent with this Agreement, the Rules of Procedure and the Code of Conduct.
2. Unless the Parties otherwise agree, the panel shall make an objective assessment of the matter before it, including an objective assessment of:
(a) the facts of the case;
(b) the applicability of the relevant provisions of this Agreement; and
(c) whether:
(i) a measure of the responding Party is inconsistent with its obligations under the Agreement; or
(ii) the responding Party has otherwise failed to carry out its obligations under this Agreement.
3. The panel may make recommendations, if any, on the means to resolve the dispute in accordance with Article 25.13 (Terms of Reference).
Article 25.13. Terms of Reference
1. Unless the Parties otherwise agree, within 15 days after the date of establishment of the panel, the terms of reference of the panel shall be:
“to examine, in the light of the relevant provisions of this Agreement cited by the Parties, the matter referred to in the request for the establishment of the panel made pursuant to Article 25.8 (Request for Establishment of a Panel), to make such findings on the conformity of the measure at issue with the relevant provisions of this Agreement, together with the reasons, as well as recommendations, if any, on the means to resolve the dispute, and to deliver a report in accordance with Articles 25.17 (Interim Report) and 25.18 (Final Report).”
2. If the Parties agree on terms of reference other than those referred to in paragraph 1 within the timeline specified therein, they shall notify the agreed terms of reference to the panel no later than 5 days after their agreement.
Article 25.14. Rules of Interpretation
1. The panel shall interpret this Agreement in accordance with customary rules of interpretation of public international law.
2. When appropriate, the panel is required to also take into account relevant interpretations in reports of panels established under this Agreement and reports of panels and the Appellate Body adopted by the Dispute Settlement Body of the WTO.
3. The findings of the panel cannot add to or diminish the rights and obligations of the Parties provided under this Agreement.
Article 25.15. Procedures of the Panel
1. There shall be no ex parte communications with the panel concerning matters under its consideration.
2. The deliberations of the panel and the confidential information submitted to it shall be kept confidential.
3. Neither Party shall be precluded from disclosing its own information or from making statements of its own position available to the public.
4. A Party asserting that a measure of the other Party is inconsistent with the provisions of this Agreement shall have the burden of establishing such inconsistency. A Party asserting that a measure is subject to an exception under this Agreement shall have the burden of establishing that the exception applies.
5. The panel shall consult with the Parties as appropriate and provide adequate opportunities for the development of a mutually agreed solution.
6. The panel shall make its findings and decisions by consensus. If the panel is unable to reach consensus, it may make its findings by majority vote. A panellist may furnish separate opinions, including dissenting opinions, on matters not unanimously agreed. Opinions expressed by an individual panellist in a report shall be anonymous.
Article 25.16. Receipt of Information
1. On request of a Party, or on its own initiative, the panel may seek from the Parties relevant information the panel considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the panel for information.
2. Upon the request of a Party or on its own initiative, the panel may seek from any source any information it considers appropriate.
3. On request of a Party, or on its own initiative, the panel may seek technical advice or expert opinion from any individual or body that it deems appropriate and subject to any terms and conditions as the Parties agree. If the Parties agree that the Panel should not seek information or technical advice, the panel shall resume without the information or technical advice.
4. Any information, advice or opinion obtained by the panel under this Article shall be made available to the Parties and the Parties may provide comments on that information.
Article 25.17. Interim Report
1. The panel shall deliver an interim report to the Parties within 120 days after the date of establishment of the panel. If the panel considers that this deadline cannot be met, the chair of the panel shall promptly notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its interim report. The panel shall not exceed an additional period of 30 days after the deadline. The interim report shall not be made public.
2. The panel shall set out in the interim report:
(a) a descriptive section summarising the submissions and arguments of the Parties;
(b) its findings, on the facts of the case and the applicability of the provisions of this Agreement;
(c) its findings on whether:
(i) a measure of the responding Party is inconsistent with its obligations under this Agreement; or
(ii) the responding Party has otherwise failed to carry out its obligations under this Agreement.
(d) any other findings jointly requested by the Parties; and
(e) its reasons for the findings in subparagraphs 2(b) through 2(d).
3. Each Party may submit to the panel written comments and a written request to review specific aspects of the interim report within 20 days of the date of issuance of the interim report. A Party may comment on the other Party’s comments within six days of the delivery of the comments.
4. After considering any written comments and requests by each Party on the interim report, the panel may modify the interim report and make any further examination it considers appropriate.
Article 25.18. Final Report
1. The panel shall deliver its final report to the Parties within 60 days of issuance of the interim report. In exceptional cases, if the panel considers that this deadline cannot be met, the chair of the panel shall promptly notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its final report. The Panel shall not exceed an additional period of 30 days after the deadline.