(a) the complaining Party decides not to make a request under paragraph 1; or
(b) where the complaining Party has made a request under paragraph 1 of this Article, the Parties do not agree on temporary compensation within 20 days after the expiry of the reasonable period of time referred to in Article 222 or the delivery of the panel decision under Article 223(2).
The notification shall specify the level of intended suspension of obligations.
3. The complaining Party may suspend obligations under the covered provisions 10 days after the date of delivery of the notification referred to in paragraph 2, unless the Party complained against has delivered a request under paragraph 5.
4. The level of suspension of obligations shall not exceed the level equivalent to the nullification or impairment caused by the violation of the covered provisions.
5. If the Party complained against considers that the notified level of suspension of obligations exceeds the level equivalent to the nullification or impairment caused by the violation, it may deliver a written request to the original panel before the expiry of the 10-day period set out in paragraph 3 to decide on the matter. The panel shall deliver its decision to the Parties within 30 days after the date of the request. Obligations shall not be suspended until the panel has delivered its decision. The suspension of obligations shall be consistent with that decision.
6. The compensation or the suspension of obligations referred to in this Article shall be temporary and shall not be applied after:
(a) the Parties have reached a mutually agreed solution pursuant to Article 240;
(b) the Parties have agreed that the measure taken to comply with the final report brings the Party complained against into compliance with the covered provisions; or
(c) any measure taken to comply with the final report which the panel has found to be inconsistent with the covered provisions has been withdrawn or amended so as to bring the Party complained against into compliance with those provisions.
Article 225. Review of Any Measure Taken to Comply after the Adoption of Temporary Remedies
1. The Party complained against shall notify the complaining Party in writing of any measure it has taken to comply with the final report following the suspension of obligations or following the application of temporary compensation, as the case may be. With the exception of cases in which paragraph 2 applies, the complaining Party shall terminate the suspension of obligations within 30 days after the date of delivery of the notification. In cases where compensation has been applied, and with the exception of cases under paragraph 2, the Party complained against may terminate the application of such compensation within 30 days after the date of delivery of the notification that it has complied.
2. If the Parties do not reach an agreement on whether the measure notified in accordance with paragraph 1 brings the Party complained against into compliance with the covered provisions within 30 days after the date of delivery of the notification, the complaining Party may deliver a written request to the original panel to decide on the matter. The panel shall deliver its decision to the Parties within 46 days after the date of delivery of the request. If the panel finds that the measure taken to comply with the final report is in compliance with the covered provisions, the suspension of obligations or the compensation, as the case may be, shall be terminated. Where relevant, the complaining Party shall adjust the level of suspension of obligations or the level of compensation in light of the panel decision.
3. If the Party complained against considers that the level of suspension implemented by the complaining Party exceeds the level equivalent to the nullification or impairment caused by the violation, it may deliver a written request to the original panel to decide on the matter. The panel shall deliver its decision within 46 days after the date of delivery of the request.
Article 226. Replacement of Panellists
If, during dispute settlement procedures, a panellist is unable to participate, withdraws or needs to be replaced because he or she does not comply with the Code of Conduct for Panellists and Mediators set out in Annex 14-B, the procedure provided for in Article 213 applies. The time periods for the delivery of the reports or decisions of the panel set out in this Section shall be extended as necessary for the appointment of the new panellist.
Article 227. Rules of Procedure
1. Panel procedures shall be governed by this Chapter and the Rules of Procedure set out in Annex 14-A.
2. Any hearing of the panel shall be open to the public unless otherwise provided in the Rules of Procedure set out in Annex 14-A.
Article 228. Suspension and Termination
At the request of both Parties, the panel shall suspend its work at any time for a period agreed by the Parties and not exceeding 12 consecutive months. The panel shall resume its work before the end of the suspension period at the written request of both Parties, or at the end of the suspension period at the written request of either Party. Where the latter applies, the requesting Party shall notify the other Party in writing of the request. If neither Party requests the resumption of the panel's work at the end of the suspension period, the authority of the panel shall lapse and the dispute settlement procedure shall be terminated. In the event of the suspension of the work of the panel, the relevant time periods under this Section shall be extended by the same period of time for which the work of the panel was suspended.
Article 229. Receipt of Information
1. At the request of a Party, or its own initiative, the panel may seek from the Parties relevant information it considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the panel for such information.
2. At the request of a Party or on its own initiative, the panel may seek any information it deems appropriate from any source. The panel may also seek the opinion of experts, as it deems appropriate, and subject to any terms and conditions agreed by the Parties, where applicable.
3. Natural persons of a Party or legal persons established in a Party may file amicus curiae submissions in accordance with the Rules of Procedure set out in Annex 14-A.
4. Any information obtained by the panel under this Article shall be disclosed to the Parties. The Parties may provide comments on that information.
Article 230. Rules of Interpretation
The panel shall interpret the covered provisions in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties. The panel shall also take into account relevant interpretations in reports of WTO panels and reports of the Appellate Body adopted by the WTO Dispute Settlement Body under the Understanding on Rules and Procedures Governing the Settlement of Disputes, contained in Annex 2 of the WTO Agreement (hereinafter referred to as the "WTO Dispute Settlement Understanding"). Reports and decisions of the panel shall not add to or diminish the rights and obligations of the Parties under this Agreement.
Article 231. Reports and Decisions of the Panel
1. The deliberations of the panel shall be kept confidential. The panel shall make every effort to draft reports and take decisions by consensus. If this is not possible, the panel shall decide the matter by majority vote. In no case shall separate opinions of panellists be disclosed.
2. The reports and decisions of the panel shall be accepted unconditionally by the Parties. They shall not create any rights or obligations with respect to natural or legal persons.
3. Each Party shall make the reports and decisions of the panel and its submissions publicly available, subject to the protection of confidential information.
4. The panel and the Parties shall treat as confidential any information submitted by a Party to the panel in accordance with the Rules of Procedure set out in Annex 14-A.
Article 232. Choice of Forum
1. Where a dispute arises regarding a particular measure in alleged breach of an obligation under this Title and a substantially equivalent obligation under another international agreement to which both Parties are party, including the WTO Agreement, the Party seeking redress shall select the forum in which to settle the dispute.
2. Once the Party seeking redress has selected the forum and initiated dispute settlement procedures under this Section or under another international agreement, that Party shall not initiate dispute settlement procedures under the other international agreement with respect to the particular measure referred to in paragraph 1, unless the forum selected first fails to make findings for procedural or jurisdictional reasons.
3. For the purposes of this Article:
(a) dispute settlement procedures under this Section are deemed to be initiated by a Party's request for the establishment of a panel under Article 212;
(b) dispute settlement procedures under the WTO Agreement are deemed to be initiated by a Party's request for the establishment of a panel under Article 6 of the WTO Dispute Settlement Understanding;
(c) dispute settlement procedures under any other international agreement are deemed to be initiated in accordance with the relevant provisions of that agreement.
4. Without prejudice to paragraph 2, nothing in this Agreement shall preclude a Party from suspending obligations authorised by the WTO Dispute Settlement Body or authorised under the dispute settlement procedures of another international agreement to which both disputing Parties are party. The WTO Agreement or any other international agreement between the Parties shall not be invoked to preclude a Party from suspending obligations under this Section.
Section D. MEDIATION MECHANISM
Article 233. Objective
The objective of the mediation mechanism is to facilitate the finding of a mutually agreed solution through a comprehensive and expeditious procedure with the assistance of a mediator.
Article 234. Request for Information
1. At any time before the initiation of the mediation procedure, a Party may deliver to the other Party a written request for information regarding a measure that adversely affects trade or investment between the Parties. The Party to which such request is delivered shall, within 20 days after the date of delivery of the request, deliver a written response containing its comments on the requested information.
2. If the responding Party considers that it will not be able to deliver a response within 20 days after the date of delivery of the request, it shall promptly notify the requesting Party, stating the reasons for the delay and providing an estimate of the shortest period within which it will be able to deliver its response.
3. A Party is normally expected to make a request for information in accordance with paragraph 1 before the initiation of the mediation procedure.
Article 235. Initiation of the Mediation Procedure
1. A Party may at any time request to enter into a mediation procedure with respect to a measure that adversely affects trade or investment between the Parties.
2. The request referred to in paragraph 1 shall be made by means of a written request delivered to the other Party. The request shall present the concerns of the requesting Party clearly and in sufficient detail and shall:
(a) identify the specific measure at issue;
(b) provide a statement on the adverse effects that the requesting Party considers the measure has, or will have, on trade or investment between the Parties; and
(c) explain how the requesting Party considers that those effects are linked to the measure.
3. The mediation procedure may only be initiated by mutual agreement of the Parties in order to explore mutually agreed solutions and consider any advice and proposed solutions by the mediator. The Party to which the request to enter into a mediation procedure is made shall give sympathetic consideration to the request and deliver its written acceptance or rejection to the requesting Party within 10 days after the date of its delivery. If the Party to which the request is made fails to deliver its written acceptance or rejection within that period the request shall be regarded as rejected.
Article 236. Selection of the Mediator
1. The Parties shall endeavour to agree on a mediator within 10 days after the initiation of the mediation procedure.
2. In the event that the Parties are unable to agree on the mediator within the time period set out in paragraph 1 of this Article, either Party may request the co-chair of the Cooperation Committee from the Party requesting to enter into a mediation procedure to select the mediator by lot, within five days after the request, from the sub-list of chairpersons established in accordance with Article 214. The co-chair of the Cooperation Committee from the Party requesting to enter into a mediation procedure may delegate such selection by lot of the mediator.
3. If the sub-list of chairpersons provided for in Article 214 has not been established at the time a request is made pursuant to Article 235, the mediator shall be drawn by lot from the individuals who have been formally proposed by one Party or both Parties for that sub-list.
4. A mediator shall not be a national of either Party or employed by either Party, unless the Parties agree otherwise.
5. A mediator shall comply with the Code of Conduct for Panellists and Mediators set out in Annex 14-B.
Article 237. Rules of the Mediation Procedure
1. Within 10 days after the date on which the mediator was agreed upon pursuant to Article 236(1) or selected pursuant to Article 236(2) or (3), the Party which initiated the mediation procedure shall deliver to the mediator and to the other Party a detailed written description of its concerns, in particular as regards the operation of the measure at issue and its possible adverse effects on trade or investment between the Parties. The other Party may provide written comments on that description within 20 days after the date of delivery thereof. Either Party may include any information that it deems relevant in its description or comments.
2. The mediator shall assist the Parties in a transparent manner in bringing clarity to the measure at issue and its possible adverse effects on trade or investment between the Parties. In particular, the mediator may organise meetings between the Parties, consult the Parties jointly or individually, seek the assistance of, or consult with, relevant experts and stakeholders and provide any additional support requested by the Parties. The mediator shall consult with the Parties before seeking the assistance of, or consulting with, relevant experts and stakeholders.
3. The mediator may offer advice and propose a solution for the consideration of the Parties. The Parties may accept or reject the proposed solution, or agree on a different solution. The mediator shall not advise or comment on the consistency of the measure at issue with this Title.
4. The mediation procedure shall take place in the territory of the Party to which the request was made, or by mutual agreement in any other location or by any other means.
5. The Parties shall endeavour to reach a mutually agreed solution within 60 days after the date on which the mediator was agreed upon pursuant to Article 236(1) or selected pursuant to Article 236(2) or (3). Pending a final agreement, the Parties may consider possible interim solutions, especially if the measure relates to perishable goods or seasonal goods or services.
6. A mutually agreed solution may be adopted by a decision of the Cooperation Committee. Either Party may make the mutually agreed solution subject to the completion of any necessary internal procedures. Mutually agreed solutions shall be made publicly available. The version disclosed to the public shall not contain any information that a Party has designated as confidential.
7. Upon the request of either Party, the mediator shall deliver a draft factual report to the Parties, providing:
(a) a brief summary of the specific measure at issue;
(b) the procedures followed; and
(c) if applicable, any mutually agreed solution reached, including possible interim solutions.
The mediator shall allow the Parties 15 days to comment on the draft factual report. After considering the comments of the Parties, the mediator shall, within another 15 days, deliver a final factual report to the Parties. The final factual report shall not include any interpretation of this Title.
8. The procedure shall be terminated by:
(a) the adoption of a mutually agreed solution by the Parties, on the date of its adoption;
(b) mutual agreement of the Parties at any stage of the procedure, on the date of that agreement;
(c) a written declaration of the mediator, after consultation with the Parties, that further efforts at mediation would be to no avail, on the date of that declaration; or
(d) a written declaration of a Party after having explored proposed solutions under the mediation procedure and after having considered any advice and proposed solutions by the mediator, on the date of that declaration.
Article 238. Confidentiality
Unless the Parties agree otherwise, all steps of the mediation procedure, including any advice or proposed solution, shall be confidential. Each Party may disclose to the public the fact that mediation is taking place.
Article 239. Relationship to Dispute Settlement Procedures
1. The mediation procedure is without prejudice to the Parties' rights and obligations under Sections B and C or under dispute settlement procedures under any other international agreement.
2. A Party shall not rely on, or introduce as evidence, in other dispute settlement procedures under this Title or any other international agreement, nor shall a panel take into consideration:
(a) positions taken by the other Party in the course of the mediation procedure or information exclusively gathered in accordance with Article 237(2);
(b) the fact that the other Party has indicated its willingness to accept a solution in relation to the measure subject to mediation; or
(c) advice given or proposals made by the mediator.
3. Unless the Parties agree otherwise, a mediator shall not serve as a member of a panel in dispute settlement procedures under this Title or under any other international agreement involving the same matter for which he or she has been a mediator.
Section E. COMMON PROVISIONS
Article 240. Mutually Agreed Solution
1. The Parties may reach a mutually agreed solution at any time with respect to any dispute covered by Article 209.
2. If a mutually agreed solution is reached during the panel or mediation procedure, the Parties shall jointly notify that solution to the chairperson of the panel or the mediator, as appropriate. Upon such notification, the panel or the mediation procedure shall be terminated.
3. Each Party shall take any measures necessary to implement the mutually agreed solution within the agreed time period.
4. Each Party shall, before the expiry of the agreed time period, inform the other Party, in writing, of any measure that it has taken to implement the mutually agreed solution.
Article 241. Time Periods
1. All time periods set out in this Chapter shall be counted in calendar days from the day following the act to which they refer.
2. Any time period referred to in this Chapter may be modified by mutual agreement of the Parties.
3. Under Section C, the panel may at any time propose to the Parties to modify any time period referred to in this Chapter, stating the reasons for the proposal.
Article 242. Costs
1. Each Party shall bear its own expenses derived from the participation in the panel or mediation procedure.
2. The Parties shall share jointly and equally the expenses for organisational matters, including the remuneration and expenses of the panellists and of the mediator. The remuneration of the panellists and of the mediator shall be in accordance with WTO practice and shall be determined in accordance with the Rules of Procedure set out in Annex 14-A.
Article 243. Annexes
The Cooperation Council may modify Annexes 14-A and 14-B.
Chapter 15. EXCEPTIONS
Article 244. General Exceptions
1. For the purposes of Chapters 2, 3, 6 and 12, Article XX of GATT 1994, including its Notes and Supplementary Provisions, is incorporated into and made part of this Agreement, mutatis mutandis.
2. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties where like conditions prevail, or a disguised restriction on investment liberalisation or trade in services, nothing in Chapter 6 or Chapter 12 shall be construed to prevent the adoption or enforcement by either Party of measures necessary to:
(a) protect public security or public morals or to maintain public order (31) ;
(b) protect human, animal or plant life or health;
(c) secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to:
(i) the prevention of deceptive and fraudulent practices;
(ii) the effects of a default on contracts;
(iii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; and
(iv) safety.
3. For greater certainty, the Parties understand that, to the extent that measures covered by paragraphs 1 and 2 of this Article are otherwise inconsistent with Chapters 6 and 12:
(a) the measures referred to in point (b) of Article XX of GATT 1994 and in point (b) of paragraph 2 of this Article include environmental measures which are necessary to protect human, animal or plant life or health;
(b) point (g) of Article XX of GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources; and
(c) measures taken to implement multilateral environmental agreements can fall under point (b) or (g) of Article XX of GATT 1994 or under point (b) of paragraph 2 of this Article.
4. Before a Party takes any measures provided for in points (i) and (j) of Article XX of GATT 1994, that Party shall provide the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. If no agreement is reached within 30 days of the provision of such information, the Party may take the relevant measures. Where exceptional and critical circumstances requiring immediate action make the provision of prior information impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation. That Party shall inform the other Party thereof immediately.
Article 245. Taxation
1. Nothing in this Title shall affect the rights and obligations of the Kyrgyz Republic or the European Union or its Member States under any tax convention. In the event of any inconsistency between this Agreement and any tax convention, that tax convention shall prevail to the extent of the inconsistency.
2. Articles 33 and 72 of this Agreement shall not apply to an advantage accorded by a Party pursuant to a tax convention.
3. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties where like conditions prevail, or a disguised restriction on trade and investment, nothing in this Title shall be construed to prevent the adoption, maintenance or enforcement by a Party of any measure aimed at ensuring the equitable or effective imposition or collection of direct taxes that:
(a) distinguishes between taxpayers who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested; or
(b) aims to prevent the avoidance or evasion of taxes pursuant to the provisions of any tax convention or domestic fiscal legislation.
4. For the purposes of this Article:
(a) "residence" means residence for tax purposes;
(b) "tax convention" means a convention for the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation to which the Kyrgyz Republic or the European Union or its Member States are party.
Article 246. Disclosure of Information
1. Nothing in this Title shall be construed as requiring a Party to make available confidential information the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private, except where a panel requires such confidential information in dispute settlement proceedings under Chapter 14. In such cases, the treatment of confidential information shall be governed by the relevant provisions of Chapter 14.
2. When a Party submits to the other Party, including through the bodies established under this Agreement, information which is considered confidential under its laws and regulations, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.
Article 247. WTO Waivers
If an obligation in this Title is substantially equivalent to an obligation contained in the WTO Agreement, any measure taken in conformity with a waiver adopted pursuant to Article IX of the WTO Agreement is deemed to be in conformity with the substantively equivalent provision of this Agreement.
Title V. COOPERATION IN THE AREA OF ECONOMIC AND SUSTAINABLE DEVELOPMENT
Article 248. General Cooperation Objectives
1. The Parties shall cooperate on economic reform by improving the shared understanding of the fundamentals of their respective economies and the formulation and implementation of economic policies.
2. The Kyrgyz Republic shall take further steps to develop a well-functioning and sustainable market economy, including the improvement of the investment climate and an increased inclusion of the private sector. The Parties shall work together in ensuring sound macroeconomic policies and public finance management that are compatible with the fundamental principles of effectiveness, transparency and accountability.
Article 249. General Cooperation Principles
The Parties shall:
(a) exchange experience and best practices related to strategies for sustainable development, including the promotion of economic, social and cultural rights;
(b) exchange information on macroeconomic trends and policies, as well as on structural reforms;
(c) exchange expertise and best practices in areas such as public-finance, monetary and exchange-rate policy frameworks, financial-sector policy and economic statistics;
(d) exchange information and experiences on regional economic integration, including the functioning of the European economic and monetary union;
(e) review the status of bilateral cooperation in the economic, financial and statistical fields.
Article 250. Management of Public Finances, Financial Control and External Audit
The Parties shall cooperate on the further development of robust public financial management systems for the Kyrgyz Republic, essential for the country's financial framework within which the government of the Kyrgyz Republic delivers its economic and social policy objectives for the benefit of its citizens, and which rest on the following best principles and practices:
(a) the government publishes a medium-term budgetary framework on a general government basis that is founded on credible forecasts and covers a minimum period of three years, and all budget institutions operate within that budgetary framework;
(b) the budget is formulated in line with the national legal framework, with comprehensive spending appropriations that are consistent with the medium-term budgetary framework and are observed;
(c) the central budget authority, or authorised treasury authority, centrally controls disbursement of funds from the treasury single account and ensures cash liquidity;
(d) there is a clear debt management strategy in place and implemented so that the country's overall debt target is respected and debt-servicing costs are kept under control;