Article 14.6. PERFORMANCE REQUIREMENTS
1. A Party may not impose or enforce the following requirements or apply any commitment or obligation in connection with the establishment, acquisition, expansion, management, conduct or operation, or sale of a covered investment of a Party or of a non-Party in its territory (3):
(a) export a certain level or percentage of a good or service;
(b) to reach a certain level or percentage of domestic content;
(c) to purchase, use or give preference to a good produced in its territory, or to purchase a good from a person in its territory;
(d) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with that investment;
(e) restrict sales in its territory of a good or service that the investment produces or provides by linking, in any way, such sales to the volume or value of its exports or to the foreign exchange earnings it generates;
(f) transferring a technology, production process or other proprietary knowledge to a person in its territory (4); or
(g) provide exclusively from the territory of the Party a good that produces such an investment or a service that supplies a specific regional market or the world market.
2. A measure that requires an investment to use technology that complies with generally applicable health, safety or environmental requirements shall not be interpreted as being inconsistent with subparagraph 1(f). For greater certainty, Articles 14.3 and 14.4 apply to such a measure.
3. A Party may not condition the receipt or continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale of an investment in its territory by an investor of a Party or of a non-Party, on compliance with the following requirements:
(a) to reach a certain level or percentage of domestic content;
(b) to purchase, use or give preference to a good produced in its territory, or to purchase a good from a producer in its territory;
(c) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment; or
(d) restrict sales in its territory of a good or service that such investment produces or provides by linking, in any way, such sales to the volume or value of its exports or to the foreign exchange earnings it generates.
4. Paragraph 3 shall not prevent a Party from conditioning the receipt, or continued receipt, of an advantage in connection with an investment in its territory by an investor of the other Party or of a non-Party on compliance with the requirement to locate production, provide services, train or employ workers, construct or expand particular facilities or carry out research and development in its territory.
5. Subparagraph 1(f) does not apply:
(a) where a Party authorizes the use or transfer of an intellectual property right in accordance with Article 31 of the TRIPS Agreement or measures requiring the disclosure of proprietary information that fall within the scope of, and are consistent with, Article 39 of the TRIPS Agreement; or
(b) if the requirement is imposed or the commitment or obligation is ordered by a judicial or administrative tribunal or competent authority to resolve an alleged violation of domestic competition law (5).
6. Paragraphs 1 and 3 do not apply to a requirement, commitment or obligation other than those set forth in those paragraphs.
7. This Article does not exclude the application of any commitment, obligation or requirement between private parties.
8. The provisions of:
(a) subparagraphs 1(a), (b) and (c), and 3(a) and (b) do not apply to qualification requirements for a good or service with respect to export promotion programs and foreign aid programs;
(b) subparagraphs 1(b), (c), (f) and (g), and 3(a) and (b) do not apply to procurement by a Party or State enterprise; and
(c) subparagraphs 3(a) and (b) do not apply to a requirement imposed by an importing Party with respect to the content of a good necessary to qualify for a preferential tariff or quota.
9. Provided that such measures are not applied in an arbitrary or unjustified manner, or do not constitute a disguised restriction on international trade or investment, nothing in subparagraphs 1(b), (c) and (f), and subparagraphs 3(a) and (b) shall be construed to prevent a Party from adopting or maintaining measures, including those of an environmental nature:
(a) necessary to ensure compliance with laws and regulations not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) relating to the preservation of living or non-living non-renewable natural resources.
Article 14.7. SENIOR EXECUTIVES AND BOARDS OF DIRECTORS
1. No Party may require an enterprise of that Party that is a covered investment to appoint natural persons of a particular nationality to senior management positions.
2. No Party may require that a majority of the members of the board of directors, or a committee thereof, of an enterprise of that Party that is a covered investment be ofa particular nationality or be a resident of the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 14.8. NON-CONFORMING MEASURES
1. Articles 14.3, 14.4, 14.6 and 14.7 do not apply to:
(a) an existing non-conforming measure that is maintained by a Party at the level:
(i) central government, as established by that Party in its Schedule to Annex I; or
(ii) local government;
(b) the continuation or prompt renewal of a nonconforming measure referred to in subparagraph (a); or
(c) modification of a nonconforming measure referred to in subparagraph (a) if such modification does not diminish the degree of conformity of the measure, as in effect immediately before the modification, with Articles 14.3, 14.4, 14.6, and 14.7.
2. Articles 14.3, 14.4, 14.6 and 14.7 do not apply to a measure that a Party adopts or maintains in relation to sectors, subsectors or activities as set out in its Schedule to Annex II.
3. With respect to intellectual property rights, a Party may derogate from Articles 14.3, 14.4 and 14.6(f) in a manner consistent with the TRIPS Agreement.
4. Articles 14.3, 14.4 and 14.7 do not apply to:
(a) procurement by a Party or State enterprise; or
(b) a subsidy or grant provided by a Party or a State enterprise, including a government-backed loan, guarantee or insurance.
Article 14.9. TRANSFERS
1. Each Party shall permit transfers related to a covered investment to be made freely and without undue delay into and out of its territory. Such transfers include:
(a) capital contributions;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other fees, and other amounts derived from the investment;
(c) the proceeds from the total or partial sale of the covered investment or from the total or partial liquidation of the covered investment;
(d) payments made under a contract entered into by the investor, or the covered investment, including payments made under a loan contract;
(e) payments made in accordance with Articles 14.10 and 14.11; and
(f) payments made pursuant to Section B.
2. Each Party shall permit transfers related to a covered investment to be made in a freely usable currency at the market rate of exchange prevailing on the date of the transfer.
3. Each Party shall permit, in accordance with its customs regulations, transfers in kind relating to a covered investment. It may also restrict transfers of profits in kind in circumstances where it would otherwise restrict transfers under the WTO Agreements, in particular Article XI of GATT 1994.
4. Notwithstanding paragraphs 1, 2 and 3, a Party may prevent the implementation of a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or protection of a creditor's rights; (b) issuance, trading or operations of securities, futures, options or derivatives; (c) criminal offenses;
(d) financial reporting or record keeping of transfers when necessary to assist financial regulatory authorities or law enforcement; or
(e) guarantee compliance with resolutions, rulings or awards issued in judicial, administrative or arbitration proceedings.
5. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of Agreement of the International Monetary Fund, nor the provisions of Annex 14-A.
Article 14.10. EXPROPRIATION (6)
1, A Party may not nationalize or expropriate a covered investment, directly or indirectly, through a measure having the equivalent effect of nationalization or expropriation ("expropriation") except for reasons of public utility or social interest (7) in accordance with the principle of due process, in a non-discriminatory manner and through prompt, adequate and effective compensation.
2. Compensation under paragraph 1 should be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and should not reflect any change in value because the intention to expropriate was known in advance of the date of expropriation. In determining fair market value, a Tribunal will use appropriate valuation criteria which may include going concern value, valuation of assets including the value of the tax declared for tangible property, or other valuation criteria.
3. Compensation shall be paid without undue delay and shall be fully liquidable and freely transferable. Compensation shall be paid in a freely convertible currency and shall include interest at a commercial rate fixed according to market criteria for such currency from the date of expropriation until the date of payment.
4. The affected investor shall be entitled, under the law of the Party executing the expropriation, to a prompt review of his case and of the valuation of his investment by a judicial or other independent authority of that Party, in accordance with the principles set forth in this Article.
5. This Article does not apply to the issuance of a compulsory license granted in connection with intellectual property rights, or to the revocation, limitation or creation of an intellectual property right, if such issuance, revocation, limitation or creation is consistent with the WTO Agreement.
Article 14.11. COMPENSATION FOR LOSSES
1. Notwithstanding Article 14.8.4(b), each Party shall accord to an investor of the other Party, and to a covered investment, nondiscriminatory treatment with respect to a measure it adopts or maintains relating to losses suffered by investments in its territory due to armed conflict or civil strife.
2. Paragraph 1 does not apply to existing measures relating to grants or donations that are inconsistent with the provisions of Article 14.3, with the exception of Article 14.8.4(b).
Article 14.12. SUBROGATION
1. If a Party or one ofits entities makes a payment to one ofits investors under a guarantee or a contract of insurance against non-commercial risks that it has entered into with respect to an investment, the other Party shall recognize the validity of the subrogation in favor of that Party or entity of a right or claim held by the investor. The subrogated right or claim may not be greater than the original right or claim of the investor.
2. A Party or an entity of a Party that has subrogated itself to a right of an investor in accordance with paragraph 1 shall have the same rights as the investor with respect to the investment. These rights may be exercised by the Party or one of its entities, or by the investor if the Party or entity so authorizes.
Article 14.13. DENIAL OF BENEFITS
A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of that Party and to investments of that investor, if investors of a non-Party or of the denying Party own or control the enterprise and the enterprise does not have substantial business activities in the territory of the Party under whose law it is incorporated or organized.
Article 14.14. MEASURES RELATED TO HEALTH, SAFETY, ENVIRONMENT AND LABOR RIGHTS
The Parties recognize that it is not appropriate to encourage investment by diminishing their domestic health, safety, environmental or labor measures. Accordingly, a Party should not exempt or derogate from or refrain from applying such measures, or offer to exempt or refrain from applying such measures as a means of encouraging the establishment, acquisition, expansion or retention in its territory of an investor's investment.
Article 14.15. CORPORATE SOCIAL RESPONSIBILITY
Each Party shall encourage enterprises operating in its territory, or subject to its jurisdiction, to incorporate, on a voluntary basis, internationally recognized standards of corporate social responsibility into their internal policies, such as statements of principles that have been approved or endorsed by the Parties. These principles address issues such as environmental and human rights, community relations and anti-corruption.
Article 14.16. SPECIAL FORMALITIES AND REPORTING REQUIREMENTS
1. Article 14.3 shall not prevent a Party from adopting or maintaining a measure that prescribes special formalities relating to the establishment of a covered investment, such as a requirement that an investor's agent be a resident of the Party or that the covered investment be constituted in accordance with the laws and regulations of the Party, provided that such formalities do not significantly impair the protection afforded by a Party to investors of the other Party and to covered investments under this Chapter.
2. Notwithstanding Article 14.3 or 14.4, a Party may require an investor of the other Party, or its covered investment, to provide routine information concerning that investment solely for informational or statistical purposes. The Party shall protect any confidential information that, if disclosed, could prejudice the competitive position of the investor or the covered investment. This paragraph shall not prevent a Party from obtaining or disclosing information relating to the equitable and good faith application of its laws.
Section B. INVESTOR-STATE DISPUTE SETTLEMENT
Article 14.17. CONSULTATIONS AND NEGOTIATION
1. In the event of an investment dispute, the disputing parties shall first seek to resolve the dispute through consultations and negotiation, which may include the use of non-binding procedures before third parties, such as conciliation and mediation. The consultation and negotiation procedure shall be initiated by the request sent to the address designated in Article 14.2.6. Such request (Notification of the Dispute) shall be sent to the disputing Party prior to the Notice of Intention, referred to in Article 14.20, and shall include the information set forth in Article 14.20, and shall include the information set forth in Article 14.20. 14,20.2 (d) and (e).
2. Consultations shall be held for a minimum period of three months, extendable by agreement between the parties, and may include face-to-face meetings in the capital of the disputing Party.
Article 14.18. CLAIM BY AN INVESTOR OF a PARTY IN ITS OWN NAME
An investor of a Party may, in accordance with this Section, submit to arbitration a claim that the other Party has breached an obligation under Section A, other than the obligations set forth in Articles 14.2(4), 14.14, 14.15 or 14.16, and that the investor, by reason of or arising out of such breach, has incurred loss or damage.
Article 14.19. CLAIM BY AN INVESTOR OF a PARTY ON BEHALF OF AN ENTERPRISE
1. An investor of a Party, on behalf of an enterprise of the other Party that is a juridical person owned or controlled, directly or indirectly, by the investor, may submit to arbitration a claim that the other Party has breached an obligation under Section A, other than obligations under Articles 14.2(4), 14.14, 14.15 or 14.16, and that the enterprise, by reason of such breach, has incurred loss or damage.
2. Where an investor submits a claim under this Article and the investor, or an investor that does not control the enterprise, submits a claim under Article 14.18, based on the same events that gave rise to the claim under this Article, and two or more claims are submitted to arbitration under Article 14.21, the claims should be heard together by a Tribunal established under Article 14.25, unless the Tribunal determines that the interests of a disputing Party would be prejudiced as a result of joinder.
Article 14.20. CONDITIONS PRECEDENT TO THE SUBMISSION OF a COMPLAINT TO THE ARBITRATION
1. In the case of administrative acts, in order to submit a claim to the domestic forum or to the arbitration provided for in this Article, it shall be indispensable to previously exhaust governmental proceedings when the law of the disputing Party so requires. Such exhaustion may in no case exceed a period of six months from the date of its initiation by the investor and shall not prevent the investor from requesting the consultations referred to in Article 14.17(2). (8)
2. A disputing investor may submit a claim to arbitration in accordance with Article 14.18 or 14.19 only if:
(a) the disputing investor and, if the claim is made pursuant to Article 14.19, the enterprise consents to arbitration in accordance with the procedures set forth in this Section;
(b) at least nine months have elapsed since the events giving rise to the claim took place;
(c) the time limit provided for in Article 14.17.2 has elapsed;
(d) the disputing investor has, after the period referred to in subparagraph (c) has elapsed, delivered to the disputing Party a written Notice of Intent ("notice of intent") to submit a claim to arbitration at least 180 days before submitting the claim, which notice shall specify:
(i)the name and address of the disputing investor and, if the claim is made pursuant to Article 14.19, the name and address of the enterprise;
(ii) the provisions of Section A allegedly violated;
(iii) the legal and factual basis of the claim, including the measures at issue; and
(iv) the relief sought and the approximate amount of damages claimed;
(e) the disputing investor has submitted evidence that it is an investor of the other Party with its notice of intent to submit a claim to arbitration under subparagraph (d);
(f) in the case of a claim under Article 14.18:
(i) no more than three years have elapsed since the date on which the disputing investor first became aware, or should have first become aware, of the alleged breach and that the disputing investor has incurred loss or damage as a result;
(ii) the disputing investor waives its right to initiate before a court or administrative tribunal under a Party's national law, or other dispute settlement procedure, proceedings with respect to the disputing Party's measure alleged to be in breach of Article 14.18; and
(iii) If the claim is for loss or damage to an interest in an enterprise of the other Party that is a juridical person under the direct or indirect ownership or control of the disputing investor, the enterprise waives the the right referred to in subparagraph (ii); and
(g) in the case of a claim under Article 14.19:
(i) no more than three years have elapsed since the date on which the company first became aware, or should have first become aware, of the alleged violation and that the company has incurred loss or damage as a result, and
(ii) both the disputing investor and the enterprise waive their rights to initiate before a court or administrative tribunal under a Party's domestic law, or other dispute settlement procedure, a proceeding with respect to the disputing Party's measure alleged to be in breach of Article 14.19.
3. Subparagraphs 2(f) (ii) and (iii) and 2(g) (ii):
(a) do not apply to proceedings before a court or administrative or judicial tribunal under the law of a disputing Party that:
(i) whether for provisional precautionary measures or other extraordinary protection measures;
(ii) do not involve the payment of monetary damages; and
(iii) are made for the sole purpose of preserving the rights and interests of the claimant or the company while the arbitration is taking place; (9) and
(b) They are not necessary if a disputing Party has deprived an investor of control of an enterprise.
4. The disputing enterprise or investor shall provide the consent and waiver required in paragraph 2 to the disputing Party, and shall include it with the submission of the claim to arbitration.
5. An investor of a Party that is also a national of another State may not institute proceedings under this Section if, as a national of another State, it submits or has submitted, directly or indirectly, a claim with respect to the same measure or set of measures under another Agreement between the other Party and that other State.
Article 14.21. SUBMISSION OF a CLAIM TO ARBITRATION
1. A disputing investor that meets the conditions set forth in Article 14.20 may submit the claim to arbitration in accordance with:
(a) the ICSID Convention, provided that both the disputing Party and the Party of the disputing investor are parties to the Convention;
(b) the ICSID Additional Facility Rules, provided that either the disputing Party or the Party of the disputing investor, but not both, is a party to the ICSID Convention;
(c) the UNCITRAL Arbitration Rules; or
(d) an arbitral tribunal under another arbitration institution or under other arbitration rules.
2. The Commission shall have the power to make supplementary rules to the rules applicable to arbitration and may amend any of its supplementary rules. Such rules shall be binding on the Tribunal established pursuant to this Section and on each arbitrator member of such Tribunal.
3. The applicable arbitration rules shall govern the arbitration, unless modified by this Section and supplemented by rules adopted by the Free Trade Commission pursuant to this Agreement.
4. Once the investor has referred the dispute concerning the breach of an obligation under Section A to a competent tribunal of the host Party, or to one of the arbitral proceedings indicated above, the choice of one or the other forum shall be final.
5. A claim is deemed to have been submitted to arbitration in accordance with this Chapter when:
(a) the Secretary-General of ICSID receives the request for arbitration pursuant to Article 36(1) of the ICSID Convention;
(b) the Secretary-General of ICSID receives the notice of arbitration under Article 2 of Annex C of the ICSID Additional Facility Rules; or
(c) the disputing Party receives the notice of arbitration filed under the UNCITRAL Arbitration Rules;
(d) the respondent receives the notice of arbitration referred to in any other arbitration institution or under any arbitration rules selected under paragraph 1(d).
6. Service of notice and other documents in disputes under Section B shall be served by delivery at:
(a) the Republic of Colombia:
Foreign Investment and Services Directorate
Ministry of Commerce, Industry and Tourism,
Calle 28 No. 13 A-15 Piso 3. Bogota D.C. - Colombia;
(b) the Republic of Panama:
National Directorate for the Administration of International Trade Treaties and Trade Defense (DINATRADEC)
Ministry of Commerce and Industries of Panama,
Plaza Edison Building, Second Floor El Paical Avenue, Panama - Republic of Panama,
or its successors.
7. The disputing investor shall deliver together with the "notice of arbitration" in paragraph 6:
(a) the name of the arbitrator appointed by the disputing Party; or