4. The date of establishment of the panel shall be the date on which the Chairman of the panel is appointed.
Article 21.7. PANEL SELECTION
1. The Panel will be composed of three members.
2. Within 20 days of receipt of the request for the establishment of a panel, each Party shall notify the other Party of the appointment of a panelist and propose up to four non-national candidates to serve as chair of the panel. If a Party fails to appoint a panelist within this period, the panelist shall be selected by the other Party within five days thereafter from the four proposed candidates for chairperson.
3. The Parties shall endeavor to agree upon and appoint the chairperson from the proposed candidates within 30 days from the date of receipt of the request for the establishment of a Panel. If the Parties are unable to select the chairperson within that period, the chairperson shall be selected by lot from the proposed candidates within seven days thereafter.
4. If a panelist appointed by a Party withdraws, is removed, or is unable to serve, a replacement shall be appointed by that Party within 30 days, and if this is not possible, shall be appointed in accordance with paragraph 2.
5. If the chairperson of the Panel retires, is removed, or is unable to serve, the Parties shall endeavor to decide on the appointment of his or her replacement within 30 days, and if this is not possible, the replacement shall be appointed in accordance with paragraph 3.
6. If the appointment referred to in paragraph 4 or 5 would require the selection from the list of candidates proposed by the Chair and there are no remaining candidates, each Party shall propose 3 additional candidates within 30 days thereafter and within seven days after such deadline, the panelist shall be selected from the proposed candidates.
7. The time limit applicable to the procedure is suspended at the time the panelist resigns, is removed or is unable to serve, and resumes on the date the replacement is selected.
Article 21.8. QUALIFICATIONS OF PANELISTS
1. Each Panelist shall:
(a) have expertise or experience in law, international trade or other matters covered by this Agreement, or in the settlement of disputes arising under international trade agreements;
(b) be selected strictly on the basis of objectivity, reliability, and sound judgment;
(c) be independent and not bound to the Parties, nor receive instructions from them;
(d) comply with the Code of Conduct for Arbitrators set forth in the "Understanding on Rules and Procedures Governing the Settlement of Disputes" of the WTO Agreement (document WT/DSB/RC/1) (3); and
(e) not have been involved in an alternative dispute resolution procedure referred to in Article 21.5 in relation to the same dispute.
Article 21.9. MODEL RULES OF PROCEDURE
1. Any Panel established pursuant to this Chapter shall be governed by the provisions of this Chapter and the Model Rules of Procedure, as set forth in Annex 21-B. A
The Panel, after consultation with the Parties, may establish supplementary rules of procedure that do not conflict with the provisions of this Chapter.
2. Unless otherwise agreed by the Parties, the Model Rules of Procedure shall ensure that:
(a) each Party has the right to present and receive written and oral pleadings and to submit rebuttals;
(b) the Parties have the right to at least one hearing before the Panel, which may be open to the public, subject to subparagraph (d);
(c) all submissions and comments made to the Panel are made available to the other Party; and
(d) information classified by any of the Parties as confidential shall be protected.
3. Unless the Parties decide otherwise within 15 days from the date of the establishment of the Panel, its mandate shall be:
"To examine, in an objective manner and in the light of the relevant provisions of this Agreement, the matter referred to in the request for the establishment of the panel and to make findings, rulings and recommendations as provided in Article 21.10."
4. If the complaining Party alleges that a benefit has been nullified or impaired within the meaning of Annex 21-A, the mandate shall so state.
5. Ifa Party wishes the Panel to make findings on the level of adverse trade effects caused by non-compliance with the obligations of this Agreement, the terms of reference should so state.
6. At the request of a Party, or on its own initiative, the Panel may seek information and technical opinions from any person or entity it deems relevant under the Model Rules of Procedure.
7. The findings, determinations and recommendations of the Panel pursuant to Article 21.10 shall be adopted by a majority of its members.
8. Panelists may submit separate opinions on matters not unanimously agreed upon. The Panel may not disclose the identity of panelists who are associated with the majority or minority opinions.
9. The expenses associated with the proceeding, including the expenses of the panelists, shall be borne equally by the Parties, unless the Panel determines otherwise based on the particular circumstances of the case.
Article 21.10. PANEL REPORTS
1. Unless the Parties agree otherwise, the Panel shall issue its reports in accordance with the provisions of this Chapter. The Panel shall interpret this Agreement and base its reports in accordance with the rules of interpretation of public international law, the submissions and arguments of the Parties; as well as any other information and technical opinions made available to it in accordance with the provisions of this Chapter.
2. The Panel shall submit an initial report to the Parties within 90 days after the election of the last panelist, in accordance with its terms of reference. This report shall contain:
(a) findings of fact and conclusions of law;
(b) a determination as to whether or not a Party complained against has complied with its obligations under this Agreement and any other findings or determinations requested in the mandate; and
(c) the resolutions and recommendations for the resolution of the dispute.
3. The Panel's initial report shall be confidential.
4. A Party may submit written comments to the Panel on its initial report within 15 days of the submission of the report. After considering such comments, the Panel, on its own initiative or at the request of a Party, may within the terms provided in this Article:
(a) request the opinion of a Party;
(b) reconsider its report; or
(c) conduct any other examinations it deems appropriate.
5. The Panel shall submit a final report to the Parties within 30 days after the presentation of the initial report, if there are no comments from the Parties. If there are comments, this period shall be extended to 45 days following the presentation of the initial report.
6. Unless the Parties agree otherwise, the final report of the Panel shall be published by the two Parties 15 days after it is submitted by the Panel, subject to the protection of confidential information as provided in Article 21.9.2. (d). At the request of a Party, the Parties shall postpone publication for up to 30 days following the submission of the final report.
Article 21.11. COMPLIANCE WITH THE FINAL REPORT
1. Upon receipt of the final report of the Panel, the Parties shall reach an agreement on the resolution of the dispute, which shall be in accordance with the findings and recommendations of the Panel, if any, unless the Parties decide otherwise.
2. Whenever possible, the solution should consist of the elimination of the measure that is inconsistent with this Agreement or that causes nullification or impairment within the meaning of Annex 21-A.
3. If the Parties do not reach an agreement on the implementation of the Panel's final report within 30 days of its submission, or such other period as the Parties may have agreed, the complaining Party may request the Party complained against to enter into negotiations with a view to agreeing on mutually acceptable compensation. Such compensation shall be provided on a temporary basis until the recommendations and rulings of the final report are implemented.
Article 21.12. NON-COMPLIANCE - SUSPENSION OF BENEFITS
1. The complaining Party may, upon notification to the other Party, suspend in an equivalent manner the application of benefits or other obligations of this Agreement, when:
(a) the Parties have not been able to agree on the implementation of the Panel's mutually agreed resolutions and recommendations within 30 days of receipt of the final report; or
(b) the Parties fail to decide on compensation within 30 days of the Party's request, if there is a request by a Party to that effect; or
(c) having agreed on the manner of implementation of the Panel report or compensation, the Complaining Party considers that the Party complained against has not complied with the terms of the agreement;
2. In the case of activation of the Panel provided for in Article 21.13.1(b), the complaining Party may suspend benefits or other obligations, once the final report of this Panel, confirming the possibility of suspending such benefits or obligations, has been issued and notified in accordance with Article 21.13.
3. The notification referred to in paragraph 1 shall specify the level of benefits or obligations that the complaining Party shall suspend.
4. In considering the benefits or obligations to be suspended pursuant to paragraph 1, the complaining Party:
(a) shall first seek the suspension of benefits or obligations within the same sector affected by the measure that the panel has found to be inconsistent with an obligation under this Agreement, or to be a cause of nullification or impairment within the meaning of Annex 21-A; and
(b) if it considers that it is not feasible or effective to suspend benefits or obligations in the same sector, it may suspend benefits or obligations in another sector.
4. The suspension of benefits or obligations shall be temporary and shall be applied by the complaining Party only until such time as the other Party brings the inconsistent measure that gave rise to the suspension into conformity with this Agreement, or as a result of the panel process described in Article 21.13, or until such time as the Parties reach agreement on the manner of implementation of the rulings and recommendations of the Panel.
Article 21.13. EVALUATION OF COMPLIANCE AND SUSPENSION OF BENEFITS
1, A Party may, by written notice to the other Party, request that a Panel be reconvened to determine:
(a) if the level of benefits or obligations suspended by a Party pursuant to Article 21.12.1 is manifestly excessive; or
(b) any disagreement as to the existence or consistency with this Agreement of measures taken to comply with previously established Panel rulings or recommendations.
2. In the written notification of the request referred to in paragraph 1, the Party shall identify the specific measures or other matters at issue and provide a summary of the legal basis of the complaint.
3. The Panel shall be reconvened upon receipt by the other Party of the written notification of the request referred to in paragraph 1. In the event that any of the panelists is unable to serve on the new panel, such panelist shall be replaced in accordance with Article 21.7.
4. The provisions of Articles 21.9 and 21.10 apply to the procedures adopted and the report issued by the Panel reconvened under this Article, except that the panel shall submit an initial report within 60 days after reconvening.
5. A Panel reconvened pursuant to this Article may include in its report a recommendation, as appropriate, that any suspension of benefits or obligations be terminated or that the amount of benefits or level of obligations suspended be modified.
6. In the case provided for in paragraph 1(b), where a Panel concludes that the measures taken by the Party complained against to comply with the rulings or recommendations of the previously established Panel do not comply with such rulings or recommendations, the complaining Party may proceed in accordance with Article 21.12, as appropriate.
Article 21.14. RIGHTS OF INDIVIDUALS
A Party may not grant a right of action under its domestic law against the other Party on the ground that the act or omission of that Party is inconsistent with this Agreement.
Article 21.15. DEFINITIONS
For the purposes of this Chapter:
Party complained against means the Party receiving the request for the establishment of a Panel pursuant to Article 21.7; and
Complaining Party means a Party that requests the establishment of a Panel pursuant to Article 21.7.
Annex 21-A. NULLIFICATION OR IMPAIRMENT
1. If a Party believes that the benefit it could reasonably have expected to receive under a provision of the following chapters:
(a) Chapters 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin and Origin Procedures), 4 (Customs Administration and Trade Facilitation); or 12 (Government Procurement).
(b) Chapter 10 (Cross-Border Trade in Services), or
is being nullified or impaired as a result of the application of a measure of the other Party that is inconsistent with this Agreement within the meaning of Article XXTII:1(b) of the GATT 1994, Article XXII.3 of the GATS or Article XXII.2 of the Agreement on Government Procurement, signed on April 15, 1994 (GPA), the Party may have recourse to the dispute settlement mechanism of this Chapter. A Panel established under this Chapter shall take into account relevant case law interpreting Article XXIII.1(b) of the GATT 1994, Article XXIII.3 of the GATS and Article XXII.2 of the GPA.
Annex 21-B. MODEL RULES OF PROCEDURE
Application
1. The following rules of procedure are established in accordance with the following Article 21.9 and shall apply to dispute settlement procedures pursuant to Chapter 21, unless the Parties agree otherwise.
Definitions
2. For the purposes of this Annex:
advisor means a person engaged by a Party to advise or assist such Party in connection with the Panel proceeding;
assistant means a person who, under the terms of appointment by a panelist, investigates or provides assistance to such panelist;
Complaining Party means a Party that requests the establishment of a panel pursuant to Article 21.6 (Establishment of Panel);
days means one calendar day;
legal holiday means every Saturday and Sunday and any other day designated by a Party as a holiday for the purposes of these rules;
Panel means a Panel established pursuant to Article 21.6 (Establishment of a Panel);
panelist means a member of the Panel actually constituted pursuant to Article 21.6 (Establishment of a Panel);
procedure means a procedure of the Panel;
representative means an employee of a government department or agency or any government entity of a Party; and
Party complained against means the Party that has received the request for the establishment of the Panel pursuant to Article 21.6 (Establishment of a Panel).
3. Any reference in these rules of procedure to an Article is a reference to the relevant Article in Chapter 21 (Dispute Settlement).
Writings and Other Documents
4. Each Party shall send the original and at least three copies of any written submissions to the chairperson of the Panel, who shall distribute them among the other panelists, and one copy to the other Party. The sending of written submissions and any other documents related to the Panel proceedings may be made by facsimile or any other means of electronic transmission if the Parties so agree. Where a Party sends physical copies of written submissions or any other documents related to the Panel proceedings, that Party shall at the same time send an electronic version of such submission or other document.
5. Deadlines shall be counted from the day after the date of receipt of the written submissions or other documents. The complaining Party shall send an initial written submission to the Party complained against within 15 days after the date on which the last panelist is appointed. The Party complained against shall in turn send a counter-submission within 20 days after the date on which the deadline for the filing of the complaining Party's first written submission expires.
6. The Panel shall establish, in consultation with the Parties, the dates for the submission of the Parties' subsequent counter-arguments and for any other submissions that the Panel and the Parties agree are appropriate.
7. A Party may at any time correct minor errors of a typographical nature in any pleading or other document relating to the Panel proceeding by submitting a new document clearly indicating the changes.
8. If the last day for mailing a document falls on a legal holiday of a Party or on any day on which the government offices of such Party are closed by order of the government or by force majeure, the document may be mailed on the next business day.
Burden of Proof
9. A Party claiming that an existing measure of the other Party is or may be inconsistent with an obligation under this Agreement; or that the other Party has in any way breached an obligation under this Agreement; or that there is nullification or impairment within the meaning of Annex 21-A shall bear the burden of establishing such inconsistency.
10. If the other Party asserts that a measure is subject to an exception under this Agreement, it shall bear the burden of establishing that such exception applies.
Panel Operation
11. The Chairperson of the Panel shall preside at all meetings. The Panel may delegate to the chairperson the power to make administrative decisions relating to the proceeding.
12. The Panel may conduct its business by any means it deems appropriate, including by telephone, facsimile and video transmission or computer link.
13. Only panelists may attend the deliberations of the Panel. The Panel may, in consultation with the Parties, employ such number of assistants, interpreters, translators or stenographers as may be necessary for the proceedings and allow them to be present during the deliberations. The members of the Panel and persons employed by the Panel shall maintain the confidentiality of the deliberations of the Panel and of any information that is protected pursuant to Article 21.9.2(d) and the rules of this Annex.
14. When a procedural question arises that is not covered by the provisions of this Agreement and its Annexes, the Panel may establish an appropriate procedure that is consistent with the provisions contained in this Agreement.
15. A Panel may, in consultation with the Parties, modify any applicable time limits in the Panel proceedings and make other procedural or administrative adjustments to the extent required by the proceeding.
Procedures for Selecting the Panel Chairperson by Lottery
16. The following procedures apply to select the Chairperson of the Panel by lot, in accordance with Article 21.7:
(a) the Party presiding over the selection by lot (hereinafter "the presiding Party") shall, for the purpose of selecting the chairperson in accordance with Article 21.7.3, be the complaining Party; and
(b) the presiding Party shall notify, three days in advance, the other Party (hereinafter "the responding Party") of the date and place for the selection by lot, which shall take place within seven days of the date on which the Parties were unable to agree on the designation of the Chairperson in accordance with Article 21.7.3, and shall invite representatives of the responding Party to attend. The selection by lot shall take place in the territory of the presiding Party;
(c) the presiding Party shall prepare a mailbox containing identical sealed envelopes, each of which shall contain the name of one of the candidates nominated in accordance with paragraph 2 of Article 21.7, so that there is exactly one envelope corresponding to each of the candidates;
(d) a representative of the responding Party shall remove from the mailbox, at random and without being able to discern the identity of the candidate to whom the envelope corresponds, an envelope until the seal is removed and the envelope is opened;
(e) the candidate to whom the envelope corresponds will be the panelist selected as chairperson;
(f) after selection by lot, the mailbox and any envelopes remaining in the mailbox shall be made available for verification by the representatives of the responding Party in the presence of the representatives of the presiding Party.
17. If, despite notification in accordance with subparagraph 16(b), no representative of the responding Party attends the selection by lot, the presiding Party may itself conduct the procedures for the selection.
Hearings
18. The chairperson of the Panel shall set a date and time for the initial hearing and any subsequent hearings in consultation with the Parties and the panelists, and then notify the Parties in writing of such dates and times.
19. The place for the hearings shall alternate between the territories of the Parties, the first hearing being in the territory of the Party complained against, unless the Parties agree otherwise. The Party in whose capital the hearing is held shall be responsible for making the administrative and logistical arrangements for the hearing.
20. If the Parties deem it necessary, the Panel may agree to additional hearings. 21. All panelists must be present during the hearing.
22. No later than five days before the date of a hearing, each Party shall deliver to the other Party and to the Panel a list of names of those persons who will be present at the hearing on behalf of that Party, and of other representatives or advisors who will attend the hearing.
23. Each hearing shall be conducted by the Panel in a manner that ensures that the complaining Party and the Party complained against are given equal time to present their arguments, rebuttals and counter-rebuttals.
24. Hearings may be open to the public, except where it is necessary to protect information that the Parties have designated as subject to confidential treatment in accordance with Article 21.9.2(b) and (d). The Panel, in consultation with the Parties, shall adopt appropriate logistical arrangements and procedures to ensure that the hearings are not interrupted by the attendance of the public.
25. The Panel shall arrange for the preparation of transcripts of the hearings, if any, and shall deliver a copy to each Party as soon as possible after such transcripts are prepared.
Ex Parte Contacts
26. Neither Party may communicate with the Panel without notifying the other Party. Likewise, the Panel shall not communicate with a Party in the absence of, or without notifying the other Party.
27. No panelist may discuss any aspect of the substantive issues in the Parties' proceedings in the absence of the other panelists.
Disclosure of information
28. The Parties shall maintain the confidentiality of the hearings of the Panels, their deliberations and preliminary report, as well as the written submissions and communications addressed to the Panel, in accordance with the following procedures:
(a) a Party may at any time make its submissions public;
(b) to the extent it deems strictly necessary to protect the privacy of individuals or to legitimate commercial interests of particular enterprises, whether public or private, or to avoid fundamental confidentiality concerns, a Party may designate as confidential specific information contained in its submissions or in submissions to a Panel hearing;
(c) a Party shall treat as confidential any information submitted by the other Party to the Panel, which has been designated by that Party as confidential pursuant to subparagraph (b); and
(d) each Party shall take such reasonable measures as may be necessary to ensure that experts, interpreters, translators, stenographers (personnel designated to take notes) and other persons involved in the Panel proceedings safeguard the confidentiality of the proceedings.
Remuneration and Payment of Expenses
29. The chairperson of the Panel shall be remunerated for each full day of performance of his or her duties on the Panel, in accordance with the WTO Scale of Payment for non- governmental arbitrators in a WTO dispute; or at a value agreed by the Parties.
30. Each Party shall bear the remuneration and expenses of the panelist designated by it, including any panelist designated by the other Party pursuant to the procedure set out in Article 21.7 in the event that the Party has not designated its panelist.
31. Each panelist shall keep a record and submit a final account to the Parties of his or her time and expenses, as well as those of any assistant. The chairperson of the Panel shall keep a record and submit a final account to the Parties of all overhead expenses.
Written Questions
32. During the process, the Panel may at any time put questions in writing to one or both Parties. The Parties shall receive a copy of the questions posed by the Panel.
33. Each Party shall also provide a written copy of its response to the questions posed by the Panel to the other Party. The Parties shall have the opportunity to comment in writing on the other Party's response within five days from the date of delivery.
Role of the Experts
34. At the request of a Party, or on its own initiative, the Panel may seek information and technical advice from any appropriate person or body, subject to paragraphs 35 and 36 and any additional terms and conditions that the Parties may agree. The requirements set out in Article 21.8 shall apply to experts or bodies, as appropriate.
35. Before the Panel seeks information or technical advice, the Panel:
(a) notify the Parties of its intention to seek information or technical advice pursuant to paragraph 34 and provide them with an adequate period of time to submit comments; and