1. Each Party shall promote and facilitate the arbitration and other means of alternative for the settlement of international commercial disputes between private parties in the Free Trade Area.
2. For the purposes of paragraph 1, each Party shall provide appropriate procedures to ensure observance of agreements to arbitrate which has ratified, and the recognition and enforcement of arbitral awards in such disputes.
3. The Commission shall establish an advisory committee on private commercial disputes comprising persons with expertise or experience in the resolution of private international commercial disputes. Once established, the Committee shall report and general recommendations to the Commission on the existence, use and effectiveness of arbitration and other procedures for the resolution of disputes.
Chapter 21. Exceptions
Article 21.01. Definitions
For purposes of this chapter:
Tax convention means a convention for the avoidance of double taxation or other international agreement or arrangement taxation;
The Fund: international Monetary Fund;
Payments for current international transactions means payments for current international transactions as defined under the Articles of Agreement of the International Monetary Fund;
International capital transactions "means international capital transactions as defined under the Articles of Agreement of the International Monetary Fund; and
Transfers means international transactions and related international transfers and payments.
Article 21.02. General Exceptions
1. This Treaty shall be incorporated into and form an integral part thereof, article XX of GATT 1994 and its interpretative notes for purposes of:
a) Part two (trade in goods), except to the extent that some of its provisions apply to services or investment;
b) Part Three (Technical Barriers to Trade), except to the extent that some of its provisions apply to services or investment;
c) Chapter 15 (competition policy, State monopolies and enterprises), to the extent that some of its provisions apply to goods; and
d) (chapter 16 government procurement), to the extent that some of its provisions apply to goods.
2. This Treaty shall be incorporated into and form an integral part thereof, subparagraphs (a), (b) and (c) of article XIV of the GATS, for purposes of:
a) Part two (trade in goods), to the extent that some of its provisions apply to services;
b) Part Three (Technical Barriers to Trade), to the extent that some of its provisions apply to services;
c) Chapter 10 (investment);
d) Chapter 11 (cross-border trade in services);
e) Chapter 12 (Financial Services);
f) Chapter 13 (telecommunications);
g) Chapter 14 (temporary entry for business persons);
h) Chapter 15 (competition policy, State monopolies and enterprises), to the extent that some of its provisions apply to services; and
i) (chapter 16 government procurement), to the extent that some of its provisions apply to services.
Article 21.03. National Security
Nothing in this Treaty shall be construed as:
a) To require a party to furnish or allow access to information the disclosure of which it considers contrary to its essential security interests;
b) Prevent a Party from taking any action which it considers necessary to protect its essential security interests:
i) Relating to trade in arms, munitions and war materiel and trade operations and on goods, materials, technology and services undertaken directly or indirectly for the purpose of supplying a military establishment or other establishment of defence;
ii) Applied in time of war or other serious international tension or;
iii) With regard to the implementation of national policies or international agreements in the field of non-proliferation of nuclear weapons or other nuclear explosive devices; or
c) To prevent any Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 21.04. Balance of Payments
1. Nothing in this Treaty shall be construed as preventing a party from maintaining or adopting measures that restrict transfers where the party faces serious difficulties in their balance of payments, or threat thereof, provided that such restrictions are consistent with this article.
2. As soon as practicable after a party to apply a measure under this article, in accordance with the provisions of its international obligations, the Party:
a) Subject to revision of all restrictions on current account transactions in accordance with article VIII of the Articles of Agreement of the International Monetary Fund;
b) Shall enter into consultations in good faith with the IMF on economic adjustment measures to address the fundamental underlying problems in the economic difficulties; and
c) Endeavour to adopt or maintain economic policies consistent with such consultations.
3. The measures that apply or maintain in accordance with this Article shall:
a) To avoid unnecessary damage to the economic, commercial or financial interests of the other party;
b) Shall not be more burdensome than necessary to deal with the balance of payments difficulties or threat thereof;
c) Be temporary and phased out progressively as the situation improves the balance of payments;
d) Consistent with paragraph 2 (c) and with the Articles of Agreement of the International Monetary Fund; and
e) Application of agreement with the most favourable, including the principles of National Treatment and most-favoured nation.
4. A Party may adopt or maintain a measure under this article that gives priority to services that are essential to its economic programme, provided that the Party does not impose a measure for the purpose of protecting a specific industry or sector unless the measure is consistent with paragraph 2 (c) and with article VIII (3) of the Articles of Agreement of the International Monetary Fund.
5. Restrictions imposed on transfers:
a) Shall be consistent with article VIII (3) of the Articles of Agreement of the International Monetary Fund, where they apply to payments for current international transactions;
b) Shall be consistent with article VI of the Articles of Agreement of the IMF and be imposed only in conjunction with measures on payments for current international transactions under paragraph 2 (a), where they apply to international capital transactions; and
c) May not take the form of surcharges, tariff quotas, licensing or similar measures.
Article 21.05. Exceptions to Disclosure of Information
Nothing in this Treaty shall be construed as requiring a party to furnish or allow access to information the disclosure of which would impede the enforcement or otherwise be contrary to the Constitution, to the public interest or their laws concerning the protection of the privacy of individuals, the accounts and financial affairs of individual customers of financial institutions.
Article 21.06. Taxation
1. Except as provided in this article nothing in this Agreement shall apply to Taxation Measures.
2. Nothing in this Agreement shall affect the rights and obligations of either party under any tax convention. In the event of incompatibility between any of these treaties and this treaty, they shall prevail to the extent of the inconsistency.
3. Notwithstanding paragraph 2:
a) Article 3.03 (National Treatment) and such other provisions in this Treaty necessary to give effect to that article shall apply to taxation measures to the same extent as article III of the GATT 1994; and
b) Article 3.14 (export taxes) shall apply to taxation measures.
4. For the purposes of this article: Taxation Measures do not include:
a) A customs tariff "as defined in article (2.01 definitions of general application); or
b) The measures listed exceptions in (b), (c) and (d) that definition.
5. Subject to paragraph 2:
a) Articles 1103 (National Treatment), and 12.06 (National Treatment) shall apply to Taxation Measures on income or capital gains on the capital of taxable corporations, relating to the purchase or consumption of particular services;
b) Articles 10.02 (National Treatment), (10.03 most-favoured-nation treatment); 1103 (National Treatment) and 11.04 (most-favoured-nation treatment); and (12.06 National Treatment) and 12.07 (most-favoured-nation treatment) apply to all taxation measures, other than those on income or capital gains on the capital of taxable corporations, as well as taxes on capital, inheritance and gifts.
Nothing in these rules shall not apply to:
i) Any most favoured nation obligations with respect to advantages accorded by a Party pursuant to a tax convention;
ii) Any dissenting provision of any existing taxation measure;
iii) The continuation or renewal of a provision of any dissenting existing taxation measure;
(IV) reforms to dissenting A provision of any existing taxation measure, in both the amendment does not decrease, at the time of his grade in accordance with any of those articles; or
v) Any new taxation measure aimed at ensuring the implementation and tax collection of fair and effective, and that does not arbitrarily discriminate between individuals, goods or services of the Parties or nullifies or impairs similarly advantages granted pursuant to those articles, in the sense of nullification and impairment (annex 20).
Chapter 22. Final Provisions
Article 22.01. Amendments
1. Without prejudice to articles 19.01 (5) (Committee administering the treaty 2203) (2), and any amendment to this Treaty shall require the agreement of all the parties.
2. The agreed amendments shall enter into force after approval by the appropriate legal procedures of the Parties, and shall constitute an integral part of this Treaty.
Article 22.02. Reservations
This Treaty shall not be subject to reservations and interpretative declarations at the time of ratification.
Article 22.03. Duration
1. This Treaty shall have indefinite duration and shall enter into force between Panama and each Central American country on the thirtieth day after the date on which respectively have exchanged their respective instruments of ratification certifying that the necessary legal procedures and formalities have been completed.
2. For the present treaty takes effect between Panama and each Central American country, in the instruments of ratification shall be that the legal procedures and formalities have been completed on bilateral protocol containing:
a) Annex 3.04 (tariff relief) on the programme of tariff relief between Panama and the Central American country;
b) Section C of annex 4.03 (specific rules of origin) applicable between Panama and the Central American country;
c) Annexes I, II, III and IV of chapter 10 (investment) relating to reservations and restrictions on investment applicable between Panama and the Central American country;
d) Annexes I, II and V of chapter 11 (cross-border trade in services), relating to reservations and restrictions on cross-border services applicable between Panama and the Central American country;
e) Chapter 12 of annex VI (Financial Services), relating to reservations and restrictions on financial services applicable between Panama and the Central American country;
f) Annexes 3.10 (6) (restrictions on the importation and exportation) and 16.01 (entities), where appropriate; and (g) Such other matters as the parties may agree.
3. Protocols to be concluded pursuant to paragraph 2 shall be an integral part of this Treaty.
Article 22.04. Annexes
The annexes to this Agreement constitute an integral part of it.
Article 22.05. Denunciation
1. Any Party may denounce this Treaty. If Panama is not a party to the complaint, the Treaty shall remain in force for the other parties.
2. Denunciation shall take effect one hundred and eighty (180) days after be communicated to the other parties, without prejudice to the parties may agree on a different period.
Conclusion
Done in Panama City, Panama, six days of March two thousand six two original copies in equally authentic.
Miguel Ángel Rodríguez Echeverría President of the Republic of Costa Rica
Francisco Flores Pérez
The President of the Republic of El Salvador
Alfonso Portillo Cabrera
The President of the Republic of Guatemala
Enrique Bolaños Geyer
The President of the Republic of Nicaragua
Mireya Moscoso Rodríguez President of the Republic of Panama
Vincent Williams
First appointed Chair Honduras
In witness honour
Fernando Henrique Cardoso
President of the Federative Republic of Brazil