(b) the time at which the Parties reach an agreement on the settlement of the dispute; or
(c) that the panel described in Article 18.12 concludes in its report that the Party complained against has complied.
Article 18.12. Compliance Review and Suspension of Benefits
1. A Party may, by written notice to the other Party, request that the panel established under Article 18.5 be reconvened to make a determination:
(a) if the level of suspension of benefits applied by the complaining Party in accordance with Article 18.11.1 is manifestly excessive; or
(b) on any disagreement as to the existence of measures taken to comply with the originally established panel report or as to the compatibility of such measures with this Agreement.
2. In the written communication, the Party shall indicate the specific measures or issues in dispute and provide a brief summary of the legal basis of the complaint sufficient to present the problem clearly.
3. If the original panel or any of its members cannot be reconvened, the provisions of Article 18.7 shall apply mutatis mutandis.
4. The provisions of Articles 18.8 and 18.9 apply mutatis mutandis to procedures adopted and reports issued by a panel that is reconstituted under the terms of this Article, except that, as provided in Article 18.8.8, the panel shall submit a report within sixty (60) days from the appointment of the last panelist, if the request refers to subparagraph 1 (a) and within ninety (90) days, if the request refers to subparagraph 1 (b).
5. A panel reconvened under subparagraph 1(b) shall determine whether it is appropriate to terminate any suspension of benefits. If the panel is reconstituted under subparagraph 1(a) and determines that the level of suspended benefits is manifestly excessive, it shall set the level of benefits it considers to be of equivalent effect.
Article 18.13. Matters Relating to Judicial and Administrative Proceedings
1. If a dispute arises as to the interpretation or application of this Agreement in any internal judicial or administrative proceeding of a Party that either Party considers merits its intervention, or if a court or administrative body requests the opinion of a Party, that Party shall so notify the other Party. The Commission shall endeavor to agree, as soon as possible, on an appropriate response.
2. The Party in whose territory the court or administrative body is located shall submit the interpretation agreed upon by the Commission to the court or administrative body, in accordance with the procedures of the court or administrative body concerned.
3. If the Commission is unable to reach agreement, each Party may submit its own views to the court or administrative body, in accordance with the procedures of that body.
Article 18.14. Rights of Individuals
Neither Party may grant a right of action under its domestic law against the other Party on the ground that a measure of the other Party is inconsistent with this Agreement.
Article 18.15. Alternative Means of Dispute Resolution
1. To the greatest extent possible, each Party shall promote and facilitate recourse to arbitration and other alternative means of settling international commercial disputes between private parties in the free trade area.
2. For these purposes, each Party shall provide for appropriate procedures to ensure the enforcement of arbitration agreements and the recognition and enforcement o f arbitral awards rendered in such disputes.
3. A Party shall be deemed to be in compliance with paragraph 2 if it is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958, and conforms to its provisions.
Article 18.16. Suspension and Termination of Proceedings
1. The Parties may agree to suspend the work of the panel at any time for a period not exceeding twelve (12) months following the date of such agreement. If the work of the panel remains suspended for more than twelve (12) months, the authority of the panel shall lapse, unless the Parties agree otherwise. If the authority of the panel lapses and the Parties have not reached an agreement on the settlement of the dispute, nothing in this Article shall prevent a Party from requesting a new proceeding regarding the same matter.
2. The Parties may agree to terminate the panel proceedings by joint notification to the chairperson of the panel at any time prior to the notification of the report.
Chapter 19. Transparency
Article 19.1. Points of Contact
1. Each Party shall designate within sixty (60) days after the date of entry into force of this Agreement, a point of contact to facilitate communications between the Parties on any matter covered by this Agreement.
2. At the request of the other Party, the contact point shall indicate the office or official responsible for the matter and provide such support as may be necessary to facilitate communication with the requesting Party.
Article 19.2. Publication
1. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application that relate to any matter covered by this Agreement are promptly published or otherwise made available for the information of interested persons and the other Party.
2. To the extent possible, each Party:
(a) publish any measure referred to in paragraph 1 which it proposes to adopt relating to matters covered by this Agreement; and
(b) shall afford interested persons and the other Party the opportunity to comment on such measures.
Article 19.3. Provision of Information
1. At the request of a Party, and to the extent permitted by its domestic law, the other Party shall provide information and respond promptly to questions concerning any matter that could materially affect this Agreement.
2. Any provision of information provided under this Article shall be without prejudice to whether or not the measure is consistent with this Agreement.
Article 19.4. Administrative Procedures
In order to administer in a consistent, impartial and reasonable manner all measures of general application affecting matters covered by this Agreement, each Party shall ensure that, in its administrative procedures applying the measures referred to in Article 19.2.1 with respect to particular persons, goods or services of the other Party in specific cases:
(a) whenever possible, persons of the other Party who are directly affected by a proceeding shall, in accordance with domestic law, be given reasonable notice of the commencement of the proceeding, including a description of its nature, a statement of the legal basis under which the proceeding is initiated, and a general description of all matters in dispute;
(b) where time, the nature of the proceeding and the public interest permit, such persons are given a reasonable opportunity to present facts and arguments in support of their claims prior to any final administrative action; and
(c) its procedures are in accordance with national legislation.
Article 19.5. Review and Challenge
1. Each Party shall establish or maintain courts or tribunals or procedures of a judicial or administrative nature for the purpose of the prompt review and, where warranted, correction of final administrative actions relating to matters covered by this Agreement. Such tribunals shall be impartial and not connected with the administrative enforcement agency or authority, and shall have no substantial interest in the outcome of the matter.
2. Each Party shall ensure that, before such courts or in such proceedings, the Parties have the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and arguments or, in cases where required by national legislation, on the record compiled by the administrative authority.
3. Each Party shall ensure that, subject to the means of challenge or subsequent review available under its domestic law, such rulings are implemented by its agencies or authorities and govern the practice of such agencies or authorities with respect to the administrative action in question.
Article 19.6. Specific Standards
The provisions of this Chapter are without prejudice to the specific rules established in other Chapters of this Treaty.
Article 19.7. Definitions
For the purposes of this Chapter:
administrative ruling of general application means an administrative ruling or interpretation that applies to all persons and factual situations that generally fall within its scope, and that establishes a standard of conduct, but does not include:
(a) rulings or decisions in an administrative proceeding that applies to a particular person, good or service of the other Party in a specific case; or
(b) a resolution that resolves with respect to a particular act or practice.
Chapter 20. Administration of the Treaty
Article 20.1. The Free Trade Commission
1. The Parties establish the Free Trade Commission, composed of representatives at the Ministerial level of each Party, in accordance with Annex 20.1 (The Free Trade Commission), or their designees.
2. The Commission shall:
(a) supervise the implementation of the Treaty;
(b) supervise the further development of the Treaty;
(c) oversee the work of all bodies established under this Treaty, including committees and working groups;
(d) approve at its first meeting, unless otherwise agreed by the Parties, the Rules of Procedure and Code of Conduct referred to in Chapter 18 (Dispute Settlement), and modify them as necessary;
(e) fix the amount of remuneration and expenses to be paid to the members of the panels referred to in Chapter 18 (Dispute Settlement);
(f) to hear any other matter that may affect the operation of the Treaty; and
(g) establish and modify its rules of procedure.
3. The Commission may:
(a) establish and delegate responsibilities to the bodies established under this Treaty;
(b) modify in compliance with the objectives of this Treaty:
(i) the Schedules set out in Annex 2.3 (Tariff Elimination Program) by improving the tariff conditions for market access, including the possibility of accelerating tariff elimination and including one or more excluded goods in the Tariff Elimination Program;
(ii) the rules of origin set out in Annex 3 (Specific Rules of Origin), Annex 3.16 (Certificate of Origin), Annex 3.17 (Declaration of Origin); and
(iii) Annex 10.1 (Coverage Annex);
(c) issue interpretations of the provisions of this Agreement;
(d) analyze any proposed amendments to this Agreement in order to make a recommendation to the Parties;
(e) review the impacts of the Treaty on the micro, small and medium-sized enterprises of the Parties;
(f) seek the advice of non-governmental individuals or groups; and
(g) take any other action for the exercise of its functions as agreed by the Parties.
4. Each Party shall implement, in accordance with its national legislation, any modification referred to in subparagraph 3(b), within the period agreed by the Parties.
5. All decisions of the Commission shall be adopted by mutual agreement.
6. The Commission shall meet at least once (1) a year in regular session, unless the Commission decides otherwise. The regular sessions of the Commission shall be held alternately in the territory of the Parties or by any technological means.
Article 20.2. Free Trade Agreement Coordinators
1. Each Party shall designate a Free Trade Agreement Coordinator, in accordance with Annex 20.2 (Free Trade Agreement Coordinators).
2. The Coordinators will work together in the development of agendas, as well as in other preparations for the meetings of the Commission and will give appropriate follow-up to the decisions of the Commission.
Article 20.3. Administration of Dispute Settlement Procedures
1. Each Party shall:
(a) designate an office to provide administrative support to the panels contemplated in Chapter 18 (Dispute Resolution) and perform other functions at the direction of the Commission; and
(b) notify the other Party of the address of its designated office.
2. Each Party shall be responsible for the operation and costs of its designated office.
Annex 20.1. The Free Trade Commission
The Free Trade Commission shall be composed of:
(a) in the case of Panama, the Minister of Commerce and Industry; and
(b) in the case of Peru, the Minister of Foreign Trade and Tourism, or his successors.
Annex 20.2. Free Trade Agreement Coordinators
The Free Trade Agreement Coordinators will be for:
(a) in the case of Panama, the Office of the Chief of International Trade Negotiations of the Ministry of Commerce and Industries or its designee; and
(b) in the case of Peru, the agency designated by the Vice Minister of Foreign Trade,
or their successors.
Chapter 21. Exceptions
Article 21.1. General Exceptions
1. For the purposes of Chapter 2 (Market Access for Goods), Chapter 3 (Rules of Origin and Origin Procedures), Chapter 4 (Trade Facilitation and Customs Procedures), Chapter 5 (Cooperation and Mutual Assistance in Customs Matters), Chapter 6 (Sanitary and Phytosanitary Measures) and Chapter 7 (Technical Barriers to Trade), Article XX of GATT 1994 and its interpretative notes are incorporated into and form an integral part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XX(b) of GATT 1994 include environmental measures necessary to protect human, animal or plant life or health, and that Article XX(g) of GATT 1994 applies to measures relating to the conservation of living or non-living exhaustible natural resources.
2. For the purposes of Chapter 13 (Cross-Border Trade in Services), Chapter 15 (Maritime Services), Chapter 16 (Telecommunications) and Chapter 17 (Temporary Entry of Business Persons), Article XIV of the WTO GATS (including the footnotes) are incorporated into and form an integral part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in Article XIV(b) of the WTO GATS include environmental measures necessary to protect human, animal or plant life or health.
Article 21.2. Essential Security
Nothing in this Agreement shall be construed to mean:
(a) oblige a Party to provide or give access to information the disclosure of which it considers contrary to its essential security interests; or
(b) prevent a Party from applying measures it considers necessary to fulfill its obligations with respect to the maintenance or restoration of international peace or security, or to protect its essential security interests.
Article 21.3. 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 the Parties under any tax convention. In the event of any inconsistency between this Agreement and any such treaty, the treaty shall prevail to the extent of any such inconsistency.
of inconsistency. In the case of a tax treaty between the Parties, the competent authorities under that treaty shall have sole responsibility for determining whether there is any inconsistency between this Agreement and that treaty.
3. Notwithstanding the provisions of paragraph 2:
(a) Article 2.2 (National Treatment) and such other provisions in this Agreement as are necessary to give effect to that Article shall apply to taxation measures to the same extent as Article III of GATT 1994; and
(b) Article 2.11 (Export Taxes) shall apply to tax measures.
4. Subject to the provisions of paragraph 2:
(a) Articles 13.3 (National Treatment) and 14.2 (National Treatment) shall apply to taxation measures on income, capital gains, or on the taxable capital of enterprises relating to the acquisition or consumption of specified services, except that nothing in this subparagraph shall prevent a Party from conditioning the receipt or continued receipt of an advantage related to the acquisition or consumption of specified services on the requirement to supply the service in its territory; and
(b) Articles 12.2 (National Treatment) and 12.3 (Most-Favored Nation Treatment), 13.3 (National Treatment) and 13.4 (Most-Favored Nation Treatment), and 14.2 (National Treatment) and 14.3 (Most-Favored Nation) shall apply to all tax measures, except those on income, capital gains, or on the taxable capital of corporations, estate, inheritance, gift, and generation-skipping transfers.
5. Paragraph 4 may not:
(a) impose any most-favored-nation obligation with respect to the benefit granted by a Party pursuant to any tax convention;
(b) apply to any non-conforming provision of any existing tax measure;
(c) apply to the continuation or prompt renewal of a non-conforming provision of any existing tax measure;
(d) apply to an amendment to a non-conforming provision of any existing tax measure, to the extent that such amendment does not, at the time it is made, reduce its degree of conformity with any of the articles referred to in paragraph 4;
(e) apply to the adoption or enforcement of any taxation measure aimed at ensuring the equitable or effective application or collection of taxes (as permitted under Article XIV(d) of the WTO GATS); or
(f) apply to a provision that conditions the receipt, or continued receipt, of an advantage in relation to contributions to, or income from, pension trusts or pension plans on the requirement that the Party maintain continuing jurisdiction over the pension trust or pension plan.
6. Subject to paragraph 2 and without prejudice to the rights and obligations of the Parties under paragraph 3, paragraphs 3, 5, 6, 7, 8, 9 and 10 of Article 12.6 (Performance Requirements) shall apply to taxation measures.
7. (a) Article 12.10 (Expropriation and Compensation) and 12.16 (Submission of a Claim to Arbitration) shall apply to a taxation measure that is claimed to be expropriatory. However, no investor may invoke Article 12.10 (Expropriation and Compensation) as a basis for a claim where it has been determined pursuant to this paragraph that the measure does not constitute an expropriation (1). An investor seeking to invoke Article 12.10 (Expropriation and Compensation) with respect to a taxation measure shall first submit the matter to the competent authorities of the respondent and claimant Party referred to in subparagraph (b) at the time it delivers written notice of its intention to submit a claim to arbitration under Article 12.16 (Submission of a Claim to Arbitration) for those authorities to determine whether the taxation measure constitutes an expropriation. If the competent authorities do not agree to examine the matter or if, having agreed to examine the matter, they do not agree that the measure does not constitute an expropriation, within six (6) months after the matter has been submitted to them, the investor may submit its claim to arbitration in accordance with Article 12.16 (Submission of a Claim to Arbitration).
(b) For the purposes of this paragraph, competent authorities means:
(i) in the case of Panama, the Dirección General de Ingresos del Ministerio de Economía y Finanzas; and
(ii) in the case of Peru, the Ministry of Economy and Finance, or its successors.
8. For the purposes of this Article:
tax convention means a convention for the avoidance of double taxation or other international tax convention or arrangement; and
taxes and tax measures do not include:
(a) a customs duty as defined in Article 1.5 (Definitions of General Application); or
(b) the measures listed in exceptions (b) and (c) of the definition of customs duty in Article 1.5 (Definitions of General Application).
Article 21.4. Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or give access to confidential information, the disclosure of which would impede the enforcement of its domestic law, or which would be contrary to the public interest, or which would prejudice the legitimate commercial interest of particular enterprises, whether public or private.
Article 21.5. Balance of Payments Safeguard Measures
In accordance with the WTO Agreement and consistent with the Articles of Agreement of the International Monetary Fund, a Party may adopt or maintain temporary, non-discriminatory safeguard measures with respect to payments and capital movements that it considers necessary:
(a) in the event of the existence or threat of serious external financial or balance of payments difficulties; or
(b) in cases where, under exceptional circumstances, payments and capital movements cause or threaten to cause serious difficulties for macroeconomic management, particularly in monetary and exchange rate policy.
Chapter 22. Final Provisions
Article 22.1. Annexes, Appendices and Footnotes
The Annexes, Appendices, and footnotes to this Agreement constitute an integral part of this Agreement.
Article 22.2. Amendments
1. The Parties may agree to any amendment to this Agreement.
2. When the amendment is agreed and approved in accordance with the legal procedures of each Party, the amendment shall constitute an integral part of this Agreement and shall enter into force on the date on which the Parties so agree.
Article 22.3. Article 22.3: Amendments to the WTO Agreement
If any provision of the WTO Agreement that has been incorporated into this Agreement is amended, the Parties shall consult with a view to amending the corresponding provision of this Agreement, as appropriate, in accordance with Article 22.2.
Article 22.4. Reservations and Interpretative Statements (1)
This Treaty shall not be subject to reservations or unilateral interpretative declarations.
Article 22.5. Entry Into Force
This Agreement shall enter into force sixty (60) days after the date on which the Parties exchange written notifications confirming that they have complied with their respective legal procedures or on the date on which the Parties so agree.