Article 22.6. Denunciation
Either Party may denounce this Agreement. The denunciation shall take effect one hundred and eighty (180) days after written notification to the other Party, notwithstanding that the Parties may agree on a different period of time to give effect to the denunciation.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Treaty.
DONE at Panama, Republic of Panama, in two equally authentic and valid copies, this 25th day of May, 2011.
BY THE GOVERNMENT OF THE REPUBLIC OF PANAMA:
Roberto C. Henríquez Minister of Commerce and Industries
BY THE GOVERNMENT OF THE REPUBLIC OF PERU:
Eduardo Ferreyros Küppers Minister of Foreign Trade and Tourism
AS A WITNESS OF HONOR:
Ricardo Martinelli Berrocal President of the Republic of Panama
Attachments
Annex I. Nonconforming Measures
Annex I. Explanatory Note
1. A Party's Schedule to this Annex sets forth, in accordance with Articles 12.7 (Nonconforming Measures) and 13.7 (Nonconforming Measures), the non- conforming aspects of a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 12.2 (National Treatment) or 13.3 (National Treatment);
(b) Article 12.3 (Most-Favored-Nation Treatment) or 13.4 (Most-Favored- Nation Treatment);
(c) Article 12.5 (Senior Executives and Boards of Directors);
(d) Article 12.6 (Performance Requirements);
(e) Article 13.5 (Market Access); or
(f) Article 13.6 (Local Presence).
2. Each reservation in the Party's Schedule sets forth the following elements:
(a) Sector refers to the general sector for which the reservation has been made;
(b) Subsector refers to the specific sector for which the reservation has been made;
(c) Obligations Affected specifies the obligation(s) referred to in paragraph 1 that, in accordance with Articles 12.7 (Non-Conforming Measures) and 13.7 (Non-Conforming Measures), do not apply to the non-conforming aspects of the measure(s) listed as provided for in paragraph 3;
(d) Level of Government indicates the level of government that maintains the measure(s) listed;
(e) Measures identifies the laws, regulations or other measures, for which the reservation has been made. A measure cited in the Measures element:
(i) means the measure as modified, continued or renewed, as of the date of entry into force of this Agreement; and
(ii) includes any subordinate action taken or maintained u n d e r the authority of, and consistent with, such action; and
(f) Description sets forth the liberalization commitments, if any, at the date of entry into force of this Agreement and the remaining non-conforming aspects of the existing measures on which the reservation has been made.
3. In interpreting a reservation to the List, all elements of the reservation shall be considered. A reservation shall be interpreted in the light of the relevant obligations of the Chapters in respect of which the reservation has been made. To the extent that:
(a) the Measures element is qualified by a liberalization commitment of the Description element, the Measures element so qualified shall prevail over any other element; and
(b) the Measures element is not qualified, the Measures element shall prevail over any other element, except where any discrepancy between the Measures element and the other elements considered as a whole is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case, the other elements shall prevail to the extent of the discrepancy.
4. Pursuant to Articles 12.7 and 13.7, the Articles of this Agreement specified in the Affected Obligations element of a reservation do not apply to the non-conforming aspects of the measures identified in the Measures element of that reservation.
5. Where a Party maintains a measure requiring a service supplier to be a national, permanent resident, or resident in its territory as a condition for the supply of a service in its territory, a reservation made for that measure with respect to Article 13. 3 (National Treatment), 13.4 (Most-Favored-Nation Treatment), or 13.6 (Local Presence), shall operate as a reservation with respect to Article 12.2 (National Treatment), 12.3 (Most-Favored-Nation Treatment), or 12.6 (Performance Requirements) with respect to such measure.
6. For greater certainty, Article 13.5 (Market Access) refers to non-discriminatory measures.
7. The Parties understand that the requirement to appoint proxies, representatives or agents, whether national, local or resident, is not incompatible with the obligations of Chapter 13 (Cross-Border Trade in Services).
Annex I. Schedule of Panama
1. Sector: Retail Trade
Subsector:
Obligations Affected: National Treatment (Article 12.2) Senior Executives and Boards of Directors (Article 12.5)
Level of government: Central
Measures: Article 293 of the 1972 Constitution
Article 5 and 10 of Law No. 5 of January 11, 2007
Article 12 of Executive Decree No. 26 of July 12, 2007
Description: Investment
1. Only the following persons may have a retail business in Panama:
(a) a Panamanian national by birth;
(b) a natural person who, at the date of the entry into force of the 1972 Constitution, was a naturalized Panamanian national, the spouse of a Panamanian national or a natural person who had a child with a Panamanian national;
(c) a natural person who has been a naturalized Panamanian national for at least three (3) years;
(d) a foreign national or a foreign juridical person subject to the national legislation of a foreign country that had a legal retail trade business in Panama at the date of entry into force of the 1972 Constitution; and
(e) a juridical person, organized under the national legislation of Panama or of any other country, if the ownership of such person corresponds to a person included in subparagraphs (a), (b),(c) or (d), as provided in Article 293, paragraph 5 of the 1972 Constitution.
2. However, a foreign national not authorized to engage in the retail trade business may participate in those companies that sell products manufactured by such companies.
For greater certainty, it is understood by:
Wholesale trade: The activity exercised by engaging in:
(a) the rendering of services, except for those classified as retail trade by the legislation in force;
(b) sales to the State and to companies;
(c) the exercise of all kinds of commercial activities that do not constitute retail trade.
Retail trade: The activity exercised by engaging in:
(a) the sale of goods to the consumer;
(b) representation or agency of production or commercial companies;
(c) any other activity that the law qualifies as such.
2. Sector: Real Estate
Subsector:
Obligations Affected: National Treatment (Article 12.2)
Level of government: Central
Measures: Articles 290 and 291 of the 1972 Constitution.
Description: Investment
1. No foreign government, foreign official or foreign state enterprise may own real property in Panama, except for those properties used as embassies.
2. A foreign national, or a foreign company incorporated under the laws of Panama and owned in whole or in part by foreign nationals, may not own real property within ten (10) kilometers of the borders of Panama.
3. Sector: Utilities
Subsector:
Obligations Affected: National Treatment (Article 12.2)
Level of government: Central
Measures: Article 285 of the 1972 Constitution
Description: Investment
The majority of the capital of a private company participating in public utilities operating in Panama must be owned by a Panamanian person, except when permitted by national legislation. For clarity, public utilities are understood as potable water supply services, sanitary sewage, electricity, telecommunications, radio and television, and transmission and distribution of natural gas.
4. Sector: All Sectors
Subsector:
Obligations Affected: National Treatment (Article 13.3) Senior Executives and Boards of Directors (Article 12.5)
Level of government: Central
Measures: Article 322 of the 1972 Constitution
Articles 13, 14 and 86 of Law No. 19 of June 11, 1997
Description: Investment and Cross-Border Trade in Services
1. Preference shall be given to Panamanian nationals over foreign nationals to fill contractual positions in the Panama Canal Authority. A foreign national may be hired instead of a Panamanian national, provided the position is difficult to fill and all means have been exhausted to hire a qualified Panamanian national, and the Panama Canal Authority Administrator has given his authorization. If the only applicants for a position in the Panama Canal Authority are foreign nationals, preference shall be given to a foreign national with a Panamanian spouse or a foreign national who has lived in Panama for ten (10) consecutive years.
2. Only a Panamanian national may be a director of the Panama Canal Authority.
5. Sector: Artistic Activities
Subsector:
Obligations Affected: National Treatment (Article 13.3)
Level of government: Central
Measures: Article 1 of Law No. 10 of January 8, 1974.
Article 1 of Executive Decree No. 38 of August 12, 1985
Description:Cross Border Trade in Services
1. Every employer that hires a foreign orchestra or musical group must hire a Panamanian orchestra or musical group to perform in each of the locations where the foreign orchestra or musical group performs. This obligation will be maintained throughout the duration of the contract of the foreign orchestra or musical group. This Panamanian orchestra or musical group shall receive at least the amount of one thousand United States dollars (USD 1,000.00) per performance. Each member of the group must receive an amount not less than sixty United States dollars (USD 60.00).
2. A Panamanian artist performing alongside a foreign artist must be contracted under equal conditions and with the same professional considerations. This applies, but is not limited to, promotions, publicity and advertisements related to the event, regardless of the medium used.
3. The contracting of a foreign artist for promotions, or the donation or charitable exchange of services or works of a foreign artist will be approved only if it does not adversely affect or displace a Panamanian artist. In any case, the hiring must be subject to an expert evaluation to determine the value of the service and work provided for the purpose of paying union dues and fees.
6. Sector: Communications
Subsector:
Obligations Affected: National Treatment (Articles 12.2 and 13.3)
Most-Favored-Nation Treatment (Article 13.4) Senior Executives and Boards of Directors (Article 12.5)
Level of government: Central
Measures: Article 285 of the 1972 Constitution
Articles 14 and 25 of Law No. 24 of June 30, 1999
Articles 152 and 161 of Executive Decree No. 189 of August 13, 1999.
Description: Investment and Cross-Border Trade in Services
1. A concession to operate a public radio or television station in Panama may be awarded to a natural person or a company. In the case of a natural person, the concessionaire must be a Panamanian national. In the case of a corporation, at least sixty-five percent (65%) of the shares of the concessionaire must be owned by Panamanian nationals. By exception to the provisions of Article 280 of the Constitution, this requirement does not apply to public radio and paid television services, and therefore, foreign ownership of more than fifty percent (50%) in the capital of these concessions is authorized.
2. Each of the senior executives and directors of a company operating a public radio or television station must be a Panamanian national.
3. Under no circumstances may a foreign government or foreign state enterprise supply, by itself or through a third party, public radio or television services or have a controlling interest, directly or indirectly, in an enterprise providing such services.
4. The concessionaire of a public radio or television service may not broadcast any type of advertising originating within Panama that contains an advertisement made by an advertiser that does not have a license issued by the National Authority of Public Services. Such license may only be obtained by a Panamanian national or by a national of another country that has granted reciprocal rights to Panamanian nationals.
7. Sector: Communications
Subsector:
Obligations Affected: National Treatment (Article 12.2)
Level of government: Central
Measures: Article 21 of Law No. 31 of February 8, 1996.
Description: Investment
An enterprise under the ownership or control, directly or indirectly, of a foreign government, or in which a foreign government is a partner, may not supply telecommunications services in the territory of Panama.
8. Sector: Education
Subsector:
Obligations Affected: National Treatment (Article 13.3)
Level of government: Central
Measures: Article 100 of the 1972 Constitution
Description:Cross Border Trade in Services
Only a Panamanian national may teach Panamanian history and civic education in the territory of Panama.
9. Sector: Electric Power
Subsector:
Obligations Affected: Market Access (Article 13.5)
Level of government: Central
Measures: Articles 32, 45 and 46 of Law No. 6 of February 3, 1997.
Description:Cross Border Trade in Services
1. Electric power transmission services in the territory of Panama may be provided only by the Government of Panama.
2. Electric power distribution services in the territory of Panama will be provided by three (3) companies for a period of fifteen (15) years, under concessions granted by the National Authority of Public Services. Said period began on October 22, 1998.
10. Sector: Crude Oil, Hydrocarbons and Natural Gas.
Subsector:
Obligations Affected: Local Presence (Article 13.6) Performance Requirements (Article 12.6)
Level of government: Central
Measures: Articles 21, 26 and 71 of Law No. 8 of June 16, 1987
Law No. 52 of July 30, 2008
Description: Investment and Cross-Border Trade in Services
1. If the contractor is a foreign legal entity, it must establish or open a branch in the Republic of Panama.
2. A contractor or subcontractor may procure goods or services abroad if:
(a) the good or service is not available in Panama; or