(b) No later than 31 December 2008, the Parties will complete negotiations on services liberalisation on the basis of the following:
(i) a liberalisation schedule for one service sector for each participating SADC EPA State;
(ii) a commitment to a standstill as specified in Article V(1)(b)(ii) GATS, for all services sectors; and
(iii) an agreement to negotiate progressive liberalisation with substantial sectoral coverage within a period of three years following the conclusion of a full EPA.
2. Cooperation in Services
(a) The Parties recognise that trade capacity building can support the development of economic activities, in particular in services sectors. To this end, the EC Party agrees to support capacity building aimed at strengthening the regulatory framework of the participating SADC EPA States.
(b) By the time of laying down the necessary arrangements for the liberalisation of trade in services, the Parties will define the specific cooperation objectives, principles and procedures that will accompany trade liberalisation.
3. Investment
The Parties agree to negotiate an Investment Chapter, taking into account the relevant provisions of the SADC Protocol on Finance and Investment, no later than 31 December 2008.
4. Cooperation on Investment
The EC Party agrees to provide adequate technical assistance to facilitate negotiations and implementation of the Investment Chapter.
5. Competition and Government Procurement
The EC Party agrees to cooperate with a view to strengthening regional capacity in the areas of competition and government procurement. Negotiations will only be envisaged once adequate regional capacity has been built.
Part III.
Chapter 12. Dispute Avoidance and Settlement
Article 68. Objective
The objective of this Part is to avoid or settle any dispute between the Parties.
Article 69. Scope
1. This Part shall apply to any dispute concerning the interpretation and application of this Agreement except as otherwise expressly provided for in this Agreement.
2. Notwithstanding paragraph 1, the procedure set out in Article 98 of the Cotonou Agreement shall be applicable in the event of a dispute concerning the financing pertaining to development cooperation between the SADC EPA States and the EC Party.
Article 70. Consultations
1. The Parties shall endeavour to resolve any dispute referred to in Article 69 by entering into consultations in good faith with the aim of reaching an amicable solution.
2. A Party shall seek consultations by means of a written request to the other Party, copied to the Trade and Development Committee, identifying the measure at issue and the provisions of this Agreement with which it considers the measure not to be in conformity.
3. Consultations shall be held within 40 days of the date of the receipt of the request. The consultations shall be deemed concluded within 60 days of the date of the receipt of the request, unless both Parties agree to continue consultations. All information disclosed during the consultations shall remain confidential.
4. Consultations on matters of urgency, including those regarding perishable or seasonal goods, shall be held within 15 days of the date of the receipt of the request, and shall be deemed concluded within 30 days of the date of the receipt of the request.
5. If consultations are not held within the timeframes laid down in paragraph 3 or in paragraph 4 respectively, or if consultations have been concluded and no mutually agreed solution has been reached, the complaining Party may request the establishment of an arbitration panel in accordance with Article 73.
Article 71. Mediation
1. If consultations fail to produce a mutually agreed solution, the Parties may, by agreement, seek recourse to a mediator. Unless the Parties agree otherwise, the terms of reference for the mediation shall be the matter referred to in the request for consultations.
2. The mediator's opinion may include a recommendation on how to resolve the dispute consistent with the provisions of this Agreement. The mediator's opinion is non-binding.
3. The proceedings involving mediation, in particular all information disclosed and positions taken by the Parties during these proceedings, shall remain confidential.
Article 72. Initiation of the Arbitration Procedure
1. Where the Parties have failed to resolve the dispute by recourse to consultations as provided for in Article 70, or by recourse to mediation as provided for in Article 71, the complaining Party may request the establishment of an arbitration panel.
2. The request for the establishment of an arbitration panel shall be made in writing to the Party complained against and the Trade and Development Committee. The complaining Party shall identify in its request the specific measures at issue, and it shall explain how such measures constitute a breach of the provisions of this Agreement.
Article 73. Establishment of the Arbitration Panel
1. An arbitration panel shall be composed of three arbitrators.
2. Each party to the dispute shall appoint one arbitrator within ten days of the date of the receipt of the request for the establishment of an arbitration panel. The two arbitrators shall appoint a third arbitrator, who shall be the chairperson of the arbitration panel, within 20 days of the receipt of the request for the establishment of a panel. The Chairperson shall not be a national of the Parties nor permanently reside in the territory of the Parties.
3. If all three arbitrators are not appointed within 20 days, or if, within ten days of the appointment of the third arbitrator either Party submits a reasoned written objection to the arbitrators chosen to the Trade and Development Committee, either Party may request the chairperson of the Trade and Development Committee, or her or his delegate, to select all three members by lot from the list established under Article 87 of this Agreement, one among the individuals proposed by the complaining Party, one among the individuals proposed by the Party complained against and one among the individuals selected by the Parties to act as chairperson. Where the Parties agree on one or more of the members of the arbitration panel, any remaining members shall be selected by the procedure laid down in this paragraph.
4. The chairperson of the Trade and Development Committee, or her or his delegate, shall select the arbitrators within five days of receipt of the request made by either Party referred to in paragraph 3 of this Article. The selection shall be done in the presence of a representative of each Party.
5. The date of establishment of the arbitration panel shall be the date on which the three arbitrators are finally selected.
Article 74. Interim Panel Report
The arbitration panel shall notify to the Parties an interim report containing both the descriptive section and its findings and conclusions, as a general rule not later than 120 days from the date of establishment of the arbitration panel. In cases of urgency, the time limit shall be reduced to 60 days. Any Party may submit written comments to the arbitration panel on precise aspects of its interim report within 15 days of the notification of the report.
Article 75. Arbitration Panel Ruling
1. The arbitration panel shall notify its ruling to the Parties and to the Trade and Development Committee within 150 days from the date of the establishment of the arbitration panel. Where it considers that this deadline cannot be met, the chairperson of the arbitration panel must notify the Parties and the Trade and Development Committee in writing, stating the reasons for the delay and the date on which the panel plans to conclude its work. Under no circumstances should the ruling be notified later than 180 days from the date of the establishment of the arbitration panel.
2. In cases of urgency, including those involving perishable and seasonal goods, the arbitration panel shall make every effort to notify its ruling within 90 days from the date of its establishment. The arbitration panel may give a preliminary ruling within ten days of its establishment on whether it deems the case to be urgent.
3. Either Party may request the arbitration panel to provide a recommendation as to how the Party complained against, or as the case may be, the relevant SADC EPA State, could bring itself into compliance.
Article 76. Compliance with the Arbitration Panel Ruling
The Party complained against, or as the case may be, the relevant SADC EPA State, shall take any measure necessary to comply with the arbitration panel ruling and the Parties shall seek to agree on the period of time to comply with the ruling.
Article 77. The Reasonable Period of Time for Compliance
1. No later than 30 days after the notification of the arbitration panel ruling to the Parties, the Party complained against shall notify the complaining Party and the Trade and Development Committee of the reasonable period of time it will require to bring itself into compliance with the ruling of the arbitration panel.
2. Upon notification by the Party complained against, the Parties shall seek to agree on such a reasonable period of time. If there is disagreement between the Parties on the reasonable period of time to comply with the arbitration panel ruling, the complaining Party shall, within 30 days of the notification made under paragraph 1 of this Article, request the arbitration panel in writing to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the other Party and to the Trade and Development Committee. The arbitration panel shall notify its ruling to the Parties and to the Trade and Development Committee within 30 days from the date of the receipt of the request.
3. The arbitration panel will, in determining the length of the reasonable period of time, take into consideration the length of time that it will normally take the Party complained against, or as the case may be, the relevant SADC EPA State, to adopt comparable legislative or administrative measures to those identified by the Party complained against, or as the case may be, the relevant SADC EPA State, as being necessary to ensure compliance. The arbitration panel shall also take into consideration capacity constraints and the different level of development which may affect the adoption of the necessary measures.
4. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures set out in Article 73 of this Agreement shall apply. The time limit for notifying the ruling shall be 45 days from the date of the receipt of the request referred to in paragraph 2 of this Article.
5. The reasonable period of time may be extended by agreement of the parties to the dispute.
Article 78. Review of Any Measure Taken to Comply with the Arbitration Panel Ruling
1. The Party complained against shall notify the other Party and the Trade and Development Committee, before the end of the reasonable period of time, of any measure that it has taken to comply with the arbitration panel ruling.
2. In the event that there is disagreement between the Parties concerning the compatibility of any measure notified under paragraph 1 of this Article with the provisions of this Agreement, the complaining Party may request in writing the arbitration panel to rule on the matter. Such request shall identify the specific measure at issue and it shall explain how such measure is incompatible with the provisions of this Agreement. The arbitration panel shall notify its ruling within 90 days of the date of the receipt of the request. In cases of urgency, including those involving perishable and seasonal goods, the arbitration panel shall notify its ruling within 45 days of the date of the receipt of the request.
3. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures set out in Article 73 of this Agreement shall apply. The time limit for notifying the ruling shall be 105 days from the date of the receipt of the request referred to in paragraph 2 of this Article.
Article 79. Temporary Remedies In Case of Non-compliance
1. If the Party complained against fails to notify any measure taken to comply with the arbitration panel ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that the measure notified under Article 78 paragraph 1 is not compatible with the provisions of this Agreement, the Party complained against or, as the case may be, the relevant SADC EPA State shall, if so requested by the complaining Party, present an offer for compensation. Such compensation may include or consist of financial compensation although nothing in this Agreement shall oblige the Party complained against, or as the case may be, the relevant SADC EPA State, to offer such financial compensation.
2. If no agreement on compensation is reached within 30 days of the end of the reasonable period of time or of the arbitration panel's ruling under Article 78 that a measure taken to comply is not compatible with this Agreement, the complaining Party shall be entitled, upon notification to the other Party, to adopt appropriate measures. Such measures may be adopted either by the complaining Party, or as the case may be, the relevant SADC EPA State.
3. In adopting such measures the complaining Party or, as the case may be, the relevant SADC EPA State, shall seek to select measures proportionate to the violation which least affect the attainment of the objectives of this Agreement and shall take into consideration their impact on the economy of the Party complained against and on the individual SADC EPA States.
4. In the event that the EC Party fails to notify any measure taken to comply with the arbitration panel ruling by the expiry of the reasonable period of time at the latest, or if the arbitration panel rules that the measure notified under Article 78 paragraph 1 is not compatible with that Party's obligations under this Agreement, and the complaining Party asserts that adopting appropriate measures would result in significant damage to its economy, the EC Party shall consider providing financial compensation.
5. The EC Party shall exercise due restraint in asking for compensation or adopting appropriate measures pursuant to paragraph 1 or 2 of this Article.
6. Compensation or appropriate measures shall be temporary and shall be applied only until any measure found to violate the provisions of this Agreement has been withdrawn or amended so as to bring it into conformity with those provisions or until the Parties have agreed to settle the dispute.
Article 80. Review of Any Measure Taken to Comply after the Adoption of Appropriate Measures
1. The Party complained against shall notify the other Party and the Trade and Development Committee of any measure it has taken to comply with the ruling of the arbitration panel and of its request for an end to application of appropriate measures by the complaining Party or the relevant SADC EPA State, as the case may be.
2. If the Parties do not reach an agreement on the compatibility of the notified measure with the provisions of this Agreement within 30 days of the date of notification, the complaining Party shall request in writing the arbitration panel to rule on the matter. Such request shall be notified to the other Party and to the Committee. The arbitration panel ruling shall be notified to the Parties and to the Committee within 45 days of the date of the receipt of the request. If the arbitration panel rules that any measure taken to comply is not in conformity with the provisions of this Agreement, the arbitration panel will determine whether the complaining Party or, as the case may be, the relevant SADC EPA State, can continue to apply appropriate measures. If the arbitration panel rules that any measure taken to comply is in conformity with the provisions of this Agreement, the appropriate measures shall be terminated.
3. In the event of the original arbitration panel, or some of its members, being unable to reconvene, the procedures laid down in Article 73 of this Agreement shall apply. The period for notifying the ruling shall be 60 days from the date of the receipt of the request referred to in paragraph 2 of this Article.
Article 81. Mutually Agreed Solution
The Parties may reach a mutually agreed solution to a dispute under this Chapter at any time. They shall notify the Trade and Development Committee of any such solution. Upon adoption of the mutually agreed solution, the dispute settlement procedure shall be terminated.
Article 82. Rules of Procedure and Code of Conduct
1. The Parties shall agree on Rules of Procedure and a Code of Conduct by 1 July 2008 which shall be adopted by the Joint Council. The Rules of Procedure shall address the issue of opening arbitration panel hearings to the public.
2. Any meeting of the arbitration panel shall be open to the public in accordance with the Rules of Procedure, unless the arbitration panel decides otherwise on its own motion or at the request of the Parties. The arbitration panel shall meet in closed session when the submissions or arguments of a Party contain confidential information.
Article 83. Information and Technical Advice
At the request of a Party, or upon its own initiative, the arbitration panel may obtain information from any source, including the Parties involved in the dispute, it deems appropriate for the arbitration proceeding. The arbitration panel shall also have the right to seek the opinion of relevant experts as it deems appropriate. Interested entities are authorised to submit amicus curiae briefs to the arbitration panel in accordance with the Rules of Procedure. Any information obtained in this manner must be disclosed to the Parties to the dispute and submitted for their comments.
Article 84. Languages of the Submissions
1. The written and oral submissions of the Parties shall be made in any official language of the Parties.
2. The Parties shall endeavour to agree on a common working language for any specific proceedings under this Part. If the Parties are unable to agree on a common working language, each Party shall arrange for and bear the costs of the translation of its written submissions and interpretation at the hearings into the language chosen by the Party complained against, unless such language is an official language of that Party. The EC Party shall, when seeking to agree on a common working language, take into account the potential impact of such costs on SADC EPA States.
Article 85. Rules of Interpretation
An arbitration panel shall settle a dispute in accordance with the provisions of this Agreement and the customary rules of interpretation of public international law, including those set out in the Vienna Convention on the Law of Treaties. The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided for in this Agreement.
Article 86. Arbitration Panel Rulings
1. The arbitration panel shall make every effort to take any decision by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote.
2. The ruling shall set out the findings of fact, the applicability of the relevant provisions of this Agreement and the reasoning behind any findings and conclusions that it makes. The Trade and Development Committee shall make the arbitration panel rulings publicly available unless it decides not to do so.
Article 87. List of Arbitrators
1. The Trade and Development Committee shall, no later than three months after the provisional application of this Agreement, establish a list of 21 individuals who are willing and able to serve as arbitrators. Each of the Parties shall select eight individuals to serve as arbitrators. The Parties shall also agree on five individuals who are not nationals of either Party and who shall act as chairperson of the arbitration panel. The Committee will ensure that the list is always maintained in accordance with this Article.
2. Arbitrators shall have specialised knowledge of or experience in law and international trade. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government, or be affiliated with the governments of any of the Parties, and shall comply with the Code of Conduct annexed to the Rules of Procedures.
3. The Committee may establish an additional list of 15 individuals having a sectoral expertise in specific matters covered by this Agreement. When recourse is made to the selection procedure of Article 73 of this Agreement, the chairperson of the Committee may use such a sectoral list upon agreement of both Parties.
Article 88. Relation with Wto Obligations
1. Arbitration bodies set up under this Agreement shall not arbitrate disputes on a Party's, or as the case may be, the relevant SADC EPA State's, rights and obligations under the Agreement establishing the WTO.
2. Recourse to the dispute settlement provisions of this Agreement shall be without prejudice to any action in the WTO framework, including dispute settlement action. However, where a Party or the relevant SADC EPA State, as the case may be, has, with regard to a particular measure, initiated a dispute settlement proceeding under this Agreement or under the WTO Agreement, it may not initiate a dispute settlement proceeding regarding the same measure until the first proceeding has ended. For the purposes of this paragraph, dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party's or the relevant SADC EPA State's request, as the case may be, for the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO.
3. Nothing in this Agreement shall preclude a Party or SADC EPA State from implementing the suspension of obligations authorised by the Dispute Settlement Body of the WTO.
Article 89. Time Limits
1. All time limits laid down in Part III of this Agreement, including the limits for the arbitration panels to notify their rulings, shall be counted in calendar days from the day following the act or fact to which they refer.
2. Any time limit referred to in this Part may be extended by mutual agreement of the Parties.
Part IV.
Chapter 13. General Exceptions
Article 90. General Exception Clause
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties where like conditions prevail, or a disguised restriction on trade in goods, services or establishment, nothing in this Agreement shall be construed to prevent the adoption or enforcement by the EC Party or the SADC EPA States of measures which:
(a) are necessary to protect public morals or to maintain public order and public security or;
(b) are necessary to secure compliance with laws or regulations which are not inconsistent with this Agreement, including those relating to customs enforcement, the protection of intellectual property rights, and the prevention of deceptive practices or;
(c) are necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;
(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;
(iii) safety; or
(d) relate to the importation or exportation of gold or silver; or
(e) relate to the protection of national treasures of artistic, historic or archaeological value; or
(f) relate to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption of goods, domestic supply or consumption of services and on domestic investors; or
(g) relate to the products of prison labour; or
(h) are inconsistent with Article 36 of this Agreement, provided that the difference in treatment is aimed at ensuring the effective or equitable imposition or collection of direct taxes in respect of economic activities or investors of the other Party.
Article 91. Security Exceptions
1. Nothing in this Agreement shall be construed:
(a) to require the EC Party or the SADC EPA States to furnish any information the disclosure of which it considers contrary to its essential security interests;
(b) to prevent the EC Party or the SADC EPA States from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to fissionable and fusionable materials or the materials from which they are derived;
(ii) relating to economic activities carried out directly or indirectly for the purpose of supplying or provisioning a military establishment;
(iii) relating to government procurement indispensable for national security or for national defence purposes; or
(iv) taken in time of war or other emergency in international relations; or
(c) to prevent the EC Party or the SADC EPA States from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
2. The Trade and Development Committee shall be informed to the fullest extent possible of measures taken under paragraphs 1(b) and (c) and of their termination.
Article 92. Taxation
1. Nothing in this Agreement, or in any arrangement adopted under this Agreement, shall be construed to prevent the EC Party or the SADC EPA States from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested.
2. Nothing in this Agreement, or in any arrangement adopted under this Agreement, shall be construed to prevent the adoption or enforcement of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation or other tax arrangements or domestic fiscal legislation.
3. Nothing in this Agreement shall affect the rights and obligations of the EC Party or the SADC EPA States under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
Part V. Institutional Provisions
Chapter 14. Institutional Provisions
Article 93. Establishment of a Joint Institution
For purposes of this Agreement a Joint SADC EPA States - EC Council ("the Joint Council") is hereby established, which shall oversee and administer the implementation of this Agreement.
Article 94. Composition and Functions
1. The Joint Council shall be composed, on the one hand, of the members of the Council of the European Union and relevant members of the European Commission or their representatives, and, on the other hand, the Ministers of the SADC EPA States or their representatives.
2. Without prejudice to the functions of the Council of Ministers as defined in Article 15 of the
Cotonou Agreement, the functions of the Joint Council shall be to:
(a) be responsible for the operation and implementation of this Agreement and monitor the fulfilment of its objectives;
(b) examine any major issues arising within the framework of this Agreement that are of common interest and affect trade between the Parties;
(c) examine proposals and recommendations from the Parties for the review of this Agreement;
(d) make appropriate recommendations;
(e) monitor the development of economic and trade relations between the Parties;
(f) monitor and assess the impact of the cooperation provisions of this Agreement on sustainable development;
(g) monitor and review progress on all matters covered by this Agreement;
(h) establish the rules of procedures of the Trade and Development Committee;
(i) monitor the work of the Trade and Development Committee; and
(j) perform any other duties under this Agreement.
3. The Joint Council may provide periodic reports on the operation of this Agreement to the Council of Ministers established in accordance with Article 15 of the Cotonou Agreement.
Article 95. Decision-making Powers and Procedures
1. In order to attain the objectives of this Agreement, the Joint Council shall have the power to take decisions in respect of all matters covered by this Agreement.
2. The decisions taken shall be by consensus between all the Parties and such decisions shall be binding on the Parties and each of the SADC EPA States, as the case may be. The Parties shall take all the measures necessary to implement such decisions in accordance with each Party's and the SADC EPA States' internal rules.
3. For procedural matters and dispute settlement procedures, the SADC EPA States agree to act collectively and the Joint Council shall adopt decisions and recommendations by mutual agreement between the Parties. For the matters for which the SADC EPA States have not agreed to act collectively, adoption of any decision shall require the agreement of the SADC EPA State concerned.
4. The Joint Council shall meet at regular intervals, not exceeding a period of two years, and extraordinarily whenever circumstances so require, if the Parties so agree.
5. The Joint Council shall determine its own rules of procedure.
Article 96. Trade and Development Committee (the Committee)
1. The Joint Council shall be assisted in the performance of its duties by a Committee composed of representatives of the Parties, normally at senior officials' level.