5. Unless otherwise agreed by the Parties, the Committee shall be of a permanent nature and shall develop its working rules during its first meeting.
6. All decisions of the Committee shall be taken by mutual agreement.
Article 10.24. DEFINITIONS
For the purposes of this Chapter:
notice of intended procurement means a notice published by the procuring entity inviting interested suppliers to submit a request for participation, a tender, or both;
special countervailing conditions means any condition or commitment that encourages local development or improves a Party's balance of payments accounts, such as local content requirements, technology licensing, investment requirements, countertrade or similar requirements; and
requirements, technology licensing, investment requirements, countertrade or similar requirements;
conditions for participation means any registration, qualification or other prerequisites for participation in a procurement;
procuring entity means an entity listed in Annex 10-A;
written or in writing means any expression in words, numbers or other symbols, which can be read, reproduced and subsequently communicated. It may include information transmitted and stored electronically;
technical specification means a procurement requirement that:
(a) sets out the characteristics of the goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or
(b) establishes terminology, symbols, packaging, marking or labeling requirements, as applicable to a good or service;
commercial goods or services means goods or services of the type that are generally sold or offered for sale in the commercial marketplace to, and normally purchased by, nongovernmental purchasers for nongovernmental purposes;
standard means a document approved by a recognized body, which provides, for common and repeated use, rules, guidelines or characteristics for goods, or services or related processes and methods of production, compliance with which is not mandatory. It may also include or refer exclusively to terminology, symbols, packaging, markings or labeling requirements as they apply to a product, service, process or method of production;
open tendering procedures means any type of procurement method of a Party, except direct procurement methods as set out in Article 10.11.2, provided that such methods are consistent with this Chapter;
supplier means a person that provides or may provide goods or services to a procuring entity;
services includes construction services, unless otherwise specified;
construction service means a service the object of which is the performance by whatever means of civil or construction work, based on Division 51 of the provisional version of the United Nations Central Product Classification (hereinafter referred to as "CPC"); and
electronic auction means an iterative process in which suppliers use electronic means to submit new prices or new values for non-price quantifiable elements of the tender, hereinafter referred to as the "CPC".
quantifiable non-price bid elements, or both, that are linked to the evaluation criteria, and that results in a ranking or reclassification of bids.
Chapter 11. COMPETITION POLICY AND CONSUMER PROTECTION
Article 11.1. OBJECTIVES
The purpose of this Chapter is to:
(a) to ensure that the benefits of trade liberalization under this Agreement are not undermined by anticompetitive practices;
(b) to promote cooperation between the Parties in the enforcement of their respective competition laws; and
(c) ensuring the enforcement and protection of consumer rights.
Article 11.2. NATIONAL LEGISLATION AND AUTHORITIES
1. Each Party shall adopt or maintain domestic legislation that comprehensively and effectively addresses anticompetitive practices and consumer protection.
2. Each Party shall establish or maintain an authority responsible for the enforcement of its respective competition and consumer protection laws.
3. Each Party shall maintain its autonomy to develop and implement its respective competition and consumer protection laws and policies.
4. Each Party shall ensure that its respective national authorities act in accordance with the principles of transparency, non-discrimination and due process in the application of their respective competition and consumer protection laws.
Article 11.3. COOPERATION
1. The Parties recognize the importance of cooperation and coordination between their respective national authorities in promoting the effective enforcement of their respective competition and consumer protection laws.
2. Accordingly, the Parties shall cooperate on matters relating to the enforcement of competition and consumer protection policy and law, including notification, exchange of information, and consultations, in accordance with Articles 11.4, 11.5, and 11.6, respectively.
3. The Parties, through their national authorities, may sign cooperation agreements or arrangements for the purpose of strengthening cooperation in matters related to competition and consumer protection.
Article 11.4. NOTIFICATIONS
1. The national authority of a Party shall notify the national authority of the other Party of activities in the application of its competition and consumer protection laws if it considers that such activities may affect important interests of the other Party.
2. Provided that it is not contrary to the laws of the Parties, nor does it affect an ongoing investigation, the notification shall be made at an early stage of the administrative procedure. The national authority of the Party carrying out the enforcement activity of its competition or consumer protection law may, in its determinations, take into consideration the comments received from the other Party.
Article 11.5. EXCHANGE OF INFORMATION
In order to facilitate the effective enforcement of their respective competition and consumer protection laws, the national authorities may exchange information at the request of one of them, provided that this is not contrary to their laws and does not affect any ongoing investigation.
Article 11.6. CONSULTATIONS
To promote understanding between the Parties or to address specific matters arising under this Chapter, each Party shall, at the request of the other Party, enter into consultations on matters referred to it. The requesting Party shall indicate how the matter affects trade or investment between the Parties. The requested Party shall give the utmost consideration to the concerns of the other Party.
Article 11.7. DISPUTE SETTLEMENT
Neither Party may have recourse to the dispute settlement procedures set out in Chapter 12 (Investment) and Chapter 18 (Dispute Settlement) with respect to any matter arising under this Chapter.
Article 11.8. DEFINITIONS
For the purposes of this Chapter:
national authorities are:
(a) in the case of Colombia, the Superintendencia de Industria y Comercio (SIC) and other authorities determined by the Ley para la Defensa del Consumidor (Law for the Defense of Consumers); and
(b) in the case of Costa Rica, the Commission to Promote Competition and the National Consumer Commission of the Ministry of Economy, Industry and Commerce,
or their successors;
competition and consumer protection legislation is:
(a) in the case of Colombia, Law 155 of 1959, Law 1340 of 2009, Decree 2153 of 1992 and its regulations, Law 1480 of 2011 and other special regulatory norms; and.
(b) in the case of Costa Rica, Law 7472 on Promotion of Competition and Effective Consumer Defense, as amended;
anti-competitive practices means:
(a) any agreement, decision, recommendation, or concerted practice that has the object or effect of preventing, restricting, or distorting competition in accordance with the provisions of their respective competition laws;
(b) the abuse of a dominant position or substantial market power in accordance with the provisions of their respective competition laws; and
(c) concentrations of undertakings, which significantly impede effective competition in accordance with the provisions of their respective competition laws.
Chapter 12. INVESTMENT
Section A. SUBSTANTIVE OBLIGATIONS
Article 12.1. SCOPE OF APPLICATION (1)
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) covered investments; and
(c) with respect to Articles 12.6, 12.8, and 12.9, all investments in the territory of the Party.
2. A Party's obligations under this Section shall apply to a state enterprise or other person where it exercises regulatory, administrative, or other governmental authority delegated to it by that Party, such as the authority to expropriate, grant licenses, approve commercial transactions, or impose fees, duties, or other charges.
3. For greater certainty, this Chapter does not bind a Party in relation to any act, fact or dispute that took place before the date of entry into force of this Agreement, even if its effects continue after that date.
4. For greater certainty, nothing in this Chapter shall be construed to impose an obligation on a Party to privatize any investment that it owns or controls, or to prevent a Party from designating a monopoly.
5. Nothing in this Chapter shall obligate a Party to protect investments made with capital or assets derived from illegal activities, and shall not be construed to prevent a Party from adopting or maintaining measures aimed at the preservation of public order, the performance of its duties to maintain or restore international peace and security, or the protection of its own essential security interests.
6. In the event of any inconsistency between this Chapter and another Chapter of this Agreement, the other Chapter shall prevail to the extent of the inconsistency.
7. A Party's requirement that a service supplier of the other Party post a bond or other form of financial security as a condition for supplying a cross-border service does not, of itself, make this Chapter applicable to measures adopted or maintained by the Party with respect to the cross-border supply of the service. This Chapter applies to measures adopted or maintained by the Party with respect to the bond or financial security, to the extent that such bond or financial security constitutes a covered investment.
8. This Chapter does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter 14 (Financial Services).
Article 12.2. NATIONAL TREATMENT
Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
Article 12.3. MOST-FAVORED-NATION TREATMENT
1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favorable than that it accords, in like circumstances, to investments of investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
3. For greater certainty, the treatment with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments referred to in paragraphs 1 and 2 does not include dispute settlement procedures, such as those provided for in Section B of this Chapter, that are set forth in international treaties, including trade or investment agreements.
Article 12.4. MINIMUM STANDARD OF TREATMENT2 (2)
1. Each Party shall accord to covered investments treatment consistent with customary international law, including fair and equitable treatment and full protection and security.
2. For greater certainty, paragraph 1 prescribes that the minimum standard of treatment of aliens under customary international law is the minimum standard of treatment that may be accorded to covered investments. The concepts of fair and equitable treatment and full protection and security do not require treatment in addition to or beyond that required by that standard and do not create significant additional rights. The obligation in paragraph 1 to provide:
(a) fair and equitable treatment includes the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings, in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) full protection and security requires each Party to provide the level of police protection that in no case shall be higher than that accorded to nationals of the Party where the investment has been made.
3. A determination that another provision of this Agreement or of a separate international agreement has been violated does not establish that this Article has been violated.
Article 12.5. SENIOR MANAGEMENT AND BOARDS OF DIRECTORS
1. No Party may require an enterprise of that Party that is a covered investment to appoint natural persons of a particular nationality to senior management positions.
2. A Party may require that a majority of the members of the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 12.6. PERFORMANCE REQUIREMENTS
1. No Party may, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale, or other disposition of an investment of an investor in the territory of a Party, require the investor to meet performance requirements.
(a) to export a specified level of exports or to export a specified amount of goods or services to a Party or to a non-Party in its territory, to impose or enforce any requirement or to enforce any obligation or commitment to (3):
(a) export a specified level or percentage of goods or services;
(b) to achieve a certain level or percentage of domestic content;
(c) to purchase, use or give preference to goods produced in its territory, or to purchase goods from persons in its territory;
(d) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment;
(e) restrict sales in its territory of the goods or services that such investment produces or provides by relating such sales in any way to the volume or value of its exports or to the foreign exchange earnings it generates;
(f) to transfer a particular technology, production process or other proprietary knowledge to a person in its territory, except where the requirement is imposed or the obligation or commitment is enforced by a judicial or administrative tribunal or a competition authority to remedy a practice that has been determined after judicial or administrative proceedings to be anticompetitive under the Party's competition laws; (4) or
(g) to supply exclusively from the territory of a Party the goods the investment produces or the services it provides to a specific regional market or to the world market.
2. A measure that requires an investment to use a technology to comply with general regulations applicable to health, safety or the environment shall not be considered inconsistent with paragraph 1(f).
3. Paragraph 1(f) does not apply where a Party authorizes the use of an intellectual property right pursuant to Article 31 (5) of the TRIPS Agreement or to measures requiring the disclosure of proprietary information that falls within the scope of application of, and are consistent with Article 39 of the TRIPS Agreement (6).
4. For greater certainty, nothing in paragraph 1 shall be construed to prevent a Party, in connection with the establishment, acquisition, expansion, management, conduct, operation or sale or other disposition of a covered investment or an investment of an investor of a non-Party in its territory, from imposing or enforcing a requirement or enforcing an obligation or commitment to train workers in its territory.
5. No Party may condition the receipt of an advantage, or the continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of an investment in its territory by an investor of a Party or of a non-Party on compliance with any of the following requirements:
(a) attaining a specified degree or percentage of domestic content;
(b) to purchase, use or grant preferences to goods produced in its territory or to purchase goods from persons in its territory;
(c) to relate, in any manner, the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment; or
(d) restrict sales in its territory of the goods or services that such investment produces or provides by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings.
6. Nothing in paragraph 5 shall be construed to prevent a Party from conditioning the receipt of an advantage, or the continued receipt of an advantage, in connection with an investment in its territory by an investor of a Party or of a non-Party on compliance with a requirement that it locate production, provide services, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.
7. Paragraphs 1 and 5 shall not apply to any requirement other than the commitment, obligation or requirements set out in those paragraphs.
8. The provisions of paragraphs 1 and 5 shall not apply to any other requirement other than the commitment, obligation or requirements set forth in those paragraphs:
(a) paragraphs 1(a), (b) and (c), and 5(a) and (b) shall not apply to qualification requirements for goods or services with respect to export promotion programs and foreign aid programs; and
(b) paragraphs 5(a) and (b) shall not apply to requirements imposed by an importing Party with respect to the content of goods necessary to qualify for preferential duties or quotas.
9. Provided that such measures are not applied in an arbitrary or unjustified manner and provided that such measures do not constitute a disguised restriction on international trade or investment, nothing in paragraphs 1(b), (c) and (f) and 5(a) and (b) shall be construed to prevent a Party from adopting or maintaining measures, including measures of an environmental nature:
(a) necessary to secure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) related to the preservation of living or non-living non-renewable natural resources.
10. Paragraphs 1(b), (c), (f) and (g), and 5(a) and (b) do not apply to government procurement.
11. This Article does not preclude the application of any commitment, obligation or requirement between private parties where a Party did not impose or require the commitment, obligation or requirement.
Article 12.7. NON-CONFORMING MEASURES
1. Articles 12.2, 12.3, 12.5, and 12.6 shall not apply to:
(a) any existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I; or
(ii) the local level of government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in paragraph (a); or
(c) the modification of any nonconforming measure referred to in paragraph (a), provided that such modification does not diminish the degree of conformity of the measure, as in effect immediately before the modification, with Article 12.2, 12.3, 12.5 or 12.6.
2. Articles 12.2, 12.3, 12.5 and 12.6 shall not apply to any measure that a Party adopts or maintains, in relation to sectors, sub-sectors or activities, as set out in its Schedule to Annex II.
3. Articles 12.2 and 12.3 shall not apply to any measure adopted under the exceptions under Articles 3, 4 and 5 of the TRIPS Agreement.
4. Neither Party may require, pursuant to any measure adopted after the date of entry into force of this Agreement and included in its Schedule to Annex II, an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
5. The provisions of Articles 12.2, 12.3, and 12.5 shall not apply to:
(a) subsidies or grants provided by a Party, including government-backed loans, guarantees, and insurance; or
(b) government procurement.
Article 12.8. MEASURES RELATED TO HEALTH, SAFETY, ENVIRONMENT, AND LABOR RIGHTS
1. The Parties recognize that it is inappropriate to promote investment by weakening or reducing protections under their domestic health, safety, environmental, and labor laws. Accordingly, each Party shall endeavor to ensure that it shall not waive or derogate from, or offer to waive or derogate from, such laws in a manner that weakens or reduces the protection afforded by such laws as a means of encouraging the establishment, acquisition, expansion or retention of an investment in its territory.
2. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investments in its territory are made taking into account health, safety, environmental and labor concerns.
Article 12.9. CORPORATE SOCIAL RESPONSIBILITY
Each Party shall encourage enterprises operating in its territory or subject to its jurisdiction to voluntarily incorporate into their internal policies internationally recognized standards of corporate social responsibility that have been approved by the Parties. These principles address issues such as labor rights, the environment, human rights, community relations, and anti-corruption.
Article 12.10. TREATMENT IN CASE OF DISPUTE
1. Notwithstanding Article 12.7.5(a), each Party shall accord to investors of the other Party and to covered investments nondiscriminatory treatment with respect to any measures it adopts or maintains with respect to losses suffered by investments in its territory as a result of armed conflict or civil strife.
2. Paragraph 1 shall not apply to existing measures relating to subsidies or grants that would be inconsistent with Article 12.2, with the exception of Article 12.7.5(a).
Article 12.11. EXPROPRIATION AND COMPENSATION (7)
1. No Party shall nationalize or expropriate a covered investment, whether directly or indirectly, by measures tantamount to expropriation or nationalization ("expropriation"), except:
(a) for a public purpose or in the social interest, in the case of Colombia; and
(b) for a public purpose or in the public interest, in the case of Costa Rica,
in accordance with due process, in a non-discriminatory manner and through the payment of prompt, adequate and effective compensation.
2. The compensation shall be paid without delay and shall be fully liquidable and freely transferable. Such compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and shall not reflect any change in value due to the fact that the intention to expropriate was known in advance of the date of expropriation.