Article 375. Dispute Settlement
1. Subject to paragraphs 2 and 3 of this Article, Title I of Part Six applies to disputes between the Parties concerning the interpretation and application of this Chapter, except for Articles 371 and 372.
2. An arbitration tribunal shall have no jurisdiction regarding:
(a) an individual subsidy, including whether such a subsidy has respected the principles set out in Article 366(1), other than with regard to the conditions set out in Article 367(2), Article 367(3), (4) and (5), Article 367(8) to (11) and Article 367(12); and
(b) whether the recovery remedy within the meaning of Article 373 has been correctly applied in any individual case.
3. Title I of Part Six shall apply to Article 374 in accordance with that Article and Article 760.
Chapter 4. STATE-OWNED ENTERPRISES, ENTERPRISES GRANTED SPECIAL RIGHTS OR PRIVILEGES AND DESIGNATED MONOPOLIES
Article 376. Definitions
For the purposes of this Chapter, the following definitions apply:
"Arrangement" means the Arrangement on Officially Supported Export Credits, developed within the framework of the OECD or a successor undertaking, whether developed within or outside of the OECD framework, that has been adopted by at least 12 original WTO Members that were Participants to the Arrangement as of 1 January 1979;
"commercial activities" means activities, the end result of which is the production of a good or the supply of a service to be sold in the relevant market in quantities and at prices determined by an enterprise on the basis of the conditions of supply and demand, and which are undertaken with an orientation towards profit-making; activities undertaken by an enterprise which operates on a non-profit basis or a cost-recovery basis are not activities undertaken with an orientation towards profit-making;
(c) "commercial considerations" means considerations of price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale, or other factors that would normally be taken into account in the commercial decisions of a privately owned enterprise operating according to market economy principles in the relevant business or industry;
(d) "covered entity" means:
(i) a designated monopoly;
(ii) an enterprise granted special rights or privileges; or
(iii) a State-owned enterprise;
(e) "designated monopoly" means an entity, including a consortium or a government agency, that, in a relevant market in the territory of a Party, is designated as the sole supplier or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant; in this context, designate means to establish or authorise a monopoly, or to expand the scope of a monopoly to cover an additional good or service;
(f) "enterprise" means enterprise as defined in point (g) of Article 124;
(g) "enterprise granted special rights or privileges" means any enterprise, public or private, to which a Party has granted special rights or privileges, in law or in fact;
(h) "service supplied in the exercise of governmental authority" means a service supplied in the exercise of governmental authority as defined in GATS;
(i) "special rights or privileges" means rights or privileges by which a Party designates or limits to two or more the number of enterprises authorised to supply a good or service, other than according to objective, proportional and non-discriminatory criteria, substantially affecting the ability of any other enterprise to supply the same good or service in the same geographical area or product market under substantially equivalent conditions;
(j) "State-owned enterprise" means an enterprise in which a Party:
(i) directly owns more than 50 % of the share capital;
(ii) controls, directly or indirectly, the exercise of more than 50 % of the voting rights;
(iii) holds the power to appoint a majority of the members of the board of directors or any other equivalent management body; or
(iv) has the power to exercise control over the enterprise. For the establishment of control, all relevant legal and factual elements shall be taken into account on a case-by-case basis.
Article 377. Scope
1. This Chapter applies to covered entities, at all levels of government, engaged in commercial activities. If a covered entity engages in both commercial and non-commercial activities, only the commercial activities are covered by this Chapter.
2. This Chapter does not apply to:
(a) covered entities when acting as procuring entities, as defined in each Party's Annexes 1 to 3 to Appendix I to the GPA and paragraph 1 of each Party's respective subsections of Section B of Annex 25, conducting covered procurement as defined in Article 277(2);
(b) any service supplied in the exercise of governmental authority.
3. This Chapter does not apply to a covered entity, if in any one of the three previous consecutive fiscal years the annual revenue derived from the commercial activities of the enterprise or monopoly concerned was less than 100 million Special Drawing Rights.
4. Article 380 does not apply to the supply of financial services by a covered entity pursuant to a government mandate, if that supply of financial services:
(a) supports exports or imports, provided that those services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market; or
(b) supports private investment outside the territory of the Party, provided that those services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market; or
(c) is offered on terms consistent with the Arrangement, if the supply of those services falls within the scope of the Arrangement.
5. Without prejudice to paragraph 3 of this Article, Article 380 does not apply to the following sectors: audio-visual services; national maritime cabotage (60); and inland waterways transport, as set out in Article 123(5).
6. Article 380 does not apply to the extent that a covered entity of a Party makes purchases or sales of goods or services pursuant to:
(a) any existing non-conforming measure that the Party maintains, continues, renews or amends in accordance with Article 133(1) or 139(1) as set out in its Schedules to Annexes 19 and 20, as applicable; or
(b) any non-conforming measure that the Party adopts or maintains with respect to sectors, subsectors, or activities in accordance with Article 133(2) or 139(2) as set out in its Schedules to Annexes 19 and 20, as applicable.
Article 378. Relationship with the WTO Agreement
The Parties affirm their rights and obligations under paragraphs 1 to 3 of Article XVII of GATT 1994, the Understanding on the Interpretation of Article XVII of the GATT 1994, as well as under paragraphs 1, 2 and 5 of Article VIII of GATS.
Article 379. General Provisions
1. Without prejudice to the rights and obligations of each Party under this Chapter, nothing in this Chapter prevents a Party from establishing or maintaining a covered entity.
2. Neither Party shall require or encourage a covered entity to act in a manner inconsistent with this Chapter.
Article 380. Non-discriminatory Treatment and Commercial Considerations
1. Each Party shall ensure that each of its covered entities, when engaging in commercial activities:
(a) acts in accordance with commercial considerations in its purchase or sale of a good or service, except to fulfil any terms of its public service mandate that are not inconsistent with point (b) or (c);
(b) in its purchase of a good or service:
(i) accords to a good or service supplied by an enterprise of the other Party treatment no less favourable than it accords to a like good or a like service supplied by enterprises of the Party; and
(ii) accords to a good or service supplied by a covered entity in the Party's territory treatment no less favourable than it accords to a like good or a like service supplied by enterprises of the Party in the relevant market in the Party's territory; and
(c) in its sale of a good or service:
(i) accords to an enterprise of the other Party treatment no less favourable than it accords to enterprises of the Party; and
(ii) accords to a covered entity in the Party's territory, treatment no less favourable than it accords to enterprises of the Party in the relevant market in the Party's territory. (1)
2. Points (b) and (c) of paragraph 1 do not preclude a covered entity from:
(a) purchasing or supplying goods or services on different terms or conditions, including terms or conditions relating to price, provided that those different terms or conditions are in accordance with commercial considerations; or
(b) refusing to purchase or supply goods or services, provided that such refusal is made in accordance with commercial considerations.
Article 381. Regulatory Framework
1. Each Party shall respect and make best use of relevant international standards including the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
2. Each Party shall ensure that any regulatory body, and any other body exercising a regulatory function, that that Party establishes or maintains:
(a) is independent from, and not accountable to, any of the enterprises regulated by that body; and
(b) in like circumstances, acts impartially with respect to all enterprises regulated by that body, including covered entities; the impartiality with which the body exercises its regulatory functions is to be assessed by reference to a general pattern or practice of that body.
For those sectors in which the Parties have agreed to specific obligations relating to such a body in this Agreement, the relevant provisions of this Agreement shall prevail.
3. Each Party shall apply its laws and regulations to covered entities in a consistent and non- discriminatory manner.
Article 382. Information Exchange
1. A Party which has reason to believe that its interests under this Chapter are being adversely affected by the commercial activities of an entity of the other Party may request the other Party in writing to provide information on the commercial activities of that entity related to the carrying out of the provisions of this Chapter in accordance with paragraph 2.
2. Provided that the request referred to in paragraph 1 includes an explanation of how the activities of the entity may be affecting the interests of the requesting Party under this Chapter and indicates which of the following categories of information is or are to be provided, the requested Party shall provide the information so requested:
(a) the ownership and the voting structure of the entity, indicating the cumulative percentage of shares and the percentage of voting rights that the requested Party and its covered entities cumulatively have in the entity;
(b) a description of any special shares or special voting or other rights that the requested Party or its covered entities hold, to the extent that such rights are different from those attached to the general common shares of the entity;
(c) a description of the organisational structure of the entity and the composition of its board of directors or of any equivalent body;
(d) a description of the government departments or public bodies which regulate or monitor the entity, a description of the reporting requirements imposed on it by those departments or public bodies, and the rights and practices of those departments or public bodies with respect to the appointment, dismissal or remuneration of senior executives and members of its board of directors or any equivalent body;
(e) the annual revenue and total assets of the entity over the most recent three-year period for which information is available;
(f) any exemptions, immunities and related measures from which the entity benefits under the laws and regulations of the requested Party;
(g) any additional information regarding the entity that is publicly available, including annual financial reports and third-party audits.
3. Paragraphs 1 and 2 do not require a Party to disclose confidential information the disclosure of which would be inconsistent with its laws and regulations, would impede law enforcement, or otherwise would be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises.
4. If the requested information is not available, the requested Party shall provide to the requesting Party, in writing, the reasons why that information is not available.
Chapter 5. TAXATION
Article 383. Good Governance
The Parties recognise and commit to implementing the principles of good governance in the area of taxation, in particular the global standards on tax transparency and exchange of information and fair tax competition. The Parties reiterate their support for the OECD Base Erosion and Profit Shifting (BEPS) Action Plan and affirm their commitment to implementing the OECD minimum standards against BEPS. The Parties will promote good governance in tax matters, improve international cooperation in the area of taxation and facilitate the collection of tax revenues.
Article 384. Taxation Standards
1. A Party shall not weaken or reduce the level of protection provided for in its legislation at the end of the transition period below the level provided for by the standards and rules which have been agreed in the OECD at the end of the transition period, in relation to:
(a) the exchange of information, whether upon request, spontaneously or automatically, concerning financial accounts, cross-border tax rulings, country-by-country reports between tax administrations, and potential cross-border tax planning arrangements;
(b) rules on interest limitation, controlled foreign companies and hybrid mismatches.
2. A Party shall not weaken or reduce the level of protection provided for in its legislation at the end of the transition period in respect of public country-by-country reporting by credit institutions and investment firms, other than small and non-interconnected investment firms.
Article 385. Dispute Settlement
This Chapter shall not be subject to dispute settlement under Title I of Part Six.
Chapter 6. LABOUR AND SOCIAL STANDARDS
Article 386. Definition
1. For the purposes of this Chapter, "labour and social levels of protection" means the levels of protection provided overall in a Party's law and standards (1), in each of the following areas:
(a) fundamental rights at work;
(b) occupational health and safety standards;
(c) fair working conditions and employment standards;
(d) information and consultation rights at company level; or
(e) restructuring of undertakings.
2. For the Union, "labour and social levels of protection" means labour and social levels of protection that are applicable to and in, and are common to, all Member States.
Article 387. Non-regression from Levels of Protection
1. The Parties affirm the right of each Party to set its policies and priorities in the areas covered by this Chapter, to determine the labour and social levels of protection it deems appropriate and to adopt or modify its law and policies in a manner consistent with each Party's international commitments, including those under this Chapter.
2. A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards.
3. The Parties recognise that each Party retains the right to exercise reasonable discretion and to make bona fide decisions regarding the allocation of labour enforcement resources with respect to other labour law determined to have higher priority, provided that the exercise of that discretion, and those decisions, are not inconsistent with its obligations under this Chapter.
4. The Parties shall continue to strive to increase their respective labour and social levels of protection referred to in this Chapter.
Article 388. Enforcement
For the purposes of enforcement as referred to in Article 387 each Party shall have in place and maintain a system for effective domestic enforcement and, in particular, an effective system of labour inspections in accordance with its international commitments relating to working conditions and the protection of workers; ensure that administrative and judicial proceedings are available that allow public authorities and individuals with standing to bring timely actions against violations of the labour law and social standards; and provide for appropriate and effective remedies, including interim relief, as well as proportionate and dissuasive sanctions. In the domestic implementation and enforcement of Article 387, each Party shall respect the role and autonomy of the social partners at a national level, where relevant, in line with applicable law and practice.
Article 389. Dispute Settlement
1. The Parties shall make all efforts through dialogue, consultation, exchange of information and cooperation to address any disagreement on the application of this Chapter.
2. By way of derogation from Title I of Part Six, in the event of a dispute between the Parties regarding the application of this Chapter, the Parties shall have recourse exclusively to the procedures established under Articles 408, 409 and 410.
Chapter 7. ENVIRONMENT AND CLIMATE
Article 390. Definitions
For the purposes of this Chapter, "environmental levels of protection" means the levels of protection provided overall in a Party's law which have the purpose of protecting the environment, including the prevention of a danger to human life or health from environmental impacts, including in each of the following areas:
(a) industrial emissions;
(b) air emissions and air quality;
(c) nature and biodiversity conservation;
(d) waste management;
(e) the protection and preservation of the aquatic environment;
(f) the protection and preservation of the marine environment;
(g) the prevention, reduction and elimination of risks to human health or the environment arising from the production, use, release or disposal of chemical substances; or
(h) the management of impacts on the environment from agricultural or food production, notably through the use of antibiotics and decontaminants.
2. For the Union, "environmental levels of protection" means environmental levels of protection that are applicable to and in, and are common to, all Member States.
3. For the purposes of this Chapter, "climate level of protection" means the level of protection with respect to emissions and removals of greenhouse gases and the phase-out of ozone depleting substances. With regard to greenhouse gases, this means:
(a) for the Union, the 40 % economy-wide 2030 target, including the Union's system of carbon pricing;
(b) for the United Kingdom, the United Kingdom's economy-wide share of this 2030 target, including the United Kingdom's system of carbon pricing.
Article 391. Non-regression from Levels of Protection
1. The Parties affirm the right of each Party to set its policies and priorities in the areas covered by this Chapter, to determine the environmental levels of protection and climate level of protection it deems appropriate and to adopt or modify its law and policies in a manner consistent with each Party's international commitments, including those under this Chapter.
2. A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its environmental levels of protection or its climate level of protection below the levels that are in place at the end of the transition period, including by failing to effectively enforce its environmental law or climate level of protection.
3. The Parties recognise that each Party retains the right to exercise reasonable discretion and to make bona fide decisions regarding the allocation of environmental enforcement resources with respect to other environmental law and climate policies determined to have higher priorities, provided that the exercise of that discretion, and those decisions, are not inconsistent with its obligations under this Chapter.
4. For the purposes of this Chapter, insofar as targets are provided for in a Party's environmental law in the areas listed in Article 390, they are included in a Party's environmental levels of protection at the end of the transition period. These targets include those whose attainment is envisaged for a date that is subsequent to the end of the transition period. This paragraph shall also apply to ozone depleting substances.
5. The Parties shall continue to strive to increase their respective environmental levels of protection or their respective climate level of protection referred to in this Chapter.
Article 392. Carbon Pricing
1. Each Party shall have in place an effective system of carbon pricing as of 1 January 2021.
2. Each system shall cover greenhouse gas emissions from electricity generation, heat generation, industry and aviation.
3. The effectiveness of the Parties' respective carbon pricing systems shall uphold the level of protection provided for by Article 391.
4. By way of derogation from paragraph 2, aviation shall be included within two years at the latest, if not included already. The scope of the Union system of carbon pricing shall cover departing flights from the European Economic Area to the United Kingdom.
5. Each Party shall maintain its system of carbon pricing insofar as it is an effective tool for each Party in the fight against climate change and shall in any event uphold the level of protection provided for by Article 391.
6. The Parties shall cooperate on carbon pricing. They shall give serious consideration to linking their respective carbon pricing systems in a way that preserves the integrity of these systems and provides for the possibility to increase their effectiveness.
Article 393. Environmental and Climate Principles
1. Taking into account the fact that the Union and the United Kingdom share a common biosphere in respect of cross-border pollution, each Party commits to respecting the internationally recognised environmental principles to which it has committed, such as in the Rio Declaration on Environment and Development, adopted at Rio de Janeiro on 14 June 1992 (the "1992 Rio Declaration on Environment and Development") and in multilateral environmental agreements, including in the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992 ("UNFCCC") and the Convention on Biological Diversity, done at Rio de Janeiro on 5 June 1992 (the "Convention on Biological Diversity"), in particular:
(a) the principle that environmental protection should be integrated into the making of policies, including through impact assessments;
(b) the principle of preventative action to avert environmental damage;
(c) the precautionary approach referred to in Article 356(2);
(d) the principle that environmental damage should as a priority be rectified at source; and
(e) the polluter pays principle.
2. The Parties reaffirm their respective commitments to procedures for evaluating the likely impact of a proposed activity on the environment, and where specified projects, plans and programmes are likely to have significant environmental, including health, effects, this includes an environmental impact assessment or a strategic environmental assessment, as appropriate.
3. These procedures shall comprise, where appropriate and in accordance with a Party's laws, the determination of the scope of an environmental report and its preparation, the carrying out of public participation and consultations and the taking into account of the environmental report and the results of the public participation and consultations in the consented project, or adopted plan or programme.
Article 394. Enforcement
1. For the purposes of enforcement as referred to in Article 391, each Party shall, in accordance with its law, ensure that: