(e) if the arbitration tribunal has found the rebalancing measures to be inconsistent with paragraph 2 of this Article, the concerned Party shall, within three days from the delivery of the ruling, notify the complaining Party of the measures (1) it intends to adopt to comply with the ruling of the arbitration tribunal. Article 748(2) and Articles 749 (2) and 750 shall apply mutatis mutandis, if the complaining Party considers that the notified measures are not in compliance with the ruling of the arbitration tribunal. The procedures under Article 748(2) and Articles 749 and 750 shall have no suspensive effect on the application of the notified measures pursuant to this paragraph;
(f) if rebalancing measures were adopted prior to the arbitration ruling in accordance with point (c), any countermeasures adopted pursuant to that point shall be withdrawn immediately, and in no case later than five days, after delivery of the ruling of the arbitration tribunal;
(g) a Party shall not invoke the WTO Agreement or any other international agreement to preclude the other Party from taking measures pursuant to paragraphs 2 and 3, including when those measures consist of suspension of obligations under this Agreement;
(h) if the notified Party does not submit a request pursuant to point (b) of this paragraph within the time period laid down therein, that Party may without having prior recourse to consultations in accordance with Article 738 initiate the arbitration procedure referred to in Article 739. An arbitration tribunal shall treat the issue as a case of urgency for the purposes of Article 744,
4. In order to ensure an appropriate balance between the commitments made by the Parties in this Agreement on a more durable basis, either Party may request, no sooner than four years after the entry into force of this Agreement, a review of the operation of this Heading, The Parties may agree that other Headings of this Agreement may be added to the review.
5. Such a review shall commence at a Party's request, if that Party considers that measures under paragraph 2 or 3 have been taken frequently by either or both Parties, or if a measure that has a material impact on trade or investment between the Parties has been applied for a period of 12 months. For the purposes of this paragraph, the measures in question are those which were not challenged or not found by an arbitration tribunal to be strictly unnecessary pursuant to point (d) or (h) of paragraph 3. This review may commence earlier than four years after the entry into force of this Agreement.
6. The review requested pursuant to paragraph 4 or 5 shall begin within three months of the request and be completed within six months.
7. A review on the basis of paragraph 4 or 5 may be repeated at subsequent intervals of no less than four years after the conclusion of the previous review. If a Party has requested a review under paragraph 4 or 5, it may not request a further review under either paragraph 4 or 5 for at least four years from the conclusion of the previous review or, if applicable, from the entry into force of any amending agreement.
8. The review shall address whether this Agreement delivers an appropriate balance of rights and obligations between the Parties, in particular with regard to the operation of this Heading, and whether, as a result, there is a need for any modification of the terms of this Agreement.
9. The Partnership Council may decide that no action is required as a result of the review. If a Party considers that following the review there is a need for an amendment of this Agreement, the Parties shall use their best endeavours to negotiate and conclude an agreement making the necessary amendments. Such negotiations shall be limited to matters identified in the review.
10. If an amending agreement referred to in paragraph 9 is not concluded within one year from the date the Parties started negotiations, either Party may give notice to terminate this Heading or any other Heading of this Agreement that was added to the review, or the Parties may decide to continue negotiations. If a Party terminates this Heading, Heading Three shall be terminated on the same date. The termination shall take effect three months after the date of such notice.
11. If this Heading is terminated pursuant to paragraph 10 of this Article, Heading Two shall be terminated on the same date, unless the Parties agree to integrate the relevant parts of Title XI of this Heading in Heading Two.
12. Title I of Part Six does not apply to paragraphs 4 to 9 of this Article.
Title XII. EXCEPTIONS
Article 412. General Exceptions
1. Nothing in Chapter 1 and Chapter 5 of Title I, Chapter 2 of Title II, Title III, Title VIII and Chapter 4 of Title XI shall be construed as preventing a Party from adopting or maintaining measures compatible with Article XX of GATT 1994. To that end, Article XX of GATT 1994, including its Notes and Supplementary Provisions, is incorporated into and made part of this Agreement, mutatis mutandis.
2. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment liberalisation or trade in services, nothing in Title II, Title III, Title IV, Title VIII and Chapter 4 of Title XI shall be construed to prevent the adoption or enforcement by either Party of measures:
(a) necessary to protect public security or public morals or to maintain public order (1);
(b) necessary to protect human, animal or plant life or health;
(c) 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; and
(iii) safety.
3. For greater certainty, the Parties understand that, to the extent that such measures are otherwise inconsistent with the provisions of the chapters or titles referred to in paragraphs 1 and 2 of this Article:
(a) the measures referred to in point (b) of Article XX of GATT 1994 and in point (b) of paragraph 2 of this Article include environmental measures, which are necessary to protect human, animal or plant life and health;
(b) point (g) of Article XX of GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources; and
(c) measures taken to implement multilateral environmental agreements can fall under points (b) or (g) of Article XX of GATT 1994 or under point (b) of paragraph 2 of this Article.
4. Before a Party takes any measures provided for in points (i) and (j) of Article XX of GATT 1994, that Party shall provide the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. If no agreement is reached within 30 days of providing the information, the Party may apply the relevant measures. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith precautionary measures necessary to deal with the situation. That Party shall inform the other Party immediately thereof.
Article 413. Taxation
1. Nothing in Titles I to VII, Chapter 4 of Title VII, Titles IX to XII of this Heading or Heading Six shall affect the rights and obligations of either the Union or its Member States and the United Kingdom, under any tax convention. In the event of any inconsistency between this Agreement and any such tax convention, the tax convention shall prevail to the extent of the inconsistency. With regard to a tax convention between the Union or its Member States and the United Kingdom, the relevant competent authorities under this Agreement and that tax convention shall jointly determine whether an inconsistency exists between this Agreement and the tax convention. (1)
2. Articles 130 and 138 shall not apply to an advantage accorded pursuant to a tax convention.
3. Subject to the requirement that tax measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade and investment, nothing in Titles I to VII, Chapter 4 of Title VIII, Titles IX to XII of this Heading or Heading Six shall be construed to prevent the adoption, maintenance or enforcement by a Party of any measure that:
(a) aims at ensuring the equitable or effective (1) imposition or collection of direct taxes; or
(b) distinguishes 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.
4. For the purposes of this Article, the following definitions apply:
(a) "residence" means residence for tax purposes;
(b) "tax convention" means a convention for the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation; and
(c) "direct taxes" comprise all taxes on income or capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, taxes on wages or salaries paid
by enterprises and taxes on capital appreciation.
Article 414. WTO Waivers
If an obligation in Titles I to XII of this Heading or Heading Six of this Part is substantially equivalent to an obligation contained in the WTO Agreement, any measure taken in conformity with a waiver adopted pursuant to Article IX of the WTO Agreement is deemed to be in conformity with the substantially equivalent provision in this Agreement.
Article 415. Security Exceptions
Nothing in Titles I to XII of this Heading or Heading Six shall be construed:
(a) to require a Party to furnish or allow access to any information the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent a Party from taking an action which it considers necessary for the protection of its essential security interests:
(i) connected to the production of or traffic in arms, ammunition and implements of war and to such production, traffic and transactions in other goods and materials, services and technology, and to economic activities, carried out directly or indirectly for the purpose of supplying a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from which they are derived; or
(iii) in time of war or other emergency in international relations; or
(c) to prevent a Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 416. Confidential Information
1. With the exception of Article 384, nothing in Titles I to XII of this Heading or Heading Six of this Part shall be construed as requiring a Party to make available confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private, except where an arbitration tribunal requires such confidential information in dispute settlement proceedings under Title I of Part Six, or where a panel of experts requires such confidential information in proceedings under Article 409 or 410. In such cases, the arbitration tribunal, or, as the case may be, the panel of experts shall ensure that confidentiality is fully protected in accordance with Annex 48.
2. When a Party submits information to the Partnership Council or to Committees that is considered as confidential under its laws and regulations, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.
HEADING TWO. AVIATION
Title I. AIR TRANSPORT
Article 417. Definitions
For the purposes of this Title, the following definitions apply:
(a) "air carrier" means an air transport undertaking holding a valid operating licence or equivalent;
(b) "air carrier of the Union" means an air carrier that fulfils the conditions laid down in point (b) of Article 422(1);
(c) "air carrier of the United Kingdom" means an air carrier that fulfils the conditions laid down in point (a) of Article 422(1) or Article 422(2);
(d) "air navigation services" means air traffic services, communication, navigation and surveillance services, meteorological services for air navigation, and aeronautical information services;
(e) "air operator certificate" means a document issued to an air carrier which affirms that the air carrier in question has the professional ability and organisation to secure the safe operation of aircraft for the aviation activities specified in the certificate;
(f) "air traffic management" means the aggregation of the airborne and ground-based functions (air traffic services, airspace management and air traffic flow management) required to ensure the safe and efficient movement of aircraft during all phases of operations;
(g) "air transport" means the carriage by aircraft of passengers, baggage, cargo, and mail, separately or in combination, held out to the public for remuneration or hire;
(h) "citizenship determination" means a finding that an air carrier proposing to operate air services under this Title satisfies the requirements of Article 422 regarding its ownership, effective control and principal place of business;
(i) "competent authorities" means, for the United Kingdom, the authorities of the United Kingdom responsible for the regulatory and administrative functions incumbent on the United Kingdom under this Title; and for the Union, the authorities of the Union and of the Member States responsible for the regulatory and administrative functions incumbent on the Union under this Title;
(j) "the Convention" means the Convention on International Civil Aviation, done at Chicago on 7 December 1944, and includes:
(i) any amendment that has entered into force under Article 94(a) of the Convention and has been ratified by the United Kingdom and the Member State or Member States concerned, as is relevant to the issue in question; and
(ii) any Annex or any amendment thereto adopted under Article 90 of the Convention, insofar as such Annex or amendment is at any given time effective for the United Kingdom and the Member State or Member States concerned, as is relevant to the issue in question;
(k) "discrimination" means differentiation of any kind without objective justification in respect of the supply of goods or services, including public services, employed for the operation of air transport services, or in respect of their treatment by public authorities relevant to such services;
(l) "effective control" means a relationship constituted by rights, contracts or any other means which, either separately or jointly, and having regard to the considerations of fact or law involved, confer the possibility of directly or indirectly exercising a decisive influence on an undertaking, in particular by:
(i) the right to use all or part of the assets of an undertaking;
(ii) rights or contracts which confer a decisive influence on the composition, voting or decisions of the bodies of an undertaking or otherwise confer a decisive influence on the running of the business of the undertaking;
(m) "fitness determination" means a finding that an air carrier proposing to operate air services under this Title has satisfactory financial capability and adequate managerial expertise to operate such services and is disposed to comply with the laws, regulations and requirements that govern the operation of such services;
(n) "full cost" means the cost of the service provided, which may include appropriate amounts for cost of capital and depreciation of assets, as well as the costs of maintenance, operation, management and administration;
(o) "ICAO" means the United Nations International Civil Aviation Organization;
(p) "principal place of business" means the head office or registered office of an air carrier within which the principal financial functions and operational control, including continued airworthiness management, of that air carrier are exercised;
(q) "ramp inspection" means an examination by the competent authority of a Party or its designated representatives, on board and around an aircraft of the other Party, to check both the validity of the relevant aircraft documents and those of its crew members and the apparent condition of the aircraft and its equipment;
(r) "self-handling" means the performance of ground handling operations by an air carrier directly for itself or for another air carrier where:
(i) one holds the majority in the other; or
(ii) a single body has a majority holding in each;
(s) "scheduled air transport services" means air services which are scheduled and performed for remuneration according to a published timetable, or which are so regular or frequent as to constitute a recognisably systematic series, and which are open to direct booking by members of the public; and extra section flights occasioned by overflow traffic from scheduled flights;
(t) "stop for non-traffic purposes" means a landing for any purpose other than taking on board or discharging passengers, baggage, cargo and/or mail in air transport;
(u) "tariff" means any fare, rate or charge for the carriage of passengers, baggage or cargo (excluding mail) in air transport (including any other mode of transport in connection therewith) charged by air carriers, including their agents, and the conditions governing the availability of such fare, rate or charge;
(v) "user charge" means a charge imposed on air carriers for the provision of airport, air navigation (including overflights), aviation security facilities or services including related services and facilities, or environment-related charges including noise-related charges and charges to address local air quality problems at or around airports.
Article 418. Route Schedule
1. Subject to Article 419, the Union shall grant the United Kingdom the right for the air carriers of the United Kingdom to operate, while carrying out air transport, on the following routes:
Points in the territory of the United Kingdom - Intermediate Points - Points in the territory of the Union - Points Beyond.
2. Subject to Article 419, the United Kingdom shall grant the Union the right for the air carriers of the Union to operate, while carrying out air transport, on the following routes:
Points in the territory of the Union - Intermediate Points - Points in the territory of the United Kingdom - Points Beyond.
Article 419. Traffic Rights
1. Each Party shall grant to the other Party the right for its respective air carriers, for the purpose of carrying out air transport on the routes laid down in Article 418, to:
(a) fly across its territory without landing;
(b) make stops in its territory for non-traffic purposes.
2. The United Kingdom shall enjoy the right for its air carriers to make stops in the territory of the Union to provide scheduled and non-scheduled air transport services between any points situated in the territory of the United Kingdom and any points situated in the territory of the Union (third and fourth freedom traffic rights).
3. The Union shall enjoy the right for its air carriers to make stops in the territory of the United Kingdom to provide scheduled and non-scheduled air transport services between any points situated in the territory of the Union and any points situated in the territory of the United Kingdom (third and fourth freedom traffic rights).
4. Notwithstanding paragraphs 1, 2 and 3 and without prejudice to paragraph 9, the Member States and the United Kingdom may, subject to the respective internal rules and procedures of the Parties, enter into bilateral arrangements by which, as a matter of this Agreement, they grant each other the following rights:
(a) for the United Kingdom, the right for its air carriers to make stops in the territory of the Member State concerned to provide scheduled and non-scheduled all-cargo air transport services, between points situated in the territory of that Member State and points situated ina third country as part of a service with origin or destination in the territory of the United Kingdom (fifth freedom traffic rights);
(b) for the Member State concerned, the right for Union air carriers to make stops in the territory of the United Kingdom to provide scheduled and non-scheduled all-cargo air transport services between points situated in the territory of the United Kingdom and points situated in a third country, as part of a service with origin or destination in the territory of that Member State (fifth freedom traffic rights).
5. The rights mutually granted in accordance with paragraph 4 shall be governed by the provisions of this Title.
6. Neither Party shall unilaterally limit the volume of traffic, capacity, frequency, regularity, routing, origin or destination of the air transport services operated in accordance with paragraphs 2, 3 and 4, or the aircraft type or types operated for that purpose by the air carriers of the other Party, except as may be required for customs, technical, operational, air traffic management, safety, environmental or health protection reasons, in a non-discriminatory manner, or unless otherwise provided for in this Title.
7. Nothing in this Title shall be deemed to confer on the United Kingdom the right for its air carriers to take on board in the territory of a Member State passengers, baggage, cargo or mail carried for compensation and destined for another point in the territory of that Member State or any other Member State.
8. Nothing in this Title shall be deemed to confer on the Union the right for its air carriers to take on board in the territory of the United Kingdom passengers, baggage, cargo or mail carried for compensation and destined for another point in the territory of the United Kingdom.
9. Subject to the internal rules and procedures of the Parties, the competent authorities of the United Kingdom and of the Member States may authorise non-scheduled air transport services beyond the rights provided for in this Article provided that they do not constitute a disguised form of scheduled services, and may establish bilateral arrangements regarding the procedures to be followed for the handling of, and decisions on, air carriers' applications.
Article 420. Code-share and Blocked Space Arrangements
1. Air transport services in accordance with Article 419 may be provided by means of blocked-space or code-share arrangements, as follows:
(a) an air carrier of the United Kingdom may act as the marketing carrier with any operating carrier that is an air carrier of the Union or an air carrier of the United Kingdom, or with any operating carrier of a third country which, under Union law or, as applicable, under the law of the Member State or Member States concerned, enjoys the necessary traffic rights as well as the right for its air carriers to exercise those rights by means of the arrangement in question;
(b) an air carrier of the Union may act as the marketing carrier with any operating carrier that is an air carrier of the Union or an air carrier of the United Kingdom, or with any operating carrier of a third country which, under United Kingdom law enjoys the necessary traffic rights as well as the right for its air carriers to exercise those rights by means of the arrangement in question;
(c) an air carrier of the United Kingdom may act as the operating carrier with any marketing carrier that is an air carrier of the Union or an air carrier of the United Kingdom, or with any marketing carrier of a third country which, under Union law or, as applicable, under the law of the Member State or Member States concerned, enjoys the necessary rights to enter into the arrangement in question;
(d) an air carrier of the Union may act as the operating carrier with any marketing carrier that is an air carrier of the Union or an air carrier of the United Kingdom, or with any marketing carrier of a third country which, under United Kingdom law, enjoys the necessary rights to enter into the arrangement in question;
(e) inthe context of the arrangements provided under points (a) to (d), an air carrier of one Party may act as the marketing carrier in a blocked-space or code-share arrangement, in services between any pair of points of which both origin and destination are situated in the territory of the other Party provided that the following conditions are fulfilled:
(i) the conditions laid down in point (a) or (b), as the case may be, as regards the operating carrier; and
(ii) the transport service in question forms part of a carriage by the marketing carrier between a point in the territory of its Party and that destination point in the territory of the other Party.
2. An air carrier of one Party may act as the marketing carrier in a blocked-space or code-share arrangement, in services between any pair of points of which one is situated in the territory of the other Party and the other is situated in a third country, provided that the following conditions are fulfilled:
(a) the conditions laid down in point (a) or (b) of paragraph 1, as the case may be, as regards the operating carrier; and
(b) the transport service in question forms part of a carriage by the marketing carrier between a point in the territory of its Party and that point in a third country.
3. In respect of each ticket sold involving the arrangements referred to in this Article, the purchaser shall be informed upon reservation of which air carrier will operate each sector of the service. Where that is not possible, or in case of change after reservation, the identity of the operating carrier shall be communicated to the passenger as soon as it is established. In all cases, the identity of the operating carrier or carriers shall be communicated to the passenger at check-in, or before boarding where no check-in is required for a connecting flight.
4. The Parties may require the arrangements referred to in this Article to be approved by their competent authorities for the purpose of verifying compliance with the conditions set out therein and with other requirements provided for in this Agreement, in particular as regards competition, safety and security.
5. In no case shall recourse to code-share or blocked-space arrangements result in the air carriers of the Parties exercising traffic rights on the basis of this Agreement other than those provided for in Article 419.
Article 421. Operational Flexibility
The rights mutually granted by the Parties in accordance with Article 419(2), (3) and (4) shall include, within the limits laid down therein, all of the following prerogatives:
(a) to operate flights in either or both directions;
(b) to combine different flight numbers within one aircraft operation;
(c) to serve points in the route schedule in any combination and in any order;
(d) to transfer traffic between aircraft of the same air carrier at any point (change of gauge);
(e) to carry stopover traffic through any points whether within or outside the territory of either Party;
(f) to carry transit traffic through the territory of the other Party;
(g) to combine traffic on the same aircraft regardless of where such traffic originates;
(h) to serve more than one point on the same service (co-terminalisation).
Article 422. Operating Authorisations and Technical Permissions
1. On receipt of an application for an operating authorisation from an air carrier of a Party, in the form and manner prescribed, to operate air transport services under this Title, the other Party shall grant the appropriate authorisations and technical permissions with minimum procedural delay, provided that all the following conditions are met:
(a) in the case of an air carrier of the United Kingdom:
(i) the air carrier is owned, directly or through majority ownership, and is effectively controlled by the United Kingdom, its nationals, or both;
(ii) the air carrier has its principal place of business in the territory of the United Kingdom, and is licenced in accordance with the law of the United Kingdom; and
(iii) the air carrier holds an air operator certificate issued by the competent authority of the United Kingdom, which shall be clearly identified, and that authority exercises and maintains effective regulatory control of the air carrier;
(b) in the case of an air carrier of the Union:
(i) the air carrier is owned, directly or through majority ownership, and is effectively controlled by one or more Member States, by other member states of the European Economic Area, by Switzerland, by nationals of such states, or by a combination thereof;
(ii) the air carrier has its principal place of business in the territory of the Union and holds a valid operating licence in accordance with Union law; and
(iii) the air carrier holds an air operator certificate issued by the competent authority of a Member State, or by a Union authority on its behalf, the certifying authority is clearly identified, and that Member State exercises and maintains effective regulatory control of the air carrier. (c) Articles 434 and 435 are being complied with, and
(d) the air carrier meets the conditions prescribed under the laws and regulations normally applied to the operation of international air transport by the Party considering the application or applications.
2. Notwithstanding point (a)(i) of paragraph 1, the appropriate operating authorisations and permissions shall be granted to air carriers of the United Kingdom provided that all the following conditions are met:
(a) the conditions laid down in points (a)(ii), (a)(iii), (c) and (d) of paragraph 1 are complied with;
(b) the air carrier is owned, directly or through majority ownership, and is effectively controlled by one or more Member States, by other member states of the European Economic Area, by Switzerland, by nationals of such states, or by a combination thereof, whether alone or together with the United Kingdom and/or nationals of the United Kingdom;
(c) on the day the transition period ended the air carrier held a valid operating licence in accordance with Union Law.
3. For the purposes of paragraphs 1 and 2, evidence of effective regulatory control includes but is not limited to:
(a) the air carrier concerned holding a valid operating licence or permit issued by the competent authority and meeting the criteria of the Party issuing the operating licence or permit for the operation of international air services; and