3. Where a supplier's challenge is initially reviewed by an authority other than those referred to in paragraph 2, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority independent of the entity that is the subject of the challenge.
4. Each Party shall provide that the authority established or designated in accordance with paragraph 2 shall have the authority to take, without delay, interim measures to preserve the supplier's opportunity to participate in the procurement and ensure that the Party complies with this Chapter. Such measures may have the effect of suspending the procurement proceedings.
5. Without prejudice to other challenge procedures provided or developed by each Party, each Party shall ensure the following:
(a) A sufficient time period for the supplier to prepare and submit written challenges, which in no case shall be less than ten (10) days from the time the act or omission giving rise to the challenge became known to the supplier or reasonably should have become known to the supplier, and
(b) The delivery without delay and in writing of the decisions related to the challenge, with an explanation of the grounds for each decision.
Article 7.18. Use of Electronic Media
1. The Parties shall endeavor to provide information regarding future procurement opportunities through electronic means.
2. The Parties shall encourage, to the extent possible, the use of electronic means for the delivery of procurement documents and the receipt of bids.
3. When covered procurement is carried out through electronic means, each Party: (a) Ensure that procurement is conducted using information technology systems and software, including those related to authentication and cryptographic coordination of information, that are accessible and interoperable with generally accessible information technology systems and software; and (b) Maintain mechanisms to ensure the security and integrity of requests for participation and bids, as well as the determination of the time of their receipt.
Article 7.19. Modifications and Rectifications
1. Either Party may modify its lists contained in Annex 7.1, provided that:
(a) Notify the other Party in writing;
(b) Include in the notification a proposal for appropriate compensatory adjustments to the other Party to maintain a comparable level of coverage to that existing prior to the modification, except as provided in paragraphs 2 and 3, and
(c) The other Party does not object in writing within thirty (30) days following such notification.
2. Either Party may make rectifications of a purely formal nature to its lists contained in Annex 7.1, such as:
(a) A change in the name of an entity listed in Exhibit 7.1;
(b) Merger of two or more entities listed in Annex 7.1 and
(c) The separation of an entity listed in Schedule 7.1 into two or more entities that are added to Schedule 7.1,
provided that they do not affect the mutually agreed coverage in the Chapter, that the other Party is notified in writing and that the other Party does not object in writing within thirty (30) days following the notification. The Party making such rectifications shall not be obligated to provide compensatory adjustments.
3. A Party need not provide compensatory adjustments in circumstances where the proposed modification to its Schedule to Annex 7.1 covers an entity in respect of which the Party has effectively eliminated its control or influence. Where the Parties do not agree that such governmental control or influence has been effectively eliminated, the objecting Party may request additional information or consultations with a view to clarifying the nature of any governmental control or influence, and reaching agreement on whether to retain or remove the entity from coverage in accordance with this Chapter.
4. When the Parties have agreed on a modification or rectification of a purely formal nature to their lists contained in Annex 7.1, including the case when no Party has objected within thirty (30) days, in accordance with paragraphs 1 and 2, the Committee on Government Procurement shall make a recommendation to the Bilateral Administrative Commission to adopt a decision in this regard.
Article 7.20. Undisclosed Information
1. The Parties, their entities and their review authorities shall not disclose confidential information, without the written authorization of the supplier that provided it, when such disclosure could prejudice the legitimate commercial interests ofa particular person or fair competition between suppliers.
2. Nothing in this Chapter shall be construed to require a Party or its entities to disclose confidential information that would impede law enforcement or otherwise be contrary to the public interest.
Article 7.21. Exceptions
1. Nothing in this Chapter shall be construed to prevent a Party from taking any action or refraining from disclosing any information deemed necessary for the protection of its essential security interests relating to procurement essential to national security or national defense.
2. Provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties, or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining such measures as it considers appropriate:
(a) Necessary to protect public morals, order or safety;
(b) Necessary to protect human, animal or plant life or health, including environmental measures;
(c) Necessary to protect intellectual property, or
(d) Related to goods or services of disabled persons, charitable institutions or prison labor.
Article 7.22. Facilitation of the Participation of Micro, Small and Medium-Sized Enterprises
1. The Parties recognize the important contribution that Micro, Small and Medium- sized Enterprises (hereinafter referred to as "MSMEs") can make to economic growth and employment, and the importance of facilitating their participation in government procurement.
2. The Parties also recognize the importance of business alliances between suppliers of the Parties and in particular MSMEs, including joint participation in procurement procedures.
3. Where a Party maintains measures that provide preferential treatment for its MSMESs, it shall ensure that such measures, including eligibility criteria, are objective and transparent.
4. The Parties may:
(a) Provide information regarding their measures used to assist, promote, encourage or facilitate the participation of MSMEs in public procurement, and
(b) Cooperate in the development of mechanisms to provide information to MSMEs on the means to participate in government procurement covered by this Chapter.
5. To facilitate the participation of MSMEs in covered procurement, each Party shall, to the extent possible:
(a) Provide information related to public procurement, including a definition of MSMEs in an electronic portal;
(b) It will ensure that procurement documents are available free of charge;
(c) Identify MSMEs interested in becoming business partners of other enterprises in the territory of the other Party;
(d) Develop databases on MSMEs in its territory for use by entities of the other Party; and
(e) It shall carry out activities aimed at facilitating the participation of MSMEs in public procurements covered by this Chapter.
Article 7.23. Cooperation
1. The Parties recognize their common interest in cooperating to promote the international liberalization of government procurement markets in order to achieve a better understanding of their respective government procurement systems and to improve access to their respective markets.
2. The Parties shall endeavor to cooperate in matters such as:
(a) Exchange of experiences and information, including regulatory framework, best practices and statistics;
(b) Facilitation of the participation of suppliers of the Parties in covered government procurement, particularly MSMEs;
(c) Development and use of electronic means of information in public procurement systems;
(d) Training and technical assistance to suppliers on access to the public procurement market, and
(e) Institutional strengthening for compliance with this Chapter, including training of public officials.
Article 7.24. Committee on Procurement
1. The Parties establish the Committee on Government Procurement which shall be composed of representatives of their respective Governments and shall meet at such times, places and by such means as the Parties may agree.
2. The Committee on Government Procurement may:
(a) Monitor the implementation of this Chapter, including taking advantage of the opportunities offered by increased access to government procurement and recommend appropriate activities to the Parties;
(b) Evaluate and follow up on the cooperation activities submitted by the Parties;
(c) Consider holding additional negotiations with the objective of expanding the coverage of this Chapter at the request of either Party;
(d) Make efforts to increase understanding of the Parties' respective public procurement systems, with a view to maximizing access to public procurement opportunities, especially for MSME suppliers;
(e) To address issues related to the application of this Chapter and to seck mutually acceptable solutions, without prejudice to the right of the Parties to have recourse to the dispute settlement system set forth in Chapter 18 (Dispute Settlement), and
(f) Submit reports and recommendations to the Bilateral Administrative Commission on matters related to this Chapter.
4. The Parties may establish ad hoc working groups, which shall meet jointly or separately from the Committee on Government Procurement.
Article 7.25. Future Negotiations
At the request of any Party, the Parties shall consider initiating future negotiations with a view to extending the coverage of this Chapter, where the Party grants suppliers of a non-Party, through an international treaty that enters into force after the entry into force of this Agreement, greater access to its government procurement market than it grants to suppliers of the other Party in accordance with this Chapter.
Chapter 8. Investment
Section A. Substantive Provisions
Article 8.1. Definitions
For the purposes of this Chapter:
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights of the WTO Agreement;
Center means the International Centre for Settlement of Investment Disputes (ICSID) established by the ICSID Convention;
New York Convention means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on March 18, 1965;
Inter-American Convention means the Inter-American Convention on Commercial Arbitration, concluded in Panama on January 30, 1975;
PCA means the Permanent Court of Arbitration, established by the Convention for the Peaceful Settlement of International Disputes of July 29, 1899;
respondent means the Party that is a party to an investment dispute;
claimant means an investor of a Party that is a party to an investment dispute with another Party. If such investor is a natural person, who is a permanent resident of a Party and a national of the other Party, it may not submit a claim to arbitration against the Party of which it is a national;
legal entity means any entity organized or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship or partnership, joint venture or partnership, association or similar organization;
legal person of a Party means a legal person constituted or organized under the laws of a Party, which carries out business activities in the territory of that Party;
State enterprise means a legal person wholly or majority owned or controlled by a Party, which engages in commercial activities;
existing means in effect on the date of signature of this Agreement;
protected information means confidential business information or information privileged or otherwise protected from disclosure under the laws of a Party, including classified government information;
investment means any asset owned or controlled directly or indirectly by an investor of a Party, including, but not limited to, the following characteristics: the assumption of entrepreneurial risk, the expectation of profit or gain, the commitment of capital or other resources in the territory of the host Party, and the contribution to the economic development of the host Party.
In particular, the term "investment" includes:
(a) A company;
(b) Shares, securities and other forms of participation in the capital of a company;
(c) Bonds, debentures or other debt instruments of a company, issued for the purpose of carrying out an activity of a productive nature;
(d) Turnkey, construction, management, production, concession, revenue sharing and other similar contracts;
(e) Intellectual property rights, in accordance with the provisions of the TRIPS Agreement;
(f) Licenses, authorizations and permits and similar rights granted in accordance with the legal system of Party (1), and
(g) Other tangible or intangible, movable or immovable property rights and related property rights, such as leases, mortgages, liens and pledges.
2. The term "investment" does not include:
(a) Debt instruments issued by a Party or a State enterprise, or loans to a Party or a State enterprise, regardless of the original maturity date;
(b) Monetary claims arising exclusively from commercial contracts for the sale of goods or services, or
(c) Judicial or administrative rulings.
protected investment means, with respect to a Party, an investment made in its territory by an investor of the other Party as of the date of entry into force of this Agreement or established, acquired or expanded thereafter;
investor of a non-Party means, with respect to a Party, an investor that intends to make, (2) is making or has made an investment in the territory of that Party, and is not an investor of any Party;
investor of a Party means a Party or an enterprise of the State of such Party, or a national or juridical person of such Party, that intends to make (3), is making or has made an investment in the territory of the other Party; provided, however, that a natural person who has dual nationality shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality;
freely usable currency means "freely usable currency" as determined by the International Monetary Fund in accordance with the Articles of Agreement;
disputing party means either the plaintiff or the defendant; disputing parties means the plaintiff and the defendant;
Non-disputing Party means a Party that is not a party to an investment dispute; and UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law.
Article 8.2. Scope of Application
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) Investors of the other Party, and
(b) To protected investments.
The obligations of a Party under this Chapter shall apply to measures adopted or maintained by:
(a) The central, regional, provincial, municipal or local governments or authorities of that Party, and
(b) Any person, including a state enterprise or any other body, when exercising any governmental authority delegated to it by central, regional, provincial, municipal or local governments or authorities of that Party.
2. This Chapter shall not apply to any act, fact or situation that originated prior to the date of entry into force of this Agreement or that is directly related to facts or acts that occurred prior to the date of entry into force of this Agreement, even if their effects persist at the date of entry into force of this Agreement.
3. This Chapter does not apply to financial services as defined in Article XI of the Fifty-third Additional Protocol to ACE No. 35. 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 in its territory does not of itself make this Chapter applicable to the cross-border supply of this service. This Chapter applies to measures adopted or maintained by the Party with respect to the bond or financial security, where such bond or financial security constitutes a protected investment.
4. For greater certainty, the mere fact that a Party takes or fails to take an action, including through a modification of its laws and regulations, in a manner that adversely affects investments or does not meet an investor's expectations, including its expectations of benefits, even if there would be a loss or damage to the protected investment as a result, does not constitute a breach of the obligations of this Chapter.
5. For greater certainty, the mere fact that a Party does not provide, renews or maintains a subsidy or grant, or that it has been modified or reduced by a Party, does not constitute a breach of this Chapter, even if as a result there is a loss or damage to the protected investment.
6. For greater certainty, Articles 8.5 and 8.6 shall not apply to any measure affecting trade in services in any sector or sub-sector, whether or not listed in Chapter 9 (Trade in Services), other than an investor of a Party that has made a protected investment in accordance with the provisions of this Chapter.
Article 8.3. Relationship with other Chapters
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.
Article 8.4. Right to Regulate
For the purposes of this Chapter, the Parties reaffirm the right of each Party to regulate in its territory to achieve legitimate public policy objectives, such as the protection of health, safety, the environment, public morals, social or consumer protection, or the promotion and protection of cultural diversity.
Article 8.5. National Treatment
1. 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 protected 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.
3. For greater certainty, whether treatment is accorded "in like circumstances" under this Article will depend on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives.
4. For greater certainty, treatment accorded by a Party under paragraphs 1 and 2 means, with respect to the regional level of government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level of government to investors and investments of investors of the Party of which it is a part.
Article 8.6. 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 any 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 protected investments treatment no less favorable than that it accords, in like circumstances, to investments of investors of any 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, whether treatment is accorded "in like circumstances" under this Article will depend on the totality of the circumstances, including whether the treatment accorded distinguishes between investors or investments on the basis of legitimate public policy objectives.
4. For greater certainty, the treatment referred to in this Article does not apply to procedural or jurisdictional matters, such as those included in Section B of this Chapter. Substantive obligations contained in other international treaties and other trade agreements do not in themselves constitute "treatment" and therefore cannot give rise to a breach of this Article.
5. This Article shall not apply to treatment accorded by a Party pursuant to any bilateral or multilateral agreement in force or entered into prior to the date of entry into force of this Agreement.
6. This Article shall not apply to treatment accorded by a Party pursuant to any other bilateral or multilateral agreement:
(a) Establishing, strengthening or expanding a free trade area, customs union, common market, economic union or other similar situation, or
(b) Relating to:
(i) aviation;
(ii) fishing, or
(iii) maritime affairs, including salvage.
Article 8.7. Minimum Standard of Treatment (4)
1. Each Party shall accord to protected investments treatment in accordance with applicable principles of customary international law, including fair and equitable treatment and full protection and security.
2. For greater certainty, paragraph 1 prescribes the minimum standard of treatment under customary international law that the Parties agree to accord to protected 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 additional substantive rights. For the purposes of paragraph 1:
(a) "Fair and equitable treatment" includes the obligation of the Parties not to engage in a denial of justice in criminal, civil, administrative, or criminal proceedings, or administrative litigation, in accordance with the principle of due process incorporated in the main legal systems of the world, and
(b) "Full protection and security" requires each Party to provide the level of police protection required under customary international law.
3. A determination that another provision of this Chapter or of another international agreement has been violated does not establish that this Article has been violated.
Article 8.8. Expropriation and Compensation
1. No Party shall expropriate a protected investment, whether directly or indirectly, by measures tantamount to expropriation unless it is:
(a) For reasons of public utility;
(b) In a non-discriminatory manner;
(c) By payment of compensation in accordance with paragraphs 3 to 5, and
(d) In accordance with the principle of due process.
2. The Parties confirm their common understanding that: