a) The matters included in Annex 1 to this Agreement, in which case the Commission shall adopt its Decisions by the affirmative vote of the Member Countries with no negative votes being cast.
The Commission may add new matters to that Annex through the affirmative vote of the absolute majority of the Member Countries;
b) For the cases listed in Annex II, General Secretariat proposals shall be approved with the affirmative vote of the absolute majority of the Member Countries, provided that no negative vote is cast. Any proposal that receives the affirmative votes of the absolute majority of the Member Countries, but also a negative vote, shall be returned to the General Secretariat for consideration of the grounds for that negative vote.
Within a period of no less than two months or more than six, the General Secretariat shall present the proposal once again for consideration by the Commission, including any modifications it deems appropriate. The amended proposal shall be considered approved if it receives the affirmative vote of the absolute majority of the Member Countries, with no negative vote. In this case, the vote of the country that had dissented previously shall not be counted as a negative vote; and
c) Industrial Development Programs and Projects shall be approved with the affirmative vote of the absolute majority of the Member Countries, provided that no negative vote is cast.
Article 27-.
The general secretariat or the member countries shall present their proposals at least fifteen days prior to the corresponding meeting of the andean council of foreign ministers or of the commission.
Only in duly justified exceptional cases and in accordance with Andean Community Law may the required deadlines be waived, provided that both the proponent and the other Member Countries agree to this.
Proposals that receive the affirmative vote of the absolute majority of the Member Countries, but also a negative vote, shall be returned to the proponent for consideration of the grounds that gave rise to that negative vote.
Within a period of no less than one month or more than three, the proponent shall once again present the proposal for consideration by the corresponding body, incorporating any modifications it considers appropriate. In that case, the amended proposal shall be considered approved if receives the affirmative vote of the absolute majority of the Member Countries.
Article 28-.
Any member country that falls behind more than four quarters in the payment of its contributions to the general secretariat or to the andean community court of justice may not exercise its right to vote in the commission until it resolves that situation.
In such cases, the quorum for attendance and voting shall be computed according to the number of contributing countries.
Section D. The Andean Community General Secretariat
Section 29-.
The General Secretariat is the executive body of the Andean Community and, as such, acts solely in accordance with the interests of the Subregion. The General Secretariat shall give technical support, when appropriate, to the other bodies and institutions of the Andean Integration System.
The General Secretariat shall be headed by the General Secretary. In performing his duties, the General Secretary shall rely on the Directors General, in accordance with the respective regulations. The General Secretary shall also enjoy the services of any technical and administrative staff needed to accomplish his duties. The General Secretariat shall express itself through Resolutions.
Article 30-.
The Andean Community General Secretariats responsibilities are:
a) To ensure the application of this Agreement and compliance with the provisions that comprise Andean Community Law;
b) To carry out the tasks assigned to it by the Andean Council of Foreign Ministers and the Commission;
c) To formulate and put forward draft Decisions to the Andean Council of Foreign Ministers and the Commission, in accordance with their respective spheres of responsibility, and initiatives and suggestions to the enlarged meeting of the Andean Council of Foreign Ministers, aimed at facilitating or hastening the fulfillment of this Agreement, so that its objectives may be achieved within the shortest possible time frame;
d) To conduct studies and propose the necessary measures for applying the special treatments in benefit of Bolivia and Ecuador and, in general, those regarding the participation of the two countries in this Agreement;
e) To study and report annually to the Andean Council of Foreign Ministers and the Commission, on the results of the application of this Agreement and the achievement of its objectives, paying special attention to the fulfillment of the principle of fair distribution of the benefits of integration, and to propose pertinent corrective measures;
f) To perform the technical studies and coordination entrusted to it by other bodies of the Andean Integration System, together with any others it considers necessary;
g) To maintain permanent working relations with the Member Countries, in coordination with the national integration body appointed by each country for that purpose;
h) To draw up its annual working program, in which it shall give preference to the tasks assigned to it by other System bodies;
i) To promote periodic meetings of the national organizations responsible for economic policy formulation or execution and, particularly, those charged with economic planning;
j) To maintain working relations with the executive bodies of other regional integration and cooperation organizations, in order to strengthen their relationship and reciprocal cooperation;
k) To keep the records of the enlarged meetings of the Andean Council of Foreign Ministers and of the Commission, and to draw up a tentative agenda of their meetings, in coordination with the chairmen of those bodies;
l) To be the depository for the records of the meetings and other documents of Andean Integration System bodies and to certify their authenticity;
m) To publish the Official Gazette of the Cartagena Agreement;
n) To act as Secretariat for the Meeting of Representatives of the institutions that comprise the Andean Integration System; and,
To carry out all other responsibilities expressly assigned to it by Andean Community Law.
Article 31-.
The General Secretariat shall operate on a permanent basis and its headquarters shall be in the city of Lima, Peru.
Article 32-.
The General Secretariat shall be headed by a Secretary General who shall be chosen by consensus of the Andean Council of Foreign Ministers for a five-year term of office and may be reelected a single time. The Secretary General shall be a person with broad representation and acknowledged prestige, and must be a national of one of the Member Countries. He shall act only in the interests of the subregion as a whole.
The Secretary General may not carry out any other activity during his term of office; nor shall he seek or accept instructions from any government, national institution or international organization.
If the office falls vacant, the Andean Council of Foreign Ministers, meeting in enlarged session, shall immediately proceed to appoint a new Secretary General by consensus. Until that time, the Director-General with the most seniority shall temporarily head the General Secretariat.
Article 33-.
The General Secretary can be removed, by consensus, at the request of a Member Country, only after committing a serious fault foreseen in the General Secretariat’s Regulations, while exercising his duties.
Article 34-.
The responsibilities of the Andean Community Secretary General are:
a) To act as the General Secretariats legal representative;
b) To propose initiatives in regard to the General Secretariat Regulations to the Commission or to the Andean Council of Foreign Ministers;
c) To hire and dismiss technical and administrative staff, in accordance with the General Secretariat Regulations;
d) To participate with the right to be heard in the sessions of the Andean Council of Foreign Ministers and the Commission and in their respective enlarged meetings, and, when invited to do so, in the meetings of other System bodies;
e) To present the draft annual budget to the Commission for its approval; and,
f) To present an annual report of the General Secretariats activities to the Andean Council of Foreign Ministers meeting in enlarged session.
Article 35-.
The Secretary General, in consultation with the Member Countries and in keeping with the General Secretariats Functional and Organic Structure, shall appoint the directors-general. These persons shall be top-level professionals, appointed strictly in accordance with their academic background, suitability, reputation, and experience, and they shall each be responsible for a specific technical area.
The Directors-General shall be nationals of Member Countries and the Secretary General shall seek to ensure balanced subregional geographic distribution in their appointment. The appointment and dismissal of the Directors-General shall be governed by the Secretary General Regulations.
Article 36-.
In carrying out proceedings involving the interests of two or more Member Countries, the General Secretary shall have technical support from special experts, whose appointment and method of participation shall be determined according to the Secretary General’s Regulations.
Article 37-.
The General Secretary, when hiring technical and administrative staff, who may be of any nationality, shall strictly bear in mind the ability, competence, and reputation of the candidates and shall ensure that, provided that it is compatible with the prior criteria, there should be a balanced subregional geographic distribution. The appointment and removal of the staff shall take place according to the criteria and grounds established in the Regulations of the General Secretariat, without prejudice for what is provided for such purpose by the Charter of the Court of Justice and its modifying protocols.
Article 38-.
The staff of the General Secretariat, shall refrain from any action which may be incompatible with the nature of its duties, and shall neither seek nor accept any instructions from a Government, national entity or international body.
Article 39-.
In the case of proceedings that should conclude with the adoption of a resolution or opinion, public or private individuals or legal entities from the Member Countries shall cooperate in such investigations as the General Secretariat may make in carrying out its duties and, in this Sense, shall supply any information they are requested for this Purpose. The General Secretariat shall keep any documents and information furnished strictly confidential, in accordance with the rules governing those matters.
Section E. On the Andean Community Court of Justice
Article 40-.
The Court of Justice is the judicial authority of the Andean Community.
Article 41-.
The Andean Community Court of Justice is governed by its Charter, its modifying protocols and this Agreement.
The Court has its headquarters in the city of Quito, Ecuador.
Section F. On the Andean Parliament
Article 42-.
The Andean Parliament is the systems deliberating body. It has a community nature, represents the peoples of the Andean Community and shall be made up of representatives chosen by universal and direct suffrage, according to the procedure that is adopted through an Additional Protocol that shall include adequate criteria for national representation.
Until the Additional Protocol establishing direct elections is in force, the Andean Parliament shall be comprised of representatives of the National Congresses, in accordance with their internal regulations and the General Regulations of the Andean Parliament.
The headquarters of the Andean Parliament shall be in the city of Bogota, Colombia.
Article 43-.
The Andean Parliaments Responsibilities Are:
a) To participate in the promotion and guidance of the Andean Subregional integration process, with a view to consolidating Latin American integration;
b) To examine the progress of the Andean subregional integration process and the fulfillment of its objectives, requesting periodic information from the System bodies and institutions for that purpose;
c) To formulate recommendations regarding the annual draft budgets of the System bodies and institutions that are financed through the direct contributions of the Member Countries;
d) To suggest to the System bodies and institutions actions or decisions, whose goal or effect is the adoption of modifications, adjustments, or new general guidelines in relation to the programmed objectives and institutional structure of the System;
e) To participate in the law-making process by suggesting to the System bodies draft provisions on subjects of common interest, for incorporation in Andean Community Law;
f) To promote the harmonization of Member Country legislation; and,
g) To promote cooperative and coordinated relations with Member Country Parliaments, System bodies and institutions, and third country parliamentary integration or cooperation bodies.
Section G. On the Advisory Institutions
Article 44-.
The Business Advisory Council and the Labor Advisory Council are the consultative institutions of the Andean Integration System. They are comprised of high-level delegates, who shall be directly elected by the representative organizations in the business and labor sectors of each of the Member Countries, according to their respective regulations, and officially accredited by them.
The responsibilities of the Advisory Councils shall be to express their opinions to the Andean Council of Foreign Ministers, the Commission or the General Secretariat, at the request of these bodies or on their own initiative, with regard to programs or activities of the Andean subregional integration process that are of interest to their respective sectors. They can also be summoned to meetings of working groups and of government experts involved in preparing draft decisions, and may participate in meetings of the Commission with the right to take part in the discussions.
Section H. On the Financial Institutions
Article 45-.
The Andean Development Corporation and the Latin American Reserve Fund are the financial institutions of the System whose purpose is to promote the process of Andean subregional integration.
Article 46-.
The General Secretariat and the Executive Bodies of the Andean Development Corporation and the Latin American Reserve Fund Shall Maintain Working Relations for the Purpose of Coordinating Activities Adequately and, Thereby, Facilitating the Achievement of the Objectives of this Agreement.
Section I. On Dispute Resolution
Article 47-.
The Settlement of any disputes that may arise as a result of the application of Andean Community law shall abide by the Provisions of the Treaty Establishing the Court of Justice.
Section J. On the International Legal Capacity and the Privileges and Immunities
Article 48.
The Andean Community is a subregional organization with an international legal capacity or status.
Article 49-.
The Secretary General, the Court of Justice, the Andean Parliament, the Andean Development Corporation, the Latin American Reserve Fund, and the Social Agreements which are part of the System, shall enjoy, within the territory of each one of the Member Countries, the privileges and immunities required for the fulfillment of their objectives. Their representatives and international staff shall have, likewise, the privileges and immunities required to carry out their duties, in relation to this agreement, with independence. Their premises are inviolable and their goods and property are immune to all judicial proceedings, unless expressly waived. Nevertheless, such a waiver shall not apply to any judicial executory measure.
Chapter III. Harmonization of Economic Policies and Coordination of Development Plans
Article 50-.
Member Countries shall progressively adopt a strategy for the achievement of the subregional development objectives foreseen in this Agreement.
Article 51-.
Member Countries shall coordinate their development plans in specific sectors and will gradually harmonize their economic and social policies, with the objective of achieving an integrated development of the area, through planned actions. This process shall be carried out in parallel to and in coordination with the creation of the subregional market, by means of the following mechanisms, among others:
a. Industrial Development Programs;
b. Agricultural and Agro-industrial Development Programs;
c. Physical Infrastructure Development Programs;
d. The harmonization of foreign exchange, monetary, financial, and fiscal policies, including the treatment of subregional or foreign capital;
e. A common trade policy in relation to third countries; and
f. The harmonization of planning methods and techniques.
Article 52-.
Before December 31, 1970, the Commission, shall at the General Secretariat’s proposal, approve and submit to the Member Countries for their consideration a common regime on the treatment of foreign capital and, among others, about trademarks, patents, licenses, and royalties. The Member Countries shall take the necessary measures to put this regime into effect within six months following its approval by the Commission.
Article 53-.
Before December 31, 1971, the Commission shall, at the General Secretariat’s proposal, approve and propose to the Member Countries a uniform regime that Andean multinational corporations must abide by.
Article 54-.
The Commission shall, at the General Secretariat’s proposal, establish permanent procedures and mechanisms deemed necessary to achieve the coordination and harmonization referred to in Article 51.
Article 55-.
The Commission shall, at the General Secretariat’s proposal and taking into account the progress and needs of the subregional integration process, as well as the balanced compliance with the mechanisms of the Agreement, approve rules, and determine dates for the gradual harmonization of the economic legislations and the instruments and mechanisms for the regulation and promotion of Member Countries´ foreign trade that affect the mechanisms foreseen in this Agreement for the creation of the subregional market.
Article 56-.
The Member Countries shall include in their national development plans and in the formulation of their economic policies, the necessary measures to ensure compliance with the preceding Articles.
Chapter IV. Industrial Development Programs
Article 57-.
The Member Countries pledge themselves to promote a common process of industrial development to attain, among others, the following objectives:
a. The expansion, specialization, diversification, and promotion of industrial activity;
b. The development of economies of scale;
c. An optimum utilization of resources available in the area, specially through the industrialization of natural resources;
d. The improvement in productivity;
e. A greater degree of relationship, linkage, and complementarity among the industrial enterprises of the Subregion;
f. An equitable distribution of benefits; and
g. An improved degree of participation of subregional industry in the international context.
Article 58-.
With respect to the previous Article, the following shall constitute modes of industrial integration:
a. Industrial Integration Programs;
b. Industrial Complementarity Agreements ; and
c. Industrial Integration Projects.
Section A. On Industrial Integration Programs
Article 59-.
The Commission shall, at the General Secretariat’s proposal, adopt Industrial Integration Programs, preferably to promote new industrial production that is sectorial or intersectorial in scope, and that shall have the participation of at least four Member Countries. The programs shall include clauses about:
a. Specific goals;
b. The determination of the products that are the subject matter of the Program;
c. Location of production facilities in the countries of the Subregion whenever required by the characteristics of the sector or sectors subject to the program, in which case, they must include rules regarding the commitment not to encourage production in countries which are not favored by the assignment;
d. A Tariff Reduction Program which may provide different rates of implementation by country and product; e. A Common External Tariff;
f. Coordination of new investment on a subregional scale and measures to ensure its financing; g. Harmonization of policies on aspects directly affecting the Program;
h. Complementary measures that may create greater industrial linkages and facilitate the fulfillment of the goals of the Program; and i. The periods of time during which the rights and obligations arising from the Program shall be maintained, in case the Agreement is denounced.
Article 60-.
In the Industrial Integration Programs, the nonparticipant country shall be subject to the following conditions: a. When the products that are the subject matter of these programs belong to the list of reserved products, it may keep them as in a reserved position, with the commitment of improving the Tariff Reduction Program or the Common Minimum External Tariff, as the case may be, within a period which does not exceed that established in the Programs for these purposes; and b. For the other products, by the general rules of this Agreement.
Article 61-.
A country not participating in a Program of Industrial Integration may request its incorporation at any time in which case the Commission shall approve the conditions for said incorporation, through the voting system provided in paragraph b) of Article 26. In the respective proposals, the Commission shall take into account the negotiations carried out between participating and the non-participating countries.
Section B. On the Agreements of Industrial Complementarity
Article 62-.
The Agreements of Industrial Complementarity shall promote industrial specialization among the Member Countries and may be entered into and carried out by two or more of them. Such Agreements must be notified to the Commission. With respect to the preceding paragraph, the Agreements may include measures such as distribution of production, joint production, subcontracting of productive capacity, market agreements, and joint foreign trade operations, as well as others which may facilitate a greater articulation of the productive processes and entrepreneurial activity.
The Agreements of Industrial Complementarity shall be transitory in nature, and in addition to the determination of products that are their subject matter and of the expiration date of the rights and obligations of the participant Member Countries, may include special measures regarding tariff treatment, trade regulations, and the establishment of preferential margins, that are not applicable to nonparticipant countries, provided that such measures represent an equal or better level of conditions than those existing for reciprocal exchange. In this case, the duties applicable to third countries shall be determined.
Article 63-.
In the case of Agreements of Industrial Complementarity, the following rules shall apply to the products subject to them:
a. Whenever they belong to the list of reserved products, the participant and nonparticipant countries may maintain them in it; and
b. Regarding the other products, the nonparticipant countries shall apply the general rules of this Agreement.
Article 64-.
Countries not participating in the Agreements of Complementarity may request their incorporation at any time, in which case the conditions for said incorporation shall be approved by the participant countries. These conditions shall be notified to the Commission.
Section C. On Industrial Integration Projects
Article 65-.
The Commission shall, at the General Secretariat’s proposal, approve Industrial Integration Projects, which shall be carried out with regard to specified products or product families, preferably new ones, through collective cooperation policies and with the participation of all of the Member Countries In carrying out these Projects, the following tasks, among others, shall be performed:
a. Feasibility and design studies;
b. Supplying equipment, technical assistance, technology, and other goods and services, preferably of subregional origin;
c. Support by the Andean Development Corporation through financing or through equity; and d. Joint negotiations with international entrepreneurs and government agencies to obtain foreign funds or the transfer of technology.
Industrial Integration Projects shall include clauses regarding the location of production facilities in the Member Countries whenever the characteristics of the corresponding sector or sectors so require and may include clauses that facilitate product access to the subregional market. In the case of specific projects located in Bolivia or Ecuador, the Commission shall establish temporary and exclusive tariff treatment that improves the conditions of access of such products to the subregional market. Regarding products that are not produced in the Subregion, if these were to be included in this category, they shall include exceptions to the principle of irrevocability provided in the first paragraph of Article 75.
Article 65-.
The Commission shall, at the General Secretariat’s proposal, approve Industrial Integration Projects, which shall be carried out with regard to specified products or product families, preferably new ones, through collective cooperation policies and with the participation of all of the Member Countries In carrying out these Projects, the following tasks, among others, shall be performed:
a. Feasibility and design studies;
b. Supplying equipment, technical assistance, technology, and other goods and services, preferably of subregional origin;
c. Support by the Andean Development Corporation through financing or through equity; and
d. Joint negotiations with international entrepreneurs and government agencies to obtain foreign funds or the transfer of technology.
Industrial Integration Projects shall include clauses regarding the location of production facilities in the Member Countries whenever the characteristics of the corresponding sector or sectors so require and may include clauses that facilitate product access to the subregional market. In the case of specific projects located in Bolivia or Ecuador, the Commission shall establish temporary and exclusive tariff treatment that improves the conditions of access of such products to the subregional market. Regarding products that are not produced in the Subregion, if these were to be included in this category, they shall include exceptions to the principle of irrevocability provided in the first paragraph of Article 75.
Article 66-.
In the application of the modes of industrial integration, the Commission and General Secretariat shall consider the situation and requirements of small and medium-sized industry, particularly those referred to the following aspects:
a. The installed capacity of the existing companies;
b. The financial and technical needs for the installation, expansion, modernization, or conversion of production facilities;
c. The perspectives for establishing joint marketing, technological and research systems, and other forms of cooperation among similar companies; and d. Employee training requirements.
Article 67-.
The modes of industrial integration may foresee industrial rationalization actions with the intention of achieving an optimum utilization of the factors of production and to reach higher levels of productivity and efficiency.
Article 68-.
The General Secretariat may carry out or promote cooperation actions, including those for industrial rationalization and modernization, in favor of any activity of the sector and, particularly, of Subregional small and medium-sized industry, with the purpose of contributing to the industrial development of the Member Countries. These actions shall be carried out with priority in Bolivia and Ecuador.
Article 69-.
When the General Secretariat deems it advisable and, in any case, in its periodic evaluations, it shall propose to the Commission the measures it considers essential for ensuring the equitable participation of the Member Countries in the modes of industrial integration that are covered under the present Chapter, in their execution, and in the attainment of their objectives.
Article 70-.
It shall be the Commission and the General Secretariat’s responsibility to maintain an adequate coordination with the Andean Development Corporation, and to arrange for the assistance of any other national or international institutions whose technical and financial contribution it considers desirable for: a. Facilitating the coordination of policies and the joint programming of investments; b. Channeling an increasing volume of funds to the solution of problems created for Member Countries by the process of industrial integration; c. Promoting the financing of the investment projects that arise from the execution of the different modes of industrial integration, d. Expanding, modernizing, or converting industrial plants that may be adversely affected by trade liberalization.