Article 16.8. Establishment of a Panel
1. If the Parties fail to resolve the dispute through recourse to consultations as provided for in Article 16.6 (Consultations), the Party that sought consultations may request the establishment of a panel.
2. The request for the establishment of a panel shall be made by means of a written request delivered to the other Party and shall identify the measure at issue and indicate the legal basis, specifying the relevant covered provisions in a manner sufficient to present how such measure is inconsistent with those provisions.
3. When a request is made by the complaining party in accordance with paragraph 1, a panel shall be established.
Article 16.9. Composition of a Panel
1. Unless the Parties agree otherwise, a panel shall consist of three panelists.
2. Unless the Parties agree otherwise, the panelists shall not be nationals of the Parties to the dispute.
3. Within 20 days of the establishment of a panel, each Party shall appoint a panelist. The Parties shall, by common agreement, appoint the third panelist, who shall serve as the chairperson of the panel, within 40 days of the establishment of a panel.
4. If either Party fails to appoint a panelist within the time period established in paragraph 3, the other Party may request that the Director-General of the World Trade of Organization designate a panelist within 20 days of that request.
5. If the Parties do not agree on the chairperson of the panel within the time period established in paragraph 3, they shall within the next 10 days, exchange their respective lists comprising three nominees, none of whom shall be nationals of either Party. The chair shall then be appointed by draw of lot from the lists within 10 days of the expiry of the time period during which the Parties shall exchange their respective lists of nominees. The selection by lot of the chairperson of the panel shall be made by the Joint Committee.
6. If a Party fails to submit its list of three nominees within the time period established in paragraph 4, the chairperson shall be appointed by draw of lot from the list submitted by the other Party.
7. The date of composition of the panel shall be the date on which the last of the three selected panelists has notified the Parties of the acceptance of his or her appointment.
Article 16.10. Requirements for Panelists
1. Each panelist shall:
(a) have demonstrated expertise in law, international trade, and other matters covered by this Agreement;
(b) be independent of, and not be affiliated with or take instructions from, either Party;
(c) serve in his or her individual capacity and shall not take instructions from any organization or government with regard to matters related to the dispute;
(d) comply with the Code of Conduct for Panelists established in Annex 16B;
(e) be chosen strictly on the basis of objectivity, reliability, and sound judgment; and
(f) disclose to the Parties information which may give rise to justifiable doubts as to his or her independence or impartiality.
2. The chairperson shall also have experience in dispute settlement procedures.
3. Persons who provided good offices or mediation to the Parties, pursuant to Article 16.7 (Good Offices, Conciliation, or Mediation) in relation to the same or a substantially equivalent matter, shall not be eligible to be appointed as panelists in that matter.
Article 16.11. Replacement of Panelists
If any of the panelists of the original panel becomes unable to act, withdraws, or needs to be replaced because that panelist does not comply with the requirements of the Code of Conduct, a successor panelist shall be appointed in the same manner as prescribed for the appointment of the original panelist, and the successor shall have the powers and duties of the original panelist. The work of the panel shall be suspended during the appointment of the successor panelist.
Article 16.12. Functions of the Panel
Unless the Parties agree otherwise, the panel:
(a) shall make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability and conformity of the measure at issue with the covered provisions;
(b) shall set out, in its decisions and reports, the findings of fact and law and the rationale behind any findings and conclusions that it makes; and
(c) should consult regularly with the Parties and provide adequate opportunities for the development of a mutually agreed solution.
Article 16.3. Terms of Reference
1. Unless the Parties agree otherwise, within 15 days of the date of establishment of the panel, the terms of reference of the panel shall be:
“to examine, in the light of the relevant covered provisions of this Agreement cited by the Parties, the matter referred to in the request for the establishment of the panel, to make findings on the conformity of the measure at issue with the relevant covered provisions of this Agreement as well as recommendations, if any, on the means to resolve the dispute, and to deliver a report in accordance with Articles 16.18 (Interim Report) and 16.19 (Final Report).”
2. If the Parties agree on other terms of reference than those referred to in paragraph 1, they shall notify the agreed terms of reference to the panel no later than 5 days after their agreement.
Article 16.14. Decision on Urgency
1. If a Party so requests, the panel shall decide, within 15 days of its composition, whether the dispute concerns matters of urgency.
2. In cases of urgency, the applicable time periods set out in Articles 16.18 (Interim Report) and 16.19 (Final Report) shall be half of the time prescribed therein.
Article 16.15. Rules of Interpretation
1. The panel shall interpret the covered provisions in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties done at Vienna on 23 May 1969.
2. When appropriate, the panel may also take into account relevant interpretations in reports of prior panels established under this Chapter and reports of panels and the Appellate Body adopted by the Dispute Settlement Body of the WTO.
Article 16.16. Rules of Procedure for the Panel
1. Unless the parties agree otherwise, the panel shall follow the model rules of procedure set out in Annex 16A (Rules of Procedure for the Panel).
2. The panel may, after consulting with the Parties, adopt additional rules of procedure not inconsistent with the model rules of procedure.
Article 16.17. Receipt of Information
1. The panel, on request of a Party or on its own initiative, may seek from the Parties relevant information it considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the panel for information.
2. The panel, on request of a Party or on its own initiative, may seek information or technical advice of experts from any sources it considers appropriate, provided that the Parties agree and subject to any terms and conditions agreed by the Parties.
3. Any information obtained by the panel under this Article shall be made available to the Parties, and the Parties may provide comments on that information.
Article 16.18. Interim Report
1. The panel shall deliver an interim report to the Parties within 120 days of the date of composition of the panel. When the panel considers that this deadline cannot be met, the chairperson of the panel shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its interim report. Under no circumstances shall the delay exceed 30 days after the deadline.
2. The interim report shall set out a descriptive part and the panel’s findings and conclusions.
3. Each Party may submit to the panel written comments and a written request to review precise aspects of the interim report within 15 days of the date of issuance of the interim report. Each Party may comment on the other Party's request within 10 days of the delivery of the request.
4. After considering any written comments and requests by each Party on the interim report, the panel may modify the interim report and make any further examination it considers appropriate.
Article 16.19. Final Report
1. The panel shall deliver its final report to the Parties within 150 days of the date of composition of the panel. When the panel considers that this deadline cannot be met, the chairperson of the panel shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its final report. Under no circumstances shall the delay exceed 30 days after the deadline.
2. The final report shall include a discussion of any written comments and requests made by the Parties on the interim report. The panel may, in its final report, suggest ways in which the final report could be implemented.
3. The final report shall be made public within 15 days of its delivery to the Parties unless the Parties agree to publish the final report only in parts or not to publish the final report.
Article 16.20. Implementation of the Final Report
1. When the panel finds that the respondent Party has acted inconsistently with a covered provision, the respondent Party shall take any measures necessary to comply promptly and in good faith with the findings and conclusions in the final report.
2. The respondent Party shall, no later than 30 days after delivery of the final report, notify the complaining Party of the length of the reasonable period of time necessary for compliance with the final report, and the Parties shall endeavour to agree on the reasonable period of time required for compliance with the final report.
Article 16.21. Reasonable Period of Time for Compliance
1. If the Parties have not agreed on the length of the reasonable period of time, the complaining Party may, no later than 20 days after the date of receipt of the notification made by the respondent Party in accordance with paragraph 2 of Article 16.20 (Implementation of the Final Report), request in writing that the original panel determine the length of the reasonable period of time. Such request shall be notified simultaneously to the respondent Party. The 20-day period referred to in this paragraph may be extended by mutual agreement of the Parties.
2. The original panel shall deliver its decision to the Parties within 20 days of the date of submission of the request made under paragraph 1.
3. The length of the reasonable period of time for compliance with the final report may be extended by mutual agreement of the Parties.
Article 16.22. Compliance Review
1. The respondent Party shall deliver a written notification of its progress in complying with the final report to the complaining Party at least 30 days before the expiry of the reasonable period of time unless the Parties agree otherwise.
2. The respondent Party shall, no later than the date of expiry of the reasonable period of time, deliver a notification to the complaining Party of any measures that it has taken to comply with the final report.
3. When the Parties disagree on the existence of measures to comply with the final report, or their consistency with the covered provisions, the complaining Party may request in writing that the original panel decide on the matter. Such request shall be notified simultaneously to the respondent Party.
4. The request made under paragraph 3 shall provide the factual and legal basis for the complaint, including an identification of the specific measures at issue and an indication of why any measures taken by the respondent fail to comply with the final report or are otherwise inconsistent with the covered provisions.
5. The panel shall deliver its decision to the Parties within 60 days of the date of submission of the request.
Article 16.23. Temporary Remedies In Case of Non-Compliance
1. If the respondent Party:
(a) fails to notify any measures taken to comply with the final report before the expiry of the reasonable period of time;
(b) notifies the complaining party in writing that it is not possible to comply with the final report within the reasonable period of time; or
(c) the original panel finds that no measure taken to comply exists or that the measure taken to comply with the final report as notified by the party complained against is inconsistent with the covered provisions;
the respondent Party shall, on request of the complaining Party, enter into consultations with a view to reaching a mutually satisfactory agreement or any necessary compensation.
2. If the Parties fail to reach a mutual satisfactory agreement or to agree on compensation within 20 days of the date of receipt of the request made in accordance with paragraph 1, the complaining Party may deliver a written notification to the respondent Party that it intends to suspend the application to that Party of benefits or other obligations under this Agreement. The notification shall specify the level of intended suspension of benefits or other obligations.
3. The complaining Party may begin the suspension of benefits or other obligations referred to in the preceding paragraph 20 days after the date on which it served notice to the respondent Party, unless the respondent Party made a request under paragraph 7.
4. The suspension of benefits or other obligations:
(a) shall be at a level equivalent to the nullification or impairment that is caused by the failure of the respondent Party to comply with the final report; and
(b) shall be restricted to benefits accruing to the respondent Party under this Agreement.
5. In considering what benefits to suspend in accordance with paragraph 2, the complaining Party shall apply the following principles:
(a) the complaining Party should first seek to suspend benefits in the same sector or sectors affected by the measure that the panel has found to be inconsistent with this Agreement or have caused nullification or impairment; (38)
(b) the complaining Party may suspend benefits in other sectors if it considers that it is not practicable or effective to suspend benefits or other obligations in the same sector.
6. The suspension of benefits or other obligations shall be temporary and shall only apply until the inconsistency of the measure with the relevant covered provisions which has been found in the final report has been removed, or until the Parties have reached a mutually satisfactory agreement or any necessary compensation.
7. If the respondent Party considers that the suspension of benefits does not comply with paragraphs 4 and 5, that Party may request in writing to the original panel to examine the matter no later than 15 days after the date of receipt of the notification referred to in paragraph 2. That request shall be notified simultaneously to the complaining Party. The original panel shall notify to the Parties its decision on the matter no later than 30 days of the receipt of the request from the respondent Party. The complaining Party shall not suspend benefits or other obligations until the original panel has delivered its decision. The suspension of benefits or other obligations shall be consistent with this decision.
Article 16.24. Review of Any Measures Taken to Comply after the Adoption of Temporary Remedies
1. Upon the notification by the respondent Party to the complaining Party of the measure taken to comply with the final report:
(a) in a situation where the right to suspend benefits or other obligations has been exercised by the complaining Party in accordance with Article 16.23 (Temporary Remedies in Case of Non-Compliance), the complaining Party shall terminate the suspension of benefits or other obligations no later than 30 days after the date of receipt of the notification, with the exception of the cases referred to in paragraph 2; or
(b) in a situation where necessary compensation has been agreed, the respondent Party may terminate the provision of such compensation no later than 30 days after the date of receipt of the notification, with the exception of the cases referred to in paragraph 2.
2. If the Parties do not reach an agreement on whether the measure notified in accordance with paragraph 1 is consistent with the relevant covered provisions within 30 days of the date of receipt of the notification, the complaining Party shall request in writing that the original panel examine the matter. That request shall be notified simultaneously to the respondent Party. The decision of the panel shall be notified to the Parties no later than 45 days of the date of submission of the request. If the panel decides that the measure notified in accordance with paragraph 1 is consistent with the relevant covered provisions, the complaining Party shall terminate the suspension of benefits or other obligations, or the respondent Party shall terminate the provision of the compensation, no later than 15 days of the date of the decision. If the panel determines that the notified measure achieves only partial compliance with the covered provisions, the level of suspension of benefits or other obligations, or of the compensation, shall be adapted in light of the decision of the panel.
Article 16.25. Suspension and Termination of Proceedings
If both Parties so request, the panel shall suspend its work for a period agreed by the Parties and not exceeding 12 consecutive months. In the event of a suspension of the work of the panel, the relevant time periods under this Section shall be extended by the same period of time for which the work of the panel was suspended. The panel shall resume its work before the end of the suspension period at the written request of both Parties. If the work of the panel has been suspended for more than 12 consecutive months, the authority of the panel shall lapse and the dispute settlement procedure shall be terminated.
Section D. General Provisions
Article 16.26. Choice of Forum
1. Unless otherwise provided in this Article, this Chapter is without prejudice to the rights of the Parties to have recourse to dispute settlement procedures available under other international trade agreements to which they are both Parties.
2. When a dispute arises with regard to the alleged inconsistency of a particular measure with an obligation under this Agreement and a substantially equivalent obligation under another international trade agreement to which both Parties are party, including the WTO agreements, the complaining Party may select the forum in which to settle the dispute.
3. Once a Party has selected the forum and initiated dispute settlement proceedings under this Chapter or under the other international agreement with respect to the particular measure referred to in paragraph 2, that Party shall not initiate dispute settlement proceedings in another forum with respect to that particular measure unless the forum selected first fails to make findings on the issues in dispute for jurisdictional or procedural reasons.
4. For the purpose of paragraph 3:
(a) dispute settlement proceedings under this Chapter are deemed to be initiated when a Party requests the establishment of a panel in accordance with Article 16.8 (Establishment of a Panel);
(b) dispute settlement proceedings under the WTO Agreement are deemed to be initiated when a Party requests the establishment of a panel in accordance with Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes in Annex 2 to the WTO Agreement; and
(c) dispute settlement proceedings under any other agreements are deemed to be initiated when a Party requests the establishment of a dispute settlement panel in accordance with the relevant provisions of that agreement.
Article 16.27. Costs
1. Unless the Parties agree otherwise, the costs of the panel and other expenses associated with the conduct of its proceedings shall be borne in equal parts by both Parties.
2. Each Party shall bear its own expenses and legal costs in the panel proceedings.
Article 16.28. Mutually Agreed Solution
1. The Parties may reach a mutually agreed solution at any time with respect to any dispute covered by this Chapter.
2. If a mutually agreed solution is reached during the panel procedure, the Parties shall jointly notify that solution to the chairperson of the panel. Upon such notification, the panel shall be terminated.
3. Each Party shall take measures necessary to implement the mutually agreed solution within the agreed time period.
4. No later than the expiry of the agreed time period, the implementing Party shall inform the other Party, in writing, of any measures that it has taken to implement the mutually agreed solution.
Article 16.29. Time Periods
1. All time periods laid down in this Chapter shall be counted in calendar days from the day following the act to which they refer.
2. Any time periods referred to in this Chapter may be modified by mutual agreement of the Parties.
Article 16.30. Annexes
The Joint Committee may modify Annex 16A (Rules of Procedure for the Panel) and Annex 16B (Code of Conduct for Panelists).
Annex 16A. Rules of Procedure for the Panel
Timetable
1. After consulting the Parties, the panel shall, whenever possible, within seven days of the date of composition of the panel, fix the timetable for the panel process. The indicative timetable attached to this Annex should be used as a guide.
2. The panel process shall, as a general rule, not exceed 150 days from the date of composition of the panel until the date of the final report, unless the Parties agree otherwise.
3. Should the panel consider there is a need to modify the timetable, it shall consult with the Parties in writing regarding the proposed modification and the reason for it and make necessary procedural or administrative adjustments as may be required.
Written Submissions and other Documents
4. Unless the panel otherwise decides, the complaining Party shall deliver its first written submission to the panel no later than 15 days after the date of composition of the panel. The responding Party shall deliver its first written submission to the panel no later than 45 days after the date of delivery of the complaining Party’s first written submission. Copies shall be provided for each panellist.
5. Each Party shall also provide a copy of its first written submission to the other Party at the same time as it is delivered to the panel.
6. Within 10 days of the conclusion of the hearing, each Party may deliver to the panel and to the other Party a supplementary written submission responding to any matter that arose during the hearing.
7. All written documents provided to the panel or by one Party to the other Party shall also be provided in electronic form.
8. Minor errors of a clerical nature in any request, notice, written submission, or other document related to the panel proceeding may be corrected as soon as possible by delivery of a new document clearly indicating the changes.
Operation of the Panel
9. The Chair of the panel shall preside at all of its meetings. The panel may delegate to the Chair the authority to make administrative and procedural decisions.
10. Panel deliberations shall be confidential. Only panellists may take part in the deliberations of the panel. The Panel Report shall be drafted without the presence of the Parties in light of the information provided and the statements made.
11. Opinions expressed in the Panel Report by individual panellists shall be anonymous.
12. Except as otherwise provided in this Annex, the panel may conduct its activities by any means, including by telephone, facsimile transmission, and any other means of electronic communication.
Hearings
13. The timetable established in accordance with Rule 1 shall provide for at least one hearing for the Parties to present their cases to the panel.
14. The panel may convene additional hearings if the Parties so agree.
15. All panellists shall be present at hearings. Panel hearings shall be held in closed session with only the panellists and the Parties in attendance. However, in consultation with the Parties, assistants, translators, or designated note takers may also be present at hearings to assist the panel in its work. Any such arrangements established by the panel may be modified with the agreement of the Parties.
16. The hearing shall be conducted by the panel in a manner ensuring that the complaining Party and the responding Party are afforded equal time to present their case. The panel shall conduct the hearing in the following manner: argument of the complaining Party; argument of the responding Party; reply of the complaining Party; counter-reply of the responding Party; closing statement of the complaining Party; and closing statement of the responding Party. The Chair may set time limits for oral arguments to ensure that each Party is afforded equal time.
17. The Parties to the dispute shall make available to the panel written versions of their oral statements within one day of the date of the hearing.
Questions
18. The panel may direct questions to either Party at any time during the proceedings. The Parties shall respond promptly and fully to any request by the panel for such information as the panel considers necessary and appropriate.
19. When the question is in writing, each Party shall also provide a copy of its response to such questions to the other Party at the same time as it is delivered to the panel. Each Party shall be given the opportunity to provide written comments on the response of the other Party.
Confidentiality
20. The panel’s hearings and the documents submitted to it shall be confidential. Each Party shall treat as confidential information submitted to the panel by the other Party which that Party has designated as confidential.
21. Where a Party designates as confidential its written submissions to the panel, it shall, on request of the other Party, provide the panel and the other Party with a non-confidential summary of the information contained in its written submissions that could be disclosed to the public no later than five days after the date of request. Nothing in these Rules shall prevent a Party from disclosing statements of its own positions to the public.
Role of Experts
22. On request of a Party, or on its own initiative, the panel may seek information and technical advice from any individual or body that it deems appropriate, provided that the Parties agree and subject to such terms and conditions as the Parties agree. The panel shall provide the Parties with any information so obtained for comment.
Working Language
23. The working language of the panel proceedings, including for written submissions, oral arguments or presentations, the report of the panel and all written and oral communications between the Parties and with the panel, shall be the English language.
Venue
24. The venue for the hearings of the panel shall be decided by agreement between the Parties. If there is no agreement, the first hearing shall be held in the territory of the responding Party, and any additional hearings shall alternate between the territories of the Parties.
Expenses
25. The panel shall keep a record and render a final account of all general expenses incurred in connection with the proceedings, including those paid to its assistants, designated note takers, or other individuals that it retains.