4. The Chapter 12 (Dispute Settlement) shall not apply to the present article, except to its paragraph 2.
Article 2.17. Global Safeguard Measures
1. The Parties confirm their rights and obligations under Article XIX of the GATT 1994 and the WTO Agreement on Safeguards (hereinafter referred to as "the Safeguard Agreement").
2. In taking measures under these WTO provisions, a Party shall exclude imports of an originating product from one or several Parties if such imports do not in and of themselves cause or threaten to cause serious injury. The Party taking the measure shall make such exclusion in accordance with WTO jurisprudence.
3. No Party may apply, with respect to the same good, at the same time:
(a) a bilateral safeguard measure; and
(b) a measure under Article XIX of the GATT 1994 and the Safeguard Agreement.
Article 2.18. Bilateral Safeguard Measures
1. During the transition period (1), where, as a result of the reduction or elimination of a customs duty under this Agreement, a product originating in the territory of a Party is being imported into the territory of another Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause (2) of serious injury or threat thereof to the domestic industry of like or directly competitive products in the territory of the importing Party, the importing Party may take safeguard measures to the minimum extent necessary to remedy or prevent the injury, subject to the provisions of this Article.
2. Safeguard measures shall only be taken upon clear evidence that increased imports have caused or are threatening to cause serious injury pursuant to an investigation in accordance with the procedures and definitions laid down in Articles 3 and 4 of the Safeguard Agreement.
3. The Party intending to take or extend a safeguard measure under this Article shall, immediately and in any case no later than 30 days before taking a measure, make notification to the other Parties and the Joint Committee. The notification shall contain all pertinent information, which shall include evidence of serious injury or threat thereof caused by increased imports, a precise description of the product involved, and the proposed measure, as well as the date of completion of the investigation procedure referred to in paragraph 2, expected duration and timetable for the progressive removal of the measure.
4. A Party applying a bilateral safeguard measure shall, after consultations with the other Party, provide mutually agreed trade liberalisation compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the measure. The Party applying the measure shall provide an opportunity for such consultations no later than 15 days after the application of the bilateral safeguard measure.
5. If the conditions in paragraphs 1 and 2 are met, the importing Party may to the extent necessary to prevent or remedy serious injury or threat thereof:
(a) suspend the further reduction of any rate of duty provided for under this Agreement for the product; or
(b) increase the rate of customs duty for the product to a level not to exceed the lesser of:
(i) the Most-Favoured Nation (hereinafter referred to as "MFN") applied rate of duty in effect at the time the measure is imposed; or
(ii) the MEN applied rate of duty in effect on the day immediately preceding the date of the entry into force of this Agreement.
6. No Party may maintain a bilateral safeguard measure:
(a) except to the extent, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;
(b) for a period exceeding two years. The period may be extended by up to one year if the competent authority of the importing Party determines, in conformity with the procedures set out in paragraphs 2 and 3 above, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the domestic industry is adjusting; or
(c) beyond the expiration of the transition period.
7. No bilateral safeguard measure shall be applied to the import of a product, which has previously been subject to such a measure.
8. Within 30 days from the date of notification specified in paragraph 3, the Party conducting a safeguard proceeding under this Chapter, shall enter into consultations with a Party whose product is subject to that proceeding, in order to facilitate a mutually acceptable resolution of the matter and shall notify to Joint Committee the results of the consultations. In the absence of such resolution, the importing Party may adopt a measure pursuant to paragraph 5.
9. In the absence of such resolution, the importing Party may adopt a measure pursuant to paragraph 5 to remedy the problem, and, in the absence of mutually agreed compensation, the Party against whose product the measure is taken may take compensatory action. The safeguard measure and the compensatory action shall be immediately notified to the other Parties and the Joint Committee. In the selection of the safeguard measure and the compensatory action, priority must be given to the action which least disturbs the functioning of this Agreement. The compensatory action shall normally consist of suspension of concessions having substantially equivalent trade effects or concessions substantially equivalent to the value of the additional duties expected to result from the safeguard measure. The Party taking compensatory action shall apply the action only for the minimum period necessary to achieve the substantially equivalent trade effects and in any event, only while the measure under paragraph 5 is being applied.
10. In order to facilitate adjustment in a situation where the expected duration of a safeguard measure is one year or more, the Party applying the measure shall progressively liberalise it at regular intervals during the period of application.
11. Upon the termination of the measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
12. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The Party intending to take such a measure shall immediately notify all the Parties and the Joint Committee. During the time of the application of the provisional safeguard measure, the pertinent requirements and procedures set out in paragraphs 2 to 9 shall be met.
13. Any provisional safeguard measures shall be terminated within 180 days at the latest. The following modalities shall apply:
(a) the period of application of any provisional measure shall be counted as part of the duration of the measure set out in paragraph 6 and any extension thereof.
(b) such measures may only be imposed as a tariff increase pursuant to paragraph 5. Any additional duty actually paid shall be promptly refunded, and any guarantee shall be liberated, if the investigation described in paragraph 2 does not result in a finding that the conditions of paragraph 1 are met.
(c) any mutually agreed compensation, or compensatory action, shall be based on the total period of application of the provisional safeguard measure and of the safeguard measure.
Article 2.19. General Exceptions
For the purpose of this Chapter, the rights and obligations of the Parties in respect of general exceptions shall be governed by Article XX of the GATT 1994, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.20. National Security
For the purpose of this Chapter, the rights and obligations of the Parties in respect of security exceptions shall be governed by Article XXI of the GATT 1994, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.21. Balance-of-Payments
1. The Parties shall endeavour to avoid the imposition of restrictive measures for balance of payments purposes.
2. A Party in serious balance of payments difficulties, or under imminent threat thereof, may, in accordance with the conditions established under the GATT 1994 and the WTO Understanding on the Balance of Payments Provisions of the GATT 1994, adopt trade restrictive measures, which shall be of limited duration and non- discriminatory, and may not go beyond what is necessary to remedy the balance of payments situation.
3. The Party introducing a measure under this Article shall promptly notify the other Parties thereof.
Chapter 3. PROCESSED AGRICULTURAL PRODUCTS
Article 3.1. Scope
1. Processed agricultural products shall be governed by Chapter 2 (Trade in Goods), unless otherwise provided for in this Chapter.
2. The Parties confirm their rights and obligations under the WTO Agreement on Agriculture, unless otherwise specified in this Agreement.
Article 3.2. Price Compensation Measures
1. In order to take account of differences in the cost of the agricultural raw materials incorporated into the products referred to in Article 3.3 (Tariff Concessions), this Agreement does not preclude the levying, upon import, of a duty.
2. The duty, levied upon import, shall be based on, but not exceed, the differences between the domestic price and the world market price of the agricultural raw materials incorporated into the products concerned.
Article 3.3. Tariff Concessions
1. Taking into account the provisions laid down in Article 3.2 (Price Compensation Measures) the EFTA States shall accord for products listed in the Table 1 of Annex III (Processed Agricultural Products), originating in Colombia, treatment no less favourable than that accorded to the European Community on 1 January, 2008
2. For products listed in Table 2 of Annex III (Processed Agricultural Products), and originating in an EFTA State, Colombia shall reduce its customs duties as specified therein.
Article 3.4. Agricultural Export Subsidies
1. The Parties shall not adopt, maintain, introduce or re-introduce export subsidies, as defined in the WTO Agreement on Agriculture, in their trade on products subject to tariff concessions in accordance with this Agreement.
2. Should a Party adopt, maintain, introduce or re-introduce export subsidies, as defined in paragraph 1, on a product subject to a tariff concession in accordance with Article 3.3 (Tariff Concessions), the other Parties may increase the rate of duty on such imports up to the applied MFN tariff in effect at that time. If a Party increases the rate of duty, it shall notify the other Parties within 30 days.
Article 3.5. Price Band System
Colombia may maintain its Price Stabilization Mechanism for agricultural products as set out in Table 3 to Annex III (Processed Agricultural Products).
Article 3.6. Notification
The EFTA States shall notify Colombia at an early stage, at the latest before the entry into force of this Agreement, of all measures applied under Article 3.2 (Price Compensation Measures). The EFTA States shall inform Colombia of all changes in the treatment accorded to the European Community.
Article 3.7. Consultation
The Parties shall review periodically the development of their trade in products covered by this Chapter. In the light of these reviews and taking into account the arrangements between the Parties and the European Community or in the WTO, the Parties shall decide on possible changes to this Chapter.
Chapter 4. TRADE IN SERVICES
Article 4.1. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by Parties affecting trade in services. It applies to all services sectors.
2. For the purpose of this Chapter, "measures by Parties" means measures adopted or maintained by:
(a) central, regional, or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities.
3. In respect of air transport services, this Chapter shall not apply to measures affecting air traffic rights as well as measures affecting services directly related to the exercise of air traffic rights, except as provided for in paragraph 3 of the GATS Annex on Air Transport Services. The definitions contained in paragraph 6 of the GATS Annex on Air Transport Services shall apply for the purpose of this Chapter.
4. Nothing in this Chapter shall be construed to impose any obligation with respect to government procurement, which is subject to Chapter 7 (Government Procurement).
Article 4.2. Definitions
For the purpose of this Chapter:
(a) "trade in services" is defined as the supply of a service:
(i) from the territory of one Party into the territory of any other Party;
(ii) in the territory of one Party to the service consumer of any other Party;
(iii) by a service supplier of one Party, through commercial presence in the territory of any other Party;
(iv) by a service supplier of one Party, through presence of natural persons of a Party in the territory of any other Party;
(b) “services” includes any service in any sector except services supplied in the exercise of governmental authority;
(c) “a service supplied in the exercise of governmental authority” means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;
(d) “measure” means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form
(e) “supply of a service” includes the production, distribution, marketing, sale and delivery of a service;
(f) “measures by a Party affecting trade in services” includes measures in respect of:
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by that Party to be offered to the public generally;
(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of another Party;
(g) "commercial presence" means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office, within the territory of a Party for the purpose of supplying a service;
(h) "sector" of a service means:
(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Party's Schedule,
(ii) otherwise, the whole of that service sector, including all of its subsectors;
(i) "service of a Party" means a service which is supplied:
(i) from or in the territory of a Party, or in the case of maritime transport, by a vessel registered under the laws of a Party, or by a person of a Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of a Party;
(j) “service supplier” means any person that supplies, or seeks to supply, a service; (3)
(k) “monopoly supplier of a service” means any person, public or private, which in the relevant market of the territory of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;
(l) “service consumer” means any person that receives or uses a service;
(m) “person” means either a natural person or a juridical person;
(n) “natural person of another Party” means a natural person who, under the legislation of that other Party, is:
(i) a national of that other Party who resides in the territory of any WTO Member; or
(ii) a permanent resident of that other Party who resides in the territory of any Party, if that other Party accords substantially the same treatment to its permanent residents as to its nationals in respect of measures affecting trade in services. For the purpose of the supply of a service through presence of natural persons (Mode 4), this definition covers a permanent resident of that other Party who resides in the territory of any Party or in the territory of any WTO Member;
(o) “juridical person” means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(p) “juridical person of another Party” means a juridical person which is either:
(i) constituted or otherwise organised under the laws of that other Party, and is engaged in substantive business operations in the territory of:
(A) any Party; or
(B) any Member of the WTO and is owned or controlled by natural persons of that other Party or by juridical persons that meet all the conditions of subparagraph (i)(A); or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(A) natural persons of that other Party; or
(B) juridical persons of that other Party identified under subparagraph (p)(i);
(q) a juridical person is:
(i) “owned” by persons of a Party if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party;
(ii) “controlled” by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;
(iii) “affiliated” with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;
(r) “direct taxes” comprises all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
Article 4.3. Most-Favoured-Nation Treatment
1. Except as provided for in its List of MFN Exemptions contained in Annex XI (Lists of MFN Exemptions), a Party shall accord immediately and unconditionally, in respect of all measures affecting the supply of services, to services and service suppliers of another Party treatment no less favourable than the treatment it accords to like services and service suppliers of any non-party.
2. Treatment granted under other agreements concluded by one of the Parties and notified under Article V or Article V bis of the GATS, as well as treatment granted in accordance with Article VII of the GATS, shall not be subject to paragraph 1.
3. If a Party enters into an agreement notified under Article V or Article V bis of the GATS, it shall upon request from another Party afford adequate opportunity to that Party to negotiate the benefits granted therein.
4. The provision of this Chapter shall not be so construed as to prevent any Party from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous frontier zones of services that are both locally produced and consumed.
Article 4.4. Market Access
1. With respect to market access through the modes of supply identified in subparagraph (a) of Article 4.2 (Definitions), each Party shall accord services and service suppliers of any other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule. (4)
2. In sectors where market-access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (5)
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 4.5. National Treatment
1. In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers. (6)
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of any other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like services or service suppliers of any other Party.
Article 4.6. Additional Commitments
Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 4.4 (Market Access) or 4.5 (National Treatment), including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule.
Article 4.7. Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier of another Party, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
3. Where authorisation is required by a Party for the supply of a service, the competent authorities of that Party shall, within a reasonable period of time after the submission of an application is considered complete under that Party's domestic laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of that Party shall provide, without undue delay, information concerning the status of the application.
4. In sectors where specific commitments are undertaken, each Party shall ensure that measures relating to qualification requirements and procedures, technical standards, and licensing requirements:
(i) are based on objective and transparent criteria, such as competence and the ability to supply the service;
(ii) are not more burdensome than necessary to ensure the quality of the service; and
(iii) in the case of licensing procedures, are not in themselves a restriction on the supply of the service.
5. In determining whether a Party is in conformity with the obligation under paragraph 4, account shall be taken of international standards of relevant international organisations (7) applied by that Party.
6. Each Party shall provide for adequate procedures to verify the competence of professionals of any other Party.
Article 4.8. Recognition
1. For the purpose of the fulfilment of its relevant standards or criteria for the authorisation, licensing or certification of service suppliers, each Party shall give due consideration to any requests by another Party to recognise the education or experience obtained, requirements met, or licences or certifications granted in that other Party. Such recognition may be based upon an agreement or arrangement with that other Party, or otherwise be accorded autonomously.
2. Where a Party recognises, by agreement or arrangement, the education or experience obtained, requirements met, or licences or certifications granted in the territory of a non-party, that Party shall afford another Party adequate opportunity to negotiate its accession to such an agreement or arrangement, whether existing or future, or to negotiate a comparable agreement or arrangement with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for another Party to demonstrate that the education or experience obtained, requirements met, or licences or certifications granted in the territory of that other Party should also be recognised.